United States District Court, C.D. Illinois, Springfield Division
ST. JOHN'S HOSPITAL OF THE HOSPITAL SISTERS OF THE THIRD ORDER OF ST. FRANCIS, PATRICIA FUGATE, and ROBERT FUGATE, Plaintiffs,
NATIONAL GUARDIAN RISK RETENTION GROUP, INC., EMERGENCY CONSULTANTS, INC., CENTRAL ILLINOIS EMERGENCY PHYSICIANS, P.C., a/k/a CENTRAL ILLINOIS EMERGENCY PHYSICIANS, LLP, JAMES M. JOHNSON, M.D., ROBERT M. WILLIAMS, M.D., and DERIK K. KING, M.D., Defendants.
Richard Mills United States District Judge
a diversity of citizenship case.
assert five state law counts against the Defendants.
are two motions to dismiss filed by the Defendants pursuant
Rule of Civil Procedure 12(b)(6).
end of the day, one of the motions is granted in its
their Third Amended Complaint, the Plaintiffs state that on
March 22, 2011, Plaintiffs Patricia and Robert Fugate filed a
medical malpractice complaint in Madison County, IL,
11-L-270, alleging negligence against several Defendants,
including St. John's Hospital, Emergency Consultants,
Inc., and three doctors affiliated with Emergency
Consultants: Elizabeth McDaniel, D.O.; Aamir Banday, M.D.;
and John Byrnes, M.D.
times relevant to the underlying medical malpractice case,
namely on May 3, 4 and 11 of 2009, there was in effect an
Agreement for Emergency Department Management Services
between St. John's Hospital and Central Illinois
Emergency Physicians which provided, inter alia, as
Liability Insurance. Partnership,
at no cost to Hospital, shall ensure that personnel provided
by it shall maintain professional liability insurance
coverage (primary and excess) in an amount not less than $2,
000, 000 per occurrence and $4, 000, 000 annual aggregate
(only $1, 000, 000 per occurrence and $3, 000, 000 annual
aggregate will be provided until 11/1/01, at which time the
full coverage will commence), subject to the terms and
conditions of the individual policies.
paragraph (paragraph 9) was subsequently amended to require
professional liability insurance coverage (primary and
excess) in an amount not less than $1, 000, 000 per
occurrence and $3, 000, 000 annual aggregate. The Plaintiffs
allege that for purposes of this action, “personnel
provided” include Drs. McDaniel, Banday and Byrnes.
medical staff at St. John's Hospital were required to
have professional liability insurance in the amount of $1,
000, 000 per occurrence and $3, 000, 000 annual aggregate.
November 1, 2004, Defendant Central Illinois Emergency
Physicians and St. John's Hospital executed an Amendment
to Agreement for Emergency Department Services, paragraph 9
of which provided that St. John's Hospital agreed to pay
any incremental increases in the professional liability
insurance during the term of the Agreement and that Central
Illinois Emergency Physicians would invoice St. John's
Hospital for any incremental increases.
McDaniel, Banday and Byrnes each submitted Certificates of
Insurance to St. John's Hospital, reflecting that they
were additional insureds covered by a policy issued by
National Guardian to Central Illinois Emergency Physicians
which provides coverage in the amount of $1, 000, 000 per
occurrence and $3, 000, 000 annual aggregate. The policy
(PL1021) defines an “Additional Named Insured” as
“a physician or physician extender, employee, physician
partner or independent contractor physician or physician
extender specifically listed as Additional Named Insured in
the schedule of Additional Named Insureds.” Drs.
McDaniel, Banday and Byrnes were Additional Named Insureds.
Plaintiffs allege the per occurrence limit of liability
listed in the Policy declarations applied separately to each
Additional Named Insured, so each Additional Named Insured
had a separate per occurrence limit of liability of $1, 000,
000 for each occurrence, up to the annual aggregate of $3,
Illinois Emergency Physicians entered into separate
“Physician Partnership Agreements” with Drs.
McDaniel, Banday and Byrnes. Each Agreement between Central
Illinois Emergency Physicians and each individual doctor
stated, at paragraph 11, that Central Illinois Emergency
Physicians agreed to provide each doctor with professional
liability insurance through National Guardian Risk Retention
Group which would provide coverage with limits of $1, 000,
000 per occurrence and $3, 000, 000 annual aggregate. The
Physician Partnership Agreements, paragraphs 11 in
particular, do not reference “shared limits.”
Plaintiffs allege that Defendants National Guardian,
Emergency Consultants and Central Illinois Emergency
Physicians have taken the position that the applicable
coverage to the underlying Fugate litigation is the shared
amount of $1, 000, 000 rather than $1, 000, 000 per
individual Defendant physician. Therefore National Guardian,
Emergency Consultants, Central Illinois Emergency Physicians
and Defendants Dr. Johnson, Dr. Williams and Dr. King each
agreed to deny the hospital its full insurance coverage and,
in furtherance of that position, each affirmatively took the
position that only $1 million in coverage applied to the
Plaintiffs claim that the Defendants' position is
contrary to the plain language of both the Insurance Policy
and Services Agreement, both of which were signed by
Defendant Dr. Johnson. Drs. McDaniel, Banday and Byrnes,
through their counsel, have joined in St. John's position
that each doctor is entitled to $1, 000, 000 in individual
coverage and that the three do not share $1, 000, 000 in
John's Hospital litigated the underlying Fugate case and
negotiated a settlement without the benefit of the full $3,
000, 000 coverage. Drs. McDaniel, Banday and Byrnes litigated
the underlying Fugate case and negotiated a settlement
without the benefit of the full $1, 000, 000 per doctor
coverage. St. John's Hospital settled the underlying
Emergency Consultants, Inc., Central Illinois Emergency
Physicians, P.C. a/k/a Central Illinois Emergency Physicians,
LLP, James A. Johnson, M.D., Robert M. Williams, M.D. and
Derik K. King, M.D. have moved to dismiss the Plaintiffs'
Third Amended Complaint.
National Guardian Risk Retention Group, Inc. has moved to
dismiss Counts I, II and IV.
stage, the Court accepts as true all of the facts alleged in
the complaint and draws all reasonable inferences therefrom.
See Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir.
2011). “[A] complaint must provide a short and plain
statement of the claim showing that the pleader is entitled
to relief, which is sufficient to provide the defendant with
fair notice of the claim and its basis.” Maddox v.
Love, 655 F.3d 709, 718 (7th Cir. 2011) (internal
quotation marks omitted). Courts must consider whether the
complaint states a “plausible” claim for relief.
See Id. The complaint must do more than assert a
right to relief that is “speculative.” See
Id. However, the claim need not be probable: “a
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of those facts is improbable, and
that a recovery is very remote and unlikely.” See
Independent Trust Corp. v. Stewart Information Services
Corp., 665 F.3d 930, 935 (7th Cir. 2012) (quoting