accurate information to Banker’s Life about the status of the contract with Holy Cross. The
Court takes particular notice of HealthStar’s Tepresentations to Banker’s Life that it had a valid
contract with Holy Cross from August 31, 2000 to October 1, 2000, At that point, the
relationship between Holy Cross and HealthStar had deteriorated to the point where the initiation
of this litigation was a near certainty. HealthStar’s failure to disclose at a minimum the nature of
its dispute with Holy Cross to Banker’s Life raises a fairly strong inference of negligence.

The Court cannot conclusively determine, however, whether HealthStar was negligent in
its dealings with Banker’s Life, for any such finding depends in large part upon the resolution of
the contractual issues between HealthStar and Holy Cross. There remain disputed issues of fact
about the status of the contract during the entire period from the date of its expiration, September
30, 1996, to the initiation of this litigation. Once the status of the contract between HealthStar
and Holy Cross is established, the extent of HealthStar’s negligence, if any, can be conclusively
determined, As such, Banker’s Life’s motion for summary judgment against HealthStar must be

denied.



Service Co., 715 N.E.2d 247, 249 (Il. App. Ct. 1999). Here, the payor agreement between
HealthStar and Banker’s Life contained the following indemnification provision:

[HealthStar] agrees to indemnify and hold harmless [Banker’s Life], its officers,

directors, employees and agents against any claim, loss, damage or expense for

which [Banker’s Life] and its officers, directors, employees or agency may

become liable which arises out of or results from a breach of duty or a negligent

act or omission to act of [HealthStar] or its employees or agents.

(Banker’s Life Mot. Sum. J., Ex. 5, at 6). This indemnification provision is rather broad. It
allows that HealthStar will indemnify Banker’s Life against “any claim, loss, damage or
expense” for which it “may become liable” which “arises out of or results from [Health Star’s]
breach of duty or negligent act or omission to act.”

HealthStar asserts that Banker’s Life’s request for summary judgment on the
indemnification provision is premature, as there has not been a finding of liability for Banker’s
Life nor has there been a finding that HealthStar breached a duty or was negligent. Banker’s Life
avers that the Court found HealthStar to be negligent in its opinion denying summary judgment
on November 8, 2002. The Court did find that both HealthStar and Holy Cross were negligent in
the maintenance of the contract between them, but that negligence does not automatically
determine the rights between HealthStar and Banker’s Life.

There is significant evidence that HealthStar did not consistently convey accurate
information to Banker’s Life about the status of the contract with Holy Cross. HealthStar’s
response to the summary judgment motion is devoid of any representation to the contrary.
HealthStar asserts only that a finding of indemnity would be premature and that the indemnity

agreement does not allow for the recovery of costs and attorney’s fees. They have not put forth

any evidence to contradict Banker’s Life’s position that HealthStar breached its duty to convey


CONCLUSION
For the reasons stated in this memorandum opinion, the Court grants Banker’s Life’s

motion to correct the record and denies its motion for summary judgment against HealthStar.

Enter:

David H. Coar
United States District Judge

Dated: November 26, 2002


Minute Order Form (06/97)
ry

~ United States District Court, Northern District of Illinois
Name of Assigned Judge + Sitting Judge if Other
or Magistrate Judge David H. Coar than Assigned Judge
CASE NUMBER 01 C 1505 DATE 11/26/2002
CASE Holy Cross Hospital vs. Banker’s Life & Casualty Company
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented)
Banker’s Life & Casualty Co.’s Motion to Correct the Record
DOCKET ENTRY:
a) Oo Filed motion of [ use listing in “Motion” box above.]
(2) Qo Brief in support of motion due
@) Qo Answer brief to motion due. . Reply to answer brief due.
(4) im] Ruling/Hearing on set for at
(5) ia Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on set for at .
() Oo Trial(set for/re-set for} on at
(8) Qo {Bench/Jury trial] [Hearing] held/continued to at
(9) QO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) C) Local Rule 41.1 C)FRCP41(aX2) ( FRCP41(a)(2).
do [Other docket entry] For the reasons stated in the attached memorandum opinion and order,

Defendant Banker’s Life’s Motion to Correct the Record [Doc. # 163] is granted and its Motion for
Summary Judgment against co-Defendant/cross-Defendant HealthStar, Inc. [Doc. # 93] is denied.

(11) @ [For further detail see order attached to the original minute order.]

x No notices required, advised in open court.

No notices required.

Notices mailed by judge’s staff.

Notified counsel by telephone,

Docketing to mail notices.

Mail AO 450 form, “q
. gia"
Copy to judge/magistrate judge. yando iad / ( 5 /
jarfc deputy’s 60:5 Kd 92 NO
initials

Dace sp SOT NT syn |



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
HOLY CROSS HOSPITAL, )
) No.01C 1505
Plaintiff, )
) HONORABLE DAVID H. COAR
v. )
)
BANKERS LIFE AND CASUALTY )
COMPANY and HEALTHSTAR, INC., )
)
Defendants, )

MEMORAND) OPINI AND

This case comes before the Court on Defendant/Cross-Plaintiff Banker’s Life & Casualty
Company’s Motion to Correct Record and For Ruling on Banker’s Life & Casualty Company’s
Motion for Summary Judgment against HealthStar, Inc. For the reasons stated in the opinion, the
motion to correct the record is granted and Banker’s Life’s motion for summary judgment against
HealthStar is denied.

Motion to Correct the Record

On May 16, 2002, Defendant Banker’s Life & Casualty Company (“Banker’s Life”) filed
a motion for summary judgment against Plaintiff Holy Cross Hospital (“Holy Cross”) and against
co-Defendant/Cross-Defendant HealthStar, Inc. (“HealthStar”). Due to discovery delays,
Banker’s Life’s motion for summary judgment against Holy Cross was stricken on July 17, 2002.
On August 20, 2002, this Court granted Banker’s Life permission to refile its motion for
summary judgment. It never refiled the motion.

In a memorandum opinion entered on November 8, 2002, the Court noted that Banker’s

Mo 7


Life’s motion for summary judgment against HealthStar was stricken on July 17 as well. See

Holy Cross Hosp. v. Bankers Life & Cas, Co., No. 01-C-1505, 2002 WL 31507164, at *4 (N.D.

Ill. Nov. 12, 2002). The docket in this case reflects that Banker’s Life’s entire motion for
summary judgment was stricken on July 17. See Min. Ord. July 17, 2002 (Coar, J.) (“Motion[]
for summary judgment of... Bankers Life is stricken.”). The transcript of proceedings from
July 17, 2002, however, reveals that the Court only struck the motion for summary judgment as
against Holy Cross. (Banker’s Life Mot. Correct Record, Ex. A) The Court would prefer to be
perfect, but it accepts the fact that it is not. The motion for summary judgment against
HealthStar was not stricken from the record. Had Banker’s Life policed the docket more closely,
we might have avoided the hardship associated with this mistake.
Banker’s Life Motion for Summary Judgment against HealthStar

Banker’s Life requests summary judgment on its counterclaim against HealthStar based
on the indemnification provision of the payor agreement between them. It asserts that should it
become liable, HealthStar is required to indemnify Banker’s Life. This motion is judged by the
familiar standard set forth in Rule 56 of the Federal Rules of Civil Procedure. When all “the
pleadings, depositions, answers to interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact [then] the moving
patty is entitled to a judgment as a matter of law.” If the moving party meets its burden of proof,
the non-moving party must set forth the evidence that demonstrates a genuine issue of material
fact. All the record evidence is evaluated in the light most favorable to the non-moving party.

Indemnification provisions are interpreted by reference to the instrument that created

them. In Illinois, “indemnity contracts are strictly construed.” McNiff v. Millard Maintenance