Selective Insurance Company of v. City of Paris
769 F.3d 501
7th Cir.2014Background
- Steidl and Whitlock were wrongfully convicted of arson and murders in Paris, Illinois; exonerated in 2004 and 2008 respectively.
- Post-exoneration, Steidl/Whitlock and City Defendants faced insurance defense/indemnity litigation among three insurers: Western World, Allianz, and Selective.
- January 27, 2010: district court granted Allianz and Selective summary judgment, denied Western World; declared terms of indemnity/defense duties.
- May 27, 2010: district court amended Rule 59(e) ruling, clarifying duties to indemnify vs defend; Western World’s second amended complaint denied.
- April 28, 2010: Seventh Circuit issued McFatridge-based Illinois law rule: malicious prosecution occurs when underlying conviction is terminated in plaintiff’s favor.
- October 24, 2012: City moved under Rule 54(b) to reconsider, asserting new controlling law; district court denied, ruling no separate claim remained pending.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 54(b) applies to a final judgment already entered | City argues final order not final for Rule 54(b) because unadjudicated claim exists. | Selective argues judgment final as to all claims; Rule 54(b) inapplicable. | Rule 54(b) did not apply; judgment final and review under Rules 59(e)/60(b) only. |
| Whether Selective's ad damnum defense-reimbursement claim is a separate 'claim for relief' | Selective’s defense-cost reimbursement constitutes a separate relief claim under Rule 54(b). | Costs/reimbursement were ancillary, not a separate claim for relief. | Selective’s request for defense costs was not a separate claim; not subject to Rule 54(b). |
| Whether Western World’s indemnification issue was ripe for Rule 54(b) reconsideration | Indemnification issues were unsettled and ripe for reconsideration. | Defendant did not raise Western World's indemnity issue in motion; waived. | Indemnification issue waived; not considered on appeal. |
| Whether the January 27, 2010 judgment was final under Rule 58/159 | Final judgment not clearly final due to pending issues. | Judgment was final; Form AO 450 used; case terminated. | Judgment was final; Rule 54(b) inapplicable. |
| Whether a change in law after judgment justifies Rule 60(b) relief | Subsequent McFatridge-American Safety updates justify relief. | Rule 60(b) not available to relitigate final judgment based on new law. | Rule 60(b) not available to reopen; no extraordinary circumstance. |
Key Cases Cited
- National Casualty Co. v. McFatridge, 604 F.3d 335 (7th Cir. 2010) (malicious prosecution occurs when underlying conviction is terminated in plaintiff’s favor)
- American Safety Casualty Insurance Co. v. City of Waukegan, 678 F.3d 475 (7th Cir. 2012) (reaffirmed McFatridge; insurer duties under Illinois law)
- Northfield Insurance Co. v. City of Waukegan, 701 F.3d 1124 (7th Cir. 2012) (reaffirmed Illinois insurance-coverage framework)
- Sharp Electronics Corp. v. Metropolitan Life Ins. Co., 578 F.3d 505 (7th Cir. 2009) (ad damnum clauses not equivalent to separate claims for relief)
- Back Doctors Ltd. v. Metro. Property & Cas. Ins. Co., 637 F.3d 827 (7th Cir. 2011) (final judgments should grant relief owed)
- Hill v. Rios, 722 F.3d 937 (7th Cir. 2013) (Rule 60(b)(6) relief requires extraordinary circumstances)