City of Park Ridge v. Clarendon American Insurance Company
90 N.E.3d 479
Ill. App. Ct.2017Background
- Park Ridge retained $250,000 self-insured retention; Clarendon provided excess liability insurance with a $2,000,000 per-occurrence limit and a $2,000,000 aggregate limit that combined Personal Injury, Products-Completed Operations Hazard, and Public Officials’ Errors and Omissions.
- Two separate claims affected Clarendon’s available limits: a Gorman settlement (excess payments by Clarendon) and the Abruzzo wrongful-death/survival actions arising from alleged failure of Park Ridge EMTs/paramedics to assess/treat a 15-year-old who later died.
- The Illinois Supreme Court held the EMS Systems Act applied (not Tort Immunity Act), remanding Abruzzo for trial; a jury later returned a $5,187,500 verdict against Park Ridge, which was affirmed on appeal.
- Park Ridge and HELP paid settlement amounts for Abruzzo and sued Clarendon for declaratory relief and breach of contract, arguing Clarendon owed the $2,000,000 per-occurrence limit for Abruzzo rather than reducing its aggregate by amounts paid in Gorman.
- Clarendon moved for summary judgment, arguing Abruzzo fell under the policy’s Products-Completed Operations Hazard (aggregate) because the paramedics’ “work” was completed when they left the residence; the trial court granted Clarendon summary judgment.
- The appellate court reversed, holding the policy’s Incidental Medical Malpractice provision (covering emergency medical services by qualified practitioners/technicians) triggered per-occurrence coverage and that the Products-Completed Operations Hazard relates to construction/contract work, not EMT/paramedic professional inaction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Abruzzo falls under per-occurrence Incidental Medical Malpractice coverage or the aggregate Products-Completed Operations Hazard | Incidental Medical Malpractice applies because EMTs/paramedics failed to assess/treat, and that conduct is expressly covered per occurrence | Products-Completed Operations Hazard applies because the City’s “work” was completed when paramedics left, making the claim part of the aggregate limit | Held for plaintiffs: Incidental Medical Malpractice governs; per-occurrence coverage applies |
| Whether Products-Completed Operations Hazard language can be read to include professional EMS services | Park Ridge: provision concerns construction/maintenance, not emergency medical services; ambiguous terms construed for insured | Clarendon: the “work” was completed off-premises so the aggregate provision should apply | Held for plaintiffs: PCOH interpreted as construction/service work; does not encompass EMT/paramedic inaction |
| Whether policy terms are ambiguous and should be construed against insurer | Park Ridge: any ambiguity favors insured and Incidental Medical Malpractice is clear for EMS personnel | Clarendon: policy language supports aggregate application under PCOH interpretation | Held for plaintiffs: terms read in context favor insured; no reasonable interpretation placing EMS claims into aggregate |
| Whether summary judgment for Clarendon was proper | Park Ridge: genuine issue of law existed and the trial court misapplied policy terms; appellate review de novo supports reversal | Clarendon: trial court correctly interpreted policy and granted summary judgment | Held for plaintiffs: appellate court reverses and remands with instruction to enter summary judgment for Park Ridge and HELP |
Key Cases Cited
- Weather-Tite, Inc. v. University of St. Francis, 233 Ill. 2d 385 (summary judgment reviewed de novo)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (policy construction focuses on parties’ intent; ambiguous terms construed for insured)
- Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352 (ambiguity in insurance contracts construed against drafter)
- Abruzzo v. City of Park Ridge, 231 Ill. 2d 324 (Illinois Supreme Court: EMS Systems Act applied; underpinning liability theory against Park Ridge)