Myers v. Health Specialists, S.C.

• Decision Date: 21 January 1992
• Docket Number: No. 1-91-0272,1-91-0272
• Citation: 587 N.E.2d 494,225 Ill.App.3d 68
• Parties: , 167 Ill.Dec. 225 Stephen A. MYERS, D.O., Plaintiff-Appellant, v. HEALTH SPECIALISTS, S.C., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 494

587 N.E.2d 494

225 Ill.App.3d 68, 167 Ill.Dec. 225

Stephen A. MYERS, D.O., Plaintiff-Appellant, v. HEALTH SPECIALISTS, S.C., Defendant-Appellee.

No. 1-91-0272.

Appellate Court of Illinois First District, Second Division.

Jan. 21, 1992.

Rooks, Pitts and Pouse, Chicago (Terrence J. Madden, of counsel), for plaintiff-appellant.

Cotton, Watt, Jones & King, Chicago (Russell Woody and Wesley Kennedy, of counsel), for defendant-appellee.

Justice DiVITO delivered the opinion of the court:

In this case we must determine whether the circuit court properly granted summary judgment for defendant, and denied summary judgment for plaintiff, based on its conclusion that a release executed by plaintiff in connection with prior litigation between the parties barred plaintiff's claim in this litigation. For reasons that follow, we reverse and remand for a determination of plaintiff's damages.

Plaintiff Stephen A. Myers, an obstetrician/gynecologist, worked for defendant Health Specialists from July 1977 through June 1978 under a written employment agreement. The agreement provided that

"[t]he Employer shall maintain malpractice insurance covering Employee with limits of not less than One Hundred Thousand Dollars ($100,000) per person and Three Hundred Thousand Dollars ($300,000) per incident. In addition, the Employer shall maintain extended coverage liability insurance covering the Employee with a limit of not less than One Million Dollars ($1,000,000)."

Pursuant to this agreement, defendant obtained "claims made" insurance, which provided coverage only for claims that were brought while plaintiff was insured under the policy. When plaintiff left defendant's employ, his coverage under the "claims made" policy necessarily terminated; neither party obtained "tail" coverage, which would have continued plaintiff's coverage after his employment ended. Defendant subsequently changed from "claims made" malpractice insurance to "occurrence" coverage for its employees; when defendant coupled this with "prior acts" coverage, employees were insured against any claim filed while the policy was in force, including claims arising from acts occurring prior to the purchase of the "occurrence" policy. Because plaintiff was not listed among the insureds, however, he had no insurance against malpractice claims that might arise from acts he performed during the year of his employment.

In 1979, plaintiff filed suit against defendant ("the 1979 litigation"), asking for an accounting to enforce the compensation provisions of the employment agreement. That litigation resulted in a settlement agreement, based on a release plaintiff executed on January 2, 1980. The release included the following provision:

"[Plaintiff] * * * has remised, released and forever discharged and, by these Presents, does * * * remise, release, and forever discharge [defendant] of and from all manner of actions, causes, and causes of actions, suits, debts, sums of money, accounts, * * * damages, judgments, executions, claims and demands, whatsoever, in law or in equity, and particularly, without limiting the generality of the foregoing, from all claims which were or might have been asserted in that certain action entitled Stephen A. Myers, v. Health Specialists, S.C., Case No. 79 CH 621, or in any manner arising from or related to the subject matter of such action or, arising from any employment agreement between the [parties], which [plaintiff] now has against [defendant] or ever had, * * * by reason of any matter, cause, or thing, whatsoever, on or at any time prior to the date of these Presents."

Seven years later, plaintiff was named as a defendant in a 1985 medical malpractice action ("the Roberts litigation") in connection with a "good samaritan" emergency delivery that he performed during the time he was employed by defendant. When plaintiff tendered his defense to defendant's insurer, he learned to his surprise that the insurer would not defend him because he was not insured by defendant's policy. Because his own insurance company also refused to pay for his defense, plaintiff was forced to pay his own legal expenses. In that litigation, plaintiff moved for summary judgment based on the good samaritan defense. The circuit court granted his motion, and the appellate court affirmed. Roberts v. Myers (1991), 210 Ill.App.3d 408, 155 Ill.Dec. 135, 569 N.E.2d 135.

Plaintiff then filed this declaratory judgment action in April 1987. He sought indemnity for any future costs, legal fees, and adverse judgments arising from acts performed during his employment with defendant as well as reimbursement for costs and legal fees incurred by his successful defense in the Roberts litigation. Count I of his first amended complaint was predicated on Illinois corporation and agency law, while count II sought relief based on the employment agreement. Specifically, plaintiff alleged that defendant breached the agreement by refusing to continue to maintain insurance for acts he performed during his employment, in the form of either occurrence insurance or "tail" coverage, and by not providing the one million dollar extended coverage the agreement required. Defendant answered, raising four affirmative defenses: (1) the effect of the release plaintiff signed in the 1979 litigation; (2) failure to state a cause of action; (3) the act at issue was outside the scope of plaintiff's employment and thus not within defendant's potential respondeat superior liability; and (4) estoppel, based on plaintiff's "good samaritan" defense in the Roberts litigation.

Plaintiff moved for partial summary judgment on count II, arguing that defendant had breached the employment agreement as a matter of law by not providing insurance to cover his legal expenses for the Roberts litigation. He also moved to strike the first, second, and fourth affirmative defenses. Defendant moved for summary judgment as well, contending that the release barred plaintiff's suit because this claim arose from the employment agreement, and the release specifically encompassed all claims arising under the agreement.

In granting defendant's motion for summary judgment, the circuit court held that

"the release is clear, precise and definite constituting an unambiguous document[.]

* * * * * *

* * * [T]he release in question is not a general release but is instead a special or particular release applying specifically to claims having their origin, stemming from or being the product of the employment agreement or conversely any breach thereof.

The release, just as the contract of employment, is not an ambiguous writing, it is not capable of amplification by parol evidence, but instead expresses the intention of the parties being clearly manifested within the four corners of the document."

The court further noted that the parties were "educated and sophisticated" people who acted on advice of counsel in 1979, leading it to conclude that they intended "the natural ordinary meaning and intention of the language used," which in the court's view was "to terminate any dispute that might exist or be stimulated by their relationship as evidenced by the agreement." Any other interpretation of the release, the court cautioned, would mean that "the word 'Release' can no longer be of significance in the legal lexicon." It then stated its finding that "the plaintiff, by virtue of the release of January 1980, released any claim he might have had against the defendant as the consequence of the failure to provide occurrence coverage." The court then granted defendant's motion and dismissed the entire action with prejudice. It also denied plaintiff's summary judgment motion and declared that the motion to strike defendant's other defenses was moot.

In this appeal, plaintiff asks this court to reverse the entry of summary judgment for defendant, to reverse the denial of his motion for partial summary judgment, to enter summary judgment in his favor, and to remand for a determination of damages and consideration of count I. Defendant urges us to affirm, and if we cannot, to remand for consideration of plaintiff's summary judgment motion and its affirmative defenses.

Summary judgment is "a drastic means of disposing of litigation and therefore should be allowed only when the right of the moving party is clear and free from doubt" (Purtill v. Hess (1986), 111 Ill.2d 229, 240, 95 Ill.Dec. 305, 309, 489 N.E.2d 867, 871), and all evidence in the record must be construed "strictly against the movant and liberally in favor of the opponent" (Purtill, 111 Ill.2d at 240, 95 Ill.Dec. at 309, 489 N.E.2d at 871; Carona v. Illinois Central Gulf R.R. Co. (1990), 203 Ill.App.3d 947, 949, 148 Ill.Dec. 933, 935, 561 N.E.2d 239, 241, appeal denied 136 Ill.2d 542, 153 Ill.Dec. 371, 567 N.E.2d 329). In considering a summary judgment motion, the circuit court's task is not to try any issue of fact, but rather

"to determine whether any issues of material fact exist. [Citation.] Summary judgment is proper where the pleadings, depositions and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." (Winnetka Bank v. Mandas (1990), 202 Ill.App.3d 373, 386-87, 147 Ill.Dec. 621, 629, 559 N.E.2d 961, 969, citing Ill.Rev.Stat.1987, ch. 110, par. 2-1005(c).)

We review summary judgment orders de novo. (Demos v. National Bank of Greece (1991), 209 Ill.App.3d 655, 659-60, 153 Ill.Dec. 856, 859, 567 N.E.2d 1083, 1086.) In particular, when considering a circuit court decision in a contract action, "where the evidence consists mainly of documents[,] * * * the [appellate] court is not bound by the trial court's finding and may make an independent determination on the facts." Polo National Bank v. Lester (1989), 183 Ill.App.3d 411, 414, 132 Ill.Dec. 220, 222, 539 N.E.2d 783, 785.

I.

Plaintiff first contends that the circuit court...