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Professional Solutions Insurance Co. v. Giolas

United States District Court, N.D. Illinois, Eastern Division

November 8, 2017

PROFESSIONAL SOLUTION INSURANCE COMPANY, Plaintiff,
v.
DALE GIOLAS, M.D. and STACI FERGUSON, Defendants.

          MEMORANDUM OPINION AND ORDER

          Harry D. Leinenweber, Judge.

         This is an insurance coverage dispute arising out of a psychiatrist's alleged sexual misconduct with a patient. Before the Court are Cross Motions for Summary Judgment [ECF Nos. 18-19, 22]. For the reasons stated herein, the Court grants Defendant Giolas' Motion and denies Plaintiff's Motion.

         I. FACTUAL BACKGROUND

         Plaintiff Professional Solutions Insurance Company (“PSIC”) brought a declaratory action seeking a declaration that it does not have a duty to defend Defendant Dale Giolas, M.D. (“Giolas”) in an Illinois state court lawsuit. For the purposes of the coverage dispute and the cross motions before the Court, the facts are undisputed. Both parties filed Rule 56.1(a)(3) statements, but neither filed a Local Rule 56.1(b) response. See, N.D. Ill. L.R. 56.1(a)(3)(C) (“All material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the [L.R. 56.1(b)] statement of the opposing party.”). As such, the Court considers the facts contained in both parties' statements admitted. The Court does not deem any legal conclusions admitted. The facts of the underlying state court action are as follows.

         Giolas, a licensed psychiatrist, treated Staci Ferguson (“Ferguson”) as a patient from 2011 until early 2016. (See, PSIC's 56.1(a)(3) Statement, ECF No. 20 (“PSIC's Fact Statement”) ¶ 4.) On August 25, 2016, Ferguson brought a lawsuit in Illinois state court alleging that Giolas repeatedly engaged in improper sexual activity with her while he was treating her. (See, Giolas' 56.1(a)(3) Statement, ECF No. 21 (“Giolas' Fact Statement”) ¶¶ 1-2; PSIC's Fact Statement ¶¶ 3-4.) Ferguson alleged that Giolas' improper sexual activity violated the Sexual Exploitation in Psychotherapy, Professional Health Services, and Professional Mental Health Services Act, 740 ILCS 140/1 et seq., the Gender Violence Act, 740 ILCS 82/1 et seq., and constituted common law battery. (See, Complaint, Ex. A to “Complaint for Declaratory Judgment, ” ECF No. 1 (the “Underlying Complaint”); see also, Giolas' Fact Statement ¶ 1.) Both parties acknowledge that Giolas denies engaging in any sexual activity with Ferguson. (See, Giolas' Fact Statement ¶ 3; PSIC's Fact Statement ¶ 5.) After receiving notice of the Underlying Complaint, Giolas tendered it to PSIC, his professional liability insurer. The underlying state court case remains pending. (See, Giolas' Fact Statement ¶ 4.)

         The insurance policy at issue, entitled Physician and Surgeon Medical Professional Liability Insurance Policy (the “Policy”), was issued by PSIC to Giolas and was in effect when Ferguson filed the Underlying Complaint. (See, Policy, Ex. B to Complaint, ECF No. 1 (the “Policy”); PSIC's Fact Statement ¶ 12; Giolas' Fact Statement ¶ 5.) The policy states, in relevant part:

         Section II. Coverage Agreement

         Within the limit of liability shown on the Declarations:

In return for payment of premium and subject to all the terms of this Policy and the exclusions stated in Section VIII. Exclusions, We will pay on behalf of an Insured all sums in excess of the Deductible to which this insurance applies and for which an Insured becomes legally obligated to pay as Damages because of an Injury caused by an Incident in the performance of Professional Services by You or someone for whom You are legally responsible as provided in this Policy. The Injury must occur on or after the Retroactive Date shown on the Declarations and before this Policy or coverage for an Insured terminates. Any Claim associated with an Injury caused by an Incident must be first reported to Us in writing during the Policy Period or the Automatic Extended Reporting Period. The Injury must also be caused by an Insured under this Policy. (See, Policy § II.)

         The term “Injury” is defined as:

[B]odily injury, sickness, disease or death sustained by any one person. (Id. § I.14.)

         The term “incident” is defined as:

[A]ny negligent omission, act or error in the providing of Professional Services. All such omissions, errors or acts causally related to the rendering of or failure to render Professional Services to one person shall be considered one Incident. Causally related acts, errors or omissions that have a common cause or form a causal chain of events shall be considered one Incident. An Incident shall be deemed to have occurred at the time of the earliest act, error or omission comprising that Incident. (Id. § I.13.)

         The term “Professional Services” is defined as:

[T]he diagnosis of, treatment or medical care for or medical consultation regarding a patient's medical ...

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