July 2017 Case Notes & Comments

“It never gets easier, you just get faster” ~ Greg LeMond

MONTHLY QUIZ: Caretaker, a home healthcare worker, slips on a mat and falls while exiting Homeowner’s vehicle in Homeowner’s garage. Caretaker sues Homeowner. Caretaker alleges that Homeowner was negligent because the mat lacked a nonskid backing, Homeowner failed to warn her of the mat, provide her with a safe exit and pathway from the vehicle and maintain the garage floor. Homeowner admits in her answer that Caretaker stepped on the mat, but denies that the mat slipped or skidded, causing Caretaker to fall. Homeowner subsequently dies and the trial court appoints Homeowner’s Daughter as the special representative. Daughter argues that the Dead-Man’s Act (Act) (735 ILCS 5/8-201) applies to bar Caretaker’s testimony regarding the fall because it occurred in Homeowner’s presence. Contending that there is no admissible evidence to prove Caretaker’s case, Daughter moves for summary judgment. In response, Caretaker argues that Homeowner, who was still in her car, was not in a position to see what caused Caretaker to slip and could not have refuted Caretaker’s testimony. Caretaker also presents a medical report, indicating that Caretaker stepped out of the car and “tripped on the rug.” Under these facts, does the Act bar Caretaker’s testimony? Can Caretaker prove her case against Homeowner? You be the judge. (Answer below).

WAIVER OF MENTAL HEALTH RECORDS PRIVILEGE:  Plaintiff filed a complaint seeking damages for “great pain and anguish both in mind and body” resulting from a motor vehicle accident.  During discovery, defendant sought, inter alia, copies of plaintiff’s pre-occurrence mental health records. Plaintiff resisted the requests, asserting the records were privileged pursuant to the Mental Health and Developmental Disabilities Confidentiality Act, 740 ILCS 110/1 et seq.  Following an in camera inspection, plaintiff was ordered to produce the records.  Plaintiff’s counsel refused to do so, and was held in indirect civil contempt to facilitate appellate review.  The Appellate Court held that, while the records were subject to the privilege under the Act, plaintiff waived the privilege by placing her mental health at issue.  The Appellate Court distinguished those cases in which the alleged injuries were physical/neurological in nature, noting that plaintiff’s claimed injuries were psychological in nature.  The Appellate Court also held that the plaintiff affirmatively placed her mental condition at issue through her discovery responses which claimed “psychiatric, psychological and/or emotional injuries” as a result of the occurrence, and by disclosing, as Rule 213(f)(2) expert witnesses, a licensed clinical social worker and a neuropsychologist who testified about cognitive testing and treatment provided to plaintiff for anxiety, lowered professional confidence, panic attacks and depression.  Accordingly, the Appellate Court affirmed the contempt finding, requiring the records to be produced.  Phifer v. Gingher, 2017 IL App (3d) 1060170 (Mar. 3, 2017).

LEF WINS SUMMARY JUDGMENT BASED UPON A "FLOOD" EXCLUSION: Howard B. Randell and Peter T. Cahill of  LEF recently won summary judgment as to all counts of a Complaint filed against LEF's client, an insurer which had issued a property insurance policy to the Plaintiff. The Complaint alleged that LEF’s client improperly denied coverage after business personal property at the insured premises was damaged during severe rainstorms that hit Chicago on April 17-18, 2013. According to Plaintiff’s experts, rainwater overcharged the City’s mixed sewer-stormwater system, causing water to backflow through floor drains at the insured premises. LEF leveraged this testimony in support of an argument that the backflow of stormwater through the municipal drainpipe system was not covered by an endorsement for damage “solely caused” by water that backs up from a sewer or drain, but rather, coverage was properly declined by the insurer under the “flood” exclusion. The Circuit Court of Cook County agreed, and awarded summary judgment as to all counts of Plaintiff’s Complaint, terminating the case in its entirety. 

INSURANCE COVERAGE - "NAMED DRIVER EXCLUSION" IN AUTOMOBILE POLICY VIOLATES ILLINOIS INSURANCE LAW AND PUBLIC POLICY:  Passenger-Plaintiff is injured while riding in a vehicle driven by Named Insured. At the time of the accident, Named Insured is insured under an auto policy issued by Named Insured’s Carrier, while Passenger-Plaintiff is insured by Passenger’s Carrier under two automobile liability policies. Plaintiff makes a claim against Named Insured for her injuries, which are paid by Named Insured’s Carrier. Passenger-Plaintiff then files an underinsured motorist claim with Passenger’s Carrier, which denies coverage under a driver exclusion endorsement contained in both of the automobile liability policies it issued to Plaintiff: “It is agreed we shall not be liable and no liability or obligation of any kind shall attach to us for bodily injury, loss or damage under any of the coverages of this policy while any motor vehicle is operated” by the Driver (identifying him individually by first and last name). Passenger-Plaintiff files suit, seeking a declaration that, as applied to her, the “named driver” exclusion endorsement in the automobile liability policies issued to her by Passenger’s Carrier violates section 143a-2 of the Illinois Insurance Code and the public policy of Illinois. The trial court agrees and enters judgment in favor of Plaintiff and against the Carrier. On appeal, the reviewing court recently observed that, in general, named driver exclusions in automobile liability insurance policies are permitted in Illinois. More narrowly examining the issue, however, the appellate court framed the issue as, “whether the named driver exclusion violates our mandatory insurance requirements and public policy where the exclusion bars coverage for the named insured.” Finding in the affirmative (thus upholding the trial court), the appellate court discussed Illinois case law supporting the conclusion that a named driver exclusion in an insured’s policy that bars liability, uninsured or underinsured coverage for the named insured violates Illinois’s mandatory insurance requirements and Illinois public policy. While such endorsements are generally enforceable, they may not be relied upon to deny coverage to a named insured. Therefore, the named driver exclusion endorsement in the Passenger-Plaintiff’s automobile liability policies with Passenger’s Carrier were not enforceable against the Plaintiff, as the named insured. Thounsavath v. State Farm Mut. Ins. Co., 2016 IL App (1st) 161334 (Jun. 30, 2017).

WORKERS' COMPENSATION - MEDICAL CARE PROVIDERS HAVE NO STANDING TO MAINTAIN CLASS ACTION AGAINST INSURERS UNDER THE ACT: Several Chicago-Area medical providers (Providers) filed four putative class-action lawsuits against dozens of insurers (Insurers) for alleged failures to comply with requirements contained in the Workers’ Compensation Act (Act), 820 ILCS 305/1, et seq.  Section 8.2(d)(3) of the Act provides that late payments made to providers “shall incur interest at a rate of 1% per month payable to the provider.” (820 ILCS 305/8.2(d)(3)), which provision was incorporated into Insurers’ standard policies. Providers contended that, as third-party beneficiaries of the employers’ insurance policies, Providers were entitled to recover for Insurers’ breach of those policies, that Providers had an implied cause of action under Section 8.2(d)(3) of the Act and could seek attorneys’ fees and statutory damages under Section 155 of the Illinois Insurance Code (215 ILCS 5/155). The trial court dismissed Providers’ suit with prejudice. On review, the Appellate Court held that Providers were not intended third-party beneficiaries of the workers’ compensation policies but were, at best, incidental, indirect beneficiaries of those policies. Further, in rejecting the contention that the 2005 and 2011 amendments to the Act entitled Providers to “benefits,” the appellate court reasoned that the “fundamental purpose of the Act [was] to afford protection to employees by providing [employees] with prompt and equitable compensation for their injuries.” (emphasis added). As to the dismissal of the Section 155 claims, the appellate court applied the general rule – namely, that only insured parties and “policy assigns” can avail themselves of Section 155. Consequently, all of Providers’ claims were properly dismissed. Marque Medicos Fullerton, LLC v. Hartford Underwriters Insurance Co., 2017 IL App (1st) 160756 (Jun. 30, 2017).

ANSWER TO QUIZ: Daughter wins, Caretaker loses. To prevail in a negligence action in Illinois, a plaintiff must prove a duty owed to plaintiff, breach of that duty, and proximate causation of the injury or damages. However, proximate cause can be established only when there is a reasonable certainty that a defendant’s acts caused the injury. The Dead Man’s Act provides, in part, that “no adverse party or person directly interested in the action shall be allowed to testify on his or her own behalf to … any event which took place in the presence of the deceased.” Here, Homeowner was indisputably in Caretaker’s presence during the slip and fall. The appellate court found Caretaker’s argument – that Homeowner was in the driver’s seat and unable to see – “circular” and unavailing because Homeowner could, of course, have disputed where she was at the time of the fall and/or whether she was able to see Caretaker fall. Accordingly, Caretaker was barred from testifying about the fall. The trial and appellate courts also found the medical records inconclusive and therefore insufficient to defeat Daughter’s summary judgment motion. Summary judgment in favor of Daughter, affirmed. Spencer v. Wayne, 2017 IL App (2d) 160801 (Jun. 29, 2017).