Find Court Cases > Go Back to List > Steadfast Insurance Co. v. Caremark Rx, Inc.

Steadfast Insurance Co. v. Caremark Rx, Inc.

Case Date: 08/17/2005
Court: 1st District Appellate
Docket No: 1-04-3423 Rel

Third Division
Filed: August 17, 2005



 

No. 1-04-3423

STEADFAST INSURANCE COMPANY,

                                        Plaintiff-Appellant,

                                        v.

CAREMARK RX, INC. and CAREMARK, INC.,

                                        Defendants-Appellees.

)
)
)
)
)
)
)
)
)		 Appeal from the
Circuit Court of
Cook County.

No. 02 CH 18381

Honorable
John Madden,
Judge Presiding.



JUSTICE HOFFMAN delivered the opinion of the court:

In this declaratory judgment action, the plaintiff, Steadfast Insurance Company ("Steadfast"), appeals from a circuit court order entering summary judgment in favor of the defendants, Caremark Rx, Inc. ("Caremark Rx") and Caremark, Inc., finding that Steadfast has a duty to defend them in two underlying federal actions, and denying its cross-motion for summary judgment. For the reasons which follow, we reverse and remand the matter to the circuit court for further proceedings not inconsistent with the opinions expressed herein.

The facts giving rise to this litigation are not in dispute. Caremark Rx and its subsidiary, Caremark, Inc., are in the business of providing pharmacy benefit management services to various health plan sponsors throughout the country. In 2001, Steadfast issued a managed care professional liability policy (hereinafter referred to as the "Policy"), pursuant to which it agreed, under specified circumstances, to pay those sums in excess of the Policy's deductible that Caremark Rx might become legally obligated to pay as "Damages" for "Claims" made by reason of "Wrongful Acts" committed by Caremark Rx or its subsidiaries arising out of its rendering or failing to render "Professional Services" in the course of business. Under the Policy, wrongful acts include any alleged or actual negligent act, error, or omission with respect to professional services rendered or failed to be rendered. Any claims arising from, inter alia, dishonest, fraudulent, criminal, intentional, or malicious acts or any acts of a knowingly wrongful nature are specifically excluded from coverage.

On March 22, 2002, Roland H. Bickley filed a putative class action suit on behalf of the Georgia Pacific Corporation Health and Accident Plan and all other similarly situated plans against Caremark Rx in the United States District Court for the Central District of California (hereinafter referred to as the "Bickley Action"). Bickley alleged in his six-count complaint that he is a participant in the Georgia Pacific Corporation Life Health and Accident Plan (hereinafter referred to as the "Plan"), for which Caremark Rx serves as the pharmacy benefits manager and acts as a "fiduciary" to the Plan under the Employee Retirement Income and Security Act (ERISA) (29 U.S.C.