Cook County Record

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Insurance company wants out of destroyed-sperm suits against Northwestern hospital, foundation

By Kenneth Lowe | Oct 22, 2014

Northwestern Medical Faculty Foundation will need to convince a judge its insurance company should cover the costs of litigation it's facing over claims it lost the legacies of several potential families.

The alleged failure of one of the foundation’s cryogenic tanks lies at the heart of suits playing out in the Cook County Circuit Court against the foundation, Northwestern Memorial Hospital and others.

In a bevy of suits filed over the past two years, a number of couples, the majority of whom are identified only as John and Jane Does, claim the 2012 failure of the tank thawed out and destroyed sperm samples they had entrusted the foundation to keep safe.

On Oct. 16, Wisconsin-based Sentry Insurance filed a complaint against the foundation and a handful of others in the court's Chancery Division, seeking a declaration that it doesn't have a duty to defend or indemnify the foundation in the litigation and that it should be reimbursed for money it has already spent.

Sentry is being represented by Christian D. Ambler of Stone & Johnson in Chicago and Milwaukee attorneys Heidi L. Vogt and Jason R. Fathallah of von Briesen & Roper.

While Sentry contends its policy does not cover the claims at the crux of the underlying lawsuits, it acknowledges it previously accepted the foundations' tender of defense.

It, however, stresses it did so under the condition that it reserved its right to terminate the defense, as well as to seek reimbursement for defense costs and any settlement it may pay on the foundation's behalf.

Sentry appears to trying to take advantage of those rights now, asserting that the foundation's policy does not afford coverage for the alleged incident.

“The policy affords coverage for sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury,’ ‘property damage,’ or ‘personal and advertising injury’ as those terms are defined in the policy,” Sentry argues in its suit. “To the extent the underlying actions do not allege ‘bodily injury,’ ‘property damage,’ or ‘personal and advertising injury,’ there is no coverage under the policy.”

Sentry is not only seeking a declaration it has no obligation to defend or indemnify the foundation, but also a court order awarding it a reimbursement for the money it has already spent on the defense, as well as costs and fees.

The underlying litigation stemming from the busted tank continues to work its way through the court system. Last month, a panel of the First District Appellate Court upheld the plaintiffs' use of pseudonyms in bringing their claims.

The appeals panel -- Justices Stuart E. Palmer, Robert E. Gordon and Jesse Reyes-- agreed with the lower court and rejected the due process argument presented by Northwestern's hospital and foundation that challenged the anonymity of some of the plaintiffs.

"Here, those individuals' most basic human right, to have a biological child, has been
irrevocably destroyed through no fault of their own," Palmer wrote for the panel in his Sept. 19 opinion. "We can imagine few circumstances more devastating, more highly personal and more entitled to privacy."

The plaintiffs in the underlying litigation, according to the insurance company's complaint, are being represented by a number of attorneys from the following law firms: Corboy & Demetrio; The Howard Law Firm; Goldberg & Goldberg; Pfaff & Gill; Copeland, Finn and Fieri; Burke Wise Morrissey & Kaveny; Belin McCormick; The Patterson Law Firm; and Whiteside & Goldberg.

Court records show Northwestern hospital and foundation are being represented by attorneys from Donohue, Brown Mathewson & Smyth in Chicago and Cook County Circuit Judge Thomas H. Hogan is presiding over the matter.

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Organizations in this Story

Corboy & Demetrio Northwestern Memorial Hospital

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