Source: https://law.justia.com/cases/federal/district-courts/FSupp/642/1119/2398605/
Timestamp: 2020-04-05 23:40:50
Document Index: 55558951

Matched Legal Cases: ['§ 1335', '§ 38', '§ 18', '§ 18', '§ 18', '§ 18', '§ 188', '§ 6', '§ 6', '§ 16', '§ 16', '§ 38', '§ 18', '§ 18', '§ 18', '§ 16']

Travelers Indem. Co. of Illinois v. Moore, 642 F. Supp. 1119 (C.D. Ill. 1986) :: Justia
Justia › US Law › Case Law › Federal Courts › District Courts › Illinois › Central District of Illinois › 1986 › Travelers Indem. Co. of Illinois v. Moore
Travelers Indem. Co. of Illinois v. Moore, 642 F. Supp. 1119 (C.D. Ill. 1986)
U.S. District Court for the Central District of Illinois - 642 F. Supp. 1119 (C.D. Ill. 1986)
642 F. Supp. 1119 (1986)
On April 1, 1982, an explosion occurred at a welding shop in Cass County, Illinois, resulting in serious injury to three persons named as Defendants in this lawsuit. Sometime after the explosion, the insurance carrier for the shop, the Travelers Indemnity Company of Illinois (Travelers), filed this statutory interpleader action pursuant to 28 U.S.C. § 1335 against Roy *1120 Moore (administrator of the estate of Gregory Moore, who was killed in the explosion), the Washington Hospital Center of Washington, D.C. (which treated Gregory Moore), and a variety of other parties.
The action seeks a declaratory judgment as to how the proceeds of the insurance policy covering the shop, currently deposited in escrow by Travelers, should be distributed. Presently before the Court are cross motions for summary judgment on Counts I and II of Washington Hospital's cross-claim against Moore, which seeks a declaration that as a result of services it provided to Gregory Moore, the hospital has a valid and enforceable lien against (1) the estate of Gregory Moore, and (2) the proceeds of any wrongful death claim Moore may have against any negligent party. Also before the Court are motions for summary judgment filed by other parties asserting claims to the proceeds of the insurance policy.[1] These parties move for summary judgment on their cross-claims against Washington Hospital for declaratory relief to the effect that the hospital has no lien or claim to those proceeds.
Summary judgment is proper only when "there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." Fed.R. Civ.P. 56(c). In determining whether an issue of material fact exists, the Court must construe the facts alleged in the light most favorable to the party opposing the motion for summary judgment. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970); Stumph v. Thomas & Skinner, Inc., 770 F.2d 93, 97 (7th Cir. 1985). Cross motions for summary judgment require no less careful scrutiny of the factual allegations. LacCourte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.1983). In determining whether such undisputed facts entitle one of the parties to judgment in their favor, the Court's inquiry "unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the [moving party] is entitled to a verdict`whether there is [evidence] upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed.'" Anderson v. Liberty Lobby, Inc., ___ U.S. ___, ___, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986) (quoting Improvement Co. v. Munson, 14 Wall. 442, 448, 81 U.S. 442, 20 L. Ed. 867 (1872) (emphasis in original)).
On April 1, 1982, Steve Edwards and Gregory Moore went to the premises owned by Critic Mills, Inc. (Critic Mills) in Cass County, Illinois, to do repairs to the facilities. While Edwards was using an electric welder, the explosion and fire occurred. *1121 Gregory Moore and Allen Tomlinson, an employee of Critic Mills, were present at the place where Steve Edwards was doing the welding. All three parties suffered burns, with Allen Tomlinson and Gregory Moore receiving the worst burns. Allen Tomlinson was treated for his burns at Memorial Hospital in Springfield, Illinois. Gregory Moore was also initially treated there but was later transferred to the burn unit of the Washington Hospital Center in the District of Columbia. Gregory Moore remained in that hospital until he died on May 27, 1982, as a result of the burns received in the explosion.
On July 17, 1982, Washington Hospital filed a hospital lien for medical services rendered to the decedent pursuant to the District of Columbia Code, §§ 38-301 et seq. (1981)[2], in the amount of $237,081.60 and notice of said lien was served upon Travelers, Aetna[3], Critic Mills, Edwards, *1122 the State of Illinois, Attorney William Allison, and Roy Moore, prior to the payment of any money to the injured person, his attorney or his legal representative.
The Moores' first contention is that Count I of Washington Hospital's claim that the hospital has a valid lien against the estate of Gregory Mooreis barred by Illinois law which requires timely notification of a claim against an estate. Section 18-12, chap. 110½, of the Illinois Revised Statutes states that "[a]ll claims against the estate of a decedent ... not filed with the representative or the court within six months after the entry of the original order directing issuance of letters of office are barred as to all of the decedent's estate." Ill.Rev.Stat., ch. 110½, § 18-12 (1983 and Supp., 1984-1985) (emphasis added). Furthermore, every claim "must be filed in writing and state sufficient information to notify the representative of the nature of the claim or other relief sought." Ill.Rev. Stat., ch. 110½, § 18-2 (1983 and Supp., 1984-85). The claim, however, need not be filed with the court, but "may be filed with a representative or the court or both." Ill. Rev.Stat., ch. 110½, § 18-1 (1983 and Supp., 1984-85) (emphasis added).
2. Roy L. Moore acknowledged receipt of the hospital's itemized statements by letter to the hospital dated September 18, 1982, in which Roy Moore directed the *1123 hospital to send all bills for Gregory Moore to the Illinois Department of Public Aid.
The hospital's claim involved herein satisfies these requirements. It was set forth to the administrator in writing, and gave the estate notice of the nature of the claim. Thus, the hospital has met the requirements of § 18-2, thereby entitling its lien to consideration as a claim against the estate.[4]
Ergo, in light of the foregoing discussion, the Court finds that Washington Hospital is entitled to judgment in their favor on the issue of liability in Count I of their cross-claim against the estate of Gregory Moore.[5]
*1124 II
As jurisdiction in this case is based upon diversity of citizenship, this Court must apply the law of the forum state, including its conflict of laws rules, to determine the rights of the parties. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938); Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941). Federal statutory interpleader actions, premised upon the diversity of citizenship of the claimants, are no different in this regard from actions brought under the Court's general grant of diversity jurisdiction. Griffin v. McCoach, 313 U.S. 498, 61 S. Ct. 1023, 85 L. Ed. 1481 (1941). This Court, therefore, must apply Illinois' conflict of laws rules to the facts of this case.
Illinois courts rely on the "most significant contacts" test to determine the applicable law. Champagnie v. W.E. O'Neil Construction Co., 77 Ill.App.3d 136, 32 Ill.Dec. 609, 395 N.E.2d 990 (1979); Ingersoll v. Klein, 46 Ill. 2d 42, 262 N.E.2d 593 (1970). This so-called "test" is really a list of relevant factors meant to illuminate which state has the most significant interest in the application of its own substantive law to the merits of the issue involved. In this regard, the Seventh Circuit has approved the concept of "depecage": the process of applying rules of different states to the various issues involved in the lawsuit. In re Air Crash Disaster Near Chicago, Illinois, on May 25, 1979, 644 F.2d 594, 611 *1125 (7th Cir.1981). This means that the choice of the applicable law should depend on the issue involved. As explained by the Court in Air Crash:
In analyzing these factors, Illinois requires more than a mere counting of contacts to determine which state has the "most significant relationship" to the transaction. Rather, what is required is a "consideration of the interests and public policies of potentially concerned states and a regard as to the manner and extent of such policies as they relate to the transaction in issue." Mitchell v. United Asbestos Corp., supra, 100 Ill.App.3d 485 at 493-94, 55 Ill.Dec. 375 at 380-81, 426 N.E.2d 350 at 355-56 (citing Johnson v. Spider Staging Corp., 87 Wash. 2d 577, 582, 555 P.2d 997, 1001 (1976)). This approach is based on the principle that "[c]ontacts obtain significance only to the extent they relate to the policies and purposes sought to be vindicated by the conflicting laws." Id.
Applying § 188 of the Restatement, Factors (a) through (d) weigh in favor of the application of District of Columbia law to the question of the enforceability of the lien, since the lien arose from an implied contract that was performed in the District. Factor (e), the domicile and place of business of the parties, points to both Illinois and the District of Columbia. The issue at *1126 this juncture is the importance of these contacts in light of the principles espoused by § 6 of the Restatement.
In analyzing the principles enunciated by this section, the parties have focused on the question of the relevant policies of the interested states, which is essentially Factors (b), (c), and (e) of § 6. The Moores contend that D.C. law should not be applied because the District of Columbia would enforce the lien against the proceeds of a wrongful death claim, which is something an Illinois court would not do.[6] Therefore, the Moores argue, the strong interest Illinois has in insuring that liens are not satisfied through the proceeds of an Illinois wrongful death claim mandates the application of Illinois law to protect this interest.
The Moores' argument is without merit because it mistakenly assumes that the District of Columbia wouldin contrast to Illinoissatisfy a lien with the proceeds of a wrongful death claim.
Thus, it appears that the District of Columbia, as distinguished from the State of Illinois, allows recovery for the reasonable expenses of a decedent's last illness in a *1127 suit for the wrongful death of that person. However, the applicable District of Columbia statute which governs the distribution of damages in wrongful death actions must be read in conjunction with § 16-2701.
The import of § 16-2703 is that it allows a hospital providing last illness medical care to recover its charges only to the extent specifically provided for in the judgment or verdict, no more and no less. Thus, should the judgment or verdict provide no award for medical expenses, as would always be the case in Illinois wrongful death actions, the hospital would recover nothing from that suit.[7] On the other hand, should the decedent's estate bring a survival action for personal injury, authorized by both jurisdictions, a hospital lien would attach to the proceeds of the survival action regardless of whether or not the proceeds are earmarked for medical expenses.
In sum, District of Columbia law provides for last illness medical care recovery within its Wrongful Death Act, in addition to authorizing survivor actions against which a hospital lien might attach. See generally, Rustin v. District of Columbia, 491 A.2d 496 (D.C.App.1985), cert. denied, ___ U.S. ___, 106 S. Ct. 343, 88 L. Ed. 2d 290 (1985). Illinois law, on the other hand, provides that only pecuniary loss is recoverable in a wrongful death action but, like the District of Columbia, authorizes survivor actions against which a hospital lien might attach. Graul v. Adrian, 32 Ill. 2d 345, 205 N.E.2d 444 (1985). To find a conflict in the policies of the two states on the mere fact that Illinois requires a two count complaint in order to recover for wrongful death and last illness medical expenses while the District of Columbia requires only one is to exhault form over substance. Given this distinction, it cannot even be concluded that the differences between the District of Columbia's Wrongful Death Act and that of Illinois' pose an actual conflict of law.
*1128 As explained previously, the District of Columbia would not enforce its hospital lien against the proceeds of any wrongful death claim. Therefore, summary judgment in favor of the Moores is appropriate on the central issue raised by the motions: whether the hospital's lien may be enforced against the proceeds of the Moores' wrongful death claim. The Court holds that it may not, and enters partial summary judgment on this issue.[8] However, should the Moores recover medical expenses or damages in a cause of action separate from their wrongful death claim, there would apparently be no policy prohibiting enforcement of the hospital's lien against such proceeds.[9]
[1] The following is a summary of all claims, liens, and demands known to have been asserted against the insured welding shop and its insurer, Travelers. Roy Moore, individually and as administrator of the estate of Gregory Moore, Shirley Moore and Eric Moore seek damages resulting from the death of Gregory Moore. Allen Tomlinson seeks damages for personal injury as a result of the explosion. Nancy Tomlinson seeks damages for loss of consortium as a result of Allen Tomlinson's injuries. Critic Mills seeks damages to its property in excess of $1.9 million. Washington Hospital has asserted a hospital lien under the laws and statutes of the District of Columbia against the insured's policy of insurance in the amount of $237,081.60. The Burlington Northern Railroad has asserted a property damage claim against the insured for $7,648.04. Royal Insurance Company of America is asserting a subrogation claim for $99,250.34, the amount paid by Royal Insurance to Critic Mills pursuant to a policy of insurance with Critic Mills. First State Insurance Company is asserting a subrogation claim in excess of $697,000.00, the amount paid by First State to Critic Mills pursuant to a policy of insurance with Critic Mills. Aetna Casualty and Insurance Company of Illinois is also asserting a subrogation claim based on a policy of insurance with Critic Mills.
[2] Count II of the hospital's cross-claim against the Moores is based upon District of Columbia Code, § 38-301 et seq. (Hospital Lien Statute). That statute provides, in relevant part:
[3] Aetna Casualty and Insurance Company of Illinois (Aetna) is another insurance company whose policy covers Critic Mills. The issues as to whether or not Washington Hospital is entitled to a lien for services rendered by it against either the Aetna policy of insurance or the Travelers policy of insurance are identical. Aetna, however, has not as yet paid out any funds under its policy.
[4] Although a claim filed with a representative and not with the Court could be disallowed by the representative pursuant to Ill.Rev.Stat., ch. 110 ½, § 18-11(b), and could then be barred under § 18-12 in the same manner as a claim not timely filed, the claim is not so barred unless the notice of disallowance is mailed to the claimant and the claimant's attorney. The notice must inform the claimant that the claim must be presented to the Court within 60 days after the claimant receives notice of disallowance from the representative. Ill.Rev.Stat., ch. 110 ½, § 18-11(b) (1983 and Supp. 1984-85). No such notice was ever received by Washington Hospital or its attorneys.
[5] The Moores, in response to Court interrogatories, also argue that Washington Hospital should be collaterally estopped from asserting its claim against the estate. In support of their argument, the Moores recite that the state court in Cass County, Illinois, ruling on a petition of Roy Moore filed in the probate proceedings pending there, entered an order dated May 29, 1984, to the effect that Washington Hospital has no lien on the proceeds of settlement as described in that order. That order includes, in relevant part, the following language:
Under Ill.Rev.Stat., ch. 82, ¶ 97, et seq., however, a petition pursuant to ¶ 101 on its face only grants a state court the authority to adjudicate liens perfected pursuant to the Illinois Hospital Lien Statute and no others. Thus, apparently the only issue adjudicated pursuant to the Moores' petition was whether Washington Hospital held a valid enforceable lien under the Illinois Hospital Lien Act, Ill.Rev.Stat., ch. 82, ¶ 97, et seq. (1983), not whether it has a valid lien under the laws of the District of Columbia. Were the issues identical, res judicata or collateral estoppel might arguably apply. See Jones v. City of Alton, 757 F.2d 878 (7th Cir.1985). Further, application of the doctrines of claim or issue preclusion require a judgment on the merits, Housing Authority v. YMCA, 101 Ill. 2d 246, 251-52, 78 Ill.Dec. 125, 461 N.E.2d 959 (1984), which apparently was not rendered in the prior proceeding. Since the Moores have offered no case law or argument to the contrary and since Washington Hospital does not argue that it perfected a lien pursuant to the Illinois Hospital Lien Act, this Court cannot agree that Washington Hospital should be collaterally estopped from asserting its claim for medical services or that res judicata is applicable.
[6] Illinois would not enforce any lien against the proceeds of a wrongful death claim because the Illinois Wrongful Death Act has been construed by the Illinois Supreme Court to provide only a remedy for the pecuniary loss of the decedent. It does not afford a remedy for other losses such as pain and suffering or medical and burial expenses. Graul v. Adrian, 32 Ill. 2d 345, 205 N.E.2d 444 (1965). Ill.Rev.Stat., ch. 70, ¶ 1, provides as follows:
Although the present case involves a hospital lien rather than a subrogation claim, the Court is confident that Illinois would not treat the two as distinguishable in this context. This conclusion is supported by the fact that in no event may medical expenses be awarded in a wrongful death action and that, as a general principle, creditors cannot reach the proceeds of a wrongful death action. Greenock v. Merkel, 71 Ill. App.3d 958, 28 Ill.Dec. 96, 390 N.E.2d 78, 79 (1979); In re Shield's Estate, 320 Ill.App. 522, 51 N.E.2d 816 (1943).
[7] This is possible, even though § 16-2701 provides that last illness medical expenses shall be included in the judgment, in the event of failure of proof, oversight, etc.
[8] The Moores' attempt to avoid the foregoing conclusion by arguing that, even if choice of law principles militate for the application of District of Columbia law, the District of Columbia Hospital Lien Statute was never intended to be applied beyond the territorial boundaries of the District of Columbia. The case authorities cited by the Moores to support that proposition are inapposite, and cannot be relied upon to defeat the enforcement of the hospital's lien. In both Butler v. Wittland, 18 Ill.App.2d 578, 153 N.E.2d 106 (1958), and Dur-ite Co. v. Industrial Commission, 394 Ill. 338, 68 N.E.2d 717 (1946), the parties sought relief pursuant to Illinois statutes on causes of actions arising outside Illinois, and the cases merely held that the actions could not be brought under the Illinois statute. In contrast, Washington Hospital seeks relief pursuant to a District of Columbia statute for services provided in the District of Columbia. Thus, those cases fail to shed light on the question of whether the forum court in an interpleader action should give extraterritorial effect to another state's lien in that action.
[9] Throughout this litigation, the Moores have contended that the only right they have to recover money deposited in this interpleader action comes from their cause of action for wrongful death of the decedent. However, in response to this Court's interrogatories filed June 25, 1986, First State, an insurance carrier for Critic Mills, has indicated that the Moores have brought an action against Critic Mills for personal injuries and medical expenses in addition to their cause of action for wrongful death. These claims allegedly are still pending in state court actions, which have been stayed pending determination of this interpleader action. Whether or not this fact is true is determinative of Washington Hospital's right to recover. Since there is apparent dispute over this factual matter, summary judgment against Washington Hospital on Count II at this time would be premature.