Freeman v. Kohl & Vick Machine Works, Inc.

• Decision Date: 02 March 1982
• Docket Number: No. 81-1863,81-1863
• Parties: Larry Ray FREEMAN and Brenda Freeman, Plaintiffs, v. KOHL & VICK MACHINE WORKS, INC., Defendant, Third-Party Plaintiff-Appellee, v. KEEBLER COMPANY, Third-Party Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 196

673 F.2d 196

Larry Ray FREEMAN and Brenda Freeman, Plaintiffs, v. KOHL & VICK MACHINE WORKS, INC., Defendant, Third-Party Plaintiff-Appellee, v. KEEBLER COMPANY, Third-Party Defendant-Appellant.

No. 81-1863.

United States Court of Appeals Seventh Circuit.

Submitted March 2, 1982. ^*

Decided March 17, 1982.

Rehearing Denied April 19, 1982.

John T. Burke, Walsh, Case, Coale, Brown & Burke, Kenneth C. Miller, Chicago, Ill., for plaintiffs.

Horace W. Jordan, Van Duzer, Gershon, Jordan & Peterson, Chicago, Ill., for defendant, third-party plaintiff-appellee.

Before CUMMINGS, Chief Judge, and PELL and SPRECHER, Circuit Judges.

PER CURIAM.

The issue in this case is whether this Court has jurisdiction to review a district court's conflict of laws determination, embodied in an order denying a motion for summary judgment, which has the effect of denying appellant's asserted immunity from suit.

I

Plaintiff Larry Freeman, a resident of Georgia, sued Kohl & Vick Machine Works, Inc., an Illinois corporation, in the federal district court for the Northern District of Illinois. Plaintiff sued for injuries sustained at the place of business of his employer in Macon, Georgia, while operating a machine which plaintiff alleges the defendant negligently designed, manufactured, sold and distributed. ¹ Defendant filed a third-party complaint naming Keebler Co., the plaintiff's employer, whose principal office is in Illinois, as a third-party defendant. The third-party complaint seeks indemnity from the third-party defendant for any sums that the original defendant might be held liable to pay the original plaintiffs.

The third-party defendant moved for summary judgment on the ground that Georgia law governs the third-party complaint and under the Georgia Worker's Compensation Statute, Georgia Code Section 114-103, the third-party plaintiff is precluded from bringing any action for indemnity against it, since it is paying the original plaintiff worker's compensation benefits. ²

The district court concluded that the law of Illinois applies and therefore it denied the motion for summary judgment, ordered Keebler Co. to answer the third-party complaint, and ordered the completion of discovery. This appeal followed. ³

II

Pursuant to 28 U.S.C. § 1291, the courts of appeals are vested with "jurisdiction of appeals from all final decisions of the district courts ... except where a direct review may be had in the Supreme Court." This language has consistently been interpreted to indicate that the courts of appeals would ordinarily exercise jurisdiction only when there has been "a decision by the District Court that 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.' " ⁴ Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978), quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945).

However, pursuant to section 1291, it is recognized that there are "collateral orders" that have aspects of finality and are appealable even though they do not end the main litigation. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). To qualify as such a collateral order the order must conclusively determine claims of right, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment. Coopers & Lybrand v. Livesay, 437 U.S. at 468, 98 S.Ct. at 2457; Firestone Tire & Rubber Co. v. Risjord, 449 U.S. at 375, 101 S.Ct. at 674. See Abney v. United States, 431 U.S. 651, 658, 97 S.Ct. 2034, 2039, 52 L.Ed.2d 651 (1977). Because the litigation from which the instant appeal arises has not reached final judgment, the district court's order denying appellant's motion for summary judgment based on a conflict of laws determination is appealable under section 1291 only if it falls within the collateral order doctrine.

III

Appellant, the third-party defendant, contends that we have jurisdiction to decide this appeal under 28 U.S.C. § 1291 and the collateral order doctrine. Appellant's rationale is that the effect of the district court's denial of its motion for summary judgment was to deny it the benefits of its rights under the Georgia Worker's Compensation Statute, Georgia Code § 114-103, not only to be immune from liability to indemnify but also to the right to an absolute immunity from suit, which, it argues, is an essential corollary to the indemnification immunity. ⁵ Since the district court's order would require it to further defend the action, appellant argues it would thus have irretrievably lost a substantial portion of the Georgia statutory immunity no matter what the final outcome of the trial on the merits was and consequently, the district court's order is appealable under the collateral order doctrine because the district court, in denying its motion for summary judgment, has conclusively determined the disputed question and resolved the important issue completely separate and too independent of the merits of the underlying tort action to require this court to defer its appellate review until the whole case is adjudicated.

After careful review of appellant's arguments we believe that the criteria of the collateral order doctrine have not been satisfied and therefore we dismiss the appeal. ⁶

IV

Assuming arguendo that the Georgia statute is applicable, we do not believe appellant has a claim of right under the statute to an immunity from suit. Appellant fails to appreciate the distinction between an immunity from liability to indemnify and an immunity from suit. Appellant does not cite any case that holds that the Georgia statute grants it the asserted "freedom from the burden of defending the suit." To the contrary, our review indicates that employers in appellant's position are regularly put through the burden of a trial and an appeal. The only right recognized by the courts is the right not to indemnify, rather than the immunity of employers from suit. Georgia State Telephone Co. v. Scarboro, 148 Ga.App. 390, 251 S.E.2d 309 (1978); Coleman v. General Motors Corp., 386 F.Supp. 87 (N.D.Ga.1974); Georgia Power Co. v. Diamond, 130 Ga.App. 268, 202 S.E.2d 704 (1973); Central of G. R. Co. v. Lester, 118 Ga.App. 794, 165 S.E.2d 587 (1968); Williams Bros. Lumber Co. v. Meisel, 85 Ga.App. 72, 68 S.E.2d 384 (1951).

Even in the case where it was clear that this same Georgia Act applied, and that the Act sought to protect parties from the burden of trial by providing an exclusive remedy which can be afforded only by the Georgia Compensation Board, the Supreme Court held that an Alabama State Court has the constitutional power to award damages under the Georgia statute, irrespective of the exclusive remedy provision of the state statute. Crider v. Zurich Ins. Co., 380 U.S. 39, 85 S.Ct. 769, 13 L.Ed.2d 641 (1965). Accordingly, we hold that appellant has not overcome the threshold prerequisite to the application of the collateral order doctrine to this suit by showing a "claim of right" to an immunity from suit. Hampton v. City of Chicago, 643 F.2d 478 (7th Cir. 1981).

As to appellant's contention that the denial of its motion for summary judgment should be presently appealable as it constituted a denial of a "claim of right" founded on the statutory immunity from indemnification, the obvious reply is that denials of summary judgment are interlocutory decrees, not appealable, irrespective of the burden of having to go to trial. ⁷ Pacific U. Conference, Etc. v. Marshall, 434 U.S. 1305, 98 S.Ct. 2, 54 L.Ed.2d 17 (1977); United States v. Florian, 312 U.S. 656, 61 S.Ct. 713, 85 L.Ed. 1105, reh. denied, 312 U.S. 715, 61 S.Ct. 738, 85 L.Ed. 1145 (1941). There is nothing peculiar in the asserted "claim of right" as compared to every other right where the denial of summary judgment is not appealable. ⁸ Appellant's assertion of the applicability of the Georgia statute is nothing more than an assertion of an affirmative defense whose denial is also not appealable. ⁹ Smith v. Benedict, 279 F.2d 211 (7th Cir. 1960); County of Hennepin v. Aetna Cas. & Sur. Co., 587 F.2d 945 (8th Cir. 1978).

An additional strong argument against entertaining the present appeal is that the district court's order may be rendered moot by the subsequent course of the litigation, since the "third-party action against (appellant) is only in a non-moot status if judgment is obtained against (the defendant) who then must prove its right either to indemnity or contribution." Allegheny Airlines, Inc. v. LeMay, 448 F.2d at 1343; Minnesota v. Pickands Mather & Co., 636 F.2d 251 (8th Cir. 1980).

V

It is clear that federal law expresses strong policy against piecemeal appeals. Switzerland Cheese Assoc. v. Horne's Market, 385 U.S. 23, 24, 87 S.Ct. 193, 194, 17 L.Ed.2d 23 (1966). Were we to hold appealable the denial of summary judgment, "we would condone a practice whereby a district court in virtually any case before it might render an interlocutory decision on the question of liability of (a party), and the (party) would thereupon be permitted to appeal to the court of appeals without satisfying any of the requirements that Congress carefully set forth. We believe that Congress, in enacting present §§ 1291 and 1292 of Title 28, has been well aware of the dangers of an overly rigid insistence upon a 'final decision' for appeal in every case, and has in those sections made ample provision for appeal of orders which are not 'final' so as to alleviate any possible hardship. We would twist the fabric of the statute more than it will bear if we were to agree that the District Court's order ... was appealable ...." Liberty Mut. v. Wetzel, 424 U.S. 737, 745-46, 96 S.Ct. 1202, 1207, 47 L.Ed.2d 435 (1976).

Applying the collateral order doctrine analysis to the district court's order denying appellant's motion for summary judgment, based on a conflict of...