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Beatty v. Accident Fund General Insurance Co.

United States District Court, S.D. Illinois

June 7, 2019

MICHAEL E. BEATTY, M.D., d/b/a THE SOUTHWESTERN ILLINOIS PLASTIC & HAND SURGERY ASSOCIATES, individually and as the Representative of a class of similarly situated persons, Plaintiff,
v.
ACCIDENT FUND GENERAL INSURANCE COMPANY, et al., Defendants.

          MEMORANDUM AND ORDER

          NANCY J. ROSENSTENGEL CHIEF U.S. DISTRICT JUDGE

         This matter is before the Court on Defendants' Omnibus Partial Motion to Dismiss the Second Amended Complaint Based on the Statute of Limitations (Doc. 296), [1] the motions for summary judgment filed by Country Mutual Insurance Company (Doc. 302), Federated Mutual Insurance Company (Doc. 356), Cannon Cochran Management Services, Inc. (Doc. 367), and the motions to deny or defer considering those motions for summary judgment under Rule 56(d) filed by Plaintiff Michael Beatty, M.D. (Docs. 343, 385, 391). For the reasons set forth below, the motion to dismiss and the motions for summary judgment are denied, while Beatty's motions to deny or defer consideration of the motions for summary judgment under Rule 56(d) are granted.

         Background

         Plaintiff Michael Beatty, M.D., filed this putative class action pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 Ill. Comp. Stat. § 505, alleging Defendants have failed to pay statutory interest on unpaid medical bills owed to Illinois physicians who render services to patients covered under the Illinois Workers' Compensation Act. In part, Beatty claims Defendants-since 2006-have fraudulently concealed their failure to pay statutory interest to prevent him and other health care providers from discovering the existence, nature, or extent of their injuries, who caused the injuries, or that the injuries were wrongfully caused (Doc. 284 at ¶¶ 119-125). As a result, he contends, the three-year statute of limitations imposed by the ICFA has been tolled or has not begun to run (Id. at ¶ 191).

         In July 2018, the Court granted, in part, Defendants' first motion to dismiss based on the statute of limitations because Beatty failed to plead his fraudulent concealment claim with the level of particularity required by Rule 9(b) of the Federal Rules of Civil Procedure (Doc. 269). The Court noted that when a plaintiff seeks tolling of the statute of limitations, the complaint must state what the fraud actually was and when the plaintiff discovered it, “so that the Court may evaluate whether he could have discovered it through the exercise of due diligence.” (Id.) Furthermore, the complaint must “inform each defendant of the nature of his alleged participation in the fraud.” (Id.). Beatty's complaint, however, lumped all Defendants' actions together and failed to explain how any specific Defendant engaged in allegedly fraudulent activities or when the fraudulent actions occurred. Although the Court found these deficiencies required dismissal of the fraudulent concealment claims, it granted Beatty leave to amend his complaint.

         On August 2, 2018, Beatty filed his Second Amended Complaint (Doc. 278). Defendants again jointly move for partial dismissal of the complaint, arguing Beatty has not-and cannot-plead fraud with particularity. Certain Defendants also have moved for summary judgment on the claims against them on the basis of the statute of limitations.

         Legal Standards

         A. Rule 12(b)(6) Motion to Dismiss

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is meant to “test the sufficiency of the complaint, not to decide the merits” of the case. Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990) (citation omitted). In evaluating a motion to dismiss, the Court must accept all well-pleaded allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011); Thompson v. Ill. Dep't. of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002).

         Because Beatty has alleged that the statute of limitations is tolled by Defendants' fraudulent concealment, his complaint is subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b). Squires-Cannon v. Forest Pres. Dist. of Cook Cty., 897 F.3d 797, 805 (7th Cir. 2018). Under that rule, a pleading “must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Pleading with “particularity” means to describe the “who, what, when, where, and how” of the fraud. Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436, 441-42 (7th Cir. 2011). “Heightened pleading in the fraud context is required in part because of the potential stigmatic injury that comes with alleging fraud and the concomitant desire to ensure that such fraught allegations are not lightly leveled.” Id. at 442.

         B. Motions for Summary Judgment

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014) (quoting Fed.R.Civ.P. 56(a)). Once the moving party has set forth the basis for summary judgment, the burden then shifts to the nonmoving party who must go beyond mere allegations and offer specific facts showing that there is a genuine issue of fact for trial. Fed.R.Civ.P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 232-24 (1986). The nonmoving party must offer more than “[c]onclusory allegations, unsupported by specific facts, ” to establish a genuine issue of material fact. Payne v. Pauley, 337 F.3d 767, 773 (7th Cir. 2003) (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).

         Rule 56(d) allows a nonmoving party to submit an affidavit or declaration requesting the court to defer considering or deny a summary judgment motion “in order to allow for appropriate discovery to address matters raised by the [summary judgment] motion. Spie ...


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