## Facts

- Beckwith Machinery Co., a Caterpillar equipment seller/lessor/repairer, sold tractor scrapers and related equipment to Trumbull Corp. for a construction project.
- Trumbull asserted the equipment was defective, causing breakdowns, project delays, and claimed damages exceeding $3 million.
- Trumbull sued Beckwith and Caterpillar in federal court for breach of warranties and misrepresentation, seeking compensatory and punitive damages.
- Beckwith was insured under a comprehensive general liability policy issued by Travelers Indemnity Co., which promised to pay damages because of covered “property damage” and to defend any suit alleging covered injury or damage, even if groundless.
- Travelers initially assumed Beckwith’s defense except as to punitive damages; Beckwith retained separate counsel for the punitive-damages aspect and notified Travelers it would seek reimbursement.
- About 13 months after the suit was filed, Travelers denied coverage and withdrew from the defense; Travelers later offered to resume defending only if Beckwith waived any prejudice from the withdrawal, which Beckwith refused.
- Beckwith continued with its own counsel, settled the underlying case for $100,000 (paid by Beckwith), and incurred defense costs.
- Beckwith sued Travelers for breach of the insurance contract; the district court granted summary judgment for Beckwith, awarded the $100,000 settlement (plus interest), and awarded attorney’s fees and costs for both the underlying defense and the coverage litigation, without quantifying the fee amounts.
- Travelers appealed to the Third Circuit.

## Issues

1. Whether a district court order that awards attorney’s fees as part of contractual relief, but does not quantify the fees, is a “final decision” appealable under 28 U.S.C. § 1291.
2. Whether the court of appeals may reach the merits of coverage, duty to defend, estoppel, and fee entitlement when the fee component of the contract damages remains unliquidated.

## Decision

- The Third Circuit dismissed the appeal for lack of appellate jurisdiction.
- Because the district court awarded attorney’s fees as an element of the substantive contract recovery but did not determine the amount, the order was not final under § 1291.
- The court did not decide the merits of Travelers’ challenges to coverage, estoppel, or the entitlement to attorney’s fees.

## Legal Principles

- Appellate jurisdiction under 28 U.S.C. § 1291 requires a “final decision.”
- When attorney’s fees are collateral to the merits (commonly in statutory fee-shifting), an unresolved fee amount may not defeat finality.
- When attorney’s fees arise from, and are part of, the claimant’s underlying cause of action for relief (such as contract damages), a judgment is not final until the fees are quantified.
- An appeal taken before quantification of contract-based attorney’s fees is premature and must be dismissed for lack of jurisdiction.

## Conclusion

The Third Circuit held that a judgment awarding attorney’s fees as part of the substantive contract remedy is not appealable under § 1291 until the district court determines the amount of those fees, and it dismissed the insurer’s appeal without reaching the merits.


Beckwith Machinery Co. v. Travelers Indem. Co., 815 F.2d 286 (3d Cir. 1987)