Tort Insurance Update

The attorneys at BryceDowney constantly strive to keep you updated regarding the latest developments in Illinois tort insurance law. If you would like more information on any of the topics discussed above, or have any questions regarding these issues or any aspect of tort insurance law, please contact Terrence Madden at (312) 377-1501 or tmadden@brycedowney.com, or any member of our tort insurance team.© Copyright 2005 by BryceDowney, LLC, all rights reserved.  Reproduction in any other publication or quotation is forbidden without express written permission of copyright owner.

Supreme Court Holds That a Plaintiff Can Recover More in Medical Expenses Than Was Actually Paid

 

             Plaintiff sustained injuries as a result of a fall on the defendant’s premises and filed suit.  During discovery, plaintiff disclosed that she had been charged $19,355 in medical bills by her health care providers, but that as a result of negotiated fees with her health insurer (Blue Cross/Blue Shield) the health care providers accepted only $13,577 in full payment of their charges.  The defendant filed a motion for partial summary judgment, asking that the plaintiff’s medical expenses be limited to the amounts actually paid.  The trial court granted that motion but certified the issue for appeal.  The appellate court held that the plaintiff was entitled to recover the full value of the amounts charged for her medical expenses, even though less was actually paid.  In this case, the Illinois Supreme Court affirmed that decision, specifically holding that the plaintiff could present evidence of the amount of the initial bills, even though the health care providers agreed to accept less because of reduced rates that were negotiated with the medical insurer (Blue Cross).

 

             It is important to note that although the Court held that the plaintiff is permitted to introduce evidence of the full value of medical expenses, that does not necessarily mean that the plaintiff is entitled to recover that amount.  According to the Court, the plaintiff must also introduce evidence that the charges were reasonable for the services provided.  The defendant would be permitted to introduce contrary evidence.  The Supreme Court, however, did not address and left unanswered the obvious question of whether the defense could introduce evidence that the health care providers accepted less than their initial charges.  In a dissenting opinion, Justice McMorrow speculated that such evidence might not be admissible because it would involve evidence that the defendant was insured, which is typically not permitted.  Arthur v. Catour, No. 97920 (Ill. S. Ct.) 72105.  July 21, 2005

 

Supreme Court Holds That Insurance Company Is Not Entitled To Recover Defense

Costs Upon A Finding of No Coverage

 

             General Agents Insurance Company agreed to defend a suit against Midwest Sporting Goods, but did so under a reservation of rights.  It specifically reserved its claimed right to recover defense costs, if it was successful in establishing that there was no coverage for the suit.  In a declaratory judgment action, General Agents was successful in establishing that there was no coverage and no duty to defend. It then attempted to recover the amounts that it had paid in defending the suit against Midwest Sporting Goods.

 

             Although the Appellate Court held that the insurance company was entitled to recover its defense costs, since it had expressly reserved its right to do so when it assumed the defense of the suit against the insured, the Supreme Court rejected that finding.  The Supreme Court held that the insurance policy did not give the insurance company the right to recover defense costs that it incurred in defending a suit, even if it expressly attempted to reserve that right.  The Supreme Court stated that in defending the suit, the insurance company was simply doing what it was required to do under Illinois law.

 

             Most jurisdictions that have addressed this issue have found in favor of the insurance companies.  In this case, the Illinois Supreme Court rejected that position, but did state that if the insurance policy contained a provision giving the insurance company the right to recover defense costs, such a provision would be enforceable.  General Agent’s Insurance Company of America v. Midwest Sporting Goods Company, 215 Ill. 2d 146, 828 N.E. 2d 1092 (2005).

 

Doctrine of Contribution Among Insurers Does Not Apply Where The Insurers Cover The Same Loss But Not The Same Risk

 

             A general contractor was named as an additional insured under the liability policies of two subcontractors.  When the general contractor was sued, it tendered its defense to each of the insurance carriers for the subcontractors.  One of those insurance carriers agreed to defend the general but the other did not.  The carrier who did defend eventually filed a suit seeking to recover a share of the defense costs from the non-defending insurance company.  It sought recovery under the doctrine of equitable contribution.

 

             The Illinois Supreme Court held that for the doctrine of equitable contribution to apply, the insurance carriers must insure the same risk.  In this case, the Court concluded that the insurers did not insure the same risk, even though they may have covered the same loss.  Each of the subcontractor’s insurance policies covered the general contractor, but only for liabilities arising out of the work of that particular subcontractor.  Accordingly, even though both insurance companies might have been under a duty to defend, because the allegations of the plaintiff’s complaint were sufficient to invoke coverage under each of the policies, the companies actually insured different risks and were not entitled to contribution from each other.

 

             The court further held, however, that where one of the policies was an excess policy, it was still entitled to recover amounts it had paid in defending the general contractor under the doctrine of equitable subrogation.  Unlike the doctrine of contribution, the doctrine of equitable subrogation applies regardless of whether the insurance carriers insure the same risk.  What is critical in an equitable subrogation case is that one insurer pay a loss for which another insurer was primarily responsible.

 

             This decision raises a potential dilemma in situations where multiple insurance policies may cover the same party for the same loss.  In those situations, the insurance companies would be well advised to agree among themselves on an appropriate method of sharing defense costs, because absent such an agreement, the insurers may have no legal rights against each other.  Home Insurance v. Cincannati Ins., 213 Ill. 2d 307, 821 N.E.2d 269 (2004).

 

Supreme Court Holds That A Permissive User Of A Vehicle Is Subject To The Business Pursuits Exclusion Of The Owner’s Policy

 

             Ronald Abbinate was using his mother’s car to deliver pizzas, when he was involved in an accident.  His mother’s insurance carrier refused to defend a suit filed against him, claiming that coverage was excluded by a business pursuits exclusion.  The Appellate Court held that the business pursuits exclusion could not be applied because Section 7-317(b)(2) of the Safety & Family Financial Responsibility Law required that permissive users be covered by the owner’s policy.  The Supreme Court reversed that decision, holding that the statute only requires that permissive users be insured by the owner’s policy for the same risks for which the owner would be insured.  A permissive user is therefore subject to the same exclusions as is the automobile owner.  Progressive Insurance v. Liberty Mutual Insurance, 215 Ill. 2d 121, 828 N.E.2d 1175 (2005).

 

             Testimony of Accident Reconstruction Expert Properly Barred Where Expert’s Testimony Not Based on Scientific Principles.

 

             Plaintiff, Perry Kimble, was injured when his legs were run over by a 4,000 pound steel bar while it was being loaded onto the trailer of his flatbed truck.  He sued the owner of the facility where the truck was being loaded, claiming negligence.  There were two different factual versions as to how the accident occurred, one version supported by Mr. Kimble’s testimony and the second version supported by the testimony of witnesses.  Defendant’s accident reconstruction expert, Dr. Owen Schipplein, was prepared to testify that based upon his review of the evidence and testimony, the accident more likely happened in the manner testified to by the independent witnesses.  The trial court barred that testimony, and the Appellate Court affirmed that decision.  The Appellate Court stated that testimony of an accident reconstruction expert is generally permissible where the expert is qualified by knowledge or skill in a field that has a modicum of reliability and where the testimony would assist the jury in understanding the evidence.  Where there is eyewitness testimony available, accident reconstruction testimony may be used to supplement the eyewitness testimony as long as the testimony would be needed to explain scientific principles to a jury and enable it to make factual determinations.  In this case, the court found that the testimony of the accident reconstruction expert was not based upon scientific principles but amounted to only his opinion as to which version of events was more likely.  According to the court, the facts involved in the accident were not so complicated that the jury could not make that evaluation itself.  Kimble v. Earle M. Jorgenson Company, No. 1-03-3765 (1st Dist., June 9, 2005).

 

Defense Counsel Violated “Petrillo Doctrine” by Writing a Treating Physician About His Deposition

 

             In Petrillo v. Syntex Laboratories, Inc., the Appellate Court for the First District held that a plaintiff does not waive the physician/patient privilege by filing a suit for personal injuries and that, therefore, the defendant’s attorneys are not permitted to engage in ex parte communications with treating physicians and can only discuss the plaintiff’s case with them in the context of a deposition.

 

             Since Petrillo was decided in 1986, there have been numerous decisions, analyzing whether various types of incidental contacts with treating physicians violated the doctrine.  In this case, after taking the deposition of a treating physician, defense counsel filed Rule 213 interrogatory answers, identifying the physician as a potential opinion witness and reciting the nature of the anticipated opinions the treater would express at trial.  The opinions that were listed were those given by the physician in his deposition.  Subsequently, defense counsel amended the interrogatory answers, adding an additional opinion which he expected the physician to testify at trial, but which had not been testified to during the physician’s discovery deposition.  The defendant’s attorney then sent the physician a notice for his evidence deposition.  With that notice, counsel enclosed a copy of the physician’s discovery deposition and also copies of the Rule 213 answers that had been filed.  The appellate court held that the letter to the treating physician violated the Petrillo doctrine.  The court concluded that by providing the physician with Rule 213 interrogatory answers which included a description of the opinions which counsel expected to elicit, the defendant’s attorney was attempting to suggest how the physician should testify.  Because that contact was held to violate the Petrillo doctrine, the court reversed a verdict for the plaintiff, which was appealed as being inadequate, and also held that the defendant’s attorney was not permitted to call the treating physician to testify as a witness during the new trial.

 

             This decision illustrates the dire consequences that may occur, if there is improper contact with a plaintiff’s physician.  Moss v. Amira, 356 Ill. App. 3d 701, 826 N.E.2d 1001 (1st Dist. 2005). 

 

Use of Six Person Juries Expanded in Illinois

 

             As a result of House Bill 174, which was signed on July 14^th, effective January 1^st cases involving claims of damages of $50,000 or less shall be tried by a jury of six, unless either party demands for and pays for a jury of twelve. Current law calls for a jury of 6 in cases involving damages of $15,000 or less.

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