Marque Medicos Fullerton, LLC v. Hartford Underwriters Insurance Co.
83 N.E.3d 1027
Ill. App. Ct.2017Background
- Three medical-provider plaintiffs (plus related entities) filed four consolidated putative class actions against multiple workers’ compensation insurers (Zurich, Travelers, Hartford, AIG), alleging insurers failed to pay statutorily mandated interest on late payments under 820 ILCS 305/8.2(d)(3).
- Plaintiffs alleged four counts: (I) insurers breached policies as intended third-party beneficiaries; (II) an implied private right of action under the Workers’ Compensation Act; (III) breach of implied-in-fact contract; and (IV) recovery under section 155 of the Illinois Insurance Code for vexatious/unreasonable delay.
- Defendants moved to dismiss under 735 ILCS 5/2-615 (and some 2-619 issues), arguing lack of subject-matter jurisdiction (claims belong to the IWCC) and failure to state claims; Hartford also sought to strike class allegations.
- The circuit court dismissed all suits with prejudice, concluding plaintiffs were not intended third-party beneficiaries, had no implied private right of action, no enforceable implied-in-fact contract, and no standing under section 155.
- On appeal the First District (6th Div.) independently considered jurisdiction, held circuit court had subject-matter jurisdiction over plaintiffs’ common-law and statutory claims, and affirmed dismissal on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction — whether Commission has exclusive original jurisdiction over these provider claims | Providers: claims about interest and enforcement arise under the Act but may be litigated in circuit court | Defendants: the Act vests exclusive original jurisdiction in the Illinois Workers’ Compensation Commission (IWCC) for matters arising under the Act | Court: circuit court has jurisdiction; plaintiffs’ common-law and section 155 claims are within courts’ inherent power and IWCC lacks authority to decide such claims |
| Third-party beneficiary status to enforce insurer policies | Providers: policy language and Act amendments show providers are entitled to benefits and were intended direct beneficiaries | Defendants: providers are at most incidental beneficiaries; policies and Act protect employees’ benefits, not create direct third-party rights | Court: plaintiffs are incidental beneficiaries, not intended third-party beneficiaries; Count I properly dismissed |
| Implied private right of action under section 8.2(d)(3) of the Act | Providers: statute directs payment (and interest) to providers — thus they are members of the protected class and should have a private remedy | Defendants: Act’s primary purpose is to benefit employees; incidental provider benefits don’t create a private right; IWCC procedures address disputes | Court: no implied private right — plaintiffs fail the first Fisher factor (not the primary class protected); Count II dismissed |
| Implied-in-fact contract and section 155 remedy | Providers: insurers’ direct payments and communications created an implied contract and, as intended beneficiaries, section 155 remedies apply | Defendants: any insurer obligations arise from statute or existing insurance contracts (preexisting duty), so no new consideration for implied contract; providers aren’t insureds/assignees under §155 | Court: implied-in-fact contract fails for lack of consideration (preexisting legal duty); §155 relief unavailable to third parties; Count III and IV dismissed |
Key Cases Cited
- Kelsay v. Motorola, Inc., 74 Ill. 2d 172 (discusses purpose of Workers’ Compensation Act as exclusive statutory remedy)
- McCormick v. Caterpillar Tractor Co., 85 Ill. 2d 352 (Act provides employee’s exclusive remedy; Commission has original jurisdiction over benefit disputes)
- Martis v. Grinnell Mut. Reinsurance Co., 388 Ill. App. 3d 1017 (medical providers generally not intended third-party beneficiaries of workers’ compensation policies)
- Yassin v. Certified Grocers of Illinois, Inc., 133 Ill. 2d 458 (section 155 typically extends only to insureds and assignees, not third parties)
- J&J Ventures Gaming, LLC v. Wild, Inc., 2016 IL 119870 (standard for assessing subject-matter jurisdiction and statutory interpretation in light of administrative schemes)
- Bayer v. Panduit Corp., 2016 IL 119553 (payment of necessary medical services constitutes compensation under the Act)