City of Park Ridge v. Clarendon American Insurance Co.
2017 IL App (1st) 170453
| Ill. App. Ct. | 2017Background
- Park Ridge paramedics/EMTs responded twice to a 15-year-old who was initially found drowsy; at the first visit they performed no assessment, treatment, vital signs, or documentation and left. Hours later the child was found unresponsive, later died of a drug overdose; a jury returned a large verdict against Park Ridge that was ultimately affirmed on appeal.
- Park Ridge had an insurance policy with Clarendon providing $2,000,000 "per occurrence" coverage and a $2,000,000 aggregate limit for "Personal Injury, Products-Completed Operations Hazard and Public Officials’ Errors and Omissions Combined."
- The policy separately defined "Incidental Medical Malpractice" to include "emergency professional medical services rendered or which should have been rendered by any duly qualified medical practitioner, nurse, or technician employed by or acting on behalf of the Insured." That coverage was tied to the per-occurrence limit.
- Clarendon applied prior payments it made in an unrelated Gorman settlement toward the policy’s aggregate, arguing Abruzzo’s claims fell under the Products-Completed Operations Hazard (aggregate) provision. Park Ridge and its excess carrier (HELP) argued Abruzzo falls under the incidental medical malpractice per-occurrence coverage.
- The trial court granted Clarendon’s summary judgment based on the products-completed operations interpretation; Park Ridge and HELP appealed. The appellate court reversed and remanded, directing summary judgment for Park Ridge and HELP.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Abruzzo’s claims are covered by the policy’s per-occurrence incidental medical malpractice or by the aggregate Products-Completed Operations Hazard | Abruzzo’s injuries arise from inaction by EMTs/paramedics and thus fall within the policy’s "Incidental Medical Malpractice" per-occurrence coverage | The paramedics’ "work" was completed when they left the house, so the claim falls within the Products-Completed Operations Hazard aggregate limit | Court held the claim is incidental medical malpractice covered per occurrence, not by the products-completed operations aggregate |
| Whether the products-completed operations provision reasonably applies to professional EMS services | Incidental medical malpractice language specifically covers emergency services by medical practitioners/technicians, so products-completed operations is inapplicable | Products-completed operations can apply to off-premises injuries from the insured’s work | Court held that products-completed operations ordinarily covers construction/maintenance-type work and is not reasonably read to cover EMS professional services |
| Contract interpretation: whether policy language is ambiguous and should be construed for the insured | Policy unambiguously covers EMT/paramedic inaction under incidental medical malpractice per occurrence; ambiguities resolve for insured | Claimed a reasonable reading places the loss under the aggregate provision | Court construed policy in favor of the insured and found the incidental medical malpractice provision controlling |
| Whether prior payments (Gorman) eroded Clarendon’s $2,000,000 per-occurrence limit via the aggregate | Park Ridge: prior payments do not erode the per-occurrence incidental medical malpractice limit | Clarendon: prior payments should be applied to the aggregate limit, reducing available coverage | Court rejected Clarendon’s aggregation argument and remanded to enter judgment for Park Ridge and HELP, preserving per-occurrence coverage |
Key Cases Cited
- Abruzzo v. City of Park Ridge, 231 Ill. 2d 324 (Ill. 2008) (supreme court decision describing EMS dispatch and legal context)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (Ill. 1992) (insurance policy construction principles)
- Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352 (Ill. 2006) (ambiguities construed against insurer)
- Visteon Corp. v. National Union Fire Ins. Co. of Pittsburgh, PA, 777 F.3d 415 (7th Cir. 2015) (products-completed operations generally applies to construction/service work)
- American Red Cross v. Travelers Indemnity Co. of Rhode Island, 816 F. Supp. 755 (D.D.C. 1993) (completed operations provision inapplicable to medical-professional distribution claims)