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MEMORANDUM: FIDUCIARY RELATIONSHIP, ESTOPPEL AND MITIGATION FIDUCIARY RELATIONSHIP BETWEEN HOSPITAL AND DEFENDANTS The Illinois Supreme Court, in defining a fiduciary relationship, stated in the case of Seely v. Rowe, 370 Ill. 336, 18 N.E.2d (1938) that: Courts of equity have refused to set any bounds to the circumstances out of which a fiduciary relation may spring. It includes all legal relations, such as attorney and client, principal and agent, guardian and ward, and the like, and also every case in which a fiduciary relation exists in fact, where confidence is reposed on one side and dominion and influence result on the other. (emphasis added) (cites omitted). The relation need not be legal, but it may be either moral, social, domestic, or merely personal. 370 Ill. at 342, 18 N.E.2d at 877. Black's Legal Dictionary, 4th Ed., p. 753 describes a fiduciary relation as "informal relations which exist whenever one man trusts and relies upon another." The existence of a fiduciary relationship is not restricted only to such traditional legal relationships as attorney/client, principal/agent, guardian/ward, board member/corporation, etc., but may be found in other situations where trust and confidence is established. In the instant case, defendants allege that they placed their confidence in plaintiff based on its representation, statements, and actions, that their MA-NG application would be speedily processed. Because of the hospital's expertise in processing Medicaid applications and its day-to-day contact with IDPA, patients trust and rely upon the hospital to timely submit its payment claims to IDPA. Defendant's reliance on the hospital to process the Medicaid application was justified and reasonable. Defendant's First Amended Affirmative Defense therefore alleges facts sufficient in law to establish a fiduciary relationship between plaintiff, a hospital, and defendants, its patients. See Emmett v. Eastern Dispensary and Casualty Hospital, 396 F.2d 931, 935 (D.C. Dist. 1967). EQUITABLE ESTOPPEL DEFENSE Equitable estoppel, also known as the doctrine of detrimental reliance, is a long-recognized doctrine which "preclude[s] a party from asserting a right which might otherwise have existed as against another person when the other person relies in good faith on the party's conduct and is led thereby to change his position for the worst." Hartford Accident & Indemnity Co. v. D.F. Bast, Inc., 56 Ill. App. 3d 960, 962, 372 N.E.2d 829, 832 (1st Dist. 1977). Defendants' Second Amended Affirmative Defense as alleged, clearly sets forth facts sufficient in law to establish the defense of equitable estoppel. The amended affirmative defense alleges that the plaintiff assisted defendant with his MA-NG application, that plaintiff represented that his MA-NG application would be properly processed, and that defendant reasonably relied to his detriment on such representations in not reapply for MA-NG. All the elements for an equitable estoppel defense are present. A DUTY TO MITIGATE DAMAGES ALWAYS EXISTS WHERE THE COMPLAINING PARTY IS ASSERTING A BREACH OF CONTRACT Where one party has committed a tort, breach of contract, or other legal wrong against another, it is incumbent upon the latter to use such means as are reasonable under the circumstances to mitigate or minimize the resulting damages. Kelly v. Chicago Park District, 409 Ill. 91, 98 N.E.2d 738 (1951). Plaintiff is not entitled to recover for a loss to the extent that it has been increased by its own failure to take affirmative steps to minimize the loss. Corydon & Ohlrich v. Kusper Bros. Co., 345 Ill. App. 224, 102 N.E.2d 672 (1st Dist. 1951). The caselaw clearly establishes that a party alleging a breach of contract has a duty to mitigate its damages before proceedings to suit. In the instant case, the plaintiff alleges a breach of contract. Defendants' Fourth Affirmative Defense alleges that plaintiff failed to exercise reasonable care to mitigate its damages by failing to timely submit its payment claim to IDPA. A timely submittal would have reduced its damages by the sum of $2,761.61.
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