PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
PENN-AMERICA INSURANCE COMPANY,
Plaintiff-Appellant,
v.
APRIL DAWN MAPP; ACH No. 06-2279
CORPORATION OF CHESAPEAKE,
INCORPORATED,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of Virginia, at Norfolk.
Henry Coke Morgan, Jr., Senior District Judge.
(2:06-cv-00119-HCM)
Argued: November 1, 2007
Decided: March 20, 2008
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.
COUNSEL
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,
2 PENN-AMERICA INSURANCE v. MAPP
ANDERSON, MARKS & MILLER, Richmond, Virginia, for Appel-
lant. Stephen E. Heretick, HAMPTON & HERETICK, P.L.C., Ports-
mouth, Virginia, for Appellee April Dawn Mapp; William H. Baxter,
II, MCGUIREWOODS, L.L.P., Richmond, Virginia, for Appellee
ACH Corporation of Chesapeake, Incorporated.
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 declara-
tory 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 indemnifica-
tion 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 appeal-
able decision and this appeal must be dismissed.
I.
A.
On the evening of July 4, 2003, Joshua Bristol and his friend, Tim-
othy Dodd, travelled by motorcycle to the Three Cheers bar (owned
and operated by ACH), in a strip mall in Portsmouth, Virginia.1 Dur-
ing the evening, Bristol consumed several drinks purchased from the
bar. Bristol and Dodd exited the bar a few minutes before closing
time.
1
The facts spelled out herein are drawn primarily from Mapp’s state
court pleadings and from a stipulation of relevant facts filed by the par-
ties in the declaratory judgment proceeding.
PENN-AMERICA INSURANCE v. MAPP 3
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 acci-
dent, 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 "Pol-
icy").2 The provisions of the Policy included the following: (1) a
liquor liability exclusion, barring coverage for bodily injury or prop-
erty 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 Bris-
tol, rendering him too intoxicated to legally operate his motorcycle.
Mapp further alleged that ACH had done so with notice and with "ac-
tual and constructive knowledge" that Bristol would unlawfully oper-
ate 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
2
The Policy is found at J.A. 20-96. (Citations to "J.A. __" refer to the
contents of the Joint Appendix filed by the parties in this appeal.)
4 PENN-AMERICA INSURANCE v. MAPP
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 provid-
ing 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 judg-
ment proceeding (the "DJ Action") against ACH and Mapp (collec-
tively, the "Appellees") in the Eastern District of Virginia, asserting
diversity jurisdiction and seeking declarations, inter alia, that the Pol-
icy 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 Pol-
icy; 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 dis-
missed 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
3
Huneycutt asserted that he had failed to notify Penn-America earlier
because he believed that ACH had no legal exposure, in that the accident
occurred half an hour after the bar closed, in a parking lot area that ACH
had no obligation to make safe. Huneycutt expected that any litigation
arising from the accident would be limited to criminal charges against
Bristol.
PENN-AMERICA INSURANCE v. MAPP 5
issue. As a threshold matter, the court determined that it could exer-
cise 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 tar-
diness did not void Penn-America’s obligations under the Policy. Id.
at 454-55. The court also determined that, although the Liquor Liabil-
ity 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 obli-
gated 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 deci-
sion 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 indemnifica-
tion 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
4
Penn-America’s DJ Action also sought declaratory relief concerning
two additional Policy provisions — a punitive damages exclusion, and
a provision capping coverage per occurrence and also in the aggregate.
Although the district court disposed of those issues in its Opinion, they
are not implicated in this appeal.
6 PENN-AMERICA INSURANCE v. MAPP
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 prop-
erly 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 involv-
ing 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 (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 enti-
tled, in carefully circumscribed and appropriate circumstances, to
review on appeal certain interlocutory orders involving, inter alia,
injunctions, as well as difficult and controlling legal issues. See, e.g.,
28 U.S.C. § 1292(a)(1) (identifying as appealable orders awarding
injunctive relief); 28 U.S.C. § 1292(b) (establishing certification pro-
cedure for certain otherwise interlocutory decisions involving control-
ling legal issues).
As noted above, the parties dispute whether the district court’s
Opinion was final and thus reviewable under § 1291. Although
§ 1291 does not undertake to define the term "final decision," the
Supreme Court has explained that an order is final if it "ends the liti-
gation on the merits and leaves nothing for the court to do but execute
the judgment." Catlin v. United States, 324 U.S. 229, 233 (1945). In
seeking to eliminate the universally disfavored pursuit of "piecemeal"
appeals, the jurisdictional finality prerequisite of § 1291 promotes the
interests of judicial efficiency and also serves to limit litigation costs.
PENN-AMERICA INSURANCE v. MAPP 7
Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981);
MDK v. Mike’s Train House, Inc., 27 F.3d 116, 119 (4th Cir. 1994).
In its Opinion here, the district court resolved only one of the two
claims before it. After concluding that Penn-America had a duty to
defend ACH in the Mapp Action, the court observed "that a decision
on [Penn-America’s] duty to indemnify should be withheld until the
State Court reaches its decision on the merits." Penn-Am. Ins. Co. v.
Mapp, 461 F. Supp. 2d 442, 459 (E.D. Va. 2006). The court then went
on to specify that the DJ Action would be "dismissed from [the
court’s] active docket and . . . may be reinstated upon proper motion
by any party to this proceeding." Id. The Judgment, entered three days
later, was consistent with the Opinion, specifying that the court was
"dismissing this case from the active docket." J.A. 246.
Although the Opinion and Judgment each referred to the court’s
"active docket," neither the Federal Rules of Civil Procedure nor the
Local Rules for the Eastern District of Virginia define or establish an
"active docket," or, for that matter, create or define an "inactive
docket." In our unpublished decision in Doe v. Shalala, we recog-
nized that the removal of a case from a court’s "active docket" is the
functional equivalent of an administrative closing, which does not end
a case on its merits or make further litigation improbable. 26 F. App’x
338, 339 (4th Cir. 2002) (declining to exercise § 1291 jurisdiction in
appeal from order administratively closing civil action, because order
was "neither a final order, nor an appealable interlocutory or collateral
order," but "merely remove[d] the case from the district court’s active
docket"). Our sister circuits have similarly construed an order remov-
ing a case from a court’s "active docket" as an "administrative clos-
ing" — a designation that does not independently satisfy the finality
mandate of § 1291. See, e.g., WRS, Inc. v. Plaza Entm’t, Inc., 402
F.3d 424, 427 (3d Cir. 2005) ("[A]n order administratively closing a
case is not, in and of itself, a final order . . . ."); Penn W. Assocs. Inc.
v. Cohen, 371 F.3d 118, 128 (3d Cir. 2004) ("[A]n order merely
directing that a case be marked closed constitutes an administrative
closing that has no legal consequence other than to remove that case
from the district court’s active docket."); Lehman v. Revolution Port-
folio, LLC, 166 F.3d 389, 392 (1st Cir. 1999) ("[A]n administrative
closing has no effect other than to remove a case from the court’s
8 PENN-AMERICA INSURANCE v. MAPP
active docket and permit the transfer of records associated with the
case to an appropriate storage repository.")
Put simply, an otherwise non-final order does not become final
because the district court administratively closed the case after issuing
the order. A reviewing court must consider whether an order is final
and appealable without regard to the existence of the administrative
closure. Thus, in Dees v. Billy, the Ninth Circuit concluded that it
lacked jurisdiction to review an order staying a medical malpractice
action, compelling arbitration, and administratively closing the case.
394 F.3d 1290 (9th Cir. 2005). In so ruling, the court rejected the
plaintiff’s contention that the administrative closing rendered the stay
order a final, appealable order: "[A] district court order staying judi-
cial proceedings and compelling arbitration is not appealable even if
accompanied by an administrative closing. An order administratively
closing a case is a docket management tool that has no jurisdictional
effect." Id. at 1294; see also LeBoeuf, Lamb, Greene, MacRae, L.L.P.
v. Worsham, 185 F.3d 61, 64 (2d Cir. 1999) (characterizing case as
"closed" and directing removal from "active docket" was not appeal-
able final decision, because district court had yet to award damages);
Lehman, 166 F.3d at 392 (finding no error in district court’s decision
to reopen case administratively closed pending bankruptcy, because
administrative closing was not final order).
In the context of these guiding principles, it is clear that neither the
Opinion nor the Judgment terminated the underlying coverage litiga-
tion on the merits: The district court decided against Penn-America
on the duty to defend issue, but declined to resolve the indemnifica-
tion issue pending further proceedings in state court. Given this unre-
solved indemnification issue, the court’s dismissal of the DJ Action
from its "active docket" did not convert its otherwise non-final Opin-
ion into a final judgment under 28 U.S.C. § 1291. Furthermore, the
proviso of the Opinion that the DJ Action "may be reinstated upon
proper motion by any party to this proceeding" plainly indicates that
dismissal from the "active docket" was not the court’s final word. See
Fla. Ass’n for Retarded Citizens, Inc. v. Bush, 246 F.3d 1296, 1298
(11th Cir. 2001) (administrative closing is not final because it does
not preclude court from reactivating case of its own accord or at
request of parties). In these circumstances, the Opinion does not con-
PENN-AMERICA INSURANCE v. MAPP 9
stitute a final judgment, and we are therefore not entitled to review
it under 28 U.S.C. § 1291.
In so concluding, we observe that an administrative closing of a
lawsuit does not preclude a district court from determining, pursuant
to Rule 54(b), that aspects of an otherwise non-final decision should
be deemed as final and thus immediately appealable. Such a Rule
54(b) certification is, of course, appropriate only where the district
court, in its discretion, determines that one or more but fewer than all
claims are final, and that there is no just reason to delay an appeal.
See Fed. R. Civ. P. 54(b) (providing that court may direct entry of
final judgment "as to one or more but fewer than all of the claims . . .
upon an express determination that there is no just reason for delay,
and upon an express direction for the entry of judgment"); see also
Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 10 (1980); Bras-
well Shipyards, Inc. v. Beazer E., Inc., 2 F.3d 1331, 1334-36 (4th Cir.
1993).
In certain situations, an administrative closing may function much
like a formal stay of proceedings, where separable claims are made
appealable under Rule 54(b). We recently exercised jurisdiction in
such a situation, reviewing a declaratory ruling — certified as final
under Rule 54(b) — concerning an insurer’s duty to defend, where
additional contentions on indemnity and bad faith had been stayed in
the lower court. See Res. Bankshares Corp. v. St. Paul Mercury Ins.
Co., 407 F.3d 631 (4th Cir. 2005) (exercising jurisdiction based on
Rule 54(b) determination and reversing ruling against insurer on duty
to defend). There, the district court decided that the interests of judi-
cial economy would be best served by a Rule 54(b) certification, in
that an appellate ruling that the insurer was not obliged to defend
would "end this coverage case," mooting the indemnification and bad
faith issues. Res. Bankshares Corp. v. St. Paul Mercury Ins. Co., 323
F. Supp. 2d 709, 723 (E.D. Va. 2004). In this case, however, a Rule
54(b) determination was neither sought by Penn-America nor inde-
pendently made by the district court.
B.
In concluding that the Opinion is not a final decision under § 1291,
we must also reject Penn-America’s contention that a dismissal of its
10 PENN-AMERICA INSURANCE v. MAPP
appeal will deprive it "of any means to obtain appellate review of its
duty to indemnify," and that the Opinion is reviewable on appeal
because it was "conclusive in practical effect." Reply Br. of Appellant
16, 17.5 Penn-America’s sole support for this contention is a Seventh
Circuit decision. See Am. States Ins. Co. v. Capital Assocs. of Jackson
County, Inc., 392 F.3d 939 (7th Cir. 2004). In that case, the district
court decided the duty to defend issue against an insurer, deemed it
premature to rule on the related indemnification issue while the
underlying action remained pending in state court, and "dismissed the
whole suit ‘without prejudice,’ even though its resolution of the duty-
to-defend issue [was] conclusive." Id. at 940. As a consequence of the
dismissal, the insurer faced the prospect that, if its insured prevailed
in state court, "there would be no further dispute about indemnity and
no reason to renew the federal litigation." Id. In that circumstance, the
insurer would be left "without a means to obtain appellate review of
the duty-to-defend question, for by then it would be too late to appeal
the federal judgment." Id. The court of appeals assessed the "jurisdic-
tional problem" created by the dismissal without prejudice, and
decided to exercise § 1291 jurisdiction under the principle that "when
the district judge misdescribes as ‘without prejudice’ a disposition
that is conclusive in practical effect, the court of appeals possesses
jurisdiction." Id. at 941 (emphasis added) (concluding that, "because
the parties have fully briefed the duty-to-defend question, and it turns
out to be dispositive of all issues, we resolve it now").
Unfortunately for Penn-America, American States is readily distin-
guishable from the situation here, where the district court simply
removed the DJ Action from its active docket, retaining jurisdiction
in the matter rather than dismissing it without prejudice. In removing
the DJ Action from its active docket, the court even satisfied the dicta
of American States, that "[i]t would have been better had the district
court stayed proceedings until the underlying suit reached a conclu-
5
Surprisingly, in making this contention, Penn-America emphasizes
that it is being deprived of appellate review on the indemnification issue,
which has not been resolved and remains pending in the DJ Action. It
would seem to make more sense for Penn-America to assert that its abil-
ity to appeal the duty to defend ruling has been jeopardized. In any event,
as discussed infra, there is nothing to prevent our later review of either
or both issues, once the DJ Action has concluded in the district court.
PENN-AMERICA INSURANCE v. MAPP 11
sion," as "[t]he loser or losers in the federal litigation then could have
appealed from a truly final disposition." 392 F.3d at 941. Moreover,
in contrast to American States (where the insurer’s ability to appeal
the duty to defend ruling was hindered), we see no impediment to
Penn-America’s future ability to appeal the district court’s rulings on
either its duty to defend or indemnify ACH.
Put simply, should ACH subsequently be found liable to Mapp in
state court, Penn-America could then pursue relief in the DJ Action
on the indemnification issue. A ruling on that issue — either favor-
able or unfavorable — should put the DJ Action to rest and constitute
an appealable decision. Penn-America could then pursue an appeal on
the duty to defend ruling of the Opinion and, if necessary, the district
court’s ultimate disposition of the indemnification issue as well. On
the other hand, should ACH prevail in the Mapp Action, the indemni-
fication issue of the DJ Action should be subject to dismissal for
mootness. And, at that time, the duty to defend ruling of the Opinion
would be ripe for appeal. In either event, if this Court thereafter rules
that the duty to defend issue was improperly resolved against Penn-
America in the district court, Penn-America could, pursuant to its res-
ervation of rights with respect to the defense of ACH in the Mapp
Action, seek reimbursement of its defense costs. In sum, the adminis-
trative closing effected by the Opinion has not deprived Penn-
America of its right to appeal any adverse rulings made in the DJ Action.6
III.
Pursuant to the foregoing, the Opinion of November 17, 2006, is
not appealable, and we lack jurisdiction to review it. We therefore
6
To the extent Penn-America seeks to rely on the "conclusive in practi-
cal effect" language of American States as a basis for appellate jurisdic-
tion under the collateral order doctrine, such an assertion is without merit
and is also rejected. See Cohen v. Beneficial Loan Corp., 337 U.S. 541,
546 (1949) (authorizing immediate appeal of otherwise interlocutory
decision that (1) conclusively resolves question in dispute; (2) disposes
of important issue that is separate from merits; and (3) is effectively
unreviewable on appeal from final judgment); see also Under Seal v.
Under Seal, 326 F.3d 479, 481-84 (4th Cir. 2003) (embracing and apply-
ing "three factor test" for collateral order doctrine).
12 PENN-AMERICA INSURANCE v. MAPP
dismiss this appeal.
DISMISSED