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Phil Atherton, Individually and As v. Connecticut General Life Insurance

August 22, 2011

PHIL ATHERTON, INDIVIDUALLY AND AS NATURAL FATHER AND NEXT FRIEND OF BROOKE ATHERTON, A MINOR, AND TRACY ATHERTON, INDIVIDUALLY AND AS NATURAL MOTHER OF BROOKE ATHERTON, A MINOR, AND BROOKE ATHERTON, A MINOR, PLAINTIFFS-APPELLANTS,
v.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, A/K/A CIGNA CORPORATION; CIGNA HEALTH CARE OF ILLINOIS, INC.; INTERNATIONAL REHABILITATION ASSOCIATES, INC., D/B/A INTRACORP; LUANN YORK AND DANIEL OBER,
DEFENDANTS-APPELLEES



Appeal from the Circuit Court of Cook County Honorable James D. Egan, . Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Hall

PRESIDING JUSTICE HALL delivered the judgment of the court, with opinion. Justice Rochford specially concurred in the judgment and opinion.

Justice Hoffman concurred in part and dissented in part in the judgment and opinion.

OPINION

¶ 1 Plaintiffs, Phil Atherton and Tracy Atherton, as parents and next friends of Brooke Atherton, appeal from a trial court order granting summary judgment in favor of defendants Connecticut General Life Insurance Company (CGLIC), Cigna Healthcare of Illinois, Inc. (Cigna), International Rehabilitation Associates, Inc. (Intracorp), Ms. LuAnn York, a registered nurse and caseworker employed by Intracorp, and Dr. Daniel Ober, also employed by Intracorp.

¶ 2 The trial court granted summary judgment for defendants based on the court's finding that plaintiffs' claims for common law and statutory fraud contained in their fourth amended complaint were barred by res judicata. The trial court also determined that summary judgment was warranted as to plaintiffs' claim for common law fraud on the ground that plaintiffs failed to establish the reliance element as required to sustain the claim.

¶ 3 The case arose after plaintiffs successfully brought an action for declaratory and injunctive relief in a Pulaski County court challenging a reduction in the number of hours of private in-home skilled nursing care provided to Brooke, who is severely mentally and physically disabled and in need of ongoing medical care. The Pulaski County court granted the plaintiffs' complaint for declaratory and injunctive relief requiring the State of Illinois Quality Care Health Plan (QCHP) to cover the hours of nursing care that Brooke's treating physician determined to be "medically necessary." *fn1

¶ 4 After successfully bringing the action for declaratory and injunctive relief against QCHP, plaintiffs filed a complaint in Cook County, followed by three amended complaints, against the current defendants alleging common law fraud and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1994)). Plaintiffs alleged that the defendants, as the administrators of the QCHP plan, committed common law fraud and statutory fraud by engaging in an orchestrated pattern and scheme of misrepresentation, omission, and concealment to reduce the number of hours of private in-home skilled nursing care Brooke received, even though her treating physician insisted that the number of hours previously approved under the QCHP plan was "medically necessary," and even though the supervisor of skilled nursing services documented that such care was "medically necessary." Plaintiffs sought compensatory and punitive damages, as well as attorneys fees.

¶ 5 The trial court granted defendants' motion for summary judgment, finding that the Pulaski County judgment had res judicata effect on the claims in plaintiffs' fourth amended complaint. The trial court also determined that plaintiffs failed to adequately plead the reliance element as required to sustain their claim for common law fraud.

¶ 6 Plaintiffs now appeal from the trial court's order granting summary judgment in favor of defendants. For the reasons that follow, we reverse and remand for further proceedings.

¶ 7 ANALYSIS

¶ 8 Defendants moved for summary judgment on grounds of res judicata. We review the grant of summary judgment under a de novo standard of review. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204 (1992). Summary judgment is appropriate where the pleadings, depositions, and admissions on file, together with any affidavits and exhibits, when viewed in the light most favorable to the non-movant, show that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2004); Gawryk v. Firemen's Annuity & Benefit Fund of Chicago, 356 Ill. App. 3d 38, 41, 824 N.E.2d 1102 (2005).

¶ 9 Res judicata is an equitable doctrine established to prevent the multiplicity of lawsuits between the same parties, involving the same facts and issues. Murneigh v. Gainer, 177 Ill. 2d 287, 685 N.E.2d 1357 (1997). Under the doctrine of res judicata, a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties or their privies on the same cause of action. Lane v. Kalcheim, 394 Ill. App. 3d 324, 329, 915 N.E.2d 93 (2009). Res judicata extends not only to those claims actually decided in the first action, but also to those issues that could have been decided in that action. People ex rel. Burris v. Progressive Land Developers, Inc., 151 Ill. 2d 285, 294, 602 N.E.2d 820 (1992).

¶ 10 In order to invoke this doctrine, the following elements must be shown: (1) a final judgment on the merits rendered by a court of competent jurisdiction; (2) an identity of causes of action; and (3) an identity of the parties or their privies. Kalcheim, 394 Ill. App. 3d at 329-30. The party seeking to invoke the defense bears the burden of demonstrating that it applies. Cload v. West, 328 Ill. App. 3d 946, 950, 767 N.E.2d 486 (2002); American ...


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