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Landau, Omahana & Kopka, Ltd. v. Franciscan Sisters Health Care Corporation

June 20, 2001

LANDAU, OMAHANA & KOPKA, LTD., A PROFESSIONAL CORPORATION, AND ROBERT A. BOWER, PLAINTIFFS-APPELLANTS,
v.
FRANCISCAN SISTERS HEALTH CARE CORPORATION, D/B/A ST. THERESE MEDICAL CENTER, BRUCE SANDS, M.D., RODNEY HAENSCHEIN, M.D., RICHARD KELLER, M.D., THOMAS BRANIFF, M.D., MICHAEL OSTER, M.D., PHILIP GILLESPIE, M.D., INDIVIDUALLY AND D/B/A NORTHERN ILLINOIS EMERGENCY PHYSICIANS, AN ILLINOIS GENERAL PARTNERSHIP, ALSO KNOWN AS TRI-COUNTY EMERGENCY PHYSICIANS, LTD., DEFENDANTS-APPELLEES.



The opinion of the court was delivered by: Justice Wolfson

Not Released For Publication

LANDAU, OMAHANA & KOPKA, LTD., A PROFESSIONAL CORPORATION, AND ROBERT A. BOWER, PLAINTIFFS-APPELLANTS,
v.
FRANCISCAN SISTERS HEALTH CARE CORPORATION, D/B/A ST. THERESE MEDICAL CENTER, BRUCE SANDS, M.D., RODNEY HAENSCHEIN, M.D., RICHARD KELLER, M.D., THOMAS BRANIFF, M.D., MICHAEL OSTER, M.D., PHILIP GILLESPIE, M.D., INDIVIDUALLY AND D/B/A NORTHERN ILLINOIS EMERGENCY PHYSICIANS, AN ILLINOIS GENERAL PARTNERSHIP, ALSO KNOWN AS TRI-COUNTY EMERGENCY PHYSICIANS, LTD., DEFENDANTS-APPELLEES.

The opinion of the court was delivered by: Justice Wolfson

Appeal from the Circuit Court of Cook County, The Honorable John K. Madden, Judge Presiding.

This is a peculiar case. It raises questions about whether a promise not to enforce a judgment was made and why it would have been made. We are asked to explore lawyers' motives and stratagems.

 The controversy was triggered by a legal malpractice complaint file by Northern Illinois Emergency Physicians (Northern Illinois) against a law firm, Landau, Omahana, & Kopka, Ltd. (Landau). Not this case. Before that, there was a medical malpractice lawsuit brought against Northern Illinois, St. Therese Medical Center (St. Therese), and Dr. Bruce Sands by Eric and Lori Johnson (the Johnsons). Again, not this case.

This case concerns a purported promise or assurance by St. Therese that it would not enforce any indemnity judgment it might win against Northern Illinois. Here, Landau seeks to enforce that promise. We hold Landau lacks standing to bring this lawsuit. For that reason, we affirm the trial court's order dismissing all four counts of Landau's amended complaint.

FACTS

We take relevant facts from Landau's pleadings and the exhibits attached.

In 1991, the Johnsons filed a medical malpractice claim in the Circuit Court of Lake County against defendants St. Therese, Northern Illinois, and Dr. Bruce Sands. Northern Illinois provided medical services to St. Therese pursuant to contract. Dr. Sands was a partner in Northern Illinois and provided medical services in St. Therese's emergency room.

Northern Illinois and Dr. Sands were insured by Premier Insurance (Premier). Premier retained a law firm to represent Northern Illinois and Dr. Sands. During the pendency of the medical malpractice case, Premier went into receivership.

Afterwards, the Illinois Insurance Guarantee Fund (the Fund) assumed the defense of Northern Illinois and Dr. Sands. The Fund retained the Landau firm and Bower -- one of Landau's attorneys -- to defend in the medical malpractice action. Northern Illinois also retained Steven J. Schostok as additional counsel.

St. Therese demanded the Fund assume its defense and indemnify it pursuant to an agreement it had with Northern Illinois. The Fund refused, and Michael F. Henrick of Hinshaw and Culbertson represented St. Therese throughout the Johnsons' lawsuit.

Before trial, the Johnsons said they would settle their medical malpractice claim if the Fund agreed to pay $600,000 -- which represented the liability limits of a $300,000 policy covering Dr. Sands and a $300,000 policy covering Northern Illinois. The Fund refused, maintaining there was only one policy covering Dr. Sands and Northern Illinois. That policy's maximum statutory limit was $300,000.

On March 11, 1996, the first day of trial, Henrick made an oral motion on behalf of St. Therese for leave to file a third-party complaint (actually a counterclaim) for indemnification against Northern Illinois and Dr. Sands. Bower orally objected to the motion on behalf of Northern Illinois. The initial trial judge declined to rule on St. Therese's motion and continued the motion until the assigned trial judge could hear it.

Henrick then approached Landau and Schostok and told them the purpose of filing the third-party complaint for indemnification was to force the Fund to settle the matter for $600,000. He "assured" them St. Therese would not seek enforcement of any judgment resulting from the indemnity claim. Bower told Henrick he had to make at least "some objection" to the indemnity claim. Henrick agreed.

Henrick renewed St. Therese's motion before the assigned trial judge. Bower then objected on the ground of "timeliness." The assigned trial judge overruled the objection and granted St. Therese's motion, giving St. Therese leave to file its third-party complaint.

After settlement negotiations between the Fund and the Johnsons failed, the case was tried to a jury. Henrick continued to "assure" Schostok and Bower that St. Therese would not seek to enforce any judgment obtained against Northern Illinois. The ...


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