Court of Appeals of Illinois, First District, Second Division
MARQUE MEDICOS ARCHER, LLC, and MEDICOS PAIN & SURGICAL SPECIALISTS, S.C., Plaintiffs-Appellants,
LIBERTY MUTUAL INSURANCE COMPANY and MORSE AUTOMOTIVE CORPORATION, Defendants-Appellees.
from the Circuit Court of Cook County, Illinois. No. 13 L
13456 Honorable Patrick J. Sherlock, Judge Presiding.
PRESIDING JUSTICE MASON delivered the judgment of the court,
with opinion. Justices Pucinski and Hyman concurred in the
judgment and opinion.
1 This case arises out of defendant-appellant Liberty Mutual
Insurance Company's (Liberty) alleged failure to fully
pay plaintiffs-appellees, Marque Medicos Archer, LLC and
Medicos Pain & Surgical Specialists, SC (collectively,
the providers), for services they rendered to an injured
employee of codefendant-appellant, Morse Automotive
Corporation (Morse Automotive). The trial court dismissed with
prejudice the providers' claims for breach of contract
and violation of section 8.2(d)(3) of the Workers'
Compensation Act (Act) (820 ILCS 305/8.2(d)(3) (West 2012))
against Liberty and violation of the Consumer Fraud and
Deceptive Business Practices Act (Consumer Fraud Act) (815
ILCS 505/1 et seq. (West 2012)) against both
defendants, and the providers appeal. Because we conclude
that the providers have no direct cause of action against
Liberty for its delay in paying medical bills, we affirm.
3 The providers first filed suit against Liberty and Morse
Automotive on November 15, 2013. In their second amended
complaint, at issue here, they alleged that between August
29, 2009 and November 17, 2011, they treated Ernesto Martinez
for injuries he suffered while employed by Morse Automotive.
At the outset of Martinez's treatment, he authorized
payment to be made directly to the providers for insurance
benefits payable to him. The providers billed Morse
Automotive for the services they rendered to Martinez by
submitting claims to Liberty, who issued Morse
Automotive's workers' compensation insurance policy.
The medical providers alleged that Liberty was the disclosed
agent for Morse Automotive.
4 The providers alleged that all workers' compensation
policies issued in Illinois include a promise by the insurer
to pay "promptly" the benefits required of the
employer under the Act as well as "interest on a
judgment as required by law until [the insurer] offer[s] the
amount due under this insurance." All policies further
include a provision that the insurer is "directly and
primarily liable to any person entitled to the benefits
payable by this insurance," and those persons "may
enforce our duties *** against us or against [the employer]
5 Notwithstanding this policy language, the complaint alleged
that Liberty failed to promptly pay bills for medical
services rendered to Martinez or, to a large extent, at all.
The providers alleged that a market conduct examination
conducted by the Illinois Department of Insurance in 2013 of
Liberty's claim payment history between July 1, 2011 to
June 30, 2012, found that Liberty failed to pay interest on
adequately documented medical provider bills not paid within
30 days of receipt and was in violation of section 8.2(d)(3)
of the Act.
6 As a result of the market conduct examination, on December
12, 2013, Liberty entered into a stipulation and consent
order in which it warranted to the DOI in relevant part that
it would "[i]nstitute and maintain procedures whereby
[Liberty] pays interest on adequately documented health care
provider bills not paid within thirty (30) days of receipt as
required by 820 ILCS 305/8.2(d)(3)."
7 In the meantime, in September 2009, Martinez timely filed a
claim before the Illinois Workers' Compensation
Commission (IWCC) for disability benefits and medical
expenses. A little over two years later, on December 14,
2011, Martinez entered into a settlement agreement with Morse
Automotive. The settlement agreement names Martinez as
petitioner, Morse Automotive as respondent, and Liberty as
"[r]espondent's insurance or service company."
The terms of the settlement provided that respondent would
pay petitioner $163, 000 in a lump sum for "full and
final settlement of all claims for benefits past, present and
future based on injuries arising out of an accident on or
about August 4, 2009"; the lump sum included $41, 751
for future medical expenses. The settlement further provided
"[r]espondent will pay all necessary and related medical
expenses pursuant to the fee schedule or negotiated rate,
whichever is less, that have been submitted to [r]espondent
prior to contract approval and that contain all the required
data elements necessary to adjudicate the bills pursuant to
Section 8.2(d)." The settlement agreement was silent on
the amount of medical bills outstanding as of the date of its
execution. The complaint did not allege, and the record does
not disclose, that prior to the settlement, Liberty ever took
the position that all or any portion of the medical expenses
reflected in the bills sent to it were not necessary or
related to Martinez's injuries or that the documentation
in the bills was insufficient.
8 As of the date of the settlement agreement, neither Morse
nor Liberty had paid any of the providers' bills, but
approximately six months after the settlement was approved by
the IWCC, Liberty made partial payments to the providers for
bills it received between 2009 and 2011. Approximately $39,
000 in bills is still outstanding. And as of the date of the
complaint, over $36, 000 of interest had accrued on the
unpaid bills as well as the bills paid after the statutory
grace period had elapsed.
9 On June 5, 2014, Martinez executed a specific assignment in
favor of the providers to pursue any and all of his rights
and claims arising out of the settlement agreement.
10 Based on these allegations, the second amended complaint
alleged four counts against both defendants: (1) breach of
contract (based on the settlement agreement), (2) breach of
contract implied in fact (in the alternative), (3) violation
of section 8.2(d)(3) of the Act (820 ILCS 305/8.2(d)(3) (West
2012)), and (4) violation of the Consumer Fraud Act (815 ILCS
505/1 et seq. (West 2012)); one count was alleged
only against Liberty, namely, violation of section 155 of the
Illinois Insurance Code (215 ILCS 5/155 (West 2012)).
11 The defendants filed a motion to dismiss the complaint
pursuant to section 2-615 of the Code of Civil Procedure (735
ILCS 5/2-615 (West 2012)). Ultimately, the trial court
dismissed with prejudice the providers' claims for (1)
breach of contract against Liberty based on the fact that the
providers failed to allege that Liberty was a party to the
settlement agreement, (2) violation of section 8.2(d) against
Liberty only, and (3) violation of the Consumer Fraud Act