2017 IL App (1st) 161918
FIFTH DIVISION September 15, 2017
No. 1-16-1918
ANTHONY BROWN, Individually and as Independent ) Representative of the Estate of Joyce R. Hobson, Deceased, ) ) Plaintiff-Appellee, ) Appeal from the ) Circuit Court of v. ) Cook County ) ADVOCATE HEALTH AND HOSPITALS ) CORPORATION, d/b/a Advocate South Suburban Hospital ) and Advocate Medical Group; OLALEKAN SOWADE, ) No. 13 L 4430 M.D.; ERIK SWENSON, M.D.; JAMES O’DONNELL, ) M.D.; AGOP TEPELI, M.D.; GUPTA, M.D., S.C.; and ) SURGICAL SPECIALISTS, S.C., ) ) Honorable Defendants ) Kathy M. Flanagan, ) Judge Presiding. (Advocate Health and Hospitals Corporation, d/b/a ) Advocate South Suburban Hospital, Defendant-Appellant). ) ) ) ) ______________________________________________________________________________
PRESIDING JUSTICE REYES delivered the judgment of the court, with opinion. Justice Lampkin concurred in the judgment and the opinion. Justice Gordon dissented, with opinion.
OPINION
¶1 Advocate Health and Hospitals Corporation, d/b/a Advocate South Suburban Hospital
(Advocate), a defendant in a medical malpractice action, violated an order of the circuit court of
Cook County by refusing to produce certain insurance-related documents for in camera
inspection. The circuit court held Advocate in “friendly contempt” and imposed a $100 fine,
which allowed Advocate to file this interlocutory appeal pursuant to Illinois Supreme Court Rule
304(b)(5) (eff. Mar. 8, 2016). As discussed herein, we (i) affirm the judgment of the circuit court 1-16-1918
directing Advocate to produce certain documents for in camera inspection and (ii) vacate the
order finding Advocate in contempt and imposing a monetary penalty.
¶2 BACKGROUND
¶3 Joyce R. Hobson, after being hospitalized and undergoing multiple medical procedures at
Advocate, experienced cardiopulmonary arrest and died on May 23, 2011. Anthony Brown, as
the administrator of her estate, filed a medical malpractice action against Advocate and other
defendants in 2013.
¶4 The plaintiff issued discovery requests seeking copies of Advocate’s insurance policies.
Advocate responded that there is no policy to produce because it is a self-insured entity. Pursuant
to multiple court orders, Advocate was directed to produce its insurance policies. The circuit
court also entered a protective order, which provided that any insurance documents produced by
Advocate would remain strictly confidential and solely be used for purposes of this litigation.
¶5 The plaintiff filed a motion to compel seeking compliance with the previous court orders
and for sanctions pursuant to Illinois Supreme Court Rule 219 (eff. July 1, 2002). According to
the plaintiff, Advocate had produced a “few pages of a document that was 99% blank.” 1 In a
court order entered on June 7, 2016, Advocate was directed “to tender its full trust agreement
related to the substance of the [motion to compel] and an unredacted copy of the endorsement
previously tendered for in camera inspection on or before June 14, 2016.”
¶6 During a hearing on June 14, 2016, Advocate represented that it had previously disclosed
$12.5 million in coverage for the plaintiff’s claim pursuant to a self-insured retention and trust.
Advocate continued to refuse to produce the trust agreement or related documents and asked to
be held in “friendly contempt.” At the conclusion of the hearing, the circuit court directed the
1 Because the document was the subject of the protective order, the plaintiff did not append it to its motion to compel. 2 1-16-1918
following statements to Advocate’s counsel:
“[J]ust so I can have it clear, you now are stating in open court that you
are asking me to enter a friendly contempt citation against [Advocate] for
purposes of appealing my order requiring [Advocate] to produce to me, for
in camera inspection, a copy of the self-insured trust agreement plus any
endorsements showing who is covered, under what circumstances people are
covered, if employees are covered, all the normal and customary issues that are
governed by insurance documents and/or policies and/or indemnity agreements.”
Advocate’s counsel answered affirmatively. In a written order entered on June 14, 2016, the
circuit court held Advocate in friendly contempt for failing to comply with the June 7, 2016,
order for the reasons stated on the record, and imposed a $100 fine. Advocate filed this timely
appeal pursuant to Rule 304(b)(5). Ill. S. Ct. R. 304(b)(5) (eff. Mar. 8, 2016).
¶7 ANALYSIS
¶8 Advocate advances three primary contentions on appeal. It initially argues that
“[i]nsurance documents are not discoverable in a tort action not involving insurance coverage
because the insurance documents lack relevance to the claims advanced.” Advocate next
contends that its trust agreement is a confidential financial document rather than an insurance
document, and thus the circuit court abused its discretion in ordering its production. Finally,
Advocate argues that the contempt order should be vacated because its actions were not
contemptuous of the circuit court’s authority. We address each argument below.
¶9 A discovery order issued by the circuit court is generally not appealable because it is not
a final order. Norskog v. Pfiel, 197 Ill. 2d 60, 69 (2001); Adler v. Greenfield, 2013 IL App (1st)
121066, ¶ 39. It is well settled, however, that the correctness of a discovery order may be tested
3 1-16-1918
through contempt proceedings. Adler, 2013 IL App (1st) 121066, ¶ 39; Payne v. Hall, 2013 IL
App (1st) 113519, ¶ 10. Illinois Supreme Court Rule 304(b)(5) (eff. Mar. 8, 2016) provides that
an “order finding a person or entity in contempt of court which imposes a monetary or other
penalty” is appealable without the special finding required for appeals under Rule 304(a). In the
instant case, the circuit court fined Advocate $100 for contempt to facilitate an appeal pursuant
to Rule 304(b)(5).
¶ 10 The standard of review for a contempt order is abuse of discretion. Payne, 2013 IL App
(1st) 113519, ¶ 10; Illinois Emcasco Insurance Co. v. Nationwide Mutual Insurance Co., 393 Ill.
App. 3d 782, 785 (2009). A circuit court abuses its discretion when its ruling is arbitrary,
unreasonable, fanciful, or where no reasonable person would take the view adopted by the circuit
court. Payne, 2013 IL App (1st) 113519, ¶ 10.
¶ 11 Because Advocate is appealing a finding of contempt based on its noncompliance with a
discovery order, we must necessarily review the propriety of the discovery order. See Norskog,
197 Ill. 2d at 69; Klaine v. Southern Illinois Hospital Services, 2014 IL App (5th) 130356, ¶ 9;
Illinois Emcasco Insurance, 393 Ill. App. 3d at 785. Discovery rulings generally are reviewed for
an abuse of discretion. Klaine, 2014 IL App (5th) 130356, ¶ 10; Adler, 2013 IL App (1st)
121066, ¶ 40. Although the applicability of a privilege is reviewed de novo (Klaine, 2014 IL App
(5th) 130356, ¶ 10), Advocate has expressly represented that its objection to production is based
on relevance, not on confidentiality or privilege grounds.
¶ 12 Illinois Supreme Court Rule 201 (eff. May 29, 2014) “defines the scope of discovery in
civil cases and has been interpreted to allow discovery of all information that would be
admissible at trial as well as information which is reasonably likely to lead to admissible
evidence.” Klaine, 2014 IL App (5th) 130356, ¶ 14. Rule 201(b)(1) provides, in part, that a party
4 1-16-1918
generally “may obtain by discovery full disclosure regarding any matter relevant to the subject
matter involved in the pending action.” Ill. S. Ct. R. 201(b)(1) (eff. May 29, 2014). Rule 401 of
the Illinois Rules of Evidence defines “relevant evidence” as “evidence having any tendency to
make the existence of any fact that is of consequence to the determination of the action more
probable or less probable than it would be without the evidence.” Ill. R. Evid. 401 (eff. Jan. 1,
2011). Pursuant to Rule 402 of the Illinois Rules of Evidence, all relevant evidence generally is
admissible, and evidence that is not relevant is not admissible. Ill. R. Evid. 402 (eff. Jan. 1,
2011).
¶ 13 Advocate argues that the content of the requested insurance documents lacks relevance to
the tort claims advanced by the plaintiff and thus the discovery orders compelling their
production should be vacated. As discussed herein, however, we view the issue of discoverability
as distinct from admissibility in the context of this case.
¶ 14 Citing Seldin v. Babendir, 325 Ill. App. 3d 1058 (2001), and Imparato v. Rooney, 95 Ill.
App. 3d 11 (1981), Advocate contends that “[e]vidence that a party is insured is generally
inadmissible at trial.” Seldin and Imparato addressed the propriety of questioning prospective
jurors regarding their interest in or connections to the insurance industry during voir dire in a
personal injury action. Seldin, 325 Ill. App. 3d at 1064; Imparato, 95 Ill. App. 3d at 15. The
courts in both cases noted that evidence informing a jury that a defendant is insured against
liability is generally inadmissible. Seldin, 325 Ill. App. 3d at 1064; Imparato, 95 Ill. App. 3d
at 17. Unlike in Seldin or Imparato, however, the instant case involves the discoverability of
documents, not their ultimate admissibility at trial. See, e.g., Crnkovich v. Almeida, 261 Ill. App.
3d 997, 999 (1994) (noting that “the concept of relevance is broader for discovery purposes than
for purposes of the admission of evidence at trial, since it includes not only what is admissible at
5 1-16-1918
trial, but also that which leads to what is admissible”); Maxwell v. Hobart Corp., 216 Ill. App. 3d
108, 110-11 (1991) (stating that “[p]retrial discovery presupposes a range of relevance and
materiality much broader than that of admissibility of evidence at trial”).
¶ 15 The Illinois Supreme Court in People ex rel. Terry v. Fisher, 12 Ill. 2d 231 (1957),
recognized an exception to the relevancy requirement of Rule 201, i.e., “that information that
may be discovered prior to trial be admissible in evidence or lead to admissible evidence.”
Manns v. Briell, 349 Ill. App. 3d 358, 365 (2004) (discussing Fisher). In Fisher, the defendant in
a personal injury action arising out of an automobile accident challenged circuit court orders
compelling him to answer interrogatories regarding the existence and amount of his liability
insurance. Fisher, 12 Ill. 2d at 231-32. The Illinois Supreme Court rejected “those cases limiting
pretrial discovery to matters admissible in evidence,” but noted that it did “not imply that
answers to interrogatories can be brought to the attention of the jury.” Id. at 237.
¶ 16 In upholding the discovery orders, the Fisher court noted that, under certain Illinois
statutes, “liability insurance is not merely a private matter for the sole knowledge of the carrier
and the insured, but is also for the benefit of persons injured by the negligent operation of
insured’s motor vehicle.” Id. at 238. Our supreme court further stated:
“Unlike other assets, a liability insurance policy exists for the single
purpose of satisfying the liability that it covers. It has no other function and no
other value. Litigation is a practical business. The litigant sues to recover money
and is not interested in a paper judgment that cannot be collected. The presence or
absence of liability insurance is frequently the controlling factor in determining
the manner in which a case is prepared for trial.” Id.
The Fisher court noted that a plaintiff ordinarily “has many sources of inquiry by means of
6 1-16-1918
which he can appraise the likelihood that the judgment he seeks will be enforceable.” Id. at 238-
39. An insurance company, however, “is responsible only within the limits of the policy it has
issued,” and thus a plaintiff’s knowledge of the identity or financial status of the insurance
company “does not help him.” Id. at 239.
¶ 17 Advocate essentially argues for a narrow interpretation of Fisher, limiting its
applicability to discovery disputes involving interrogatories and not document production
requests. Neither Fisher nor any other decision cited by Advocate, however, expressly provides
that insurance documents cannot or should not be produced during discovery in a tort action such
as the instant case. We further note that certain Illinois decisions in other contexts suggest that
production of an insurance policy may be proper. See, e.g., Monier v. Chamberlain, 35 Ill. 2d
351 (1966) (noting that the insurance policy was produced in accordance with a production
order; addressing whether related documents were discoverable); Curtis v. Birch, 114 Ill. App.
3d 127, 130 (1983) (stating that the plaintiffs should have provided copies of the insurance
policy on which they based their claim “and, given the liberal discovery rules in this State (87 Ill.
2d R. 214), there is no excuse for plaintiffs’ failure to have done so”); Schultz v. Continental
Casualty Co., 79 Ill. App. 3d 1035, 1039 (1979) (reversing trial court orders denying the
production of the complete insurance policy).
¶ 18 Advocate also cites Illinois Supreme Court Rule 213 (eff. Jan. 1, 2007), addressing
written interrogatories to parties, and Illinois Supreme Court Rule 214 (eff. July 1, 2014),
addressing requests for the production of documents. Advocate observes that the standard form
interrogatories for medical malpractice actions against hospitals—promulgated pursuant to Rule
213(j) —permit plaintiffs to obtain information regarding insurance. Advocate posits that “[i]f
defendants were expected to produce insurance policy documents to plaintiffs, that expectation
7 1-16-1918
would be reflected in Rule 214.” Rule 214, however, has no corollary to Rule 213(j), i.e., Rule
214 does not provide for any standard forms of requests for the production of documents. Ill. S.
Ct. R. 214 (eff. July 1, 2014).
¶ 19 Advocate notes that the Illinois Supreme Court has neither incorporated nor endorsed
Rule 26(a)(1)(A)(iv) of the Federal Rules of Civil Procedure, which requires a party’s production
of insurance agreements even prior to any discovery requests. Fed. R. Civ. P. 26(a)(1)(A)(iv).
While Advocate suggests that the fact the Illinois Supreme Court has not adopted a federal rule is
significant, it fails to provide any support for this proposition. Although we are not bound by the
Federal Rules of Civil Procedure (e.g., Bianchi v. Savino Del Bene International Freight
Forwarders, Inc., 329 Ill. App. 3d 908, 928 (2002)), we further recognize the advisory
committee notes regarding Rule 26 characterize insurance documents as part of the “basic
information that is needed in most cases to prepare for trial or make an informed decision about
settlement.” (Emphasis added.) Fed. R. Civ. P. 26 (Notes of Advisory Committee—1993
Amendment).
¶ 20 The Fisher court’s observation that “[l]itigation is a practical business” (Fisher, 12 Ill. 2d
at 238) is arguably more compelling in the instant case, given the amorphous nature of
Advocate’s self-insured status. As noted in Fellhauer v. Alhorn, 361 Ill. App. 3d 792, 796
(2005), the term “self-insurance” has no precise legal meaning. “The concept has led courts and
legislatures to struggle with questions of how to treat parties acting as their own insurer and, in
particular, whether self-insurers should be considered the equivalent of an insurer.” Id. In a
recent decision, this court defined “insurance” as generally referring to “a policy issued by an
authorized and licensed insurance company whose primary business is to assume certain risks of
loss of its insureds, in exchange for the payment of a ‘premium.’ ” Philadelphia Indemnity
8 1-16-1918
Insurance Co. v. Pace Suburban Bus Service, 2016 IL App (1st) 151659, ¶ 32. Self insurance, by
contrast, was defined as “the retention of the risk of loss by the one upon whom it is directly
imposed by law or contract.” (Internal quotation marks omitted.) Id. While the dissent suggests
that Advocate negotiated its self-insured trust with an insurance company, such proposition is not
definitively demonstrated by the record.
¶ 21 Other than the $12.5 million amount, Advocate has provided little to no information
regarding the scope or nature of the self-insured trust and related documents. Even if it is not a
standard insurance policy per se, Advocate’s self-insured trust presumably exists—at least
indirectly—for the ultimate benefit of parties such as the plaintiff, like the liability policy at issue
in Fisher. Furthermore, as the plaintiff observes, a review of the self-insurance documents may
lead to admissible evidence regarding certain substantive issues in this case, e.g., whether an
agency relationship existed between certain defendants.
¶ 22 In sum, we reject Advocate’s contention that we “need not reach the question of
in camera review because [the plaintiff’s] document request seeking irrelevant insurance policies
was improper in the first instance according to Fisher.” Advocate has not cited any case, statute,
or rule that plainly exempts it from production of its insurance-related documents.
¶ 23 Turning to the issue of in camera review, we recognize that a trial court may supervise all
or any part of the discovery process. Ill. S. Ct. R. 201(c)(2) (eff. May 29, 2014). “This power
includes the authority to review discovery materials in camera to determine any possible
relevance.” Youle v. Ryan, 349 Ill. App. 3d 377, 381 (2004). The circuit court’s comments during
the June 14, 2016, hearing indicate that its order entered on June 7, 2016—providing for
in camera review—superseded the prior orders that directed Advocate to produce the documents
to the plaintiff. Although Advocate’s notice of appeal references prior orders, the issue we
9 1-16-1918
consider herein is whether the circuit court erred in ordering an in camera inspection.
¶ 24 Circuit courts are afforded wide latitude in their rulings on discovery matters. Payne,
2013 IL App (1st) 113519, ¶ 13. Based on our review of the record, the circuit court did not
abuse its discretion in ordering an in camera inspection of Advocate’s insurance-related
documents. Absent such a firsthand review, the circuit court would have no means to assess the
discoverability of the challenged materials.
¶ 25 Citing Manns, 349 Ill. App. 3d 358, Advocate also contends that its trust agreement is a
confidential financial document rather than an insurance document and thus the circuit court
erred in ordering its production. As noted above, contrary to Advocate’s assertions, the circuit
court’s June 2016 orders solely contemplated an in camera review, not production of the
disputed materials to the plaintiff. In any event, Advocate’s reliance on Manns is misplaced.
¶ 26 The plaintiff in Manns filed a negligence action, alleging personal injuries arising out of
an automobile accident. Id. at 359. During pretrial discovery, the plaintiff sought documents and
information pertaining to the defendant’s personal financial affairs. Id. The defendant refused to
answer, contending that the requested materials were irrelevant to any issue in the lawsuit and
were not subject to discovery until a judgment was entered against him exceeding the limits of
his liability insurance policy. Id. In reversing the trial court’s finding of contempt, the appellate
court noted that “[t]here are important differences between a liability insurance policy and a
defendant’s personal financial assets that do not justify extending the holding in Fisher to pretrial
discovery of a defendant’s financial affairs.” Id. at 364. The Manns appellate court noted that
certain rights are created by liability insurance policies, which inure to the benefit of injured
parties. Id. at 365. Conversely, a plaintiff only has rights regarding a defendant’s financial assets
after a judgment is entered. Id.
10 1-16-1918
¶ 27 As an initial matter, we presume that an entity’s self-insured trust agreement would be
more akin to an insurance document than the types of confidential financial documents at issue
in Manns. The fact that Advocate appears to have disclosed the existence of the $12.5 million in
self-insurance in response to the plaintiffs’ interrogatories regarding insurance belies its efforts to
distinguish its trust document from a traditional liability policy. More significantly, we fail to
understand how the circuit court (or this court) could simply accept Advocate’s representation
that the trust document is “nothing more than one of Advocate’s financial documents,” which it
utilizes “to set forth its proprietary self-insured business structure.” The dissent contends that the
self-insured trust is a confidential document containing trade secrets, however, the circuit court
could not be expected to assess the potential applicability of Manns absent an in camera
inspection of the disputed documents. The dissent also posits that Advocate would not want its
employees, physicians, or other medical personnel to know the intricate matters contained in the
trust. Although our decision herein is limited to the propriety of in camera review, we note that a
protective order entered by the circuit court strictly limits the use or dissemination of any
produced insurance documents. We thus conclude that the circuit court did not abuse its
discretion. See, e.g., Anderson v. St. Mary’s Hospital, 101 Ill. App. 3d 596, 600 (1981) (noting
that “where there is a genuine dispute as to the nature or content of the document sought to be
discovered, an attorney must ordinarily comply with the trial court’s order for an in camera
inspection of the document or be subject to sanctions for contempt”).
¶ 28 As a final matter, Advocate asks that we vacate the contempt order, and the plaintiff does
not object. “Requesting the circuit court to enter a contempt order is a proper procedure to seek
immediate appeal of a discovery order.” Klaine, 2014 IL App (5th) 130356, ¶ 41; accord Adler,
2013 IL App (1st) 121066, ¶ 71. “If we find that the discovery order should be upheld, we may
11 1-16-1918
nevertheless vacate the finding of contempt and assessment of a monetary penalty if we find that
the defendant’s refusal to produce the documents at issue was not contemptuous of the circuit
court’s authority but rather was made in good faith based on sound legal arguments for purposes
of effectuating an interlocutory appeal.” Klaine, 2014 IL App (5th) 130356, ¶ 9. We find this to
be such a case and thus vacate the circuit court’s June 14, 2016, order, which found Advocate to
be in contempt of court for failing to produce the contested documents for in camera inspection
and assessed a monetary penalty. See Chicago Trust Co. v. Cook County Hospital, 298 Ill. App.
3d 396, 410 (1998) (vacating a contempt order where the hospital-defendant’s refusal to produce
documents was “not contemptuous of the court’s authority”).
¶ 29 CONCLUSION
¶ 30 For the foregoing reasons, we affirm the circuit court’s order of June 7, 2016, directing
the production of certain documents for in camera inspection. We vacate the circuit court’s order
of June 14, 2016, order which found Advocate in contempt and assessed a monetary penalty.
¶ 31 Discovery order affirmed; contempt order vacated.
¶ 32 JUSTICE GORDON, dissenting.
¶ 33 I must respectfully dissent. Advocate represented that it had $12.5 million in coverage for
plaintiff’s claim pursuant to a self-insured retention and trust agreement. There are obvious
reasons why a hospital that negotiates a self-insured trust with an insurance company does not
want anyone to know the financial formulas that are contained in their self-insured trust. These
documents contain confidential financial information regarding the triggering of payments by the
insurance company or companies that are providing the excess coverage contained in the trust.
Advocate’s self-insured trust does not exist for the benefit of injured parties such as the plaintiff
in this case, like the liability policy at issue in Fisher. I doubt whether Advocate would want its
12 1-16-1918
employees, physicians, or other medical personnel to know the intricate matters contained in this
trust. This is basically a confidential document with trade secrets that is not relevant in any
malpractice case before the entry of a judgment and may not even be relevant after judgment if
Advocate has the funds to pay to satisfy any judgment entered against it. I also do not agree with
the majority that it could lead to admissible evidence as to whether an agency relationship
existed between certain defendants, and there is nothing in the record of this case that would
indicate that was an issue. I know of no court that has allowed the production of a self-insured
trust by a hospital, municipality, or large corporation before judgment, nor do I find any
relevancy in ordering its production. A self-insured trust is not an insurance policy and should
not be treated as one. I would reverse the circuit court of Cook County and vacate the contempt
finding and fine.