December 2017 Case Notes & Comments

From all of us at LEF, we hope this holiday season brings happiness to you, your family and friends.

MONTHLY QUIZ:  On December 26, 2016, Santa, exhausted from delivering toys, rear-ended Ebenezer Scrooge's carriage in stop-and-go traffic. The collision causes Scrooge's carriage to hit Abominable Snowman's snowmobile, which is stopped in front of Scrooge's carriage. Scrooge claims that the collision caused him to jerk forward and hit his knees on the dash. Scrooge is immediately taken to the hospital, complaining that his neck, back and arm pain are a 9 out of 10 on the pain scale. Scrooge sues Santa and presents almost $30,000 in medical bills to the jury, most of which relate to his back. While Santa admits that his sleigh negligently collided with Scrooge's carriage, Santa contends that the collision was low-impact, did not proximately cause injuries and disputes the amount of the bills. Santa's attorney, Buddy the Elf, presents a competing medical history, documenting that Scrooge made similar complaints beginning in 2010, demonstrates that between 2011 and 2015 Scrooge made similar medical complaints which Scrooge's doctors described as "chronic", and reveals that Scrooge had called his doctor hours before the December 26, 2016 collision, complaining of arm pain. The jury finds in favor of Scrooge, awards $1,000 for reasonable medical care and treatment, but  awards no non-economic damages (e.g. pain and suffering). "Bah humbug!" decries Scrooge, claiming that the jury's verdict is against the weight of the evidence and seeks a new trial. Will this jury verdict stand? Under these facts, is Scrooge entitled to a new trial? You be the judge (Answer below).  

LEF SAVES INSURER MILLIONS IN POLICY DISPUTE: Thomas J. Finn and Scott Wing successfully defended an insurer in a first-party property loss eight-day jury trial, in the United States District Court for the Northern District of Illinois, Eastern Division. The Plaintiff-insured sustained a property loss caused by a third party's negligent sand-blasting in a building that housed the insured's architectural and design offices, studio and storage space. After the insurer paid full replacement cost business personal property limits of approximately $1.2 million and approximately $500,000 for twelve months of business income loss, Plaintiff-insured sought approximately $4.8 million in extra expense and additional business income loss. The plaintiff claimed that the insurer's delayed claim handling estopped the insurer from asserting the policy's 12-month extra expense and business income limitations and that plaintiff's approximate $2 million in expenses allegedly spent to equip and operate a new studio were necessary expenses incurred to avoid or minimize the suspension of plaintiff's business. After the insurer's $1.2 million offer to settle the claim was rejected by the plaintiff, the case was tried. The jury rejected the bulk of the plaintiff's claims and awarded plaintiff $1.3 million in damages.  The case was tried before the Honorable Ronald A. Guzmán.  Jordan Mozer & Assocs. v. Gen. Cas. Co. of Wis., Case No. 14 CV 10264, (N.D. Ill., Chicago, October 24, 2017 through November 2, 2017). 

CLARIFICATION OF WHEN ILLINOIS MEDICAL STUDIES ACT PROTECTS DOCUMENTS: Plaintiff filed a wrongful-death and survival action against Defendant Hospital and medical providers following the death of her premature newborn child.  Shortly after the child's death, Plaintiff contacted the hospital to express concerns regarding the treatment rendered to her and her child.  Pursuant to the hospital's peer-review policy and medical staff quality committee (MSQC) charter, these concerns and the death were "review indicators", which prompted the MSQC's liason to meet with Plaintiff as well as two physicians who reviewed the obstetrical and neonatal treatment rendered.  A week later, the MSQC met to discuss the plaintiff's concerns and medical treatment, and relied upon the notes created by the MSQC liason.  During discovery, Defendant Hospital withheld the notes of the MSQC liason reflecting the reviewing physicians' conclusions pursuant to a claim of privilege under the Medical Studies Act (735 ILCS 5/8-2101 et seq.).  Following an in camera review, the trial court ordered the documents to be produced, on the basis that the documents were produced prior to the MSQC meeting, and were not made pursuant to an investigation requested by the MSQC.  The Second District Appellate Court affirmed, re-emphasizing that the Medical Studies Act cannot be used to conceal evidence created before a quality-assurance committee or its designee authorized an investigation into a specific incident, even when the investigation was initiated by medical staff pursuant to the hospital's internal quality control or peer-review policies.  The Court held that in order for a party to successfully assert a claim of privilege over documents pursuant to the Medical Studies Act, two things must be true: (1) the documents must be made after an internal peer-review committee is assembled to investigate a patient's medical treatment; and (2) the documents must be initiated, created, prepared, or generated by a peer-review committee.  Grosshuesch v. Edward Hospital, et al., 2107 IL App (2d) 160972 (September 5, 2017).

INSURANCE COVERAGE - DUTY TO DEFEND: Subcontractor's Employee is injured on the job site and sues General Contractor for negligence, but makes no allegations about the acts of his employer, the Subcontractor. GC tenders the case to Subcontractor's Insurer, citing GC's status as an additional insured on the liability policy that Insurer issued to Subcontractor. Insurer rejects GC's tender because the policy excludes "liability arising out of the sole negligence of the additional insured." GC files a third-party complaint against Subcontractor, alleging that it negligently contributed to its Employee's injury.  Insurer files a complaint for declaratory judgment, requesting a ruling that it has no duty to defend GC in the underlying case. The court holds that it cannot consider the allegations of the third-party complaint in determining whether Insurer had a duty to defend GC, and that the exclusion applied because Employee's Complaint did not contain any allegation that Subcontractor acted negligently.  The appellate court recently reversed the lower court's decision, holding, as a preliminary matter, that the insurer bears the burden of proof in establishing that an exclusion bars coverage. While Employee's Complaint did not allege negligence on the part of Subcontractor, the Employee did not expect to recover damages from Subcontractor, and therefore had no reason to include allegations against Subcontractor. Therefore, the Complaint's silence about Subcontractor's conduct did not satisfy Insurer's burden of proof of showing the Subcontractor's acts or omissions did not contribute to Employee's injury, and that GC's liability in the underlying case arose out of its "sole negligence." Hastings Mut. Ins. Co. v. Blinderman Construction Co. and the Estate of Robert Woods, 2017 IL App (1st) 162234 (Oct. 24, 2017).

ANSWER TO QUIZ:  Scrooge loses, Santa wins! In Illinois, a verdict is only against the manifest weight of the evidence where the opposite result is clearly evident or where the jury's findings are unreasonable, arbitrary and not based upon any of the evidence. On review, the appellate court found that, in view of the competing medical evidence, a reasonable jury could conclude that not all of the treatment Scrooge received was reasonable and necessary, proximately caused by the collision and that Scrooge was not entitled to compensation for the full amount of the services for which he was billed.  Furthermore, the jury heard evidence from which it could conclude that Scrooge lacked credibility (e.g. history of  chronic neck, back and shoulder pain). Under these circumstances, Scrooge is not entitled to a new trial. DiFranco v. Kusar, 2017 IL App (1st) 160533-U (Oct. 24, 2017).

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