July 2015 Case Notes & Comments

"Ah, summer, what power you have to make us suffer and like it." ~ Russell Baker

MONTHLY QUIZ: Security Company enters into a Contract with Power Company to provide security at Power Company's power plant. Nothing in the Contract gives Security Company a right to control Power Company, or requires either party to procure workers' compensation insurance. Security Guard is injured while patrolling the power plant and files a workers' compensation claim against his employer, Security Company. Guard also files a civil complaint against Power Company, alleging premises liability. Power Company moves to dismiss the civil complaint, arguing that because it had engaged Security Company as a contractor, Power Company was effectively the "the employer who paid workers' compensation benefits for the plaintiff," and therefore is immune from civil suit under Section 5(a) of the Workers' Compensation Act ("Act"). In support of its motion, Power Company submits the affidavit of its workers' compensation benefits manager, who states that, on a reimbursement basis, Power Company paid the workers' compensation benefits of any/all employees of Security Company, including Security Guard, and that Power Company was obligated to make such payments under the Act. Accordingly, Power Company argues that it was immune by virtue of its payments. As a fallback position, Power Company argues that, regardless of the obligation to pay, it was an agent of Security Company for the purposes of section 5(a) and thereby cloaked with Security Company's immunity from civil suit. Should the court dismiss Security Guard's complaint? You be the Judge. (Answer below)

UNINSURED MOTORIST POLICY LANGUAGE HELD AMBIGUOUS: Insured was driving a semitrailer when a car allegedly cut him off (but did not make contact) and caused Insured to crash. Insured advanced a claim against Insurer's uninsured motorist coverage of the Policy. Insurer denied coverage and filed a declaratory action, arguing that the Policy required physical contact with the hit-and-run vehicle in order to trigger coverage. As part of its definition of "uninsured motor vehicle," the Policy states that "The vehicle must hit, or cause an object to hit, an 'insured,' a covered 'auto' or a vehicle an 'insured' is 'occupying.' If there is no physical contact with the hit-and-run vehicle, the facts of the 'accident' must be proved."  However, the trial court found these provisions ambiguous as to whether the Policy required physical contact between the Insured's car and a hit-and-run vehicle to trigger coverage.  On review, the appellate court held that the provision requiring proof of the accident facts "[i]f there is no physical contact" with the hit-and-run vehicle rendered the Policy ambiguous as to whether coverage was limited to accidents involving physical contact. Cincinnati Ins. Co. v. Pritchett, 2015 IL App (3d) 130809 (Apr 27, 2015).

PUBLIC HOSPITAL IMMUNE FROM NEGLIGENT DIAGNOSIS CLAIMS:
Plaintiff presented to the County Hospital emergency room, complaining of various symptoms including spasms and numbness following a slip on ice. The County Hospital physicians allegedly accused the uninsured Plaintiff of "lying" and "faking" her injuries, and dismissed her with pain medication and without follow-up instructions. Two days later, Plaintiff was diagnosed with a spinal cord contusion and paralysis. Plaintiff filed an action against the Hospital alleging negligence, negligent infliction of emotional distress, and violation of the Emergency Medical Treatment and Active Labor Act ("EMTALA") in the Hospital's diagnosis and treatment of her. The Hospital responded that it was immune from liability for any injury which may have been caused to Plaintiff by their failure to diagnose or treat her condition pursuant to sections 6-105 and 6-106(a) of the Local Governmental and Governmental Employees Tort Immunity Act. The trial court granted summary judgment for the Hospital, observing that, while the Act does not defeat claims for inadequate treatment of a given diagnosis, the Act does immunize the Hospital against claims for a "wrong or mistaken" initial diagnosis, which was the basis of Plaintiff's complaint. The Appellate Court affirmed the trial court's grant of summary judgment because, even though the Hospital's diagnosis was incorrect in that Hospital failed to detect spinal damage, the Hospital treated Plaintiff consistently with its diagnosis of a non-spinal back injury. No evidence in the record showed that Hospital improperly treated Plaintiff for the condition that Hospital (mistakenly) diagnosed. The court also found that there was no evidence to support Plaintiff's allegations that the Hospital had violated the EMTALA by engaging in "patient dumping" by failing to perform "an appropriate medical screening examination" or provide stabilizing treatment prior to discharge. Johnson v. Bishof, 2015 IL App (1st) 131122 (Jun 26, 2015).

NO DUTY TO INDEMNIFY BASED ON WATERCRAFT EXCLUSION:
Passenger was severely injured when he fell from the top deck of a large yacht. He brought a personal injury lawsuit against numerous defendants, including the yacht's Owner, alleging negligent maintenance of the yacht and related conduct. The Owner's CGL Insurer filed a declaratory action, arguing that it had no duty to indemnify because its policy's watercraft exclusion applied to "'Bodily injury' or 'property damage' arising out of the ownership, [or] maintenance" of a watercraft owned by an insured. The parties settled the underlying lawsuit, but the declaratory action continued. The court determined that the underlying claim fell within the CGL policy's watercraft exclusion. On appeal, the Insured argued that the injury did not arise out of the ownership, maintenance, or use of the yacht because the injury was actually caused by an unstable bench. The "unstable bench" facts were not alleged in the underlying complaint, but rather, contained in a proposed amended pleading that had never been filed. The appellate court declined to consider the unstable bench allegation as a "true but unpleaded fact," observing that no authority supports the proposition that allegations of an unfiled pleading fit within that category. Finding that the remaining allegations of the underlying complaint only alleged claims "directly related to the maintenance of the yacht," the appellate court found that the circuit court properly granted summary judgment in favor of the Insurer.  Maryland Casualty Company v. Dough Management Company, 2015 IL App (1st) 141520 (Apr 27, 2015).

ANSWER TO QUIZ:Power Company is wrong. Security Guard's civil complaint can proceed against Power Company. Though Power Company 's affidavit claims that Power Company "was obligated" to make the workers' compensation payments under the Act, such statements are legal conclusions, not admissible facts. Further, the Contract provided for no such obligation. Immunity under 5(a) of the Act requires a legal obligation to pay, and Power Company failed to demonstrate that obligation. Further, while it is true that Section 5(a) of the Act bars lawsuits against an employer's agents, Power Company has not properly shown that it was Security Company's agent. The contract does not give Security Company any authority to control Power Company's conduct, so it does not make Power Company an agent of Security Company. Accordingly, Power Company also failed to establish a basis for claiming immunity under Section (5)(a) of the Act in the capacity of an agent of Security Guard's employer. Burge v. Exelon Generation Company, LLC, 2015 IL App (2d) 141090 (Jul 30, 2015)

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