Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

Two individuals purchased Florida prepaid college tuition savings plans for their daughters in 2004 and 2006. The plans promised to cover tuition at Florida public colleges or transfer an equivalent amount to non-Florida colleges if the beneficiary chose to attend elsewhere. In 2007, the Florida Legislature authorized a new “tuition differential” fee, exempting holders of existing plans from paying that fee at Florida colleges. The Florida Prepaid College Board amended the plan contracts to specify that this new fee was not covered for out-of-state schools. Over a decade later, when both daughters chose to attend out-of-state colleges, the Board declined to transfer an amount equivalent to the tuition differential fee.The purchasers filed a putative class action in the United States District Court for the Southern District of Florida against members of the Board, alleging that the Board’s refusal violated the Contracts and Takings Clauses of the U.S. Constitution. They sought declaratory and injunctive relief to prevent the Board from applying the statutory exemption and contract amendments to beneficiaries attending non-Florida schools. The Board moved to dismiss, arguing it was protected by sovereign immunity. A magistrate judge recommended denying the motion, reasoning the relief sought was prospective. However, the district court disagreed, ruling that the relief requested was essentially a demand for a refund, thus barred by the Eleventh Amendment, and dismissed the complaint with prejudice.The United States Court of Appeals for the Eleventh Circuit reviewed the case. It held that the suit was barred by sovereign immunity because the relief sought would require specific performance of a contract with the state, which is not permitted under Ex parte Young and related Supreme Court precedent. However, the appellate court vacated the district court’s dismissal with prejudice and remanded with instructions to dismiss without prejudice, as the dismissal was for lack of subject-matter jurisdiction. View "Lavina v. Florida Prepaid College Board" on Justia Law

Two builders’ associations, whose members are largely non-union construction contractors, challenged a federal procurement mandate issued by executive order in February 2022. The order, issued by the President, presumptively requires all contractors and subcontractors on federal construction projects valued at $35 million or more to enter into project labor agreements with unions. The order allows for three specific exceptions if a senior agency official provides a written explanation. The Federal Acquisition Regulatory Council issued regulations implementing the order, and the Office of Management and Budget provided guidance. The associations argued that the mandate unfairly deprived their members of contracting opportunities and brought a facial challenge under several statutory and constitutional grounds, seeking to enjoin the mandate’s enforcement.The United States District Court for the Middle District of Florida denied the associations’ motion for a preliminary injunction. It found that the associations were likely to succeed on their claim under the Competition in Contracting Act, since the government was not meaningfully applying the order’s exceptions, but concluded that the associations would not suffer irreparable harm because they could challenge individual procurements in the United States Court of Federal Claims. The district court did not consider irreparable harm as to the associations’ other claims.On interlocutory appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the denial of the preliminary injunction, although for different reasons. The Eleventh Circuit held that the associations were unlikely to succeed on the merits of their facial challenge under the Competition in Contracting Act, the Federal Property and Administrative Services Act, the First Amendment, the Administrative Procedure Act, the Office of Federal Procurement Policy Act, and the National Labor Relations Act. The court emphasized that the existence of written exceptions in the executive order precluded a facial invalidity finding, and that the government acted within its statutory and proprietary authority. The court affirmed the district court’s order. View "Associated Builders and Contractors Florida First Coast Chapter v. General Services Administration" on Justia Law

The case involves a business arrangement among AE OpCo, AAR, and Short Brothers, centered on a procurement contract. AAR’s subsidiary manufactured airline parts for Short Brothers, and AAR guaranteed its subsidiary’s performance. When AE OpCo acquired AAR’s business, it assumed the obligation to perform under the contract, while AAR guaranteed AE OpCo’s performance to Short Brothers. In turn, AE OpCo agreed to indemnify AAR if AE OpCo defaulted. Later, AE OpCo filed for bankruptcy and rejected the procurement contract, prompting both Short Brothers and AAR to file claims in the bankruptcy proceeding.The United States Bankruptcy Court for the Middle District of Florida considered three claims from AAR: an indemnification claim for potential liability to Short Brothers, a defense-costs claim for legal fees incurred in ongoing litigation with Short Brothers in Northern Ireland, and a bankruptcy-costs claim for attorneys’ fees incurred in the bankruptcy proceedings. The bankruptcy court disallowed the indemnification claim as contingent and barred by 11 U.S.C. § 502(e)(1)(B), allowed the defense-costs claim as a fixed, non-contingent claim, and disallowed the bankruptcy-costs claim as a post-petition unsecured claim.On direct appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the bankruptcy court’s disallowance of the indemnification claim, holding that under Delaware law, the settlement between AE OpCo and Short Brothers did not release AE OpCo’s liability, so AAR remained co-liable and the claim was properly disallowed under § 502(e)(1)(B). The appellate court also affirmed the allowance of the defense-costs claim, finding it was not contingent since all events giving rise to liability had occurred. However, the court reversed the disallowance of the bankruptcy-costs claim, holding that neither § 502(b) nor § 506(b) barred allowance of such a claim, and remanded for further proceedings. View "AE OPCO III, LLC v. AAR CORP." on Justia Law

A franchisee brought several claims against a franchisor and related parties, including allegations of breach of contract, unjust enrichment, violations of Florida law, and Fair Labor Standards Act (“FLSA”) violations. The parties settled, with the franchisee receiving $50,000 and both sides signing a mutual release that broadly barred any future claims. The agreement was not approved by a court or the Department of Labor and contained a confidentiality provision. Subsequently, the franchisee initiated a separate action for fraudulent transfer and other non-FLSA claims, arguing these were not barred by the settlement’s release.After the settlement, the franchisee filed a supplemental complaint in the United States District Court for the Middle District of Florida, alleging fraudulent transfer and related non-FLSA claims. The franchisor responded with a motion for judgment on the pleadings, citing the settlement’s release. The franchisor also filed counterclaims, including breach of contract based on the franchisee’s new filings. The franchisee attempted to amend his complaint to add a claim for rescission, arguing fraudulent inducement, but the magistrate judge denied this motion, finding it was inadequately pleaded and untimely. The franchisee did not properly object to this denial before the district judge.The United States Court of Appeals for the Eleventh Circuit considered whether the unapproved settlement agreement barred the non-FLSA claims. The court held that, while FLSA claims cannot be waived or settled without court or Department of Labor approval, non-FLSA claims may be released according to state contract law. The court found the release enforceable under Florida law as to non-FLSA claims and affirmed the district court’s dismissal of the fraudulent transfer claims and grant of summary judgment to the franchisor on its counterclaims. The court also ruled the franchisee had waived his right to appeal the denial of his motion to amend. View "O'Neal v. American Shaman Franchise Systems, Inc." on Justia Law

Selina Anderson, a federal employee with a history of severe lung disease, broke her leg in a parking lot accident and subsequently died less than a week later following complications from surgery. Her official cause of death was a pulmonary embolism, but her autopsy noted that her longstanding interstitial lung disease contributed to her death. Anderson’s daughter, Brittany Finney, was the beneficiary of Anderson’s life insurance policy under the Federal Employees’ Group Life Insurance Act (FEGLI), which included both standard and accidental death benefits.After Anderson’s death, Finney submitted claims for both types of benefits to Metropolitan Life Insurance Company (MetLife), the insurer. MetLife paid the standard life insurance benefit but denied the additional accidental death benefit. The denial was based on two grounds: that Anderson’s death was not “accidental” within the policy’s meaning, and that her death was “contributed to by” her pre-existing physical illness, thus falling under an exclusion in the policy. Finney filed suit in the United States District Court for the Northern District of Alabama, arguing that the denial breached the insurance contract. Both parties moved for judgment as a matter of law. The district court ruled in favor of MetLife, finding that the denial was reasonable under the policy’s physical illness exclusion.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s judgment. The Eleventh Circuit held that MetLife’s decision to deny accidental death benefits was not arbitrary or capricious, as the policy clearly excluded coverage when a physical illness contributed to the insured’s death. The court concluded that Anderson’s pre-existing lung disease contributed to her death and that MetLife’s denial was reasonable under the terms of the insurance contract. View "Finney v. Metropolitan Life Insurance Company" on Justia Law

Several business entities formed two limited partnerships to develop and manage affordable housing complexes in Tampa, Florida. Creative Choice Homes XXX, LLC and Creative Choice Homes XXXI, LLC acted as general partners in these partnerships, with various investor and special limited partners. The partnership agreements required the general partners to follow strict financial protocols, including restrictions on advances to affiliates and requirements for the proper distribution of profits. Over several years, financial audits revealed the general partners had made unauthorized advances to related entities, violating the agreements' terms. Despite repeated warnings from the limited partners, the general partners failed to cure the breaches within the periods specified in the agreements.After the limited partners provided formal notice of default, the general partners did not fully remedy the violations in a timely manner, including continuing improper transfers and attempting to cure by making late and improperly sourced payments. The limited partners consequently removed the general partners from their positions. The general partners filed suit in state court, seeking a declaration that their removal was improper and alleging breach of contract by the limited partners. The limited partners removed the case to the United States District Court for the Middle District of Florida and counterclaimed for breach of contract and declaratory relief.Following a bench trial, the district court ruled in favor of the limited partners, finding that the general partners materially breached the partnership agreements, failed to cure, and that removal did not constitute an impermissible forfeiture, waiver, or estoppel. On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed. The court held that the general partners’ breaches were material, their cure efforts were insufficient, and that enforcing removal under the partnership agreements was proper and not inequitable. The district court’s judgment was affirmed. View "Creative Choice Homes XXX, LLC v. Amtax Holdings 690, LLC" on Justia Law

The dispute centers on a real estate transaction in which a buyer agreed to purchase a property in Miami for $5,450,000 from two sellers, with a closing set for October 2021. The sellers subsequently discovered a mortgage restriction preventing them from closing until January 2022, which resulted in their failure to close on time. They acknowledged the breach, but subsequent negotiations to revive the deal fell through because the buyer wanted a discounted price to account for damages incurred from the delay, which the sellers refused.The matter proceeded to litigation. The buyer sued for specific performance and damages in state court; the sellers removed the action to federal court and also brought their own federal suit seeking a declaratory judgment that the buyer, not they, had breached. The United States District Court for the Southern District of Florida dismissed the sellers’ declaratory action and granted summary judgment to the buyer on breach of contract, reserving the amount of damages for trial. After a bench trial, the district court awarded the buyer specific performance and damages, ordering the sale to proceed. The parties closed the transaction as ordered.On appeal, the United States Court of Appeals for the Eleventh Circuit held that the issue of specific performance was moot because the sale had already occurred and the property was now owned by third parties not before the court, making further relief impossible. However, the court found the damages issue remained live. It affirmed the district court’s damages award in all respects except for damages for lost tax savings, which it reversed due to insufficient evidence that the buyer itself suffered those losses. The case was remanded for recalculation of damages consistent with the appellate decision. View "Marmol v. Kalonymus Development Partners, LLC" on Justia Law

The case involves a Florida-based title insurer that suffered significant financial setbacks, prompting a series of business restructurings and asset transfers. In 2009, the company entered a joint venture with another title insurance group, forming a new entity to handle certain business functions. Over subsequent years, the original company retained substantial assets and continued operations, but further financial decline led to a 2015 agreement in which it transferred assets and liabilities to its business partner, in exchange for the assumption of its policy liabilities. The Florida insurance regulator scrutinized and ultimately approved the transaction after requiring additional commitments from the acquiring party.The United States Bankruptcy Court for the Middle District of Florida later oversaw the company’s Chapter 11 proceedings. The appointed Creditor Trustee brought an adversary proceeding against the acquiring parties and related entities, alleging that the asset transfer constituted a fraudulent transfer under federal bankruptcy law and Florida statutes, and sought to impose successor liability and alter ego claims. The bankruptcy court held a bench trial, excluding portions of the Trustee’s expert valuation as unreliable, and found that the company had received reasonably equivalent value in the transaction. The court also rejected the successor liability and alter ego theories, finding insufficient evidence of continuity of ownership, improper purpose, or harm to creditors.The United States District Court for the Middle District of Florida affirmed the bankruptcy court’s rulings. On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the record and affirmed the district court’s order. The Eleventh Circuit held that the bankruptcy court did not err in excluding the Trustee’s expert, that the asset transfer was for reasonably equivalent value and not fraudulent, and that the successor liability and alter ego claims failed for lack of evidence and legal sufficiency. View "Stermer v. Old Republic National Title Insurance Company" on Justia Law

Two Saudi Arabian companies, Al Rushaid Petroleum Investment Company and Al Rushaid Trading Company, specialized in helping foreign manufacturers access the Saudi oil and gas market. Over several decades, they entered into various agreements with Dresser-Rand Group (DRG), including exclusive sales representation and joint venture contracts related to the sale and servicing of DRG products in Saudi Arabia. In 2014, Siemens Energy announced its acquisition of DRG, which was completed in 2015. After the acquisition, Al Rushaid alleged that Siemens excluded them from contracts and joint venture benefits, misused proprietary information, and diverted business opportunities.The United States District Court for the Middle District of Florida first dismissed Al Rushaid’s original complaint as an impermissible shotgun pleading but allowed amendment. Al Rushaid then filed an amended complaint asserting claims for tortious interference, unfair competition, and unjust enrichment. The district court dismissed all claims without prejudice, finding that Siemens was not a stranger to the relevant business relationships due to its ownership of DRG, that the unfair competition claim was improperly pleaded and lacked necessary elements, and that the unjust enrichment claim failed to meet pleading standards.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the district court’s dismissal de novo. The Eleventh Circuit affirmed the district court’s judgment in all respects. The court held that Siemens, as owner of DRG, was not a stranger to the contracts or business relationships under Florida law, defeating the tortious interference claims. The unfair competition claim was dismissed as a shotgun pleading and for failure to allege required elements. The unjust enrichment claim was dismissed for lack of clarity and because express contracts governed the subject matter. The district court’s dismissal of all claims without prejudice was affirmed. View "Al Rushaid Petroleum Investment Company v. Siemens Energy Incorporated" on Justia Law

A nonprofit corporation purchased a 192-unit apartment complex from a government agency in 1994 at a significant discount. In exchange, the purchaser agreed by contract to rent all units at below-market rates to low-income families for 40 years and to comply with annual reporting and administrative fee requirements. Around 2016, the purchaser stopped fulfilling these obligations, including the reporting and fee provisions. The government’s successor agency, through its monitoring agent, notified the purchaser of the breach and initiated legal action seeking remedies under the contract.The purchaser counterclaimed in state court, seeking a declaration that the agreement was no longer enforceable and an injunction against further enforcement. The Federal Deposit Insurance Corporation (FDIC), as successor to the original government agency, intervened, removed the case to the United States District Court for the Middle District of Florida, and moved to dismiss the counterclaim. The purchaser argued that the contract’s obligations ended when Congress repealed the statute that created the original agency and authorized such agreements. The district court rejected this argument, holding that the contract remained enforceable, dismissed the counterclaim with prejudice, and remanded the case to state court.The United States Court of Appeals for the Eleventh Circuit reviewed the case. It held that the contract’s plain language required the purchaser to comply with its obligations for the full 40-year term, regardless of the repeal of the underlying statute. The court found that the FDIC, as successor, retained both contractual and statutory authority to enforce the agreement. The Eleventh Circuit affirmed the district court’s dismissal of the counterclaim, concluding that the agreement remains enforceable and the purchaser is still bound by its terms. View "Affordable Housing Group, Inc. v. Florida Housing Affordability, Inc." on Justia Law