Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : Kelley Drye & Warren Law Firm

BROWN v. COLUMBIA SUSSEX CORP. (December 15, 2011) 

James Piggee runs the organization Giving Education Meaningful Substance. For two decades, he has organized an annual trip that exposes African-American high school students to predominately black universities. The destination for the Spring 2008 trip was Louisiana and Texas. The group reserved 41 rooms at the Marriott Hotel in Baton Rouge Louisiana. Within a few days, the hotel canceled the reservation. Piggee, the students, and the chaperones (268 in all) filed suit against Marriott, alleging that the cancellation was racially motivated. In the district court, Marriott served discovery requests on the plaintiffs in December of 2009. Several deadlines came and went. A motion to compel was granted and ignored. The district court sanctioned the plaintiffs for their delay. Finally, almost a year after the discovery was served, Chief Judge Simon (N.D. Ind.) dismissed the case pursuant to Rule 37(b) with respect to the 200 or so plaintiffs that had not responded to discovery. Plaintiffs appealed.

In their opinion, Seventh Circuit Judges Posner, Flaum, and Sykes affirmed. The Court first addressed its jurisdiction. After the original appeal, the Court ordered briefing on jurisdiction since it appeared that the district court had not entered a final judgment. During the time for briefing, the appellant's returned to the district court and obtained a Rule 54(b) final judgment -- but did not file a new notice of appeal. In FirsTier, the Supreme Court concluded that a notice of appeal was timely when it followed a district court's decision but preceded its entry of judgment. In that case, however, the only thing that followed the notice was the actual entry of the judgment. Here, the plaintiffs had to move for and support a Rule 54 judgment. The Court identified two alternate readings of FirsTier. Under one reading, a premature notice of appeal is allowed if it is followed only by the ministerial task of entering judgment. Under another reading, a premature notice of appeal is allowed if, with respect to the claim being appealed, the only thing remaining is the entry of the judgment. The Court concluded that the latter interpretation was the correct one and held the notice timely. On the merits, the Court seemed to have little difficulty in finding the dismissal sanction, although serious, not inappropriate. Plaintiffs’ counsel missed numerous discovery deadlines, violated court orders, did not have the resources to handle the case, had not even spoken with many of the plaintiffs, and was warned that the court had given its "final extension." No more is necessary.

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GENERAL INSURANCE COMPANY OF AMERICA v. CLARK MALL CORP. (May 4, 2011)

Discount Mega Mall in Chicago was damaged in a major fire in the fall of 2007. It filed a claim with its commercial general liability carrier, General Insurance. It also tendered to General the defense of claims brought by its tenants. General filed a declaratory judgment action against Clark Mall Corporation d/b/a Discount Mega Mall Corporation as well as its principals and tenants seeking an order that it had no duty to defend or indemnify. The defendants asserted five counterclaims for: a) an order that defense and indemnity was required, b) damages for breach of contract, c) damages for a vexatious refusal to defend, d) damages for a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and e) damages for fraud. The defendants moved for judgment on the pleadings with respect to the duty to defend. Magistrate Judge Cole (N.D. Ill.) ruled that General failed to produce evidence establishing the exclusion on which they based their denial of coverage and concluded that it had a duty to defend. Although the magistrate judge originally concluded that the refusal to defend was not vexatious, he later explained that he had not rejected the argument conclusively. At General's request, the magistrate judge entered his ruling as a final judgment under Rule 54(b). General appeals.

In their opinion, Chief Judge Easterbrook and Judges Rovner and Sykes dismissed for want of appellate jurisdiction. The Court made a few comments on the merits presented by the appeal but moved quickly to consider appellate jurisdiction. Rule 54(b) requires that an order be final and that there is no just reason to delay an appeal. In order for in order to be final, it must be the final disposition of a claim in the case. A court must compare the issue resolved in the claim on appeal with those that remain. That comparison here shows that the judgment was not final. The vexatious refusal to defend claim still pends. The common law fraud claim still pending includes allegations relating to General's refusal to defend. Since several of the counterclaims still pending are intertwined with the judgment on the duty to defend, the judgment was not final and the Court has no appellate jurisdiction.

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PARISH v. CITY OF ELKHART (July 30, 2010)

A jury found Christopher Parish guilty of the 1996 shooting of Michael Kershner in his Elkhart, Indiana home. Evidence uncovered during his post-conviction proceedings supported a different conclusion: that Kershner was shot in a drug deal and was not even in his home at the time, and that local police threatened witnesses and otherwise fabricated evidence in an effort to falsely convict Parish of the crime. Parish's conviction was vacated in 2006 by the Indiana Court of Appeals. The state then dropped all charges. Parish brought suit pursuant to § 1983, alleging the denial of a fair trial. He also brought state claims for false arrest, false imprisonment, and intentional infliction of emotional distress (“IIED”). Judge Lozano (N.D. Ind.) dismissed all but the § 1983 fair trial claim on statute of limitations grounds. The court granted Parish's request for a Rule 54(b) certification. Parish appeals.

In their opinion, Judges Posner, Flaum, and Williams affirmed in part and reversed in part. Parish conceded, at oral argument, the propriety of the dismissal with respect to the claims for false arrest and false imprisonment. Thus, the only issue on appeal is the dismissal of the IIED claim. The parties agreed that the statute of limitations for the claim is two years from the date it accrued. The Court discussed four cases in its analysis of when an Indiana IIED claim accrues. In Heck, the Supreme Court held that a state prisoner could not bring a § 1983 suit for damages until his conviction was overturned. A judgment would have implied the invalidity of his conviction – the claim was therefore an improper collateral attack on the conviction. An Indiana appellate court followed Heck in Scruggs, when it dismissed false imprisonment claims. The Scruggs plaintiffs, still imprisoned, were also attacking the validity of their convictions. Next, in Wallace, the Supreme Court held that a claim for false arrest or false imprisonment requires a detention without legal process and therefore ends when legal process (e.g., appearance before a magistrate) is granted. The cause of action accrues at the same time -- when the false imprisonment ends. The Court distinguished Heck. Unlike in Heck, the Wallace claim for false imprisonment did not challenge the validity of a conviction. In fact, it did not even require a conviction. Finally, in Johnson, another Indiana appellate court concluded that a false arrest claim accrued at the time of arraignment (when process was granted) but that other claims of emotional discretion and invasion of privacy based on an unreasonable search accrued at the time of the search. Thus, the general rule requires an examination of whether the tort was complete before conviction (e.g., an IIED claim tied to an unreasonable search) or not (e.g. an IIED claim tied to a false conviction). If the former, the claim accrues upon completion of the tort. If the latter, the claim accrues upon completion of the tort unless it directly implicates the validity of the conviction. If it does, the claim does not accrue until the conviction has been lifted. Applying these principles to Parish's claim, the Court concluded that the IIED claims were not complete prior to conviction. In fact, the conviction was an integral part of Parish’s IIED allegations. The Court then concluded that the claim also attacks the validity of Parish's conviction and could not have been brought while the conviction was still outstanding. Parish brought the claim within two years of his exoneration – it is timely.

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