St. Mary's Hosp. v. HPO CORP.

• Citation: 242 Ill.Dec. 682,309 Ill. App.3d 464,721 N.E.2d 1213
• Decision Date: 16 December 1999
• Docket Number: No. 4-99-0194.,4-99-0194.
• Parties: ST. MARY'S HOSPITAL, DECATUR, OF THE HOSPITAL SISTERS OF THE THIRD ORDER OF ST. FRANCIS, an Illinois not-for-profit corporation, Plaintiff-Appellant v. HEALTH PERSONNEL OPTIONS CORPORATION, a Minnesota Corporation qualified to transact business in Illinois, Defendant-Appellee (Seth Randle, R.N., Defendant.)
• Court: United States Appellate Court of Illinois

721 N.E.2d 1213

309 Ill. App.3d 464

242 Ill.Dec. 682

ST. MARY'S HOSPITAL, DECATUR, OF THE HOSPITAL SISTERS OF THE THIRD ORDER OF ST. FRANCIS, an Illinois not-for-profit corporation, Plaintiff-Appellant v. HEALTH PERSONNEL OPTIONS CORPORATION, a Minnesota Corporation qualified to transact business in Illinois, Defendant-Appellee (Seth Randle, R.N., Defendant.)

No. 4-99-0194.

Appellate Court of Illinois, Fourth District.

Argued October 19, 1999.

Decided December 16, 1999.

Bradley E. Huff (argued), Graham & Graham, Ltd., Springfield, for St. Mary's Hospital, Decatur.

Julie A. Ward, Laura A. Sallmann, Matthew B. Smith (argued), Quinn, Johnston, Henderson & Pretorius, Chtd., Peoria, for Health Personnel Options Corporation.

Justice MYERSCOUGH delivered the opinion of the court:

A patient filed suit against St. Mary's Hospital (St. Mary's) for medical malpractice because a sponge was left in her abdomen after surgery. Summary judgment was entered against the hospital; the parties then reached a settlement. St. Mary's subsequently filed suit against Health Personnel Options Corporation (HPO), alleging breach of contract and implied indemnity because one of HPO's temporary nurses participated in the surgery from which the underlying suit arose. The trial court once again entered a summary judgment against St. Mary's, asserting that (1) St. Mary's failed to demonstrate that HPO breached its contract by providing St. Mary's with an unqualified nurse, and (2) St. Mary's could not maintain an implied indemnity action against HPO because the release St. Mary's entered into with the patient failed to extinguish HPO's liability. We affirm.

I. BACKGROUND

In August 1991, St. Mary's entered into a one-year contract with HPO to fill supplemental staffing needs at St. Mary's. Pursuant to the terms of the contract, HPO agreed to "put forth its most diligent efforts to provide qualified personnel." The specific terms of the contract required the following of HPO:

"5. Provide personnel to fill specific positions;

6. Provide St. Mary's with a completed application, resume if available, skills checklist and references for each employee prior to his first day of employment;

7. Verify that each employee has a minimum of one year [of] recent experience;

8. Verify valid state licensure;

9. [Rea]ssign or dismiss any employee upon documentation from St. Mary's of unsatisfactory performance or conduct; and,

10. Employ and compensate all personnel that have been accepted for a position by St. Mary's, and maintain responsibility for all necessary federal and state taxes, workers[`] compensation insurance, professional liability insurance, and unemployment insurance for each employee."

In September 1991, HPO referred Seth Randle to St. Mary's to fill the position of surgical nurse. Consistent with the terms of the contract, HPO provided St. Mary's with (1) Randle's completed application for employment, a skills checklist, and references; (2) verification that Randle had one year of experience; and (3) verification that Randle's registered nurse license was valid. HPO also procured professional liability insurance for Randle. St. Mary's accepted Randle's assignment and instructed Randle on hospital policies and procedures, including sponge-, needle-, and instrument-counting procedures. Randle worked at St. Mary's from September 1991 until February 1992, for a total of 21 weeks.

In January 1992, a sponge was accidentally left in a patient during surgery while Randle was serving as a "circulating nurse." Although the sponge was eventually discovered and removed in June 1992, by that time Randle no longer worked at St. Mary's or for HPO. In addition, HPO's one-year contract with St. Mary's was due to expire in three months.

In January 1994, the patient filed a medical malpractice suit against St. Mary's, the surgeon who performed the procedure, and the radiologist who allegedly failed to discover the sponge. The complaint against St. Mary's specifically alleged that St. Mary's created an unreasonable and foreseeable risk of harm to the patient when it:

"A) Failed to adequately supervise [p]laintiff's treatment;

B) Failed to properly count surgical sponges before their use by physicians and/or physician's assistants;

C) Caused to be placed a laparotomy sponge in the [p]laintiff which was not removed properly;

D) Failed to remove the laparotomy sponge from the [p]laintiff at the conclusion of the surgical procedure;

E) Failed to properly count sponges after their use by physicians and/or physician's assistants;

F) Failed to properly supervise the surgical sponge count;

G) Failed to diagnose that the [p]laintiff had a foreign body left after the surgical procedure by misreading the [p]laintiff's [X ]ray; and

H) Failed to perform or order the performance of additional tests to discover retained foreign bodies placed in [p]laintiff during the surgical procedure."

The patient did not sue nurse Randle or HPO, however, and St. Mary's did not file a third-party complaint. Therefore, Randle and HPO were not parties in the underlying suit.

In August 1995, the trial court granted the patient's motion for summary judgment against St. Mary's, but denied the patient's motions for summary judgment against the surgeon and radiologist. By November 1995, St. Mary's completed its settlement negotiations with the patient, and the trial court entered a finding of good faith as to the settlement. The settlement agreement and release expressly stated that although St. Mary's admitted no responsibility or liability for the patient's injuries, in consideration for $346,915, the patient would "release and discharge ST. MARY'S HOSPITAL, DECATUR, OF THE HOSPITAL SISTERS OF THE THIRD ORDER OF ST. FRANCIS, Decatur, Illinois, an Illinois not-for-profit corporation, from any and all claims, demands, actions[,] and rights of action of whatsoever kind, nature[,] or description growing out of occurrences while a patient in the said hospital." The release also asserted that St. Mary's retained its right to pursue various remedies against Randle and HPO. However, the release did not explicitly release Randle or HPO from liability.

In January 1996, St. Mary's filed a suit against Randle for implied indemnity but then voluntarily dismissed the suit because St. Mary's had previously been unable to secure Randle's presence for a deposition and was unable to serve Randle with the complaint. St. Mary's also filed suit against HPO for breach of contract and implied indemnity. In response, HPO filed a motion for summary judgment.

In August 1998, the trial court granted HPO's motion for summary judgment against St. Mary's. The trial court specifically found that St. Mary's had "to come forward with some evidence to show that the [d]efendant breached its contract by providing an unqualified nurse," and no such opinions were presented "on the broad issue of whether or not Mr. Randle was unqualified as a person to be provided to St. Mary's under the contract." The court further reasoned that "the fact that Mr. Randle was negligent on one occasion doesn't make him an unqualified employee."

In addition, the court held that "because of the nature of the release itself, there can be no implied indemnity [because] [HPO] was not released from liability to the injured patient and beyond that, * * * we don't have implied indemnity when we [are] talking about [two] parties who only have vicarious liability in a relationship."

In September 1998, St. Mary's filed a motion to supplement the record and a motion to reconsider. In November 1998, a hearing was held on the motions. In February 1999, the trial court denied both motions. This appeal followed.

II. ANALYSIS

As in all cases involving summary judgment, we conduct a de novo review of evidence in the record. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 102, 180 Ill.Dec. 691, 607 N.E.2d 1204, 1209 (1992). When evaluating the propriety of granting summary judgment, the trial court should construe pleadings, depositions, admissions, exhibits, and affidavits strictly against the movant and liberally in favor of the respondent. Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill.2d 107, 113, 208 Ill.Dec. 662, 649 N.E.2d 1323, 1326 (1995); Golla v. General Motors Corp., 261 Ill.App.3d 143, 146, 198 Ill.Dec. 731, 633 N.E.2d 193, 196 (1994). Summary judgment is appropriate when no genuine issue of material fact exists and the moving party's right to judgment is clear and free from doubt. In re Estate of Hoover, 155 Ill.2d 402, 410, 185 Ill.Dec. 866, 615 N.E.2d 736, 739 (1993). Although summary judgment is encouraged to aid the expeditious disposition of a lawsuit, it is a drastic means of disposing of litigation. Gilbert v. Sycamore Municipal Hospital, 156 Ill.2d 511, 518, 190 Ill.Dec. 758, 622 N.E.2d 788, 792 (1993). Therefore, where reasonable persons could draw divergent inferences from the undisputed material facts or where a dispute exists as to a material fact, summary judgment should be denied and the issue decided by the trier of fact. Espinoza, 165 Ill.2d at 114, 208 Ill.Dec. 662, 649 N.E.2d at 1326. In short, our function in reviewing a grant of summary judgment is to determine whether the trial court correctly found that no genuine issues of material fact existed and, if so, whether the trial court correctly entered judgment as a matter of law. Rockford Memorial Hospital v. Department of Human Rights, 272 Ill.App.3d 751, 754, 209 Ill.Dec. 471, 651 N.E.2d 649, 653 (1995).

A. Breach of Contract

St. Mary's asserts that the trial court erroneously found as a matter of law that Randle's alleged negligence and failure to cooperate in the underlying suit did not breach HPO's contractual obligation to provide "qualified" personnel or HPO's implied duty of good faith and fair dealing. We disagree.

HPO entered into a contractual agreement with St. Mary's to "put forth its most diligent efforts to provide...