Beatty v. Doctors' Company

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State: Illinois

Court: 5th District Appellate

Docket No: 5-06-0382 Rel

Case Date: 06/12/2007

Preview:NO. 5-06-0382
NOTICE Decision filed 06/12/07. The text of this decision may be changed or corrected prior to the filing of a Peti tion for Rehearing or th e

IN THE APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ___________________________________________________________________________ MICHAEL E. BEATTY, M.D., d/b/a The Southwestern Illinois Plastic and Hand Surgery Associates, ) Appeal from the ) Circuit Court of ) Madison County. ) Plaintiff-Appellee, ) ) v. ) No. 04-L-288 ) THE DOCTORS' COMPANY, ) Honorable ) Lola P. Maddox, Defendant-Appellant. ) Judge, presiding. __________________________________________________________________________ JUSTICE SPOM ER delivered the opinion of the court: The defendant, The Doctors' Company, appeals from the order of the circuit court of Madison County that confirmed the arbitration award and entered a judgment in favor of the plaintiff, Michael E. Beatty, M.D., doing business as The Southwestern Illinois Plastic and Hand Surgery Associates (Dr. Beatty), in the amount of $1,281,082.67 in compensatory damages and $4.5 million in punitive damages, for a total judgment of $5,781,082.67. The Doctors' Company raises four issues on appeal, which we restate as follows: (1) whether the arbitrators exceeded their powers by awarding punitive damages, (2) whether the arbitration award should be vacated on the basis that the arbitrators grossly erred in finding that The Doctors' Company owed a duty to defend Dr. Beatty, (3) whether the arbitration award should be vacated on the basis that the arbitrators grossly erred in awarding Dr. Beatty attorney fees, costs, and a statutory penalty pursuant to section 155 of the Illinois Insurance Code (215 ILCS 5/155 (West 2004)), and (4) whether the arbitration award should be vacated on the basis that the arbitrators grossly erred in holding that an insurer owes a

disposition of the same.

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fiduciary duty to defend and indemnify its insured. For the reasons set forth below, we affirm the judgment of the circuit court. The facts necessary to our disposition of this appeal are as follows. On December 10, 2004, Dr. Beatty filed an amended complaint in the circuit court of Madison County against The Doctors' Company. The amended complaint alleged that Dr. Beatty was a named insured under a policy of professional liability insurance issued by The Doctors' Company and that the policy required The Doctors' Company to provide a defense and indemnity to Dr. Beatty for claims arising out of the rendering or failing to render professional services. The insurance policy was attached to the amended complaint as "Exhibit A". The complaint further alleged that on or about July 23, 1999, a qui tam complaint had been filed in the United States District Court for the Southern District of Illinois. The complaint was entitled "The United States of America ex rel. Raghuram E. Elluru, M.D. and Raghuram G. Elluru, M.D. v. Michael Beatty, and Michael E. Beatty, M.D., P.C. d/b/a The Southwestern Illinois Plastic and Hand Surgery Associates" (the underlying lawsuit). A copy of the complaint in the underlying lawsuit was attached as "Exhibit B" to the amended complaint that is the subject of this appeal. The complaint in the underlying lawsuit consisted of seven counts, which were misnumbered as eight counts. Counts I through VI alleged causes of action under the False Claims Act (31 U.S.C.

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