Civil Procedure — abstention

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United States Court of Appeals For the Seventh Circuit

Civil

Civil Procedure — abstention

Where a case is currently pending in state court, the district court’s stay, pending resolution of that case is not appealable.

“In his brief oral ruling granting a stay in this case, the district judge didn’t even mention Colorado River. As in Doctor’s Associates, Inc. v. Duree, 375 F.3d 618, 622 (7th Cir. 2004) (a case similar to the present one, because, though it involved a dismissal rather than a stay, it was a dismissal without prejudice and in the circumstances was the equivalent of a stay), ‘all we can say is that the district court thought it was a good idea to wait until the Illinois . . . court issued its decision.’ Wegman thinks it a bad idea, because it wants to proceed with discovery against Admiral and because it wants punitive as well as compensatory damages from Admiral for breach of an insurer’s duty of good faith to its insured, which it’s not seeking against AIG. But that is neither here nor there. All that is important, so far as the appealability of the judge’s order is concerned, is that although Wegman’s two suits—against Admiral in federal district court and against AIG in state court—are related, they do not satisfy the condition for abstaining under Colorado River: that the parties’ dispute should be litigated to judgment in the state court, obviating further proceedings in federal court. If Wegman loses its suit against AIG in state court, that will not end its dispute with Admiral; for in remanding the case against Admiral to the district court we assumed that Wegman’s notice to its excess insurer had indeed been untimely and therefore that Wegman had no claim against AIG. If the assumption turns out to be correct and Wegman strikes out against AIG, as is entirely possible, Wegman will be able to resume its litigation against Admiral in the district court. Thus, that court is not finished with the case. The stay it granted really is a stay, and not a dismissal (with prejudice) called a stay.”

Dismissed.

11-2836 R.C. Wegman Construction Co. v. Admiral Ins. Co.

Appeal from the United States District Court for the Northern District of Illinois, Zagel, J., Posner, J.