American Nat. Bank & Trust Co. of Chicago v. Anchor Organization for Health Maintenance

• Decision Date: 01 March 1991
• Docket Number: No. 1-90-0780,1-90-0780
• Parties: , 155 Ill.Dec. 128 AMERICAN NATIONAL BANK & TRUST COMPANY OF CHICAGO, as Guardian of the Estate of John Libman, a Minor; Samuel Libman; and Roberta Cohen-Libman, Plaintiffs-Appellants, v. ANCHOR ORGANIZATION FOR HEALTH MAINTENANCE, a corporation, Defendant-Appellee (A. William Schafer, M.D., Defendant).
• Court: United States Appellate Court of Illinois

Page 128

569 N.E.2d 128

210 Ill.App.3d 418, 155 Ill.Dec. 128

AMERICAN NATIONAL BANK & TRUST COMPANY OF CHICAGO, as Guardian of the Estate of John Libman, a Minor Samuel Libman; and Roberta Cohen-Libman, Plaintiffs-Appellants, v. ANCHOR ORGANIZATION FOR HEALTH MAINTENANCE, a corporation Defendant-Appellee (A. William Schafer, M.D., Defendant).

No. 1-90-0780.

Appellate Court of Illinois,

First District, Fifth Division.

March 1, 1991.

Rehearing Denied April 1, 1991.

John C. Erb, Lynn Plum Duffey, Law Offices of Paul B. Episcope, Ltd., Chicago, Edward J. Kionka, Carbondale, for plaintiffs-appellants.

Max Douglas Brown, Chicago, Jerome N. Groark, Joan D. Lindauer, Edward P. Dismukes, Rooks, Pitts and Poust, Chicago, for defendant-appellee.

Justice MURRAY delivered the opinion of the court:

The above-named plaintiffs appeal from the dismissal of defendant, Anchor Organization for Health Maintenance (Anchor) from their medical malpractice suit filed June 28, 1987. The matter still pends in the lower court against defendant, Dr. A. William Schafer, who is not a party to this appeal. The dismissal order, which is the subject of this appeal, was made final and appealable by the trial court's inclusion of the necessary language as set forth in Supreme Court Rule 304(a). Ill.Rev.Stat.1987, ch. 110A, par. 304(a).

The facts are as follows:

On June 28, 1987, plaintiffs, American National Bank and Trust Company of Chicago (American National), as guardian of the estate of John Libman, and Samuel Libman, John's father, filed a two-count complaint against Anchor and Dr. Schafer. In count I, the complaint alleged that at about 11:53 a.m. on January 23, 1986, Roberta Cohen-Libman was admitted to the Labor and Delivery Unit of Hinsdale Hospital and at about 8:51 p.m. that same day, she gave birth to a son, John. The attending physician, Dr. Schafer, licensed to practice obstetrics and gynecology by the State of Illinois and an agent and employee of Anchor, allegedly used forceps to aid the birth and delivery of John.

The complaint further alleged that John suffered permanent brain damage as a result of the negligent acts and omissions of both Anchor and Dr. Schafer, in that they failed to utilize the skill and knowledge of a reasonably qualified obstetrician/gynecologist by failing to recognize the signs and symptoms of fetal distress, by failing to order and perform a Caesarean section, and by allowing labor to continue for an excessive period of time. In count I American National requested recovery on behalf of John for the injuries he suffered. In count II Samuel Libman reiterated the allegations made in count I and then requested recovery for medical expenses and for the loss of society and companionship with his son.

On January 15, 1988, an amended three-count complaint was filed. Counts I and II were identical to those in the original complaint. Count III, containing the same allegations as counts I and II, was added by Mrs. Libman, who was now included as a party-plaintiff. She also requested recovery for medical expenses and for her loss of society and companionship with her son.

Subsequently, Anchor filed a motion to dismiss, pursuant to Section 2-619 of the Illinois Code of Civil Procedure (Ill.Rev.Stat.1987, ch. 110, par. 2-619), claiming that it was immune from actions of this type, pursuant to section 26 of the Voluntary Health Services Plans Act (VHSPA or the Act). Ill.Rev.Stat.1987, ch. 32, par. 620.

Plaintiffs responded to the motion by arguing (1) that a 1988 amendment to section 26 of the VHSPA, which rescinded the immunity previously granted to health organizations such as Anchor, should be applied retroactively to deny Anchor immunity in this case, (2) that even if the amendment to the immunity provision could not be applied retroactively, Anchor was not entitled to whatever immunity it might have enjoyed under the VHSPA because it failed to comply with section 7 of the Act (Ill.Rev.Stat.1989, ch. 32, par. 601), by imposing restrictions, both directly and indirectly, upon its physicians, and (3) that the immunity provision of the Act, at least as applied to Anchor, was unconstitutional, constituting special legislation and violating equal protection and due process concerns.

On February 14, 1990, the trial court rejected plaintiffs' arguments and granted Anchor's motion, dismissing it from the cause of action. After the trial court denied plaintiffs' motion to reconsider, plaintiffs filed the instant appeal.

The appeal involves the application and effect of the Voluntary Health Services Plans Act (Ill.Rev.Stat.1987, ch. 32, par. 595 et seq.), with respect to Anchor, in the context of a medical malpractice claim raised by plaintiffs. Plaintiffs contend, as they did in the lower court, that Anchor should not have been granted the statutory immunity provided under VHSPA because: (1) Anchor should be denied entitlement to the statutory immunity because it violated certain provisions of the Act; (2) the 1988 amendment to VHSPA, which eliminated the immunity provision for health corporations such as Anchor, should be applied retroactively; and (3) the immunity clause in VHSPA is unconstitutional, as applied to Anchor, because it violates the equal protection and due process clauses of both the Illinois and Federal constitutions and constitutes special legislation under the Illinois constitution.

Anchor argues that the issue of its alleged violations of the Act are not properly before this court because they were not pleaded below. Anchor also contends that all of the remaining issues raised by plaintiffs on appeal have been conclusively determined by Moshe v. Anchor Organization for Health Maintenance (1990), 199 Ill.App.3d 585, 145 Ill.Dec. 681, 557 N.E.2d 451, appeal denied 133 Ill.2d 559, 149 Ill.Dec. 324, 561 N.E.2d 694; and Brown v. Michael Reese Health Plan, Inc. (1986), 150 Ill.App.3d 959, 104 Ill.Dec. 170, 502 N.E.2d 433, appeal denied 114 Ill.2d 543, 108 Ill.Dec. 414, 508 N.E.2d 725.

While this court finds that some of the issues raised by plaintiffs in this appeal have been dispositively determined by the above-mentioned cases, we find it necessary to address other points plaintiffs have raised.

Section 26 of the VHSPA (Ill.Rev.Stat.1987, ch. 32, par. 620), prior to the 1988 amendment, stated:

"A health services plan corporation shall not be liable for injuries resulting from negligence, misfeasance, malfeasance, nonfeasance or malpractice on the part of any officer or employee of the corporation, or on the part of any person, organization, agency, or corporation, rendering health services to the health services plan corporation's subscribers and beneficiaries."

In August 1988, the Illinois legislature amended portions of the VHSPA (Pub.Act 85-1246, eff. August 30, 1988), including section 26. The amended version of section 26 (Ill.Rev.Stat., 1988 Supp., ch. 32, par. 620), now reads:

"A health services plan corporation incorporated prior to January 1, 1965, operated on a not for profit basis, and neither owned or controlled by a hospital shall not be liable for injuries resulting from negligence, misfeasance, malfeasance, nonfeasance or malpractice on the part of any officer or employee of the corporation, or on the part of any person, organization, agency, or corporation, rendering health services to the health services plan corporation's subscribers and beneficiaries." (Emphasis added.)

It is undisputed that this amendment eliminated the statutory immunity for Anchor and all other corporations, except one, already chartered under the Act. (Moshe v. Anchor Organization for Health Maintenance, 199 Ill.App.3d at 597-98, 145 Ill.Dec. 681, 557 N.E.2d 451; the only organization still immune under the Act is the Union Health Service.) Contrary to plaintiffs' assertion, however, the Moshe case, a factually similar medical malpractice action involving the same defendant as in this case (Anchor), which was decided by this division of the Illinois Appellate Court, First District, wholly disposed of the question of whether this amendment should be applied retroactively to causes of action that accrued prior to the date the amendment became law and we feel bound by the principle of stare decisis (see generally, Williams v. Crickman (1980), 81 Ill.2d 105, 39 Ill.Dec. 820, 405 N.E.2d 799) to follow our decision in that case.

In Moshe, a complaint was filed on September 29, 1983, against Anchor and doctors under contract with Anchor, by William Moshe, on behalf of his minor son, for injuries his son sustained as a result of alleged misdiagnosis and negligent treatment; and by Moshe and his wife, on their own behalf, for medical expenses and loss of society with their child. Plaintiffs attempted to hold Anchor liable, indirectly, for the alleged negligent acts and omissions of the doctors and, directly, based on certain policies, procedures, and regulations which allegedly inhibited the physicians' ability to provide quality health care to their patients. Anchor moved for dismissal from the suit based upon the immunity provision in section 26 of the VHSPA. Despite arguments against dismissal, including arguments that Anchor violated the "unique organizational structure" required by the statute, thereby relinquishing its right to insulation from liability, (Moshe, 199 Ill.App.3d at 593, 145 Ill.Dec. 681, 557 N.E.2d 451), the trial court dismissed Anchor from the action.

On appeal this court affirmed the dismissal. The Moshe decision held (1) that Brown left no doubt as to the constitutional legitimacy of the statutory immunity conferred upon corporations chartered under the VHSPA by section 26, prior to amendment; (2) that Anchor's "dual capacity", as both a VHSPA corporation and HMO, did not diminish its entitlement to the complete statutory immunity afforded it by section 26 of the Act; and (3) that the 1988 amendment to section 26 was a "substantive" change rather than a "procedural...