In the

United States Court of Appeals

For the Seventh Circuit

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No. 04-2401

FACTORY MUTUAL INSURANCE COMPANY,

Plaintiff-Appellee,

v.

BOBST GROUP USA, INC.,

Defendant-Appellant.

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Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 02 C 0283—James B. Moran, Judge.

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ARGUED DECEMBER 1, 2004—DECIDED DECEMBER 21, 2004

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Before EASTERBROOK, EVANS, and SYKES, Circuit Judges.

EASTERBROOK, Circuit Judge. Bobst Group sold a printing press to Wm. Wrigley Jr. Company. After one of the

press’s components exploded, Factory Mutual indemnified

Wrigley and sued Bobst as its subrogee. Bobst not only

denied responsibility but also filed a flurry of third-party

claims for indemnity, plus a counterclaim against Factory

Mutual. According to Bobst, whatever Factory Mutual receives (should it prevail) it must return in whole or in part

as contribution. Bobst’s theory is that, by acquiring through

its insurance contract a right to inspect Wrigley’s plant in

order to reduce safety hazards (and thus the risk to which
2 No. 04-2401

† Nelson was decided under Florida law, and it is no longer sound

on its own facts. The Supreme Court of Illinois used the insurer’s

inspection as a loophole in the exclusivity provision of the state’s

workers’ compensation program, and the legislature has since

forbidden that kind of evasion. See 810 ILCS 305/5. See also Reid

v. Employers Mutual Insurance Co., 59 Ill. 2d 194, 319 N.E. 2d

769 (1974). But Illinois continues to hold that negligent performance of a voluntary undertaking can at least sometimes support

liability. See Pippin v. Chicago Housing Authority, 78 Ill. 2d 204,

399 N.E. 2d 596 (1979); Restatement (Second) of Torts §§ 323,

324A. For reasons that will soon become clear, we need not decide

how Illinois would today deal with claims based on insurers’

inspections.

it was exposed), Factory Mutual undertook a duty to help

Wrigley’s vendors reduce the hazards that their machines

create.

While discovery on Factory Mutual’s principal claim was

ongoing, the district court granted summary judgment

against Bobst on the counterclaim. The insurance policy

declares that Factory Mutual’s right to inspect is for its sole

benefit and that no other person—not Wrigley, and certainly not potential tortfeasors who have not paid any part

of the premium—is entitled to rely on the quality of the

inspections. The district judge concluded that neither the

policy nor the fact that the insurer gave Wrigley some

advice about how to make the printing press safer created

any duty of care to Bobst. 2004 U.S. Dist. LEXIS 4076 (N.D.

Ill. Mar. 15, 2004). The judge might well have added that,

although Illinois (whose law governs) has held that an

insurer’s power to inspect can imply a duty toward victims

of torts, see Nelson v. Union Wire Rope Corp., 31 Ill. 2d 69,

199 N.E. 2d 769 (1964), neither Illinois nor any other state

has held that this duty runs to a tortfeasor, relieving it of

the financial consequences of its own negligence, and thus

eliminating its incentive to take care.†

 Good Samaritan

liability to victims is rare; Good Samaritan liability to injurers is unheard of.
No. 04-2401 3

Having resolved the counterclaim, the district judge decided

to enter a partial final judgment under Fed. R. Civ. P. 54(b).

2004 U.S. Dist. LEXIS 9305 (N.D. Ill. May 20, 2004). The

judge recognized that the claim and counterclaim have many

issues in common but thought a separate judgment proper

because the only issue actually resolved—whether the insurer had a duty to take care for Bobst’s benefit— affects

the counterclaim alone. At oral argument we questioned

appellate jurisdiction, however, and directed the parties to

file supplemental memoranda. After considering these we

conclude that Rule 54(b) does not permit entry of a partial

final judgment on a claim for contribution.

Rule 54(b) permits entry of a partial final judgment only

when all of one party’s claims or rights have been fully adjudicated, or when a distinct claim has been fully resolved

with respect to all parties. These requirements are designed

to ensure that the claim is distinct—the sort of dispute that,

but for the joinder options in the Rules of Civil Procedure,

would be a stand-alone lawsuit. Otherwise Rule 54(b) would

amount to nothing more than an option on the district

court’s part to certify issues for interlocutory appeal. Rule

54(b) authorizes only appeals from final decisions, however;

its jurisdictional counterpart is 28 U.S.C. §1291, see Sears,

Roebuck & Co. v. Mackey, 351 U.S. 427, 435 (1956), and

interlocutory appeals in actions for damages must proceed

under §1292(b), which requires not only a demonstration

that the issue for appeal has general importance (and can

accelerate resolution of the case) but also the appellate

court’s permission. To keep Rule 54(b) distinct from §1292(b),

we have insisted that Rule 54(b) be employed only when the

subjects of the partial judgment do not overlap with those

ongoing in the district court. See, e.g., Horn v. Transcon Lines,

Inc., 898 F.2d 589 (7th Cir. 1990); Jack Walters & Sons

Corp. v. Morton Building, Inc., 737 F.2d 698 (7th Cir. 1984).

Contribution claims not only overlap but also depend on

the principal claims in the suit. There can be no contribution without established underlying liability. See Cooper
4 No. 04-2401

Industries, Inc. v. Aviall Services, Inc., No. 02-1192 (U.S

Dec. 13, 2004). Unless Bobst is liable to Wrigley (and so,

derivatively, to Factory Mutual as its subrogee), Factory

Mutual cannot be liable to Bobst in contribution. It makes

little sense for an appellate court to address contribution

when that subject may be made academic by the outcome of

trial. Everything we do on this appeal could be wasted.

Resolution of disputes about contribution and indemnity

usually should wait until the underlying claim has been

decided. See, e.g., Interstate Power Co. v. Kansas City Power

& Light Co., 992 F.2d 804, 807-08 (8th Cir. 1993);

Corrosioneering, Inc. v. Thyssen Environmental Systems,

Inc., 807 F.2d 1279 (6th Cir. 1986). Although district courts

may think it prudent to alter this order, if by doing so they

can simplify a trial, it is imprudent to dispatch the contribution or indemnity claim for immediate appeal, as appellate

resolution may never be necessary. This kind of entanglement between the underlying claim and a demand for

indemnity led us to hold in McMunn v. Hertz Equipment

Rental Corp., 791 F.2d 88, 90-91 (7th Cir. 1986), that Rule

54(b) may not be used to enter a partial final judgment

limited to indemnity, while the principal claim remains unresolved. Contribution should be treated the same way.

Contribution, like indemnity, is impossible without some

underlying liability. More than that, the proceedings to fix

the amount of that liability will cover many of the issues

that would matter to contribution. This case provides a

vivid illustration. Bobst seeks contribution from Factory

Mutual on the theory that its inspections failed to detect

and prevent whatever led to the explosion. Bobst makes

essentially the same contention defending the main claim,

in which Factory Mutual is subrogated to Wrigley’s contract

and tort rights. Here Bobst labels the argument “assumption of risk”—demonstrated, Bobst insists, by Wrigley’s

decision to hire an inspector yet not carry out all of the

inspector’s recommendations. Bobst also contends that
No. 04-2401 5

Wrigley’s damages should be reduced on the theory that it

bears part of the fault. What part? Why, the part represented by not having an inspector find and prevent the

explosion! In offering these defenses, Bobst relies on the

same contracts and letters that it argues on this appeal

show that Factory Mutual’s duty of care runs at least to

Wrigley, and thus offers some derivative benefit to Bobst

itself. Thus Bobst’s demand for contribution is neither logically nor factually separate from Factory Mutual’s demands

in the main suit. Both should be handled on one appeal—

from the real final judgment in the whole case.

Recognizing the problems entailed in treating contribution as a separate “claim” for purposes of Rule 54(b), Bobst

contended in its post-argument memorandum that jurisdiction could be sustained under the rule’s separate-party

provision. According to Bobst, the district court has resolved

all claims involving Factory Mutual Engineering Association (FMEA), which it describes as “an unincorporated

association owned by four insurance companies.” True

enough, FMEA is not a party in the proceedings ongoing in

the district court—but this is because it has never been a

party to the claim, the counterclaim, or the third-party

practice, as it does not exist. Bobst’s brief says that the four

companies “merged with Factory Mutual Ins. Co. in July of

1999, before the incident in question occurred and before

the lawsuit was filed.” So it was never named as a party.

Perhaps the Rule 54(b) judgment wrapped up all theories of

liability on account of acts that FMEA performed while it

existed. But it did not dispose of all claims by and against

FMEA as a party, for it never has been one. Its assets and

liabilities were merged into Factory Mutual, which remains

a party in the district court.

Because there is no appellate jurisdiction, we cannot explore the question whether there may be difficulties in subject-matter jurisdiction as well. Some of the additional parties are limited liability companies. Factory Mutual and
6 No. 04-2401

Bobst have treated them as corporations, with two citizenships: state of incorporation and principal place of business.

They are not; for jurisdictional purposes they are partnerships, and the citizenship of every member must be

ascertained. See Cosgrove v. Bartolotta, 150 F.3d 729 (7th

Cir. 1998). Perhaps some or all of the third-party practice

could be supported by the supplemental jurisdiction, but the

limitations in 28 U.S.C. §1367(b) must be considered and,

so far, have not been. The district judge should look at these

potential problems before the case proceeds any further.

The appeal is dismissed for want of jurisdiction.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—12-21-04