Daniel Sims and Andrea Sims v. Ega Products, Inc., Meadowbrook Risk Management, Ltd., Potential Intervenor-Appellant
475 F.3d 865
7th Cir.
2007
Check Treatment
Docket

*1 and for further Complaint, Third Amended opinion. with this

proceedings consistent Sims,

Daniel and Andrea SIMS

Plaintiffs-Appellants, PRODUCTS, INC., Defendant-

Appellee. Management, Ltd., Risk Intervenor-Appellant.

Potential 06-1057, 06-1268.

Nos. Appeals, Court of

United States

Seventh Circuit.

Argued Dec. 2006.

Decided Jan. *2 Debonis, Debonis, Jr., after its answer to the com- Five months Smith & Anthony due, filed a motion to plaint had been EGA IN, (argued), Lauren Robel Highland, 55(c), default, Law, vacate the see Fed.R.Civ.P. Bloom- University of School Indiana inac- for the earlier blaming Meadowbrook Plaintiffs-Appellants. IN, for ington, judge recommended tion. The Lewis, Newby, (argued), KusW. Martin denied, observing that that this motion be IN, Jones, Defen- Laporte, for Kaminski way to Meadowbrook give the best danh-Appellee. EGA, incentive to take care is to amerce expense could shift the to Meadow- which Burke, (argued), Cos- F. Parker Robert concluded judge But the district brook. Merrillville, IN, Appel- Cuppy, tanza & injury attributable to Meadow- the lant. mil- neglect brook’s is much less $31 lion, proposed dispro- the award making EASTERBROOK, Judge, Chief Before wrong. judge’s the In the portionate to SYKES, Circuit and CUDAHY view, correspondence between the lack of Judges. fault and the

EGA’s limited reopening the award was cause” EASTERBROOK, Judge. Chief default, judge set aside the case. The thus platform a lift Daniel fell from Sims holding open possibility that a while seriously and was made EGA Products might be in or- appropriate more sanction platform injured. Contending der. defective, his wife Andrea Daniel and was diversity discovery completed, had been a tort under the After filed this implemented via an offer of being pro- served with settlement was jurisdiction. After cess, under Fed.R.Civ.P. 68. The set- papers to Meadow- EGA sent provides that North American Management, superin- Risk which tlement brook pay the Manufacturers Insurance will coverage. tends EGA’s insurance remaining full amount on would ar- Simses the anticipated Meadowbrook $761,000. defense, policy, some Plaintiffs range policy provides. for a as the EGA’s right question to American Manufacturers Insurance reserve the North the default should have been set policy; issued the EGA deals with whether Co. aside; that, Meadowbrook, if we through provides the settlement insurer which of reverse the district on this past had obtained counsel behalf default, receiving After and reinstate the then EGA would both insurer insured. notice, however, any in excess of try recoup Meadowbrook did—noth- to award (An $761,000 insurer, order notify It did not did not from Meadow-brook. ing. EGA, represent requiring and did the district court reinstate engage counsel damages open, would leave for the protect not alert EGA to the need to default interests; just magis- sat on district did not rule on the own to award no one filed an answer trate recommendation its hands. Because million.) behalf, Finally, “in the event that on EGA’s the district court’s clerk $31.2 Appeals declines to rule for entered a default. Alerted to this the Court EGA, inactivity any concerning continued. reason on all issues [the Meadowbrook’s ... magistrate judge judgment], parties recommended default When placed position receive million in dam- back into the same plaintiffs $31.2 settlement], i.e. lawyer prior [this hired its own to see were ages, EGA trial in district court”. salvaged. awaiting the situation could be whether Meadowbrook, nothing an issue for decision. having done Courts EGA, protect regularly entertain disputes client decided from such dis protect its litigation. tort by intervening positions doubting finality. without their itself settlement, arguing that the opposed It A settlement reserves issue for million award would possibility because it com *3 injury. argu- it of its cause economic One pletely litigation resolves the if no appeal ments was that Rule 68 had not been used ensues, but also an because affirmance properly. designed Rule 68 is to shift that disposition place. leaves No fur litigant proper costs to a who refuses litigation ther will occur. The civil rules offer; accepted, here the offer was provision comparable lack a to Rule parties got “yes” to is 11(a)(2) how beside rules, of the criminal but this does point. par- But if became a jurisdiction. not affect So we held in Dow ty, it could the settlement with- block Co., ney v. State Farm Casualty Fire & own assent. The district Cir.2001), 266 F.3d 682-83 when however, intervene, the motion to denied taking jurisdiction an appeal from a observing liability, that if Meadowbrook’s on based a conditional settle in a any, could be addressed follow-on inment a civil case. action if this court should reverse and a provision Does the settlement’s that the Judgment ensue. $31 litigation resumes if to we refuse take the terms of the incorporating

was entered jurisdiction alter matters? Not at all. We Rule 68 offer. provision say read this to no than more that, if we think the decision not then

Both the and Meadowbrook Simses it must be not final litigation and the must appealed have Meadowbrook leads —and proviso implied continue. The same is in a argument with the that we should dismiss 11(a)(2); conditional plea under Rule if jurisdiction. appeal the Simses’ for want resolving appeal the reserved issue on is happens, If that then the case will be tried impossible, plea then the must be set aside on the merits the district court. Mea prosecution and the continue. What is that apparently dowbrook thinks 11(a)(2) implied under Rule has been made hook, would let it off the that’s not so. but merits, explicit in this prevail If EGA to on the were mil Simses were win less Meadowbrook invokes a line of decisions lion, they could appeal from the deci exemplified by Alloy Horwitz v. Automo- that sion ask the default be reinstated (7th Cir.1992). Co., tive 957 F.2d 1431 judge’s recommenda Many litigants civil would like to have judg tion about be turned into a interlocutory appellate resolution of some ap ment. an No matter. Jurisdiction is important issue. But when the issue does pellate court’s first order of business even certification un- not meet the standard for person if the who had raised the 1292(b), § and it not feasi- der 28 U.S.C. interests, disserves his own indeed even respect ble to enter with question. no one has raised the claim or under Fed. separate party jurisdiction 54(b), judg- possible We have if the it is not to obtain a “final an decision until the case is over. ment based the settlement judg- Crafty litigants thought could decision.” 28 U.S.C. 1291. This interlocutory on evade the limits on review ment leaves issue to be resolved suit appeal plea asking does a conditional un- the district to dismiss the so—but 11(a)(2) had der Fed.R.Crim.P. that reserves with leave reinstate once they argued decision some sanction Then resolved. been for a pending appropriate in the district less than million is nothing remained “finality” wrong prejudice of the decision. caused no apparently spoil court go refuse to party. its successors to the adverse See Mommaerts Horwitz and Co., the rest of ploy, because Accident Insurance along with Hartford Life background, remains 472 F.3d 2007 WL 38406 Cir. Jan. as soon as the resume ready McLaugh- Cf. States v. United evaluating “finality,” held in lin, ends. In

Horwitz, to look the whole it is essential Defaults be set aside for including claims that have been picture, disproportionate Damages cause”. to the through a dismiss- the back burner put on action, wrong good afford cause *4 procedure. al-with-leave-to-reinstate good no for though even there is excuse in this case has been dismissed

Nothing inattention the the defendant’s case. reinstate, Nobody however. with leave 55(c) “good for requires Rule cause” the affirm, If pull a fast one. we trying action, “good not cause” the and the Simses receive the case is over error; Rule, in defendant’s as used this reverse, $761,000. If the default is phrase synonym the is not a for “excusable (avoiding any dispute about lia- reinstated neglect.” v. Continental See Ca Redfield will entitled to an bility) and the Simses be (7th 596, sualty Corp., F.2d 601 818 Cir. damages may be substantial- award of 1987). (Another way to see is that this ly Only we to decide does higher. 55(c) “good Rule uses the cause” standard refuse trial on the merits. That’s go to the case for relief before has been en just happen, because the should what tered, referring to the un while standard to act is if can refuse way we 60(b) der Rule for relief after then the case and must still be isn’t 60(b) Rule allows relief on account of mis gimmick prevented The ongoing. take in and inadvertence addition to excus in Horwitz —that neglect; able cause” standard in happened no matter what would continue 55(c) satisfy.) Rule must be easier to not been reused. So —has States, 820, In v. Degen United 517 U.S. appealable. shall decision is We 1777, (1996), 116 S.Ct. 135 L.Ed.2d 102 presented, pro- decide Supreme Court held it abuse of discretion over. ceedings will be litigant to default a in a million civil $5.5 court, appear A default is a sanction suit for wilful failure to in during litigation. Ap given availability of lesser sanctions. for misconduct (The in impose, litigant fugitive review of decisions to was a a criminal pellate See, withhold, prosecution.) sanctions deferential. Likewise a million sanc Corp., v. Hartmarx 496 tion in e.g., & Gell would be excessive this suit: EGA’s Cooter (reckless 399-400, 2447, 384, negligent 110 S.Ct. 110 misconduct was U.S. worst) (1990); Hockey deliberate, inju National rather L.Ed.2d 359 (if Club, Inc., ry Metropolitan Hockey any) adversary to its was negligible. v. League 2778, 639, 49 747 litigation, 96 S.Ct. L.Ed.2d Like civil the sanc 427 U.S. (1976); Imperial major Ad tion should fit the offense. That’s a Pretzel Stouffer Inc., 42, why judges F.3d 45 reason justers, 28 district should en See, much ter pretty precipitately. e.g., That of review re defaults Bleit standard (7th Welborn, Cir.1994); unimag ner v. F.3d 652 appeal, for it would be 15 solves Systems Philips as an abuse of discretion a Medical International inable to label

869 (7th Bruetman, have resolved Cir. could this issue under Fed. B.V. v. 72(a)' 1993); 2 752 Chicago, cf. Ball v. F.3d unlikely, seems —-which Cir.1993). merits, default concludes the while Rule 72(a) only “nondispositive covers mat- should be let point Our is not obliged ters” —a district court is not princi easy off because Meadowbrook is give magistrate judges maximum au- litigant A bears the pally responsible. thority such a non-Article-III officer of errors chosen consequences wield. litigants The did not consent to See, agent. e.g., Pioneer Investment Ser by magistrate judge, final decision see 28 L.P., v. Brunswick Associates vices Co. 636(c), so the U.S.C. re- 380, 396-97, 113 507 U.S. S.Ct. in charge mained and was entitled to make (1993); L.Ed.2d 74 United States v. 7108 decision, independent which he did. Avenue, 15 F.3d 632 Cir. West Grand Boyle, Cf. United States v. Because the district decision to 83 L.Ed.2d 622 U.S. S.Ct. set aside the default was not an abuse of (1985). Penalizing litigant, who can discretion, Simses receive will turn, agent shift costs to the is the best $761,000, and Meadowbrook is not at risk way agent to ensure that the takes ade *5 of an excess There is no re- if all fault quate proceed care. So we as is litigation into which it maining could inter- do imputed imply to EGA. Nor we worth, however, vene. For what it is in cases defendants multi-million-dollar judge sensibly think that the district acted proceedings liti treat the as nuisance in denying the motion to intervene. firm in gation; position EGA’s should Third-party liability is best handled in in oversight invest more of its insurer third-party Allowing actions. Meadow- plaintiff demands when brook to intervene would make no more $100,000. the ad damnum is when allowing lawyers sense than to intervene Still, delay imposes slight injury parties as whenever some about does not call for multi-million-dollar competence of their work is raised. managing awards. EGA’s errors in questions Just as those should be resolved litigation defense of this did not cause actions, disputes in separate malpractice head; Daniel Sims to fall on his that is the (or lia- agents’) about insurers’ insurance (if magis- source of the million loss separate litigation. in bility belong trate estimated the cor- (better, rectly). neglected EGA did What AFFIRMED do) extended this suit a few months anxi- perhaps

and caused the Simses some CUDAHY, Judge, concurring. Circuit ety marginal legal expenses. A court compensate aggrieved litigants can majority, I agree completely with the directly; such losses the district greater to comment in separately but write here did not abuse his discretion con- I an important detail on what think is cluding entry of default would be confusing appellate issue of aspect of the overkill. jurisdiction. judgment here The consent that in that we “decline specified the event that we Note have referred to the dis- any to rule for reason on all of the issues discretion, trict not the concerning” judgment (presumably be- judge’s. suppose, Even we as the Sims- contend, that the order is nonfinal magistrate judge es cause we hold jurisdiction is that whether appellate all of the then appeal),1

and dismiss a case is final purporting to resolve order “reignite”: and defenses claims parties’ case; obviously of the part is not itself void and considered the order “will be jurisdiction not an issue before parties are ... unenforceable in present case the district court. The they position same into the placed back liability product claims volves the Sims’ entering offer of prior were EGA, and the consent against way, In this judgment.” outcome definitively them. The resolved to test without risk parties permits reig will altered and the will be “final appealable is an the order whether lack in the that we find we nite event is, that with- ],” 28 U.S.C. decision[ of a final jurisdiction. While modification any conse- committing themselves out circumscribed, Fed. strictly see order is it is not. if we determine quences 59(e) 60, nonfinal orders are disposition might such Superficially, see, modifiable, e.g., Fed.R.Civ.P. generally the nonfinal orders dis- seem similar 54(b) (“[T]he or other form of deci order majority which are opinion, cussed subject any at time sion is to revision attempting to test by parties characterized adjudicating entry before without risk- of their case parts and liabilities rights all the claims and the parts of involving other ing consequences reignition provi If the parties.”). of all the 867-68, Majority atOp. See their case. activated, it would be sion were be Co., Alloy Automotive citing Horwitz final supported by our perfectly Orders 957 F.2d Major ity, than at war with it. See rather nothing for the final unless leave not (“[I]f ity we think the decision Op. (absent court to do whatever final, it not final and the must be *6 byor reversal on called continue.”). litigation must 59(e) Rule Green of application orders, By limiting 28 U.S.C. appealable 79, Corp. Randolph, v. 531 U.S. Tree Fin. serves, things, pro among 1291 other (2000). 513, 86, 148 L.Ed.2d 373 121 S.Ct. judicial mote efficient administration a order is not final Consequently, consent judicial resources. Cun conserve scarce by “staking] parties “gamble” unless the County, 527 U.S. ningham v. Hamilton the outcome of the entire case” on the[ir] 198, 204, 1915, 144 L.Ed.2d 184 119 S.Ct. Group Corp. it. Health appeal from First States, (1999); v. 309 Cobbledick United F.3d 801- Emergis Corp., 269 v. BCE 323, 325, 60 84 L.Ed. 783 U.S. S.Ct. Cir.2001). Attempting provide Unocal, (1940); But 121 F.3d at 310. “ef litigation in the event of reversal for more syn ficient administration” is not calls for ren- than the onymous “forbidding many appeals with as nonfinal. See Union Oil ders the order Permitting parties to risk- possible.” as (Unocal), Brown E & C Cal. v. John Co. of lessly jurisdiction may en test Cir.1997). non- courage improper appeals some from cases, out, majority points judgments, what distin- but in other such as As the (where clearly appeal from such as Horwitz the this one order is guishes cases provision allowing reig- risklessly test able absent parties’ present attempt situations, untimely ap- Group Corp. Emergis Corp., 269 Health v. BCE such as an Other (7th Cir.2001) (holding might triggered reignition pro- F.3d peal, have However, right party’s pursue claims that because those situa- waiver of vision as well. arise, prejudice they without cured longer irrelevant had been dismissed tions can no defect). any jurisdictional we need not address them. See First nition), allowing test will hasten final

resolution. rate,

anyAt Congress has made its de- as to appeals

termination which will best adjudication; efficient

promote pre- it has appeals

scribed from “final decisions.”

Decisions are appropriately enough, court, end in the district it

leaving nothing more to do. Appellate

jurisdiction is not an issue before the dis- court, provisions

trict of judg- triggered

ment lack appellate juris- give

diction court no task to

perform. The consent here is

therefore final and appealable. America,

UNITED STATES

Plaintiff-Appellee, ROSS,

Kenneth Defendant-Appellant.

No. 06-1821.

United Appeals, States Court of

Seventh Circuit.

Argued Dec. 2006.

Decided Jan.