The Court of Appeals for the Seventh Circuit dismissed an appeal on jurisdictional grounds because several related counterclaims were still pending. In General Ins. Co. of America v. Clark Mall Corp., ___ F. 3d. ___ ( 7th Cir.2011) decided May 4, 2011. the District Court determined that plaintiff owed a duty to defend defendant in an underlying negligence action under a commercial general liability policy. The District Court entered its duty-to-defend order as a final judgment to facilitate an immediate appeal. The Court of Appeals raised jurisdictional concerns sua ponte at oral argument because of counterclaims pending in the District Court. The plaintiff’s lawyer told the court that the counterclaims were premised solely on the duty to indemnify, not the duty to defend. The Court of Appeals said “This is not true.” It pointed out that the counterclaims are replete with reference to the defendant’s refusal to defend the underlying lawsuit as well as the refusal to indemnify. Since the duty-to-defend issue is implicated in the remaining counterclaims the court found that the District Court’s order is not truly “final” for the purposes of an appeal.
