St. John's Hospital Sisters of the Third Order of St. Francis v. National Guardian Risk Retention Group, Inc. et al

Filing 40

OPINION entered by U.S. Magistrate Judge Tom Schanzle-Haskins. The parties are directed to file simultaneous briefing addressing whether Plaintiff has alleged facts to establish standing to bring this action. The initial memoranda shall be filed by 1/29/2016, and any response memoranda shall be filed by 2/5/2016. The Court further directs Plaintiff to file a supplemental pleading by 1/29/2016, alleging the citizenship of each partner of Defendant Central Illinois Emergency Physicians, P.C. a/k/a Central Illinois Emergency Physicians, LLP. See written order. (LB, ilcd)

E-FILED

Friday, 15 January, 2016 01:51:59 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS, SPRINGFIELD DIVISION
ST. JOHN’S HOSPITAL of the
HOSPITAL SISTERS of the
THIRD ORDER
OF ST. FRANCIS,

)
)
)
)
)
Plaintiff,
)
)
v.
)
)
NATIONAL GUARDIAN RISK
)
RETENTION GROUP, INC.,
)
EMERGENCY CONSULTANTS, )
INC., CENTRAL ILLINOIS
)
EMERGENCY PHYSICIANS,
)
P.C., a/k/a CENTRAL ILLINOIS )
EMERGENCY PHYSICANS,
)
LLP, JAMES M. JOHNSON,
)
M.D., ROBERT M. WILLIAMS,
)
M.D., and DERIK K. KING, M.D., )
)
Defendants.
)

No. 15-cv-3292

OPINION
THOMAS P. SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE:
This matter has been referred to this Court for a Report and
Recommendation on Defendant National Guardian Risk Retention Group,
Inc. (National Guardian) Motion to Dismiss (d/e 34) (Motion 34) and
Defendants Emergency Consultants, Inc. (Emergency Consultants),
Central Illinois Emergency Physicians P.C., a/k/a Central Illinois
Emergency Physicians, LLP (Emergency Physicians), James A. Johnson,
Page 1 of 4

M.D., Robert M. Williams, M.D., and Derik K. King, M.D.’s Motion to
Dismiss (d/e 35) (Motion 35). Text Order entered December 2, 2015. The
Court has carefully reviewed the Complaint (d/e 1), the Motions, and the
Plaintiff St. John’s Hospital of the Hospital Sisters of the Third Order of St.
Francis’ (St. John’s) Combined Response (d/e 37) (Response). The Court
questions its jurisdiction to hear this case. The Court must raise questions
of subject matter jurisdiction sua sponte when the Court identifies such
issues. See e.g., Joyce v. Joyce, 975 F.2d 379, 386 (7th Cir. 1992).
The Court first questions whether St. John’s has standing to bring this
action. It is unclear to the Court whether St. John’s has alleged an injury in
fact. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The
case concerns whether the Defendants committed various wrongful acts to
reduce or attempt to reduce aggregate insurance coverage from
$3,000,000.00 to $1,000,000.00 for losses from a pending medical
malpractice action filed by two individuals named Patricia and Robert
Fugate (Fugate Litigation). St. John’s is one of the defendants in the
Fugate Litigation. The Complaint alleges St. John’s injury from the alleged
wrongful conduct as follows:
[T]he plaintiff stands to be damaged because it can be held
vicariously liable and subject to satisfaction of a judgment by
Patricia and Robert Fugate in excess of the claimed $1,000,000
aggregate coverage.
Page 2 of 4

Complaint, ¶ 33. The Complaint does not allege that a judgment has yet
been entered against St. John’s in the Fugate Litigation. The parties have
not briefed whether the alleged injury is sufficient to constitute an injury in
fact necessary to establish St. John’s standing to bring this action.
Additionally, the Fugate Litigation plaintiffs have now settled their
claims against St. John’s. Motion to Dismiss (d/e 35), Exhibit A, Fugate
Litigation Settlement Dismissal Order entered June 22, 2015 (Fugate
Dismissal Order). The Court may take judicial notice of matters of public
record such as the Fugate Dismissal Order without converting the Motion
into a motion for summary judgment. See Ennenga v. Starns, 677 F.3d
766, 773-74 (7th Cir. 2012); Henson v. CSC Credit Services, 29 F.3d 280,
284 (7th Cir. 1994). The record before the Court does not indicate the
amount of the settlement. The parties have not briefed what, if any, effect
this settlement has on St. John’s standing.
The Court further questions whether this Court has diversity
jurisdiction over the state law claims in this case. Counts II and III are state
law claims for fraud and conspiracy. St. John’s alleges that this Court has
diversity jurisdiction as an alternate grounds for jurisdiction to hear these

Page 3 of 4

claims.1 Complaint, ¶ 1. The Plaintiff, however, fails to allege facts to
establish diversity jurisdiction. St. John’s alleges that Emergency
Physicians is an Illinois limited liability partnership. Complaint, ¶ 5. A
partnership is a citizen in every state in which a general or limited partner is
a citizen. See Belleville Catering Co. v. Champaign Market Place, L.L.C.,
350 F.3d 691, 692 (7th Cir. 2003). St. John’s does not allege the citizenship
of every partner of Emergency Physicians for diversity jurisdiction
purposes.
THEREFORE, this Court directs the parties to file simultaneous
briefing addressing whether Plaintiff St. John’s has alleged facts to
establish standing to bring this action. The initial memoranda shall be filed
by January 29, 2016, and any response memoranda shall be filed by
February 5, 2016. The Court further directs Plaintiff St. John’s to file a
supplemental pleading by January 29, 2016, alleging the citizenship of
each partner of Defendant Emergency Physicians.
ENTER: January 15, 2016
s/ Tom Schanzle-Haskins
UNITED STATES MAGISTRATE JUDGE
1

This Court has federal question jurisdiction over Count I, which is a claim under the Racketeering
Influenced and Corrupt Organization Act (RICO Act), 18 U.S.C. § 1961 et seq. If the Plaintiff states a
claim under RICO, then this Court has supplemental jurisdiction over Counts II and III. The question of
diversity jurisdiction will arise if Count I is dismissed and the Court declines to exercise supplemental
jurisdiction over the remaining claims. See 28 U.S.C. § 1367(c)(3).

Page 4 of 4