An Agent and Principal Are Not Generally Considered in Privity Unless the Prior Matter Concerned a Matter Within the Agency
Brooke Atherton was severely mentally and physically disabled and in need of ongoing medical care. Her parents, on her behalf, successfully brought an action for declaratory and injunctive relief, requiring the State of Illinois Quality Health Care Plan to cover hours of nursing care that Brooke’s treating physician determined to be “medically necessary.” After that, they sued Defendant for violating the Illinois Consumer Fraud and Deceptive Business Practices Act in that they committed common law and statutory fraud in order to reduce the number of private in-home skilled nursing care Brooke received. The trial court granted Defendants’ motion for summary judgment, finding that the first suit had res judicata effect on the claims in the second suit and that plaintiff had failed to plead the reliance element for common law fraud.
The appellate court found that Defendants failed to show the third element of res judicata – an identity of the parties or their privies. The court noted that agents and principals are not ordinarily considered in privity with each other unless the prior action concerned a matter within the agency. The court then found that a genuine issue of material fact existed as to whether defendants were in privity with Illinois Quality Health Care Plan; therefore summary judgment could not be granted on the basis of res judicata.
Next, the court found that the Plaintiffs would not be able to prove reliance as a matter of law. The court reasoned that just because plaintiff’s openly disagreed with the defendant’s explanations as to why Brooke’s nursing care should be reduced, this does not mean they did not rely on their explanations.
Atherton v. Connecticut General Life Insurance Co., 955 N.E.2d 656, 353 Ill.Dec. 189 (Ill.App. 1 Dist., 2011), No. 1-09-0727
