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National Fire Insurance Company of Hartford v. Kilfoy

August 13, 2007


Appeal from the Circuit Court of Cook County No. 04 CH 12414 Honorable William O. Maki, Judge Presiding.

The opinion of the court was delivered by: Justice Cahill

Published opinion

Defendant Briseis Kilfoy appeals a trial court order granting summary judgment to plaintiff National Fire Insurance Company of Hartford (National) in its suit for declaratory judgment. The trial court held National did not owe a duty to indemnify or defend its insured Nikash, Inc. (Nikash), a dissolved corporation formerly doing business as Clear Choice Laser Eye Center (Clear Choice), against Kilfoy's underlying medical malpractice and negligent hiring complaint. That complaint named as defendants Nikash, Clear Choice, Stuart P. Sondheimer, M.D., and Miriam Weller, O.D. (collectively, the underlying defendants). At issue was whether the allegations giving rise to Kilfoy's negligent hiring claim trigger the "professional services" exclusion of the National policy. We agree with the trial court that they do: the allegations charged Nikash with hiring doctors unqualified to render medical services. Such allegations assume that Nikash exercised specialized knowledge and skill by its ability to recognize the competency or incompetency of a medical professional. We affirm.

Before dissolution, Nikash conducted a business known as Clear Choice. Clear Choice specialized in outpatient LASIK eye surgery. Nikash hired Dr. Sondheimer as an independent contractor to perform LASIK surgeries for Clear Choice. Nikash also hired Dr. Weller as an independent contractor to perform preoperative evaluations and postoperative care for Sondheimer's patients.

Kilfoy, who was farsighted, went to Clear Choice in April 2002 and met with Dr. Weller. Weller told Kilfoy she was not certain whether LASIK surgery could correct farsightedness and would consult with Dr. Sondheimer. Sondheimer told Weller to perform a complete evaluation of Kilfoy and that he would determine, based on the evaluation, whether surgery was appropriate. Weller did not relate her conversation with Sondheimer to Kilfoy. Rather, Weller told Kilfoy she was a good candidate for LASIK surgery, performed a complete preoperative evaluation and scheduled the surgery. The surgery took place on May 17, 2002. Sondheimer did not perform his own evaluation of Kilfoy before performing the surgery. Nor did he explain the limited benefits of the surgery to farsighted patients and the risks involved.

Kilfoy alleged she suffered injury to her left eye as a result of the surgery and filed a three-count complaint against the named defendants in April 2003. Kilfoy maintained she would not have gone forward with the surgery had she been made aware of the risks and limited benefits. Kilfoy alleged in count I of her complaint that Nikash was negligent in creating a comanagement scheme to run Clear Choice. Kilfoy maintained the roles of Dr. Sondheimer and Dr. Weller were not clearly defined and that, as a result, Weller evaluated and advised patients who should have been evaluated and advised by Sondheimer. Kilfoy alleged Nikash was negligent in: (1) failing to structure and manage Clear Choice to assure that LASIK patients received "sound" preoperative advice; (2) failing to distinguish between the responsibilities of Sondheimer and Weller; (3) allowing Weller to advise patients without first obtaining Sondheimer's approval; (4) causing Sondheimer to believe Weller was qualified to advise LASIK patients; (5) causing Sondheimer to believe LASIK patients had been properly advised by Weller; (6) scheduling surgeries in such a manner to discourage patients from seeking additional preoperative advice from Sondheimer; (7) failing to require written consent by patients; and (8) failing to establish an oversight process to assure quality service. Counts II and III alleged negligence against Sondheimer and Weller, respectively.

Kilfoy learned during discovery in the underlying action that Nikash had general liability business insurance coverage through National during the period in which Kilfoy alleged negligence. Kilfoy forwarded a copy of her complaint to National on April 21, 2004.

National filed this action in August 2004 against the underlying defendants and Kilfoy. National sought a declaratory judgment that it did not owe a duty to defend or indemnify the underlying defendants against Kilfoy's complaint because the allegations did not invoke coverage. Dr. Sondheimer conceded he was not entitled to coverage and a default judgment was entered against Dr. Weller. Whether National owed a duty to defend and/or indemnify Sondheimer and Weller against the underlying lawsuit is not at issue in this appeal. We are concerned only with whether National owed a duty to defend Nikash.

National argued in the trial court that, under the policy's "professional services" exclusion, Nikash was not entitled to coverage against Kilfoy's underlying allegations of negligence. That provision reads:

"This insurance does not apply to:

j. Professional Services 'Bodily injury,' 'property damage,' 'personal injury' or 'advertising injury' due to rendering or failure to render any professional service. This includes but is not limited to:


(2) Preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change ...

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