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Estep v. Georgetown Leather Design8/3/1990
e agent filed suit against Aetna Life and Casualty Co. and numerous other defendants as a result of Aetna's decision to discontinue marketing medical malpractice insurance in New Jersey. Aetna cross-claimed against the New Jersey Medical Society for contribution or indemnity in the event that Aetna was found liable to the plaintiff. On July 25, 1979, the trial judge granted summary judgment in favor of Aetna on the original complaint. On October 13, 1979, the trial judge filed an additional order dismissing the original complaint after noting that the outstanding cross-claim had been withdrawn. Plaintiff subsequently filed his appeal and Aetna moved to dismiss on the ground that the appeal had been filed more than thirty days after the July 25 order granting Aetna summary judgment.
Applying federal rule 54(b), the United States Court of Appeals for the Third Circuit concluded that the July 25 order was a judgment as to fewer than all of the claims or parties, and therefore any appeal from that order would have been premature until the outstanding cross-claim had been resolved. The circuit court explained its decision as follows:
We recognize that as a practical matter Aetna's pending cross-claim for contribution/indemnity became groundless once Aetna's motion for summary judgment was granted. However, to read "practicalities" into the already plain language of Rule 54(b) would only foster uncertainty in an area of the law that must remain clear.
Id. at 220 n. 2.
The situation in Owens is virtually identical to the situation in the instant case, the only differences being that Aetna was granted a summary judgment instead of a jury verdict and that a cross-claim, rather than a third-party claim was involved. These distinctions, however, are of no consequence in a determination of whether a judgment or order is appealable based on its disposition of all of the claims or parties.
In the instant case, the judgment in favor of Georgetown made the third-party claim between Georgetown and Hadley groundless "as a practical matter." Id. Since Georgetown was found not to be liable to Estep, there were no grounds for Georgetown to maintain a suit against Hadley for indemnification or contribution. Nonetheless, it was not until the trial judge entered the additional order disposing of the third-party complaint on the docket that all of the claims or parties had reached a resolution.
The Owens court relied on its own earlier decision in Knox v. United States Lines Co. v. T. Hogan Corp., 294 F.2d 354 (3d Cir.1961), in applying federal rule 54(b). Knox involved an additional procedural step, but the rationale is instructive to the resolution of the instant case. In Knox, when judgment was entered for the defendant at trial, the judge specifically dismissed the third-party claim of United States Lines against T. Hogan Corp. At this point, the judgment entered for the defendant was final and appealable. The situation changed, however, when the plaintiff filed a motion for a new trial and United States Lines filed a motion for a new trial as to its third-party claim. Upon the filing of those motions, the earlier judgments ceased to be final.
The trial judge denied the plaintiff's motion, but for some reason failed to dispose of the defendant's motion. The undecided motion, although groundless at this point, prevented the judgment from being final and denied the appellate court jurisdiction. Id. at 360.
Both Owens and Knox stand for the proposition that no matter how groundless an outstanding claim might be, unless it is somehow disposed of through the entry of a judgment, that outstanding claim will be sufficient to deprive an a
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