No Coverage for Sex Misconduct Despite Negligence Allegations

July 11, 2023 / News / Writing and Speaking

By Don R. Sampen, published, Chicago Daily Law Bulletin, July 11, 2023

The 4th District Appellate Court, over a dissent, recently held that a professional liability insurer had no duty to defend a physician and his employer for sexual assault, despite allegations of negligence against the physician in the underlying complaint.

The case is Professional Solutions Insurance Co. v. Karuparthy, 2023 Il App (4th) 220409 (May 30). The insurer, Professional Solutions, was represented by Lewis, Brisbois, Bisgaard & Smith LLP of Chicago. Weinstein, Kavensky & Cunningham LLC of Rock Island represented the insured physician, Dr. Venkateswara Karuparthy, and his employer, Integrative Pain Centers of America. Duncan Law Group LLC of Chicago represented the underlying plaintiff, Nancy Corelis.

Corelis filed a complaint against Karuparthy and Integrative Pain Centers in 2020. Four counts of the complaint essentially alleged that when being treated by Karuparthy, he injected her with a drug that impaired her ability to move, during which time he sexually assaulted her.

The fifth count alleged negligence in that Karuparthy failed to make a proper diagnosis and failed to explain the side effects of the drug, as the result of which she became immobile, required medical treatment, and suffered emotional distress. The sixth count against the doctor’s employer was based on respondeat superior.

As required by Code of Civil Procedure Section 2-622, Corelis attached an affidavit to the complaint along with a physician’s report explaining why the physician believed the lawsuit meritorious.

The underlying defendants’ insurer, Professional Solutions, agreed to defend under a reservation and filed the instant declaratory judgment action. The complaint alleged, among other things, that Karuparthy had pled guilty to reckless conduct and assault following a criminal complaint filed against him that arose out of “the same events” giving rise to the Corelis lawsuit.

The declaratory complaint further alleged that Professional Solutions had no duty to defend due to the intentional conduct admitted by Karuparthy and under several exclusions in the policy.

Corelis filed a motion to dismiss the declaratory judgment action under Section 2-619(a)(9) of the Code, pertaining to “other affirmative matter” that defeated the complaint, attaching a copy of the Section 2-622 affidavit. Professional Solutions countered with its own motion for judgment on the pleadings under Section 2-615(e).

The trial court granted Corelis’ motion to dismiss and denied the motion of Professional Solutions. This appeal followed.

Negligence Allegations and Section 2-622 Affidavit

In an opinion by Justice Robert J. Steigmann, the 4th District reversed. He began by observing that, while the allegations of the underlying complaint are construed liberally for purposes of determining a duty to defend, the determination focuses on the alleged conduct rather than labels used by the underlying plaintiff.

In this case, Steigmann found that Corelis and the underlying defendants were seeking to elevate legal labels — i.e., the “negligence” allegations — over the substance of the factual allegations in the complaint. Any layperson reading the allegations, wrote Steigmann, would understand that Corelis sought to recover for injuries resulting from a single course of conduct, namely, Karuparthy’s sexual misconduct.

This was so even though the negligence counts were arguably pleaded in the alternative to the intentional counts. Both sets of counts were predicated on the same conduct, and the supposed negligence did not allege any injury distinct from the intentional claims. Such clever lawyering and skilled drafting, said Steigmann, could not create insurance coverage.

He also rejected Corelis’ reliance on her Section 2-622 affidavit in support of her Section 2-619(a)(9) motion to dismiss. Although the motion is one that permits affidavits in support, Steigmann said that a Section 2-622 affidavit, which is required to support a claim of malpractice against a health-care professional, does not comply with Illinois Supreme Court Rule 191(a). That rule sets the standards for affidavits in support of summary judgment and Section 2-619 motions.

Judicial Notice

To establish the intentional nature of Karuparthy’s conduct, Steigmann further held that Professional Solutions could rely on documentation evidencing the criminal charges brought against Karuparthy, even though the insurer did not present that documentation to the trial court. Professional Solutions’ reliance was justifiable because the appellate court could take judicial notice of the charging documents.

Moreover, the fact that Professional Solutions had not included in the record the “amended” charging documents to which Karuparthy pleaded guilty, nor the transcript of his guilty plea hearing, did not make a difference. The reason was, according to Steigmann, that the underlying defendants themselves admitted that the criminal convictions to which Karuparthy pleaded guilty arose out of the same allegations contained in the underlying complaint.

The 4th District therefore reversed the judgment of the trial court and remanded for entry of judgment in favor of Professional Solutions.

Justice Thomas M. Harris dissented, arguing the record did not contain a factual basis for Karuparthy’s pleas, so that it was not clear that his convictions were based on the same conduct Corelis alleged was negligent.

Key Points

  • In assessing the duty to defend, a court must rely on the substance of the underlying allegations, such that if the allegations establish a single course of conduct by the defendant for which no coverage is provided, coverage will be denied even if claims of negligence are included in the complaint.
  • A Civil Procedure Code Section 2-622 affidavit required to support a medical malpractice complaint may not be used in support of a Section 2-619 motion to dismiss.
  • An appellate court may take judicial notice of documentation establishing an insured’s guilty plea to intentional conduct, having the effect of negating coverage under a liability policy.
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