United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Rebecca R. Pallmeyer, United States District Judge.
Sachin Jain operates Plaintiff Integra Healthcare, S.C., a
corporation that "provide[s] healthcare
services"-that is, physician staffing-to hospitals and
nursing homes. Defendant APP of Illinois HM, PLLC, is engaged
in a similar business. Physicians employed by both parties,
including Dr. Jain and Defendant Dr. Amber Servatius, who
works for APP, perform work as "hospitalists,"
meaning that they provide primary care to hospitalized
patients. In this lawsuit, Integra alleges that Defendant
APP, through a medical director, Defendant Dr. Servatius, has
interfered with Integra's contractual right to provide
physician services at Vista Medical Center East
("VMCE"), a hospital in Waukegan, Illinois, and to
receive patient referrals from skilled nursing facilities.
This court has diversity jurisdiction under 28 U.S.C. §
First Amended Complaint, Integra has asserted the following
claims: tortious interference with prospective economic
advantage against Dr. Servatius (Count I); tortious
interference with prospective economic advantage against APP
(Count II); negligence against Dr. Servatius (Count III);
"respondeat superior" against APP (Count
IV); "willful and wanton" against Dr. Servatius
(Count V); "willful and wanton" against APP (Count
VI); negligent hiring against APP (Count VII); negligent
retention against APP (Count VIII); and negligent supervision
against APP (Count IX). Defendant APP has moved to dismiss
all claims; Defendant Dr. Servatius, represented by the same
attorneys, has moved only for partial dismissal of Count I.
(See Servatius Mot. to Dismiss  ("Servatius
Mot."), 1 (moving to dismiss Count I to the extent it is
"based on alleged interference with Integra's
patients at" VMCE).) She has also moved to dismiss
Counts III and V. (See id.)
following reasons, the court dismisses Integra's
negligence-based claims. The court denies the motions to
dismiss in all other respects.
Dr. Jain's and Dr. Servatius' Employment at
part of a network called Vista Health System
("VHS"). (See First Am. Compl.
¶¶ 10-11.) VHS contracts with companies like APP to
staff physicians at its hospitals, including VMCE. (See
Id. ¶ 12.) Between January 2012 and August 2014,
VHS contracted with a company called Apogee Physicians to
staff physicians at VMCE. (See Id. ¶ 13.) The
court infers from Integra's allegations that Dr. Jain
began working at VMCE in April 2013, when Apogee placed him
there. (See Id. ¶ 14.) In September 2014,
EmCare replaced Apogee as VHS's staffing contractor for
VMCE, and Dr. Jain continued working at the facility.
(Id. ¶¶ 16-17.) Then in November 2016, APP
replaced EmCare as VHS's staffing contractor for VMCE.
(Id. ¶ 18.) Dr. Jain continued working at VMCE
after this change, but "not [as] part of APP's
hospitalist team." (Id. ¶¶ 20-21.)
Although the First Amended Complaint does not otherwise
explain this, the court assumes that Dr. Jain is staffed at
VMCE through his own company, Integra.
hospitalists have an exclusive agreement with VMCE that they
will treat [emergency room] patients that are admitted into
the hospital" and do not have primary care physicians
(hereinafter "ER patients"). (Id. ¶
20.) Despite this exclusive agreement, in November 2016,
VMCE's Medical Executive Committee "granted [Dr.]
Jain the right to see" such patients once every two
weeks. (Id. ¶ 21.) Nine months later, the
Medical Executive Committee altered the arrangement and
"granted [Dr.] Jain the right to see" such patients
once every thirty-two days. (Id. ¶ 22.)
noted, Dr. Servatius also works as a hospitalist at VMCE. She
and Dr. Jain have "worked alongside each other as
hospitalists at VMCE" at "all relevant times."
(Id. ¶ 19.) Since November 2016, Dr. Servatius
has worked as the medical director of APP's hospitalist
team at the facility. (Id. ¶¶ 21, 23.)
Alleged Interference with Dr. Jain's Ability to Treat
Patients at VMCE
to Integra, Dr. Servatius' duties as medical director at
some point included creating the call schedule for doctors on
APP's hospitalist team. (Id. ¶ 23.) Integra
alleges that Dr. Servatius manipulated the schedule to
interfere with Dr. Jain's "right" to see ER
patients. (Id. ¶¶ 21, 23.) By
Integra's account, Dr. Servatius created schedules that
permitted Dr. Jain to see only seventy-five percent "of
the patients that were supposed to be under his care . . .
." (Id. ¶ 23.) Integra also alleges that
on at least one occasion, in September 2017, Dr. Servatius
"took [Dr.] Jain off the call completely and deprived
him of his right to see any of th[e] patients that were
supposed to be under his care." (Id. ¶
24.) "Subsequently," Integra alleges, "the
VMCE Medical Executive Committee permanently stripped [Dr.]
Servatius of the right to create the call schedule."
(Id. ¶ 25.) Integra further alleges that
"[a]t other times," "APP and/or [Dr.]
Servatius directed and/or allowed other doctors from the
hospitalist group" to treat patients that were
"supposed to be under [Dr. Jain's] care."
(Id. ¶ 26.) When this occurred, Integra
alleges, "APP would receive the revenues instead of
Integra." (Id. ¶ 27.)
Alleged Interference with Dr. Jain's Ability to Receive
Skilled Nursing Referrals
to Integra, it had "formal contracts" with certain
entities to "treat their patients," and this
"upset" Dr. Servatius. (Id. ¶¶
28, 30, 31.) Integra provides specific references to only
three contracts. The first is a November 11, 2016 letter from
Dr. Xavier Parreno stating, "I would like Dr. Sachin
Jain, MD to exclusively cover my patients at [VMCE] when they
are hospitalized as inpatients." (Ex. A to First Am.
Compl. [40-1]; First Am Compl. ¶ 32 (citing same).) The
second contract is a November 11, 2016 letter from Orchard
Medical Center ("Orchard") stating that it would
"be using Dr. Sachin Jain as [its] exclusive hospitalist
[at VMCE] effective November 19th at midnight." (Ex. B
to First Am. Compl. [40-2]; First Am. Compl. ¶ 34
(citing same).) The third contract is an undated
"Physician Coverage Agreement" with Lake County
Health Department and Community Health Center ("Lake
County"). (Ex. C to First Am. Compl. [40-3]; First Am.
Compl. ¶ 36 (citing same).) The agreement authorized Dr.
Jain "to provide medical services to [Lake County's]
patients admitted for medical care at" VMCE. (Ex. C to
First Am. Compl.) According to Integra, Dr. Servatius
"interfered" with the Dr. Parreno contract
"such that [Dr. Parreno] canceled [it]." (First Am.
Compl. ¶ 33.) Integra also alleges that "[Dr.]
Servatius and/or APP interfered" with the Orchard and
Lake County contracts by "direct[ing] and/or
allow[ing]" hospitalists other than Dr. Jain to see
Orchard and Lake County patients at VMCE. (Id.
¶¶ 35, 37.)
addition, Integra alleges that Dr. Servatius "made
several phone calls to physicians in the community, made
disparaging and false comments about [Dr.] Jain, and
otherwise interfered with his business contracts and
relations with [them] in an attempt to get them to stop
sending Integra referrals." (Id. ¶ 28;
see also Id. ¶ 29 (asserting similar allegation
concerning phone calls to skilled nursing facilities).) It is
unclear whether the allegations in paragraphs 28 and 29 refer
to Dr. Parreno, Orchard, and Lake County; to other physicians
or entities; or to all of the above. Integra further alleges
that Dr. Servatius "directly threatened various skilled
nursing facilities, including but not limited to GlenLake
Terrace, the Pavilion of Waukegan, and Rolling Hills, to not
refer patients to Integra if they wanted to receive patient
referrals from VMCE." (Id. ¶ 38.)
alleges that Dr. Servatius and/or APP undertook the
aforementioned conduct intentionally and with malice.
(See Id. ¶ 40.) It also alleges that the
conduct caused Integra "financial harm, loss of
reputation, and emotional distress." (See,
e.g., id. ¶ 42.) Integra seeks
compensatory and punitive damages.
12(b)(6) motion challenges the sufficiency of the complaint.
See, e.g., Camasta v. Jos. A. Bank Clothiers,
Inc., 761 F.3d 732, 736 (7th Cir. 2014); Fed.R.Civ.P.
12(b)(6). "The complaint need only contain a short and
plain statement of the claim demonstrating entitlement to
relief." Pierce v. Zoetis, Inc., 818 F.3d 274,
277 (7th Cir. 2016); see Fed. R. Civ. P. 8(a)(2).
"Although detailed factual allegations are unnecessary,
the complaint must have 'enough facts to state a claim to
relief that is plausible on its face.'" Id.
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). "A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). In assessing a Rule 12(b)(6)
motion, the court accepts all well-pleaded facts in the
complaint as true and draws all reasonable inferences in the
plaintiff's favor. Hutchinson v. Fitzgerald Equip.
Co., 910 F.3d 1016, 1025 (7th Cir. 2018). The parties
agree that Illinois law governs the substantive claims in
this diversity action.
move to dismiss Integra's negligence-based claims on the
ground that they are barred by Illinois' economic loss
rule. Under that rule, also known as the Moorman
doctrine, a plaintiff "cannot recover for solely
economic loss under the tort theories of strict liability,
negligence, and innocent misrepresentation." Moorman
Mfg. Co. v. Nat'l Tank Co., 91 Ill.2d 69, 91, 435
N.E.2d 443, 453, 61 Ill.Dec. 746, 756 (1982). In
Moorman, the Illinois Supreme Court defined
"economic loss" as "damages for inadequate
value, costs of repair and replacement of the defective
product, or consequent loss of profits-without any claim of
personal injury or damage to other property." 91 Ill.2d
at 82, 435 N.E.2d at 449, 61 Ill. Dec at 752. The
Moorman doctrine is based on the theory that tort
law provides the appropriate remedy for losses stemming from
personal injury or damage to property, whereas contract law
and the Uniform Commercial Code provide the appropriate
remedy for "economic losses occasioned by diminished
commercial expectations not coupled with injury to person or
property." In re Illinois Bell Switching Station
Litig., 161 Ill.2d 233, 241, 641 N.E.2d 440, 444, 204
Ill.Dec. 216, 220 (1994).
Whether Integra Seeks to Recover Purely ...