:: Caremark And Its Insurer Continue Legal Battle Over Lawyers’ Fees
In 2001, Steadfast issued a managed care professional liability policy to Caremark. Pursuant to the policy, Steadfast agreed to pay those sums in excess of the policy’s deductible that Caremark might become legally obligated to pay as “Damages†for “Claims†made by reason of any negligent act, error, or omission committed by Caremark arising out of its rendering or failing to render “Professional Services†in the course of business. The policy excluded claims for intentional, criminal, or fraudulent acts. Under the policy, Steadfast was required to defend any “Claim†against Caremark seeking “Damages†payable under the terms of the policy, even if the allegations were groundless, false, or fraudulent.
In 2002, members of health plans administered by Caremark filed two lawsuits in federal court. The federal actions alleged that, in managing the plans’ prescription-drug benefits, Caremark breached its fiduciary duties under the Employee Retirement Income and Security Act (ERISA) (29 U.S.C. § 1001 et seq. (2000)) by conspiring with drug manufacturers to obtain for its own benefit undisclosed discounts, rebates, and “kickbacks†for favoring certain higher-priced drugs. The complaints also charged Caremark with misrepresentation and failure to disclose material information and sought an accounting. Caremark tendered the defense of these two suits to Steadfast. . . . Steadfast stated that it had no obligation to defend or indemnify Caremark in the federal actions. Steadfast Ins. Co. v. Caremark RX, Inc., — N.E.2d —-, 2007 WL 1485900 (Ill.App. 1 Dist.) (May 22, 2007)
The byzantine procedural history of this litigation will not be recounted here, but in the latest skirmish, Caremark’s insurer succeeded in obtaining leave to amend its complaint to state a claim for unjust enrichment. The insurer is suing to recover the $964,846.43 averred to have been paid toward Caremark’s defense against the charges of malfeasance. The appeal was from the Circuit Court of Cook County, Case No. 03 L 001363. The opinion has not been officially released for publication. At that time, the Illinois Courts website will post it.
