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Chicago Hospital Risk Pooling Program v. Illinois State Medical Inter-Insurance Exchange9/27/2001
UNPUBLISHED
The Chicago Hospital Risk Pooling Program (CHRPP) brought an action against defendant, the Illinois State Medical Inter-Insurance Exchange (ISMIE), under theories of equitable contribution, unjust enrichment, and quantum meruit to recover one-half of a settlement payment it made on behalf of a physician covered by both CHRPP and ISMIE. ISMIE filed an affirmative defense, alleging, inter alia, that CHRPP's contribution claim was barred by the physician's selective tender of his claim to CHRPP. The trial court rejected ISMIE's argument, holding that the selective tender rule applied only to traditional insurance companies and did not apply to a self-insured risk-pooling trust. Thereafter, ISMIE filed a motion to dismiss the complaint pursuant to section 2-615 of the Illinois Code of Civil Procedure (the Code) (735 ILCS 5/2-615 (West 1998)), alleging that as a risk-pooling trust CHRPP lacked the necessary elements to state a cause of action for equitable contribution. The trial court denied ISMIE's motion but certified the following questions of law for review under Illinois Supreme Court Rule 308 for interlocutory appeal. 155 Ill. 2d R. 308.
"1. Whether the 'selective tender' rule of Institute of London Underwriters v. Hartford Fire Ins. Co., 234 Ill. App. 3d 70, 599 N.E.2d 1311 (1st Dist. 1992), and its progeny can be applied to the Plaintiff in this case, [CHRPP], which is a self-insurance retention trust established under the Illinois Religious and Charitable Risk Pooling Trust Act; and
2. Whether [CHRPP], a self-insurance retention trust established pursuant to the Illinois Religious And Charitable Risk Pooling Trust Act, may state a cause of action for equitable contribution, unjust enrichment, or quantum meruit against [ISMIE], an insurance company, to recover one-half of a settlement payment that [CHRPP] made on behalf of a physician covered by [ISMIE] and [CHRPP]."
We answer the certified questions as follows and remand for further proceedings consistent with this opinion.
BACKGROUND
In September 1993, Luz Rivera filed a medical malpractice action against Norwegian-American Hospital, Dr. Ha Nguyen, Dr. Carlos Baldoceda, and her private obstetrician, alleging that they were negligent in delivering her twin sons, causing the death of one and the brain damage of the other. Dr. Baldoceda was insured under a professional liability policy issued by ISMIE. He was also covered under CHRPP as an employed physician of the hospital. CHRPP administers a trust established pursuant to the Religious and Charitable Risk Pooling Trust Act (the Risk Pooling Act or Act) (215 ILCS 150/1 et seq. (West 1998)), whereby participating nonprofit hospitals pool certain risks associated with the care and treatment provided to their patients. Under the CHRPP trust agreement (the Trust Agreement), participating hospitals are required to contribute certain sums to CHRPP in consideration of CHRPP's promise to pay judgments or settlements in response to medical malpractice suits against the participating hospital or other "Covered Persons," which include hospital employees while acting within the scope of their employment.
ISMIE agreed to defend Dr. Baldoceda with respect to the Rivera action. CHRPP declined Dr. Baldoceda's request for a defense under a reservation of rights and claimed that ISMIE had the primary obligation to defend and indemnify him with respect to liability arising out of the Rivera action. However, despite refusing Dr. Baldoceda's tender of the claim, CHRPP settled the Rivera action for $3 million. The settlement reflected that $1 million was paid on behalf of Dr. Baldoceda. ISMIE did not participate in settlement neg
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