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The City of Park Ridge v. Clarendon American Insurance Co.

Court of Appeals of Illinois, First District, Third Division

October 18, 2017

THE CITY OF PARK RIDGE, a Municipal Corporation, and HIGH-LEVEL EXCESS POOL, Plaintiff-Appellant,
v.
CLARENDON AMERICAN INSURANCE COMPANY, Defendant-Appellee, and A.G., a minor, by her parents and the next friends, MARZENA SASSAK and GREGORY GORMAN Defendants.

         Appeal from the Circuit Court of Cook County No. 16 CH 00806 The Honorable Sophia H. Hall Judge, presiding.

          LAVIN JUSTICE delivered the judgment of the court, with opinion. Presiding Justice Cobbs and Justice Howse concurred in the judgment and opinion.

          OPINION

          LAVIN JUSTICE

         ¶ 1 This interlocutory appeal arises from the trial court's order, granting summary judgment to defendant Clarendon American Insurance Company (Clarendon). On appeal, plaintiffs City of Park Ridge (Park Ridge) and its excess carrier, High-Level Excess Liability Pool (HELP), contend that the trial court erroneously granted defendant's motion for summary judgment because the court erred in determining that emergency medical services fell within the scope of the "Products-Completed Operations Hazard" provision under the insurance policy, which affected how much Clarendon would have to pay in two separate claims. We reverse the trial court's order of summary judgment in Clarendon's favor and remand the case for the trial court to enter summary judgment for plaintiffs Park Ridge and HELP.

         ¶ 2 BACKGROUND

         ¶ 3 This insurance dispute arises out of monies paid to two plaintiffs who sued Park Ridge for two separate occurrences. In the first, defendants Marzena Sassak and Gregory Gorman sued in federal court after a confrontational traffic stop ended in personal injury. After a later, but related, suit was filed on behalf of their minor child, Gorman settled his case for an amount in excess of $600, 000, the first $250, 000 of which was paid by Park Ridge because it had a self-insured retention in that amount. The remainder was paid by Clarendon.

         ¶ 4 The second lawsuit involved allegations that Park Ridge paramedics failed to provide any treatment whatsoever to a 15-year-old boy whose father summoned paramedics when he was found to be unresponsive around 1:10 a.m. Some hours later, the paramedics were summoned again, when the boy was unresponsive and blue. He was transported to the hospital where he was diagnosed as brain dead owing to a drug overdose. He later died.

         ¶ 5 The deceased boy's mother, Jo Ann Abruzzo, filed a survival action and wrongful death action, which was dismissed by the trial court. The dismissal was affirmed by the appellate court, only to be reversed by the Illinois Supreme Court. The court determined that the Emergency Medical Services (EMS) Systems Act (EMS Act) (210 ILCS 50/3.150(a) (West 2004)) applied to plaintiff's allegations rather than sections of the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act) (745 ILCS 10/6-105, 6-106(a) (West 2004)) and remanded the case for further proceedings. Abruzzo v. City of Park Ridge, 231 Ill.2d 324, 348 (2008). All of these legal peregrinations are fully explicated in our opinion which affirmed the jury's subsequent verdict of $5, 187, 500. See Abruzzo v. City of Park Ridge, 2013 IL App (1st) 122360. In that opinion, we found that the evidence established a complete lack of any assessment, diagnosis, treatment, or professional judgment by the responding emergency medical technicians or paramedics in the first trip to the family home. Part of that proof involved an admission made by a Park Ridge lawyer in a reply brief in which the city was claiming immunity because their paramedics provided "no treatment" at the first stop.

         ¶ 6 When confronted with the sizeable judgment affirmed by this court, Park Ridge made efforts to resolve the Abruzzo case, but ran into resistance from Clarendon, which sought to apply the monies paid in the Gorman matters to a $2 million aggregate limit in its policy with the city. After some negotiations, Park Ridge and HELP agreed to provide the necessary funds to settle the case, while leaving the matter of Clarendon's potential contribution to be litigated later, with Park Ridge claiming that Clarendon was obligated to pay its $2 million "occurrence" limit and Clarendon claiming that the money paid in the Gorman matter should have been subtracted from its $2 million "aggregate" limit under another section of the policy.

         ¶ 7 The Insurance Litigation

         ¶ 8 Appellants filed a three-count complaint against Clarendon. Count I sought declaratory relief that Clarendon was obligated to pay a $2 million occurrence limit in Abruzzo because the facts of that case took it out of the "aggregate" limit provided for "Personal Injury, " "Public Officials' Errors and Omissions, " or the "Products-Completed Operations Hazard" as punctiliously detailed in the relevant policy. Count II claimed a breach of contract owing to the refusal to pay the $2 million. Count III sought additional monies from Clarendon owing to its obligation to indemnify and defend Park Ridge in the second Gorman suit, alleging that the aggregate limit was not fully eroded in Gorman I. Clarendon filed counterclaims, which were answered by Park Ridge and HELP, and ultimately, the disputes culminated with dueling motions for summary judgment, which will be analyzed below.

         ¶ 9 The Clarendon Policy

         ¶ 10 We will recite the relevant portions of the Clarendon policy before analyzing the trial court's interpretation thereof which led to its contested ruling. The policy held that:

"[s]ubject to the other provisions of this policy, the Company will pay on behalf of the Insured that portion of the Ultimate Net Loss in excess of the Retained Amount, which the Insured shall have become legally obligated to pay as damages and related Claims Expense because of Bodily Injury, Property Damage, Personal Injury or ...

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