Penn-America Ins. Co. v. Mapp

• Citation: 521 F.3d 290
• Decision Date: 20 March 2008
• Docket Number: No. 06-2279.,06-2279.
• Parties: PENN-AMERICA INSURANCE COMPANY, Plaintiff-Appellant, v. April Dawn MAPP; ACH Corporation of Chesapeake, Incorporated, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

521 F.3d 290

PENN-AMERICA INSURANCE COMPANY, Plaintiff-Appellant, v. April Dawn MAPP; ACH Corporation of Chesapeake, Incorporated, Defendants-Appellees.

No. 06-2279.

United States Court of Appeals, Fourth Circuit.

Argued: November 1, 2007.

Decided: March 20, 2008.

ARGUED:

Robert Barnes Delano, Jr., Sands, Anderson, Marks & Miller, Richmond, Virginia, for Appellant. Bryan Karl Meals, McGuirewoods, L.L.P., Norfolk, Virginia, for Appellees.

ON BRIEF:

Albert M. Orgain, IV, W. Ashley Burgess, Sands, Anderson, Marks & Miller, Richmond, Virginia, for Appellant. Stephen E. Heretick, Hampton & Heretick, P.L.C., Portsmouth, Virginia, for Appellee April Dawn Mapp; William H. Baxter, II, McGuirewoods, L.L.P., Richmond, Virginia, for Appellee ACH Corporation of Chesapeake, Incorporated.

Before WILLIAMS, Chief Judge, and TRAXLER and KING, Circuit Judges.

Dismissed by published opinion. Judge KING wrote the opinion, in which Chief Judge WILLIAMS and Judge TRAXLER joined.

OPINION

KING, Circuit Judge:

Penn-America Insurance Company seeks to appeal from the district court's Opinion and Order granting partial summary judgment to ACH Corporation of Chesapeake, Incorporated, and April Dawn Mapp. See Penn-Am. Ins. Co. v. Mapp, 461 F.Supp.2d 442 (E.D.Va.2006) (the "Opinion"). Penn-America initiated the underlying declaratory judgment proceeding in the Eastern District of Virginia, seeking declarations, inter alia, that it had no duty to defend or indemnify its insured, ACH, against tort claims being pursued by Mapp in Virginia state court. By its Opinion, the district court resolved the duty to defend issue in favor of ACH, but withheld ruling on the indemnification issue. The court then dismissed the proceeding from its "active docket," subject to reinstatement upon "motion by any party." Id. at 459. As explained below, the Opinion does not constitute an appealable decision and this appeal must be dismissed.

I.

A.

On the evening of July 4, 2003, Joshua Bristol and his friend, Timothy Dodd, travelled by motorcycle to the Three Cheers bar (owned and operated by ACH), in a strip mall in Portsmouth, Virginia.¹ During the evening, Bristol consumed several drinks purchased from the bar. Bristol and Dodd exited the bar a few minutes before closing time.

After going outside the bar, Bristol and Dodd were approached by three women — Marie Fly, Michelle Fly, and Mapp — who asked for a motorcycle ride. Bristol agreed and rode off with Marie Fly, driving in a "weaving, looping, and curling fashion" around the strip mall's parking lot next to the bar. Penn-Am. Ins. Co. v. Mapp, 461 F.Supp.2d 442, 446 (E.D.Va. 2006). Nearing a driveway between the parking lot and the bar, Bristol briefly stopped, but then accelerated toward a crowd that had departed the bar. Bristol, who appeared intoxicated, collided with Mapp, seriously injuring her. The accident occurred at about 1:55 a.m. on July 5, 2003, twenty-five minutes after the bar had closed.

Charles Huneycutt owns ACH, the entity that owned and operated the Three Cheers bar when Mapp was injured. On the day of the accident, Huneycutt learned of it from his brother, who advised that Mapp "was not in good shape" and "appeared to be hurt pretty bad." Penn-Am. Ins., 461 F.Supp.2d at 447. At the time, ACH was insured by Penn-America under a commercial general liability policy (the "Policy").² The provisions of the Policy included the following: (1) a liquor liability exclusion, barring coverage for bodily injury or property damage liability resulting from ACH's "causing or contributing to the intoxication of any person" (the "Liquor Liability Exclusion"); and, (2) a notice provision, requiring ACH to notify Penn-America "as soon as practicable" of any "occurrence" or "offense" that may result in a claim (the "Notice Provision"). Policy §§ I.2.c, IV.2.

Almost two years after the accident, Mapp filed suit against ACH in Virginia state court, seeking compensatory and punitive damages for injuries sustained in the accident (the "Mapp Action"). Mapp alleged negligent, grossly negligent, deliberate, and wanton conduct on the part of ACH. She asserted that ACH had sold alcohol to Bristol, rendering him too intoxicated to legally operate his motorcycle. Mapp further alleged that ACH had done so with notice and with "actual and constructive knowledge" that Bristol would unlawfully operate his motorcycle on the bar's premises, creating an "imminent probability of harm" to Mapp, as an ACH business invitee. Penn-Am. Ins., 461 F.Supp.2d at 446. Mapp also alleged that ACH had violated its duty of care to warn and protect her from imminent harm, based on theories of "dram shop" and premises liability.

On June 29, 2005, two days after ACH was served in the Mapp Action, ACH first notified Penn-America of the accident, by providing it with a copy of Mapp's state court complaint (called a "Motion for Judgment").³ On July 14, 2005, Penn-America advised ACH that, pursuant to the Policy, it would initially defend ACH in the Mapp Action, but reserved the right to thereafter disclaim coverage and seek reimbursement of defense costs if "Penn-America had no duty to defend under its policy." J.A. 97.

B.

On March 6, 2006, Penn-America initiated the declaratory judgment proceeding (the "DJ Action") against ACH and Mapp (collectively, the "Appellees") in the Eastern District of Virginia, asserting diversity jurisdiction and seeking declarations, inter alia, that the Policy did not obligate it to either defend or indemnify ACH. Penn-America's contentions had two bases: (1) that ACH had breached the Notice Provision, negating Penn-America's obligations under the Policy; and (2) that Penn-America's defense and indemnity obligations for the Mapp Action were barred by the Liquor Liability Exclusion. About a month later, on April 14, 2006, the state court granted in part ACH's motion to dismiss the Mapp Action. That is, the court dismissed the dram shop liability aspects of the Mapp Action, but declined to dismiss the premises liability claims.

In late 2006, Penn-America sought summary judgment in the DJ Action, and the Appellees moved for dismissal or summary judgment. After considering the parties' cross-submissions, the district court issued its Opinion on November 17, 2006, resolving certain of the issues presented and withholding resolution of the indemnification issue. As a threshold matter, the court determined that it could exercise jurisdiction in the DJ Action without interfering with the Mapp Action. Penn-Am. Ins., 461 F.Supp.2d at 449-52. The court then ruled, concerning the Notice Provision, that ACH's delay in providing Penn-America notice of the accident was not material, and that its tardiness did not void Penn-America's obligations under the Policy. Id. at 454-55. The court also determined that, although the Liquor Liability Exclusion relieved Penn-America of any defense or indemnity obligations to ACH on the dram shop claims, it did not preclude such obligations on the premises liability claims, which were sufficiently alleged and pending in the Mapp Action. Id. at 457-58. The court thus ruled that, as a matter of law, Penn-America was contractually obligated to defend ACH against the premises liability claims. Id. at 458.

Significantly, although the district court decided that the Liquor Liability Exclusion did not relieve Penn-America of its duty to defend ACH on the premises liability claims, the court declined to decide whether Penn-America was ultimately obliged to indemnify ACH against those claims. The court recognized that, "[b]ecause the factual allegations in the underlying [Mapp Action], if proven, may give rise to a duty to indemnify, only after the State Court has made its decision will this Court be in a position to evaluate whether or not [Penn-America] has a duty to indemnify." Penn-Am. Ins., 461 F.Supp.2d at 458. Accordingly, the court decided that "[t]he issue of [Penn-America's] duty to indemnify ACH, should it be found liable to Ms. Mapp [on the premises liability claims], is not ripe for decision by this Court." Id. The court thus determined "that a decision on [Penn-America's] duty to indemnify should be withheld until the State Court reaches its decision on the merits." Id. at 459. With the indemnification issue yet unresolved, the court dismissed the DJ Action from its active docket, providing that it "may be reinstated upon proper motion by any party to this proceeding." Id. The Judgment, entered three days later, on November 20, 2006, specified that the court was "dismissing this case from the active docket." J.A. 246. Penn-America filed a timely notice of appeal, and this proceeding ensued.⁴

II.

A.

Before we can assess the merits of Penn-America's contentions on appeal, we must determine whether we possess jurisdiction. In that regard, Penn-America maintains that we possess appellate jurisdiction under 28 U.S.C. § 1291. The Appellees dispute jurisdiction, however, maintaining that the district court did not finally resolve the DJ Action and did not render an appealable decision under § 1291.

As a general proposition, jurisdiction in the courts of appeals is limited to the review of final decisions of the district courts, see 28 U.S.C. § 1291, including certain otherwise interlocutory orders properly deemed to be final. See Fed.R.Civ.P. 54(b) (allowing for appeal of one or more but fewer than all substantive claims in action involving multiple parties or multiple claims, where judgment is final as to certain claims or parties, and there is no just reason for delay); see also Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949) (recognizing right of appellate review under collateral order doctrine when ruling conclusively determines claim of right "separable from, and collateral to, rights asserted in the action," and presents serious legal question not otherwise reviewable on appeal). We are also entitled, in carefully circumscribed...