Jean Hayes and Citizens National Bank v. Allstate Insurance Company and Allstate Indemnity Company

Before POSNER, ESCHBACH and Cir- cuit Judges, SWYGERT, Senior Circuit Judge.

SWYGERT, Senior Judge. Circuit The plaintiffs-appellants, Jean Hayes and Bank, Citizens National appeal from the district court’s order of March 1983 in their contract action against All state Company Insurance and Allstate In demnity Company (“Allstate”). This order granted Allstate’s to stay motion pro ceedings and ordered the parties to proceed to appraisal. Our is based on 28 U.S.C. § Because we believe that the district court erred ordering when was not unambiguously mandated the terms of the insurance question, in we vacate the district court’s order and remand the ease fur for ther proceedings.1 A house owned by Hayes2 and insured a policy under issued by Allstate de- stroyed a fire on 18,1980. October After investigating Hayes’s claim, rep- Allstate’s resentative informed Hayes’s attorney that Allstate not agree could with the amount Hayes’s stated on proof of and, loss form on January $175,- made an offer of 967.10 repair house, $159,976.96 for contents, for the $2,000 for restoration of the yard. later, Several days Hayes’s attorney spoke with representa- Allstate’s tive and stated that his client accepted the offer for the contents but wanted to negoti- ate further on the amount offered for fire Hayes’s house. attorney then sent a letter to representa- Allstate’s Stephen Williams, L. Mann, Chaney, tive on March stating he Goodwin, Johnson & Ind., Terre Haute, for would $330,300 recommend a settlement of plaintiffs-appellants. (ninety percent of the policy limit dwell- John Hammel, W. Yarling, Robinson, ing protection). This recommendation was Hammel Lamb, Ind., Indianapolis, for based on separate five construction reports defendants-appellees. submitted to Allstate indicating a consensus appeal order, fact, had Allstate also moved dismiss the plain went to the merits of ground precluded on the court is contract, this from tiffs’ action on the and is therefore reviewing scope district court’s order 28 U.S.C. outside the of 28 U.S.C. § 2105. See Wilke, which states no shall be rever- ruling Bowles v. “[t]here Cir. 1949). sal in appeals a court of ... error motion to dismiss is denied. upon matters in abatement which do not in- jurisdiction.” however, agree, volve We do (of Linton, Citizens Indiana) National Bank order as Allstate’s characterization mortgagee was the property upon a “ruling $192,500. matters abatement.” amount of us, judg- a court ment, between ninety opinion house had been later, ment, appraisal award.”

percent weeks or an destroyed. Several representative responded by Allstate’s send- filing a motion responded $175,- ing Hayes’s attorney a draft to procedures. enforce stay and to 967.10, original the amount of Allstate’s motion, Allstate’s granted The district offer The draft was dwelling claim. language Con- on the basing its decision accompanied by explaining a letter that the contract. of the insurance 7 and 8 ditions amount based on a from Ernie was bid two conditions these The court construed Hatfield, a homes fire-damaged rebuilder of are free parties the “although that meaning Allstate, to rebuild frequently engaged by remedy provid- any to pursue at the outset Hayes’s attorney the for that price. house for the 7, a demand once ed Condition copies sup- then of the bid and requested ei- by has been made procedures in order to determine porting documents a man- those become party, procedures ther his whether to recommend settlement to bringing to condition datory the representative client. Allstate’s mailed that the time court also found suit.” The Hayes’s attorney to requested documents written in which Allstate had made period attor- April April Hayes’s 1981. On unreasonable, was not demand $175,967.10 rejected the offer of ney rejected Hayes’s assertion and therefore letter, amount to returned draft in that right ap- any that Allstate had waived Allstate, and filed suit in Circuit Sullivan praisal. Court, Indiana. County, Sullivan National Hayes and Citizens appeal, On petition Allstate’s filed a attorney compelling ap- Bank contend that the order to the for removal from the circuit court language praisal contrary May federal district court on 1981.3 On be and should therefore policy insurance then made a attorney June Allstate’s assert that the They alternatively vacated. naming Hat appraisal, written demand that All- concluding district court erred appraiser stating field as its and any right appraisal, state had not waived demand was 8 of the pursuant Condition several and that the court’s failure decide “Ap at issue. entitled policy Condition issues, apprais- whether Allstate’s including praisal,” provides part: “If and deprived ap- disqualified, er should be loss, agree fail to on the amount of either rights of their constitutional due pellants party may make written demand for an Because we process equal protection. appraisal. party compe Each will select a contention, the first we need not agree with appraiser notify tent and disinterested remaining arguments. consider the identity within appraiser’s other case, stayed In this the district after the is received.” On days demand proceed action and ordered the All Hayes’s rejected July attorney procedures under the of Condition state’s demand letter which referred to 8 in accordance with its determination that 7 of the poli the last sentence of Condition policy required appraisal. While cy. Payment entitled “Our of Condition deciding court can exercise discretion in Loss,” will provides as follows: “We settle simply pur whether to an action pay you We will you. covered loss of the outcome of another poses awaiting policy. another is named in the payee unless Voktas, Inc. v. pending proceeding, We after Cen pay days will within 60 Co., Inc., (7th tral Soya This F.2d 103 Cir. finally amount of loss is determined. may agree- Computer Systems, amount determined Microsoftware plaintiffs-appellants suggest simply removal citizen of Indiana where it 3. The has offices. jur- may diversity improper diversity citizenship have been Nor is of defeated questionable.- 1332(c) isdiction is We see no reason proviso policy since the here is not § question jurisdiction. Un- the district court’s “liability Casualty insurance.” See Aetna 1332(c), der 28 is a citizen U.S.C. Greene, Surety Company Insurance 606 F.2d Illinois, incorporated state in which it is 1979). Cir. business, principal place has its and not cases have dis- recent Indiana (1895). More Inc. v. Ontel (7th Cir.1982), construing con- order this case was not issue when the same cussed discretionary judgment. result have for arbitration and provide tracts that pending proceeding There was no other un- as was approach strict an taken at least as compelled til the court Co., supra. Fire Assur. taken in Manchester of the order was to enforce the purpose Hospital, Inc. v. Memorial Kendrick interpreted. conditions as We there- policy Totten, (Ind.App.1980); N.E.2d order to determine fore review court’s N.E.2d Brinegar, Shahan interpretation whether this was erroneous (Ind.App.1979).4 law. under Indiana to this principles these Applying have, Although the Indiana courts case, the Allstate agree we do not like the policy not construed an insurance conditions a right issued to here, several guided by one at issue we are of an completion action on the general, Indiana cases that have articulated expressly provide does not policy construing language for the of principles it until may upon no action be maintained First, insurance Indiana courts policies. of loss is determined after the amount any ambiguities have held that in insurance the against contrary, contracts must be construed To the Condition 7 ex appraisal. insurer and in favor of the insured because the loss pressly states that the amount of the in solely by the contracts are drafted judgment. a court may be determined of surers and are thus contracts adhesion. specifies procedures by the Condition Armstrong, Indemnity Travelers Co. made, on appraisal which the is but is silent 607, Freeman v. (Ind.App.1979); N.E.2d must the action. precede whether Co., 149 Commonwealth Life Insurance Ind. 12, provides which that no action Condition 177, (1971), 211, 271 N.E.2d trans App. the against Allstate unless may brought denied, N.E.2d 396 fer 259 Ind. with all fully complied insured has ambiguity reasonably An exists “if expressly ap does not policy, terms of men, contract, upon reading the intelligent ply compliance either since meaning.” to its honestly differ as brought. the terms when suit was all Co., supra, 384 N.E.2d Indemnity Travelers conditions, when read the policy Nor do Second, specific the more regarding at 613. right that the necessarily imply together, ap for policy providing issue of whether a completion conditioned on action is making ap should be construed as praisal 7, Allstate Under Condition right to a praisal precedent condition the insured expressly promises pay action, poli states that an 1895 decision judg- court of loss determined amount unless the cy should not be so construed also All- policy permits ment.5 While in the con actually expressed is condition if the demand state demand an from its necessarily implied tract or is properly the insured has only is made after v. Koer terms. Manchester Fire Assur. Co. suit, necessar- ner, nothing policy in the brought 40 N.E. Ind.App. Shahan, policy Allstate includes Condi noted that inten- 5. Because the the court “[t]he precedent significantly policy tion to make arbitration a condition from the it differs may express right action be either or in Vernon Ins. & Trust Co. Mait construed implied implied,” but that an condition cannot len, (1902), the Indi 158 Ind. 63 N.E. 755 upon implication is tanta- be relied unless “the ana on which Allstate relies. In Vernon case only expression mount to a direct Co., policy the court held that the Ins. & Trust Shahan, supra, nothing else is inferable.” prece made a condition at issue there (quoting Arbitration N.E.2d at 1040 6 C.J.S. however, policy, dent to an action. That did 205-06). Memo- 28 at The court in Kendrick judicial provide determination of the not loss, further, Inc., stating Hospital, rial went even expressly rather stated that’ the as equiva- provision is not the that an arbitration “shall be made the in certainment of loss prior to the to sue lent of a covenant not differ, or, Company, then sured and the if provided expressly so arbitration unless Co., by appraisers.” Trust su Vernon Ins. & Hospital, contract. Kendrick Memorial pra, 63 N.E. at 756. supra, 408 N.E.2d at 135. more than matter seems ily precludes original court from still determin- As an appeala- should not be ing specified by the loss this Condition clear that rule beginning, general ble. Since Finally, argues Allstate also system has been the federal court if appraisal prece even is not a condition as a are judgments final only action, dent to an under Manchester Fire Sept. Act of right. matter of view the supra, Assur. should dis 83-87; U.S.C. Stat. §§ as a separate equitable trict court’s order 1291; Cheese Ass’n Switzerland §§ remedy, specific performance, similar to Market, Inc., 385 U.S. E. Horne’s which the court enforced Allstate’s through (1966). The final- 17 L.Ed.2d 23 As- rights. contractual In Manchester Fire delay minimizes in the trial rule judgment sur. the court held that where repeated consideration of court and action, to an not condition appellate by making case in the same policy provision submitting breach of a will be no more than one sure that there sup the amount of loss to arbitration will naturally at the end rath- appeal per case— Manchester Fire port separate action. beginning er than in the or middle. Co., supra, Assur. 40 N.E. at 1111. We do 1292(a)(1)for or- exception in 28 U.S.C. § believe, however, that the at is denying preliminary or in- granting ders supported request sue here Allstate’s based on the fact that the erro- junctions is Unlike the specific performance. preliminary injunction grant neous policy, policy construed Manchester harm may irreparable cause a defendant Fire Assur. made the insurer’s expressly Co. (notwithstanding requirement of Fed.R. loss payment disputed contingent in- 65(c) plaintiff post Civ.P. the the of loss to submitting appraisal. amount bond), while the erroneous denial junction contrast, the makes policy pay must, preliminary injunction virtually contingent ment on determination of the definition, plaintiff by irreparable cause by appraisal judgment. loss or court since he would not otherwise be enti- harm insured, Hayes, properly Where the like is no injunction. possibili- tled to an There is pursuing judgment determination ty of harm from the district irreparable pursues and Allstate determi subsequently this case while the fire staying court’s order the is by appraisal, policy ambiguous nation damage appraised. residence is super as to which method of determination appraisal could not take more than Since the other. established Indiana sedes Under days, delay plaintiffs’ few the of the law- be construed law the must therefore trivial, suit that it would entail would be Allstate, enforcement of the against certainly irrepara- was could not harm them appraisal procedure improper. bly. they disagree with results Should above, the order of For the reasons stated just as soon as appraisal, they of the could— court is vacated and the case is the district entered its final judgment the district court proceedings. further remanded for on the the same basis —file stay; have filed from the and if appeal they POSNER, Judge, dissenting. Circuit judg- we then reversed the district court’s assumes, without majority opinion The have caused the ment would point, discussion of the that the district harm plaintiffs They might, no at all. judge’s staying proceedings order be- course, which accept appraisal, repair fore him to allow the the appeal. moot appraisers is under 28 U.S.C. All that for the really plain- is stake 1292(a)(1) injunction. a preliminary therefore, tiffs, slight delay is their ap- is natural because the assumption getting appellate stay review of the jur- pellees, appellate have not contested our district court’s determination that the fire re- independent isdiction. But we have an subject is if do they and abide sponsibility to ascertain like jur- limitations on that the results of But Congress placed has have taken has appeal isdiction. meanwhile already significant caused a delay in contract, com- insurance and the insurance com pleting the trial. Interlocutory appeal is pany pleaded fraud as a defense. inappropriate these circumstances. “Un- The analysis underlying this result is an litigant less a can show that an interlocuto- historical one. What is now section ry order of the district court might have 1292(a)(1) was first enacted in 1891 as part ‘serious, perhaps irreparable, consequence,’ Act, of the Evarts 26 Stat. 828. Law and and that the can order be ‘effectually chal- equity were still separate jurisprudential lenged’ only by immediate appeal, gen- systems in the then, federal courts though eral congressional policy against piecemeal administered same judges, so that a review will preclude interlocutory appeal.” federal district judge was both a law judge Carson v. Brands, Inc., American 450 U.S. and a chancellor. Enelow v. New York Life 79, 84, 993, 997, 101 S.Ct. L.Ed.2d Co., Ins. supra, 293 382-83, U.S. at (1981). See also Gardner v. Westinghouse at 311-12. A law judge could a suit Broadcasting Co., 437 U.S. 98 S.Ct. pending him, before on a variety of 2451, 2453, 57 (1978); L.Ed.2d 364 Mellon grounds, and if he did so this was not the Bank, N.A. v. Nam Pritchard-Keang Corp., issuance injunction, of an law Cir.1981). judges by definition could not injunc- issue only conceivable tions. But he juris basis our could not stay suit before diction is the him in order (named Enelow-Ettelson rule to consider a defense that after the two could be only cases that first it) by way announced asserted of an equity action, determining because (again whether a by definition) an in he had junction for no purposes power to appeal under sec consider such a defense. A tion 1292(a)(1). litigant asserting could, Evolved in a such a series of defense how- Su preme ever, Court decisions, go to the chancellor Enelow v. New and ask him to York Life enjoin 379, 381-83, suit while chancellor con- 310, 310-12, sidered the 79 L.Ed. defense. If the (1935); underlying suit Shanferoke was equitable Coal & Supply Corp. legal rather than West chancel- chester lor’s stay Service was not an 449, 451-52, injunction; was 313, 314-15, merely (1935); ordering of matters his equity L.Ed. Ettelson v. docket. Metropolitan The upshot Life Ins. was that a stay 188, 190-92, U.S. 164-165, injunction 63 S.Ct. an if it only stayed a (1942); L.Ed. 176 suit at law permit City Morgantown of consideration of an equitable Royal 254, 257-59, defense. U.S. 1067, 1069-70, 93 (1949); L.Ed. 1347 Balti This analysis is internally inconsistent Contractors, more Inc. v. Bodinger, 348 U.S. and historically inaccurate. Even when the 176, 179-86, 249, 251-55, S.Ct. 99 L.Ed. law judge could not particular consider a (1955), applied and since by this and himself, defense there was no reason why other circuits cases, see, in many e.g., Micro- he could not stay the suit him before software Computer Systems, Inc. Ontel allow the repair defendant to the chan Corp., (7th Cir.1982); F.2d 533-36 cellor to have the chancellor consider it. Whyte v. Int’l, THinc Consulting Group Moreover, judges law actually pow had the (7th 818-20 Cir.1981); Mellon er to many defenses, consider equitable Bank, N.A. v. Nam Pritchard-Keang fraud, such as see 1 High, The Law of supra, 1247; 651 F.2d at Jensenius Texa Injunctions 100-06 1905); Enelow, ed. co, Inc., (5th Cir.1981); 639 F.2d 1342 16 supra, at at 312— Miller, Wright, Gressman, Cooper & Feder which makes the result in very puz Enelow al Practice and Procedure 3932 at pp. § zling. And judge when the law and the (1977),

48-58 rule the Enelow-Ettelson clas chancellor were the same person, he would sifies as an injunction a in a suit issued not have injunction an issue order to at law for the of purpose allowing consider stay the part law of the proceeding, and Enelow, ation equitable of an defense. there was no compelling reason to call his example, was suit under an damages injunction just an it because would be of federal injunction system

an in a this tenebrous corner separate law aware of Worse, judges. let alone can be assumed equity historical jurisdiction, it overruling is unrelated to the analysis purpose simply by of what it approved have 1292(a)(1), reenacting is now section which is not to section in the course preserve procedural fossils to allow im- that mem- There is no evidence only where appeals necessary mediate about thought have ever Congress bers of event, avert harm. irreparable any question. law and merger equity federal has been Enelow-Ettelson doctrine brought courts about Federal Rules array judges impressive an denounced (see 2) Rules 1 and Civil Procedure See, Hussain v. e.g., and commentators. an end to the notion put should have that to & Bache pending at law consideration of stay a suit Practice (D.C.Cir.1977); 9 Moore’s Federal required issuing defense equitable 1983); (2d 245-46 ed. pp. ¶ 110.20[3] But, injunction. surprisingly, Supreme Federal Wright, The Law of Courts this in the Court refused to do Ettelson Wright, in 16 (4th ed. and cases cited case, which was decided after the Federal Miller, Gressman, supra, & Cooper § Rules were adopted. n. in 1982 Pocket Part at 53-54 any Neither in Ettelson nor subsequent p. Although probably thereto at case given has the Court clear reason for too well entrenched to be overturned clinging to the approach; historical nor has appeals, mere court of the enactment after else been able think of anyone one. Al- Court last to the issue in Supreme spoke though Rule 82 states that the Federal Interlocutory Baltimore Contractors of the Rules of Civil Procedure are not to limit Appeals 1292(b), Act of 28 U.S.C. § courts, jurisdiction of the federal district just may provide lever for the lower court jurisdiction the issue here is the enough bold to use it to unseat Enelow-Et while, appeals. courts of And whatever the Miller, telson. 16 Wright, Cooper scope of Rule it would be reckless to Gressman, supra, at 65. The Ene Congress, by authorizing infer that the Su- low-Ettelson approach is also inconsistent preme Court to make rules of procedure, Theatres, Westover, with Beacon Inc. v. jurisdic- had also authorized it to limit the (1959), 3 L.Ed.2d 988 courts, of the federal this con- a few years also decided after Baltimore engaged cern is not when the elimi- rules whether, The issue Contractors. there was nate appellate particular over in a involving equitable case claim and a (here an type “injunction” of order of a suit counterclaim, legal judge the district could at law pending chancellor’s considera- try equitable (with claim first possible equitable defense) tion of an as a mere judicata estoppel res or collateral effect on eliminating jur- incident of the order. The counterclaim), legal and the held Court isdictional much consequences would be less not, holding that he could and in so brushed significant than those using 13(a) Rule argument aside the historical that a chan counterclaims) to (compulsory bring into enjoin cellor could a suit at law pending the federal courts state law that claims party’s equitable determination of a claim. federal courts would not otherwise have that Court held whether a modern dis jurisdiction step over —a that has tak- been trict try equitable court could claim en scarcely a murmur of protest. See determined, first “must be by prece not Baker Liquors, v. Gold Seal U.S. 417 dents decided procedures, under discarded 468 n. 2506 n. but in the of the light remedies now made (1974). L.Ed.2d 243 what is although And available the ... Federal Rules” of Civil now 1292(a)(1) section has been reenacted Procedure, with their of law merger pertinent without change merger since the 507-08, equity. of law U.S. 79 S.Ct. at entirely it be equity, would Bank, 954-55. unrealistic to as a Cf. Mellon N.A. v. Pritch treat the reenactment ard-Keang ratification doc- Nam Corp., supra, of the Enelow-Ettelson 651 F.2d at trine. Few can be 1249 n. 5. any Congressmen if purposes But for of this I true if a opinion you stay shall!' is not wanted assume that the you go Enelow-Ettelson doctrine is had to pending arbitration chancellor; and that controlling only job apply our is to stay you if wanted such This requires it. us to decide whether Executory not it. contracts get ini! could :! the defendant suit for They arbitration were not enforceable. an breach of insurance contract who against public policy were held to be be- con-; tended that contract entitled him to jurisdiction “ousted” the cause appraisal demand of the insured’s loss was ! parties’ dispute. courts to decide the Cor- asserting equitable an defense that could1 if a refused to honor his relatively, party not be asserted in an action at law. He was | agreement dispute to arbitrate the and in- in; Supreme not. As the made clear Court sued, get stead the defendant could not Hamilton v. Liverpool & London & Globe on stay pending specif- arbitration. See 242, 254-56, , ic Line v. Atlantic point 945 Red Cross Fruit 949-50, 34 (1890), provision L.Ed. 419 109, 121, relating appraisal to was viewed as merely ¡j (1924); Story L.Ed. 582 on Equity a condition plaintiff’s as-! Note, (Gould 10th Appealability ed. his serting rights. contract also Manc Courts, in the Federal 75 Harv.L.Rev. Koerner, hester Fire Assurance Co. v. 1 3 (1961), history judicial and on the 1110, 1111 Ind.App. 40 N.E. j hostility to arbitration Kulukundis Shipping ; ¡ agreed Since the had that the value Co. v. Amtorg Trading Corp., 126 F.2d thing the contract concerned (2d Cir.1942) (Frank, J.). would by appraisers, be determined a suit suggest I do not that because Shanferoke brought by one party required before the appears to rest on an historical error we appraisal would premature, suing like ignore should it. But we should not extend a note before making pay demand for bringing it. And appraisal under it would ment. Presumably court would either be an extension. Appraisal arbitration dismiss the suit or if as here the condition were in 1891 and are today different ani- precedent was invoked after the suit was mals. I have already pointed out that brought would stay suit until the condi agreements when were arbitrate tion was fulfilled. There would be no need agree- not enforceable at law or in equity, get injunction the defendant appraise ments were enforceable at ; order to stay the suit pending law—which means that under the Enelow- more than a defendant in an action on stay pending appraisal Ettelson doctrine a get injunction note would have to in | injunction. is not an To extend Shanferoke order to stay the action while the plaintiff appraisal thus be to create conflict demanded payment from the defendant. within the Enelow-Ettelson line of cases. this case of course the majority has held clause in the contract Hamilton distinguishes itself arbitration was not a precedent. condition But that is provision apprais- from jurisdictional the issue on the merits. The al, ousting “not issue is whether a pending courts veiled but unmistakable reference [a (rightly pursuant demanded or wrongly) arbitration], but leaving general contract is appealable; Hamilton shows to be question liability judicially deter- not. mined, and simply providing a reasonable method of estimating ascertaining It makes no difference that a loss, amount of the is unquestionably valid.” i permit suit at law to 255, 136 U.S. at 10 at 949. The dis- arbitration was held in Shanferoke Coal tinction , between and arbitration Supply Corp. Corp. v. Westchester Service See, continues to be 314, stressed. 14 supra, e.g., 293 55 at to be (2d Couch on Insurance order, unconvincing an 50:5-7 ed. rev. appealable §§ on the Dobbs, ground had Handbook on the that a defense that Law of (1973). Remedies 937 agreed dispute equita practical is It is a to arbitrate their unconvincing because it well as technical ble. The is and historical distinction. ground disabled, much he was (as in whether may protracted be determine arbitration Since supposed case are Co., in this appraisers Ins. 714 as the Leatherby Merit Ins. Co. residence to see how to examine (7th Cir.1983), where lasted F.2d from the fire. it sustained much forced into arbitra- years), plaintiff three appeal- for an even weaker one This case is may irreparably his will against Hart, the contract here ability than since harmed, if it later turns out that for appraisal explicitly. referred to matter should not have been submitted to recover his arbitration he will not be able arbitration analogy The tenuous between But, long lost and as has expense. time should not be used to extend recognized, appraisal partly been because (Enelow-Ettel- a doctrine — the boundaries of valuation, partly it is limited to issues good son for which no one has had a word ) out extreme infor- because it is carried with Corp. v. many years. Cf. Coastal Steel un- mality, mainly appraisers, but Ltd., Wheelabrator 709 F.2d Tilghman arbitrators, like do not have to listen to (3d Cir.1983) (concurring opinion). 208-09 gener- or take evidence but witnesses other courts have refused to reason Other (valuation) their ally base their decision example in this area. An is analogy knowledge nei- own observations Air decision in Allied Circuit’s Second —is time-consuming. nor expensive ther See Pan American World Air- Freight, Inc. v. Co., v. Everfresh Food Phoenix Ins. Co. (2d Cir.1965) (per ways, 340 F.2d Cir.1923); F. American Steel Co. a suit at curiam), stay which held that a Ins. 187 F. v. German-American Fire proceedings before adminis- pending law (3d Cir.1911) (“Being ap- a mere agency appealable despite trative was not being nothing and there praisement, analogy stay pending to a arbitration. which made witnesses or notice agreement that administra- long delays In Allied the notice, requisite, presence parties, frequently sup- so involve proceedings tive were not neces- giving testimony and the plied practical analogy basis for the but sary”). Martinsburg Cf. & Potomac R.R. was Here there is unimpressed. the court March, 29 L.Ed. practical argument allowing not even a appeal. an immediate ar- The difference between the issue of I have thus far discussed bitration is illustrated Hart v. Orion Ins. only thing as if the district appealability (10th Cir.1970). 427 F.2d done was to the suit while judge had an insurance plaintiff, pilot, compa- sued appraisal; but in addition parties got alleged occupational- breach of an ny get apprais- them to actually he ordered disability policy provided which “that something Any al. order to do resembles by ap- medical examination and arbitration injunction, yet most such orders mandatory arbitrators will determine pointed medical appealable. example, are not For even has occurred.” Id. at disability whether though under the Enelow-Ettelson doctrine stayed pending The suit was “arbitra- pending of suits at law arbitration are stays provision tion” in accordance with this injunctions, interlocutory deemed to be or- plaintiff appealed. ap- The court of arbitrate, though they ders to have the peals appealable, held that the was not mandatory injunctions, form of are not. requirement because the of “arbitration” Lummus Co. v. Commonwealth Oil Ref. merely a condition to the Co., (2d Cir.1961) collecting policy. under the At plaintiff’s J.); (Friendly, Clark Kraftco glance first this result is inconsistent (2d Cir.1971); Life University F.2d the Enelow-Ettelson doctrine. But the im- Ltd., of America v. Co. Unimarc once pression inconsistency dispelled (7th Cir.1983) (dictum). If an realize that what the insurance order to arbitrate is not as an and the court called “arbitration” was real- injunction, I cannot see why order to too, ly orders, a form of The “medical arbi- be. appraise Discovery should evidence; were not going injunctions trators” to take have the form of mandatory pur- going injunctions were to examine are not classified as plaintiff poses of appealability. See Wright, The,, what he would do if after he granted a stay Law of Federal Courts (4th without an accompanying order to appraise ed.j: 1983). other For examples of district court the plaintiffs refused get the appraisal. orders to do not to construed be mandatory The stay put the plaintiffs to a choice be injunctions for purposes of appealability tween appraisal and dropping their suit. Green v. Department of Commerce, 618 The appraise order to did not alter that F.2d 839 (D.C.Cir.1980) (order choice; compel it is surplusage; it should not make ling Department of Commerce to notify an otherwise unappealable stay appealable. companies that reports they had made to; On the merits of appeal, assuming as the Department might be public disclosed I do not have to decide ly); Socialist Workers 1974 Nat’l Campaign it, I also myself find in dissent. The insur- Comm. v. Jennings, 567 (D.C.Cir. F.2d 1133 ance gave contract party either an unam- 1977) (per curiam) (order directing Federal biguous right demand Be- , Election Commission to compile a factual cause the provision in question does not record); Limbach Co. v. Gevyn Construc favor the insurance company over the in- tion Corp., 1104, 1108 (1st F.2d Cir.1976) sured, but creates a right of appraisal (order requiring arbitrators i to make their equally available to either party, the cases award within 60 days); International Prod cite that majority hold that contractual ucts Koons, v. Corp. F.2d (2d provisions are to be construed against Cir.1963) (Friendly, J.) (order directing im insurance company are not in point. For all pounding of documents); and Teamsters we know we are hurting more insureds Local Unions Etc. Braswell Moto r than insurance companies by reading the Freight Lines, Inc., right demand out of the con- Cir.1970) (order referring computation of tract. damages to a master) last of these > —the cases being particularly apropos in view of , the nature of the order that the plaintiffs

are trying appeal in this case. See also

Stewart-Warner Corp. Westinghouse

Elec. (2d Cir.1963) J., (Friendly, I dissenting). PEOPLE OF THE STATE OF In deciding an order to do some whether ILLINOIS, al., Petitioners, et thing is appealable : the courts have looked to the purpose of section Mt. Products, Intervening That is Pulaski the basis on Petitioner, which the Second Circuit in Lummus held that interlocutory orders to arbitrate are not appealable. I have al INTERSTATE COMMERCE COMMIS- ready explained why there is no good rea SION and United States of : son to make the stay in this case appealable. America, Respondents, The fact that judge district went be ! yond the stay and actually ordered par- Illinois Company, Central Gulf Railroad ties to appraise is no reason for allowing an Intervening Respondent. appeal. immediate is, That order as a prac No. 82-2235. matter, tical but a : rhetorical embellishment ' United States of Appeals, Court stay. by itself would force Seventh Circuit. the plaintiffs into just as effec tively as the stay plus order because until Argued Sept. 1983. the plaintiffs got could j Decided Dec. ; recover damages. And it is incon- Rehearing Denied Jan. ceivable to me that plaintiffs if the refused j get the appraisal the district judge would hold them contempt his order. He just suit, dismiss j which is also

Case Details

Case Name: Jean Hayes and Citizens National Bank v. Allstate Insurance Company and Allstate Indemnity Company

Court Name: Court of Appeals for the Seventh Circuit

Date Published: Dec 2, 1983

Citation: 722 F.2d 1332

Docket Number: 83-1456

Court Abbreviation: 7th Cir.