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KEYSTONE CONSOLIDATED INDUSTRIES v. CONSECO MEDICAL INS.

April 12, 2004.

KEYSTONE CONSOLIDATED INDUSTRIES, Plaintiff,
v.
CONSECO MEDICAL INSURANCE COMPANY and EMPLOYEE BENEFITS CORPORATION, Defendants



The opinion of the court was delivered by: AMY J. ST. EVE, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Keystone Consolidated Industries ("Keystone") filed a five count First Amended Complaint ("FAC") against defendants Conseco. Medical Insurance Company ("Conseco") and Employee Benefits Corporation ("EBC"), alleging breach of contract against Conseco. (Count I) and EBC (Count IV), negligent misrepresentation against Conseco. (Count III) and EBC (Count V), and estoppel against Conseco. (Count II).

EBC moved for summary judgment on Counts IV and V. For the reasons stated herein, EBC's motion is granted.

  LEGAL STANDARDS

 I. Summary Judgment

  Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact, and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 So. Ct. 2548, 2552 (1986). A genuine issue of triable fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," Pugh v. City of Attica, 259. F.3d 619, 625 (7th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986)). A party will successfully oppose summary judgment only if it presents "definite, competent evidence to rebut the motion." Equal Opportunity Comm'n v. Roebuck & Co., 233 F.3d 432, 437 (7th Cir. 2000). The Court "considers the evidentiary record in the light most favorable to the nonmoving party, and draws all reasonable inferences in his favor." Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir. 2002).

 II. Local Rule 56.1

  The Court first addresses Keystone's failure to comply with Local Rule 56.1, which governs summary judgment briefing in the Northern District of Illinois. L.R. 56.1. Local Rule 56.1(a)(3) requires the moving party to provide a "statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law." L.R. 56. 1(a)(3). The opposing party must then file "a concise response to the movant's statement," in which the nonmoving party must "admit or deny each factual statement proffered by the defendant . . ., and designate with specificity and particularity those material facts believed to establish a genuine dispute for trial." Greer v. Board of Educ. of the City of Chicago, 267 F.3d 723, 727 (7th Cir. 2001). The nonmoving party may also file a statement of additional facts that require the denial of a summary judgment. L.R. 56.1(b)(3)(B). The moving party must submit a reply addressing each additional fact. In its Rule 56.1 response, Keystone consistently fails to include "specific references to the affidavits, parts of the record, and other supporting materials" as required by Local Rule 56.1. The consequences of Keystone's failure to adhere to Local Rule 56.1 are discussed below.

  BACKGROUND

  Keystone is an employer that provides its employees with medical coverage via a self-funded plan (the "Plan"). (R. 43-1, FAC ¶¶ 1, 7.) EBC is an insurance broker that administered the Plan for Keystone. (Id. ¶¶ 2, 8.) Keystone sought to obtain stop-loss coverage for the Plan, (Id. ¶¶ 2, 8.) On October 19, 1999 EBC submitted a bid package on behalf of Keystone to the entire market of insurers who write stop-loss policies for self-funded medical plans. (Id. ¶¶ 2, 9; R. 51-1, Def.'s Statement of Undisputed Material Facts ("Def.'s Rule 56.1 Statement") ¶ 3(a); R. 54-1, Pl.'s Response Statement of Undisputed Material Facts ("Pl.'s Rule 56.1 Response") ¶ 3(a).) Conseco. responded to EBC's bid request with bids on December 14 and 17, 1999. (Id. ¶ 3(f).) Conseco unambiguously stated that it based its bids on the information that Keystone provided to Conseco. (Id.) Keystone verbally committed to award its business to Conseco. on December 28, 1999. (Id. ¶ 30).)

  Conseco. issued a reinsurance treaty with an effective date of January 1, 2000 that outlined Keystone's coverage. (Pearl Aff. ¶ 11.) Conseco issued a copy of the reinsurance treaty to Keystone and EBC on September 5, 2000. (Id.) The reinsurance treaty contained an exclusion for medical bills that resulted from a participant having been injured while under the influence of alcohol. (R. 51-1, Def.'s Rule 56.1 Statement ¶ 3(m); R. 54-1, Pl's Rule 56.1 Response & 3(m).) Conseco. never advised EBC or Keystone that the policy it intended to issue excluded coverage for alcohol related injuries. (Id. ¶ 3(o).) On March 3, 2000, a Keystone employee covered by the Plan was injured in a motor vehicle accident while under the influence of alcohol, (R 43-1, FAC ¶¶ 11-12.) On behalf of Keystone, EBC submitted the injured employee's medical bills to Conseco. for payment. (Id. ¶ 13.) Conseco. refused to pay the claim, citing the alcohol-related injury exclusion. (Id. ¶ 14.) Keystone filed suit against Conseco and EBC in this Court.

  ANALYSIS

 I. Breach Of Contract (Count IV)

  Keystone's breach of contract claim fails because Keystone cannot establish a genuine issue of material fact as to whether a contract existed that obligated EBC ...


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