Beckwith MacHinery Company v. Travelers Indemnity Company

regulations provide do not the HUD While of what

an exhaustive list constitutes cause,”

“good “good to infer that it is fair mortgagor’s

cause” exists when the request

failure to conference is caused mortgagor.

no fault on the

Here, appellant it cannot be said First, appellant

without fault. does not allege timely that she ever wrote a

letter to she ever HUD or that asked to

speak Aladjem to Mr. the letter of Second, her

March 29 instructed to do.

there is no indication administrative

record or the court record district

employee represented ever HUD

appellant was not entitled to a conference most,

upon timely request; at the record

indicates that the unknown woman with appellant

whom stated conversed Gibbons, Judge, dissenting Chief filed pellant’s too low for income was HUD to opinion. thus, accept assignment; merely she iterated a reason HUD’s preliminary accept assignment.

determination not to

Finally, appellant did not seek counsel or

request a August belated conference until though 1985 even HUD’s April letter of 25, 1985 indicated that foreclosure was im- thus,

pending; appellant dilatorily. acted circumstances, agree

Under these I

the district court that HUD’s actions were arbitrary capricious.

neither nor

I would affirm the of the dis-

trict court.

BECKWITH MACHINERY

COMPANY, Appellee, INDEMNITY

TRAVELERS COMPANY, Appellant.

No. 86-3481.

United Appeals, States Court of

Third Circuit.

Argued March 1987. April

Decided Herring of an contract when Herrington (argued), a breach K. William Pa., Travelers, insurer, Grater, appel its de- Pittsburgh, withdrew ton and underlying in an action.3 fense of Beckwith lant. July court entered an order on The district Powell, (ar- Weiss P. Charles Deborah 11, granting 1986 Beckwith’s motion for Armstrong, Pitts- Thorp, Reed and gued), denying summary judgment and Travelers’ Pa., burgh, appellee. summary judgment. motion for The dis- judgment on trict court entered a behalf GIBBONS, Judge and Chief Before $100,000 plus in the amount of Beckwith GARTH, Judges. Circuit SEITZ 12, 1982 in order interest from November for its settlement to reimburse Beckwith THE OF COURT OPINION Corporation in payment made to Trumbull GARTH, Judge: Circuit Additionally, the action. this case procedural posture The which Beckwith the attor- district court awarded confront a heretofore forces us to arises ney’s and costs incurred its defense question appellate jurisdiction undecided Finally, the action. dis- circuit, a district namely, whether for this trict court ordered Beckwith was enti- awarding, yet quanti- order but not court’s attorney’s fees and costs for the tled to order1 from attorney’s fees is a final fying, of contract ac- trial of the instant breach appeal may be taken when which an yet quanti- district court has not tion. The a collateral matter arises not as of these fee awards. fied either separate statutory provision, but under F.Supp. 638 underlying cause from the instead results contract) (here forms the which of action II. parties. between the basis of conclude that Because we finality of a district The integral part of the in this case are an the merits disposing order court’s sought by Beckwith and relief ordering, quantifying, attorney’s but not determined, yet to such fees have this court has wres fees is one final order. we will dismiss is no question has for some time.4 The been tled reaching the merits of the appeal without regard to cases definitively settled with dispute.2 involving unquantified attorney’s by a of fees is authorized when the award

I. as a collateral matter. separate statute cases, court, resting on White For such this plaintiff-appellee, Beckwith Machin- Em Hampshire Department v. New (Beckwith) diversity filed this ery Company 445, 102 ployment Security, 455 U.S. S.Ct. against defendant-appellant Travel- action 1162, (1982), adopted (Travelers) 325 has alleg- 71 L.Ed.2d Indemnity Company ers controversy, history see provides, perti- 4. To trace 1. Section 1291 of 28 U.S.C. 529, Inc., part: appeals Baughman Cooper-Jarrett 530 F.2d court of ... shall have "[t]he nent 825, denied, (3d Cir.), jurisdiction appeals from all final decisions 97 2 cert. 531 n. States____” 78, (1976); district courts of the United Richerson v. S.Ct. 918, (3d Cir.1977); Jones, De F.2d 551 921-22 merits raises essen- 2. Travelers’ on the Inc., Long Corp. Raymond International 622 (1) tially the district court three issues: whether (3d Cir.1980); v. Ferro O'Hommel Co. F.2d 1135 granting summary judgment because erred in 340, 1981) (3d Cir. cert. de Corp., F.2d 354 659 remained; (2) disputed issues of material fact 1711, nied, 72 L.Ed.2d U.S. 102 S.Ct. 455 estopping court erred in whether the district Co., Boeing (1982); 662 F.2d Croker v. Beckwith; denying coverage of Travelers from 1981) (in banc); (3d and Halderman v. Cir. the district court erred whether Hospital, 673 F.2d School & Pennhurst State awarding fees. the above-mentioned Cir.1982) (in banc) (sur (3d petition for 643-45 brought underlying action involved a suit 3. The denied, rehearing), U.S. cert. against Corporation Beckwith and Trumbull (1984). 79 L.Ed.2d Company, essentially Caterpillar Tractor cerning machinery. defective deciding the rule that an order stipulated awards must be determined be- appealable a case is final therefore final.”); fore a see also Lewis from, separate apart prior as well as K, Inc., v. S.L. & to, quantifying an order the attorney’s Cir.1984) (White distinguished; attorney’s authority awarded under the fees in shareholder derivative suit were statute. Halderman v. “integral Pennhurst State to a judgment, final merely Hospital, it”); School & collateral University Johnson v. (3d Cir.1982) (in banc) (sur petition for re- Bridgeport, (2d Cir.1980); 629 F.2d 828 hearing). Isbrandtsen, Union Tank Car Co. v. 416 (2d Cir.1969); F.2d 96 Casualty Aetna & Hampshire, White v. New the Su- Surety Giesow, Co. v. 412 F.2d 468 preme Court determined that a claim for Cir.1969). attorney’s fees under 42 U.S.C. 1988 § legal “raised issues collateral to the main The Fifth Circuit has recognized likewise action,” White, 451, cause of distinction, 445 U.S. at a and it has fashioned ap- an 1166, 102 request S.Ct. at and such proach a was that upon turns “the nature of the not a motion to judg- alter or amend plaintiff’s cause of action and the source of 59(e) ment under Rule of the Federal Rules his entitlement to attorney’s fees.” Rodri- of Civil Procedure. The Court maintained guez Handy, 817, (5th v. 802 F.2d 819 “[ujnlike relief, that other Cir.1986). the attor- A fuller articulation of the Fifth ney’s fees allowed under 1988 are not Circuit test for finality appears § in Holmes compensation injury giving for the rise to Co., v. Ray J. McDermott & 682 F.2d 1143 cert, an action.” Id. at (5th 102 S.Ct. at Cir.1982), denied, Moreover the Court asserted (1983): awarding attorney’s under attorney's When fees are similar to costs U.S.C. uniquely separable 1988 “is § ... or collateral to an action ... a lack of proved cause of action to be at trial.” determination as to the amount does not Id. preclude final, appeal- issuance of a judgment able When, on the merits. This court has ques- never addressed the however, the attorney’s fees are an inte- tion of whether the White gral part of the merits of the case and intended to apply to cases in which relief, scope cannot be char- attorney’s arises as a col- acterized as costs or as collateral and lateral matter under a their any final, determination is a provision, but also to cases in which the fee appealable judgment. award integral arises as an part of the dispute. note Holmes, We at the 682 F.2d at 1146. outset that there split among is a the cir- The Fifth applied Circuit has the Holmes question. cuits on this test in declaring later cases appel that an late court does jurisdiction not have before III. attorney’s fees quantified. have been Ox The Second recognized Circuit has Production Credit Ass’n v. Duck ford collateral/integral worth, distinction and held (5th Cir.1982) (under 689 F.2d 587 “where attorney’s fees are a contractually Mississippi law, attorney’s provided stipulated damages, element of integral contract are to the is not final until the fees have collateral); been deter- merits and not County Alcorn mined.” F.H. Krear & Co. v. Inc., Nineteen Supplies, U.S. Interstate 731 F.2d Trustees, Named (2d 1160, (5th Cir.1984) (attorney’s fees in Cir.1985). White Hampshire, v. New su- action integral RICO to the merits pra, was “inapposite” considered because because the RICO statute “both creates the it concerned pur- awards of plaintiff’s provides cause of action and suant to a separate statute rather damages”); than a Shipyards Todd (“White contract. Id. ... does not lead Corp. Transportation, S.A., us v. Auto to abandon our clear rule contractually (5th Cir.1985)(in F.2d an action for implied warranties of workman- breach Ironworkers’ Local v. Madison Indus- tries, (9th performance, like “an award of 733 F.2d 656 That regarded as collateral to the rejecting fees cannot be court offered three reasons for integral part forms an case-by-case approach. action but First the court not- relief”); FDIC, scope Hooper approach 785 ed such an “spawn would (5th Cir.1986) (under body Texas whole new of law” which would lead law, motions for un- unnecessary expenditure of judicial integral part der a note or contract are an Second, resources. the court was con- merits; appeal dismissed for want of cerned that the issue of timeliness of appellate jurisdiction); Drilling, Bilmar peal limit post-judgment could counsel’s liti- Co., (5th Leasing Inc. v. 795 F.2d 1194 IFG gation Third, strategy. because the court Cir.1986)(under theory, attorney’s contract provides believed that the expenses merely fees and are “not collat- attorneys with the best device for deter- merits,” eral to whereas motion under mining appeal, the time for it reasoned that attorney’s 28 U.S.C. 2202 for fees and § the rule would reduce the odds of an “un- collateral). expenses is fair” determination that an was un- timely. adopted The Eleventh Circuit has also McQurter approach. the Fifth Circuit v. Similarly, the Seventh Circuit has held Atlanta, 881, (11th City attorney’s provided fees statute are of Cir.1984); British Certain Underwriters no different provided by from those London, Lloyds England at v. Jet Exchange tract. of National Bank of Service, Inc., Charter 739 F.2d Daniels, Chicago v. 763 F.2d (11th Cir.1984); Corporation v. C.I.T. Nel- (7th Cir.1985), the court concluded “that

son, (11th Cir.1984).5 743 F.2d power the source of the to award fees does finality not matter. The of a decision de- Fifth, Although Second, and Elev- pends on the kinds of issues the court case-by-case enth Circuits have chosen this determines, not on authority the source of approach, other circuits declined have to for the court’s decision.” Id. at 293. recognize any distinction an order between awarding 1988 fees and an order award- § Eight The and Sixth Circuits have also ing fees in a They contractual context. approach. followed this Morgan See adopt bright-line approach, instead a hold- Manufacturing, Union Metal 757 F.2d awarding that all attorney’s orders (6th Cir.1985)(refusing adopt to quantified, whether or not are orders con- integral/collateral though distinction “even cerning a collateral issue that does not may occasionally prove harsh” because finality affect the of a merits order. such a distinction would not “best serve[ ] opted bright- litigants court”);

The Ninth Circuit for this the interests of and the approach line Bridge, in Int’l Ass’n Estridge, United States v. 797 F.2d of Structural, Ornamental, (8th Cir.1986) (“We find no rational Reinforc- final, attorney’s 5. We part also note that both the First Circuit of amount fees is recognized appealable judgment.” the District of Columbia Circuit have Id. at 3. Because the drawing collateral/integral the basis for a attorney’s dis- case before it involved an award of tinction, collateral, posi- clearly but both have declined to take a fees that was the court de- squarely presented. tion before the issue was adopt clined to decide whether it would a differ- ent rule for those cases in which the award of Maccoccio, (1st In Crossman v. 792 F.2d 1 attorney’s "integral part” was an Cir.1986), the First Circuit identified three dif- merits. (1) types attorney’s ferent fees: those which Circuit, Similarly, costs, the District of Columbia (2) are similar to those which are an Crowley, integral 501-02 n. 1 part scope Shultz the case or of relief (D.C.Cir.1984), recognized some courts sought, and those which are collateral to an attorney’s drawn a distinction between have action. It noted that some courts had conclud- cases, nonstatutory fees based on type ed that "in the first and third a court, however, authority. unap- sources of de- on the merits is not rendered pealable simply clined to decide the issue and limited its "discus- because the amount of attor- determined, ney’s by requests fees has not been but sion and to the issues raised that in case, type statutory attorney's the second determination fees.” Id. determining that claim for present basis for attor- In the case we have an insurance independent company which was ney’s failing fees is collateral to and sued for to attorney’s defend its insured. purposes of the merits some but not for required spend that the insured was others”). to defend itself in the lawsuit portion form a substantial the damages IV. claimed. attorney’s until the fee as- careful After consideration of the pect quantified, order, order authorities, arguments various we re in the hypothetical contract necessar- ject bright-line approach appealabili ily finality lacks as it has not ended the ty and hold when the award of attor merits and there is still ney's out of fees arises of the more for to do.6 sepa claimant’s cause action and is not Hampshire, supra, White v. New simply rately providing authorized a statute support cannot proposition be read award, such an an order does become attorney’s that all fee determinations are to quanti final until the fees are White, be deemed collateral. In the Court fied. held request that an was not appropriate judgment. Such a result is most motion to alter or amend the White, But in appellate request those cases where review of arose under (42 awarding statutory provision requires order U.S.C. 1988),and fees could inquiry pro- detailed into the therefore be award- § ed when, modifying upsetting without ceedings. is the or Such case as in the judgment on appeal, the merits. part instant the fees awarded parcel of the relief and of the court, In the however, case before this damages otherwise, incurred. Were it we part the fee is an integral award needlessly would encouraging piecemeal be damage directly award arises out of appeals with concomitant waste of Thus, initial liability.7 determination of scarce resources. part is a judg- award consequence, any itself. As a motion Indeed, purposes determining modify upset finality of an order from may necessarily quin- would fall within taken, be can in logic we find no basis reconsider, tessential 59 Rule motion to distinguishing the case before us from that alter, or amend the situation of a which, breach contract action —a vastly different than the situation con- among damages claimed, other liq- involves Reason, sidered in White. common-sense damages. case, uidated In the latter logic compel the conclusion that summary judgment district court’s order Supreme Court did not holding intend its in holding the defendant liable for breach of applied White to to a such be case as this. not contract does become order a final until quantified only court has not the con- We are aware that some commentators tract damages, liquidated but also dam- have recommended the ages. proach, noting advantage that its chief 6. A defending final order has been defined one which incurred in Trumbull “ends the nothing on the merits and leaves portion lawsuit would then have been judg for the court to do but execute damage e.g., total award. See Krear & Co. F.H. Risjord, ment.” Firestone Tire & Rubber Co. v. Trustees, v. Nineteen Named 1564 368, 373, 669, 673, 449 U.S. 66 L.Ed.2d Indeed, argument, at oral (1981). $100,000 granted order which Beckwith summary partial judgment. characterized as a complaint 7. We observe that Beckwith's de- summary judgment appeal- not Partial cases are jury summary judg- manded a trial. if 54(b) able in the absence Fed.R.Civ.P. certi- Beckwith, trial, ment had been denied and after Liberty fication. See Mutual Insurance Co. v. verdict, jury had obtained favorable then the Wetzel, 737, 739-44, S.Ct. jury charged would have been with the task of 1204-06, (1976). determining damages the total due Beckwith fees Beckwith attorney's from Travelers. The by per- its momentum would be arrested See, Wright, A. Miller & e.g. 15 C. clarity. Procedure, compo- mitting separate Practice and reviews of the Cooper, Federal E. (1986 recog- Supp.). We too in cause. nent elements a unified 3915 at § having a rule importance nize States, v. United U.S. Cobbledick unduly complicate identification not 324-25, S.Ct. L.Ed. that results test or event (1940)(footnotes omitted). But the value acquiring jurisdiction. Therefore, a merits we conclude that or- severely com- bright-line rule is having a jurisdiction der cannot vest us with when it generality promised when fees, provides yet also important underlying differences— masks quantified, of and which fees long-settled differences that undermine out of the cause of action but were arose appeals may principle that be jurisdictional by statute. separately authorized that are final in only from orders taken appeal in a case is to time for such be parties of all disposed have entry from the of the order ulti- measured Permitting the fee award all issues. outstanding mately quantifying the fee is- sepa- this one to treated a case such as sue.8 order of which is rately from the merits appeals only piecemeal lead to part can —a by every ap- long renounced practice since V. pellate court. Applying this to the facts of giving finality rise to The considerations present it is clear that the order rejecting as a condition for review appealed is not a from which Travelers stated succinct- piecemeal appeals has been jurisdiction order vest final which will ly in v. United States: Cobbledick this court. The district court found that is an Finality as a condition of review duty had its to defend Travelers breached appel- of federal characteristic historic The court then awarded Beck- Beckwith. It was written into the procedure. late fees for the Beckwith departed Judiciary Act and has been first litigation and the at Trumbull of it would when observance torney’s pros incurred Beckwith right any to practically defeat the review ecuting Both awards of the instant action. right Since the to a at all. unquantified. attorney’s fees remain court is a matter of from more than one it fees that Beckwith incurred when of grace necessary ingredient not a underlying the Trum- forced to defend was very begin- Congress from the justice, lawsuit, incurred as a direct re- were bull has, forbidding dispo- ning piecemeal duty its to of Travelers’ breach of sult practical appeal sition on of what for under the insurance con- defend Beckwith controversy, it- purposes single is a set attorney’s fees was of tract. This award against enfeebling judicial adminis- self arid Beckwith’s cause of action part of Thereby is the obstruc- tration. avoided part as a of the relief claimed Beckwith from just tion to claims that would come These sought against Travelers. it which of a permitting harassment and cost the product not the fees were separate appeals from the succession of Thus, in ab- statutory authorization. litigation may rulings a various to which of quantifying this award of an order rise, sence give entry from its initiation to of fees, Trav- attorney’s the order which effective, judgment. To ad- be finality.9 appealed elers lacked leaden-footed. ministration must be order, attorney’s regardless of when holding obviously its In so we do not disturb Keve, circuit, jurisprudence finally quantified. of this that an West v. settled peal may are 91, finally be taken from an order that attorney’s the merits of the case even if resolves arise a collateral matter under fees which separate as from, appealed in full states: 9. The order yet quantified. In this statute are not NOW, to-wit, July, day 11th of "AND situation, appeal to be latter the time for foregoing stated in the reasons for the entry mer- measured from the of holding els, light of that failure to our the federal judiciary has demonstrated quantify fees in the Beckwith- incapacity to intelligently deal with the Trumbull resulted a non-final subject interlocutory when review order, it is not essential for us to consider Appellate Civil See be should available. the effect failure appealability on Jurisdiction 1), (pt. 47 Law and Contemp. quantify the award in the Beck- fee instant Probs., Spring at 1. The whole sub- litigation. Although with-Travelers we ject out congressional cries for attention. need not reach that issue because we have opinion the court this case is already held that order of the district typical. opportunity Given the adopt final, that, court is not we observe give guid- that would clear event, ance as to when an the merits Beckwith for instant action should be taken, must be would avoid unnecessary regarded differently no than the award of litigation at the quan- trial court level over Beckwith-Trumbull tification of fees, liability attorneys’ for litigation inasmuch as both incurred would avoid adjudications future over when consequence as a direct and result of Trav- taken, appeals may be majority rejects contract, elers’ breach by drawing logical impractical but damages both constitute due distinction between liability for Beckwith. liability fees and growing out of a We appeal, will dismiss Travelers’ with- undertaking. consequence One prejudice, out lack appealable of an majority’s approach is that the trial order. adjudicate have to will which, if the appellant is correct on the GIBBONS, Judge, dissenting: Chief issue, need never have Any system adjudication provides consequence been resolved. Another appellate should, review for the benefit litigants in future cases which fees participants system, all in that have at will have to determine whether 1) least these three features: clear rules as falls majority’s case within the to when appellate may review or must be here, within Supreme or Court’s hold- sought; 2) workable rules tend to Depart- White New unnecessary avoid premature adjudica- Employment Security, original tions at appellate both the and the 3) system; levels of the rules which, pointed —a decision out hereaf- operation disputes do not tend to multiply ter, always A easy. third conse- require judicial which The mon- resolution. quence is that in any doubtful strous edifice judiciary which federal party loses on issue still has temple erected as great to that white always whale, attempt interlocutory appeal an the rule, final satisfies in order to avoid none of the risk of later Moreover, syllo- these criteria. the gistic process that whereby untimely. an is judges federal im- This pose required one bad logical adjudi- rule the therefore will be inevitable consequence prior of bad cate issue never rules is mechani- an which need have been Hampshire jurisprudence New cal at its White v. all worst. At lev- had the resolved Opinion, hereby ORDERED, it is ADJUDGED 4. Counsel for the are Plaintiff directed to twenty (20) days DECREED that: file an affidavit within of the Judgment 1. Summary filing setting Plaintiffs Motion for of date this Order forth the above-captioned hereby by the reasonably expended matter be and hours them in de- GRANTED; is fending Plaintiff in the Trumbull case and in Summary 2. Judg- representing along Defendant’s Motion for Plaintiff in this action with services; above-captioned hourly in the matter usual for such their rates DENIED; hereby is may respond, Counsel for 5. the Defendant affidavit, Judgment 3. entered is in favor of the Plain- to the Plaintiffs submission with- $100,000.00 tiff for days with interest from Novem- in ten thereafter.” 12, 1982; ber Appendix at 993. obligation. Further, to all that applied across board breach of rule been presence the defense in the disputes. of covenant attorneys’ fee distinguish insurance contract does relationship between In this two situations because that covenant does gives dispute rise to the is an parties which apply terms the instant law- contains inde- contract that two insurance sought suit and the fees in the instant undertakings by Indem- Travelers pendent lawsuit are for the enforcement of both the indemnity undertaking Company nity —an obligation and indemnity the defense cove- insured, undertaking. The defense and a majority’s equating nant. The of fees re- Company, Machinery after set- Beckwith coverable under the terms of the insurance claim, tling sued to contract and fees recoverable as a matter indemnity obligation both the enforce apart Pennsylvania of law from that cove- obligation. It also re- the defense nant is therefore unwarranted. It is also covery attorneys’ for the fees incurred in unfortunate, majority’s since the casual re- action. The insur- prosecuting the instant generate litigation surely mark will future provision contract no for the ance makes both and outside the con- within insurance due, They attorneys’ fees. payment tract context. all, only the common law or a if at because Postponement quantification of lia- statute, modifying Pennsylvania the Ameri- bility for the cost defense of the Beck- should party rule that each bear its can presents with-Trumbull lawsuit a closer fees, imposes obligation a fee on an own which, language because company for breach contract. insurance 54(b), sep- must be considered Fed.R.Civ.P. majority opinion in the The statement arately policy light considerations “the fees to Beck- that award of Supreme which led the Court to decide re- for the instant action should be with Hampshire. The White v. New White than the garded differently no applica- New Court held that attorney’s fees Beckwith-Trumbull tion award could be [liability] inasmuch as both were provided the time in Fed. considered after consequence incurred as a direct and result 59(e), R.Civ.P. because “the decision court’s of Travelers’ breach of require to fees will entitlement ... ignores fact there is no tract” inquiry separate from decision on undertaking pay in a inquiry that cannot even com- merits —an ” indemnity for breach either the suit party ‘prevailed’ mence until one has Thus, future, the defense covenant. 59(e) “application Rule ... because majority cited for the opinion will be pro- necessary desirable to [n]or [n]either proposition fee award in a con- finality, judicial economy, mote or fair- dispute, predicated upon a tract when 451-52, ness.” at 102 S.Ct. at common state statute or a state law we should consider whether rule, modifying the American result “a inquiry requires inquiry of the breach of contract.” merits of the over obligation, postpon- indemnity whether a rule hold- Such is inconsistent ing inquiry until after is made review Hampshire, since White v. New promotes finality, judicial economy, and is no analytical difference between fairness. modifying the the federal statute American rule which case addressed and the Although the defense covenant and Pennsylvania modifying American law are indemnity covenant contained opinion majority contract, independent rule which the addresses they clearly are same See, recovery prose- e.g., Montgomery in reference to fees for undertakings. cases, Co., cuting the In both al- Indemnity instant suit. & Co. v. Ward Pacific Cir.1977); though Enterprises, assessed of a fees are because Kelmo Co., separate legal obligation Union Insurance breach Inc. Commercial (1981). In- obligation, classified, 426 A.2d they Pa.Super. fee can be if so, deed, frequently sepa- they litigated are judge to do as a decides “result” separate rate lawsuits and. involve apply. claims should not The we must A for relief. decision one claim is un- consider is whether there policy are rea- questionably collateral to the other. for, effect, sons prohibiting the district example, might for an insurance company separating court from disposition the final declaratory judgment lose a action that is dispute disposition fee from the final obliged defend, successfully to and later the dispute the indemnity over obli- seeking defend an action to its enforce gation. undertaking. indemnity In this it so argument One prohibi- favor of such a happens that both claims were asserted is contracting party tion that the is entitled dispute the same lawsuit because the arose jury to have the same determine the obligation too late to resolve the defense amount of reasonably the fees incurred in liability underlying before the claim was defense of the liability claim. not, happenstance This settled. should argument pressed This is not either however, the fact obscure that the claims Beckwith, Travelers or party for neither action, in issue in this while both contractu- objected postponement quanti- to the al, every are in real sense collateral to each fees; fication of party indeed neither con- other. appellate jurisdiction. tends that we lack happens legal It also that in this case the Assuming argument open, were how- respect and factual issues to with the insur- ever, I reject would it because the claims obligation company’s indemnity ance and for indemnification for costs of defense obligation defense so similar that a analytically are so distinct can in favor of decision Beckwith on the indem- no argument be serious that the seventh nity probably collaterally estop claim will requires amendment their submission to respect liability Travelers with on its jury. same See Gasoline Products liability. defense covenant This fact should Champlin Co. v. Co., Refining however, dispositive, not be for collateral 75 L.Ed. 1188 estoppel operates often law- (seventh prohibit amendment does not two suits. weWere to affirm on the indemnifi- being issues from separately tried where issue, only likely cation issue to remain independent” are “distinct and of each unresolved would be the amount of the other). Thus, us, if the I issue were before fees—not because the fee col- claim not try would hold that trial court could claim, lateral to the indemnification but liability indemnity for breach operation estoppel. of collateral On tract and for contractual defense hand, other towe reverse on the separate juries. costs before claim, indemnity since the defense covenant covenant, is broader than indemnity We are all too familiar with the fact that liability for defense costs and the amount litigation the quantification over of attor- might open thereof still subsequent has, neys’ development since probably review. This difference will away rule, the trend from the American pear only disputes over insurance con- very time-consuming enterprise. become contracts, rule, tracts. In most other liabili- Hampshire New White v. has the ty fees will be coextensive with the permitting considerable merit of district undertaking. contractual courts avoid such until such quantification time as it is clear that question presented respect to necessary. The merit of the White company’s an insurance de- contractual Hampshire applies New is, therefore, equally slightly fense covenant differ- disputes. In contract fee most of these presented ent from that in statutory fee providing cases cases “pre- an award to the

vailing fully liability for party.” resolve the company The insurance might fees, leaving open quantification. prevail on the their cost defense context, prevailed if it indemnity on the insurance contract where obli- gation. obligation This persuade difference defense does obli- gation coextensive, me that the White v. New are not rule a rare case complexity liability the needless resolution of barnacles of that it may in which arise open leave a liabili- has become a beached carcass. We should for indemnification fee this case and decide now resolution reserved avoid ty issue for simple liability dispute. possibility such a merits of the rather issues (which practically is non- presented appeal. case in this existent) sufficient reason for carv- is not a to the New exception White v. out an rule,

Hampshire litigation.

tract countervailing considera-

If level, appellate

tions at the operating imposing on the might

case be made obligation quantifying courts the district CLEATON, M. Everett liability entering a fees before Plaintiff-Appellant, are none fee case. There every contract out, pointed As I have case. the instant v. case, issues, every in almost SECRETARY, DEPARTMENT OF legal, will control usually HEALTH AND HUMAN they adversely If are decided issue. SERVICES, Defendant-Appellee. appellate court will never claim the not, very dispute. If see the fee GWALTNEY, Milton L. disputes quan- large over percentage Plaintiff-Appellant, For the of fees will be settled. tification v. not, the to the disputes few that are cost SECRETARY, DEPARTMENT OF system having a entire federal AND HEALTH HUMAN consider over panel second SERVICES, Defendant-Appellee. issue, compared with the cost of when obligation on the courts imposing the trial TAYLOR, Plaintiff-Appellant, Henry V. determining every the amount insignificant. SECRETARY, DEPARTMENT OF litiga resolving spend far more time We HEALTH AND HUMAN than would ever be appealability tion over SERVICES, Defendant-Appellee. considering separate spent appeals disputes. I would fol contract fee 86-1581, 86-1591 and 86-3054. Nos. precedents low those courts the sound Appeals, United States Court applied New appeals have White v. Fourth Circuit. governing as a rule attorneys’ fees, regardless all disputes over 12, 1986. Argued Nov. exception to the American whether 2, 1987. April Decided contractual, law, statu common 27,1987. Rehearing May Denied tory. See, Estridge, e.g., United States v. (8th Cir.1986); Ex F.2d Chicago v. Dan change National Bank of Cir.1985);

iels, (7th 292-94

Morgan Manufacturing, Union Metal (6th Cir.1985); Interna F.2d Structural, Bridge, Ass’n Orna tional

mental, Reinforcing Ironworkers’ Industries, 75 v. Madison

Local Union (9th

Inc., whale, judg- the final great

That white rule, has become so encrusted with

Case Details

Case Name: Beckwith MacHinery Company v. Travelers Indemnity Company

Court Name: Court of Appeals for the Third Circuit

Date Published: Apr 1, 1987

Citation: 815 F.2d 286

Docket Number: 86-3481

Court Abbreviation: 3rd Cir.