 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Steadfast Insurance Co. v. Caremark Rx8/17/2005
In this declaratory judgment action, the plaintiff, Steadfast Insurance Company ("Steadfast"), appeals from a circuit court order entering summary judgment in favor of the defendants, Caremark Rx, Inc. ("Caremark Rx") and Caremark, Inc., finding that Steadfast has a duty to defend them in two underlying federal actions, and denying its cross-motion for summary judgment. For the reasons which follow, we reverse and remand the matter to the circuit court for further proceedings not inconsistent with the opinions expressed herein.
The facts giving rise to this litigation are not in dispute. Caremark Rx and its subsidiary, Caremark, Inc., are in the business of providing pharmacy benefit management services to various health plan sponsors throughout the country. In 2001, Steadfast issued a managed care professional liability policy (hereinafter referred to as the "Policy"), pursuant to which it agreed, under specified circumstances, to pay those sums in excess of the Policy's deductible that Caremark Rx might become legally obligated to pay as "Damages" for "Claims" made by reason of "Wrongful Acts" committed by Caremark Rx or its subsidiaries arising out of its rendering or failing to render "Professional Services" in the course of business. Under the Policy, wrongful acts include any alleged or actual negligent act, error, or omission with respect to professional services rendered or failed to be rendered. Any claims arising from, inter alia, dishonest, fraudulent, criminal, intentional, or malicious acts or any acts of a knowingly wrongful nature are specifically excluded from coverage.
On March 22, 2002, Roland H. Bickley filed a putative class action suit on behalf of the Georgia Pacific Corporation Health and Accident Plan and all other similarly situated plans against Caremark Rx in the United States District Court for the Central District of California (hereinafter referred to as the "Bickley Action"). Bickley alleged in his six-count complaint that he is a participant in the Georgia Pacific Corporation Life Health and Accident Plan (hereinafter referred to as the "Plan"), for which Caremark Rx serves as the pharmacy benefits manager and acts as a "fiduciary" to the Plan under the Employee Retirement Income and Security Act (ERISA) (29 U.S.C. §1001 et seq.).
According to the factual allegations realleged in each count of the complaint, Caremark Rx contracts with retail pharmacies to provide drugs at a discounted rate for the benefit of the members of the Plan and also purchases drugs from manufacturers at a discounted price which it sells through its mail order pharmacies. Bickley alleged that Caremark Rx is involved in a scheme whereby it "secretly and subversively" through the use of pricing spreads "diverts and converts" a portion of the discounted retail and mail drug prices from the Plan for its own use and benefit. It is alleged that Caremark Rx carries out this scheme by entering into contracts with drug manufacturers, securing for its own benefit undisclosed discounts and rebates from the manufacturers, and favoring certain higher priced drugs in exchange for these "kickbacks." Bickley further alleged that Caremark Rx "conspire secretly" with the drug manufacturers to "subvert and circumvent" the "best pricing" rules set forth in the Omnibus Reconciliation Act (42 U.S.C. § 1396r-8) and, under this "hidden scheme", it distorts the average wholesale prices of its drugs and increases prescription costs to the Plan.
Predicated on the factual allegations set forth above, counts I through IV of Bickley's amended complaint consist of claims for breach of fiduciary duty under ERISA. Specifically, the complaint alleges that Caremark Rx breached its fiducia
Page 1 2 3 4 5 6 7 8 9 Illinois Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|