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

The Eleventh Circuit affirmed the district court's order granting summary judgment in part in favor of defendants and holding that James River has a duty to defend the insureds: Ultratec, MST, and Ultratec's employee. The underlying action stemmed from a pyrotechnic explosion at a work place that killed two employees and injured others. The employees filed suit against Ultratec, Ultratec's employee, and MST. James River is Ultratec entities' insurer.The court concluded that it has jurisdiction over the appeal despite its lack of finality because of its injunctive qualities. The court applied Alabama's contract interpretation principles and case law before applying that law to the insurance policy at issue, holding that James River has a duty to defend defendants because the employer's liability exclusion in the policy is ambiguous. The court explained that, because the exclusion did not unambiguously exclude coverage, James River had a duty to defend the insureds. View "James River Insurance Co. v. Ultratec Special Effects Inc." on Justia Law

In 1999, Kristina drugged her sons and put them, and herself, in a running car in a closed garage. Matthew died; Adam and Kristina survived. Kristina was convicted of second-degree murder and remained in prison until 2016. In 1999, Kristina had State Farm automobile and homeowners insurance policies. In 2001, Matthew’s estate, Adam, and their father (the Rotells) sued Kristina for wrongful death and bodily injury.Kristina tendered her defense to State Farm, which filed state court declaratory judgment actions, seeking determinations that her policies did not cover the incident. The Rotells allege that State Farm rejected a settlement offer even though Kristina wished to accept it. The state court then held that the policies did not cover the incident. State Farm withdrew from the wrongful-death lawsuit. The state court entered a default judgment against Kristina; a jury entered a $505 million verdict. Kristina was insolvent, so the Rotells petitioned for involuntary Chapter 7 bankruptcy. The bankruptcy court entered an order subjecting Kristina’s assets (claims against State Farm for bad faith and malpractice) to its control and appointed Carapella as trustee. The verdict is Kristina’s only liability. Carapella sued State Farm in Florida state court. State Farm then sought to intervene, post-judgment, in the wrongful-death action and moved to vacate the judgment, arguing that the Rotells’ fifth amended complaint was untimely and that the default judgment was void.The district court and the Eleventh Circuit affirmed the denial of the motion. The Bankruptcy Code’s “automatic stay” provision, 11 U.S.C. 362(a), precluded State Farm’s motion to intervene. View "State Farm Florida Insurance Co. v. Carapella" on Justia Law

Anderson, the lead plaintiff in a putative class action against her life insurance provider, Wilco, alleged that in 2011-2016, the company breached the terms of her universal life insurance policy by increasing her monthly rate for impermissible reasons. Her policy provides for a “guaranteed maximum monthly cost of insurance rate” and a “current monthly cost of insurance rate.” The guaranteed rate is calculated “based on” Anderson’s “age, sex, and premium class.” The current rate, by contrast, “will be determined by the Company” but cannot exceed the guaranteed rate. As a typical universal life insurance policy, Anderson’s policy was a hybrid investment vehicle and life insurance policy. As her policy aged, Wilco began to increase Anderson’s current rate sharply; her policy’s accumulation value (essentially the investment earnings from which Anderson could cover her monthly payments) was wiped out, and Anderson failed to make the monthly payments out-of-pocket. Her policy lapsed, and Anderson sued.The Eleventh Circuit affirmed the dismissal of her complaint. The policy gave Wilco discretion to set Anderson’s current rate as long as that rate was less than the guaranteed rate and unambiguously gave Wilco discretion to set Anderson’s current monthly rate. View "Anderson v. Wilco Life Insurance Co." on Justia Law

The Eleventh Circuit affirmed the district court's grant of summary judgment in favor of GEICO and its rejection of claimant's attempt to obtain a $14,900,000 bad faith judgment from the insurer. The court concluded that, under the totality of the circumstances, no reasonable jury could conclude that GEICO acted in bad faith before, during, or after sending the proposed release to claimant. The court noted that it was not allowing GEICO to escape liability merely because claimant and his attorney's actions could have contributed to the failure to settle. Rather, the court discussed claimant and his attorney's actions because they show how, in the totality of these circumstances, GEICO did fulfill its good faith duty to the driver and his mother. The court explained that they show how the failure to settle the lawsuit against the insureds did not result from bad faith of the insurer. View "Pelaez v. Government Employees Insurance Co." on Justia Law

The Eleventh Circuit affirmed the district court's order dismissing National Trust's federal declaratory judgment action without prejudice. Plaintiff filed a wrongful death action against Southern Heating and others in Alabama state court after his parents died from carbon monoxide poisoning. National Trust, Southern Heating's insurer, filed suit in federal court seeking a declaration that it has no duty to defend or indemnify Southern Heating because there is no coverage under its policy. The district court found that the Alabama state court action was parallel to the federal declaratory judgment action and that the non-exhaustive guideposts set out in Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331 (11th Cir. 2005), weighed in favor of not hearing National Trust's action.The court concluded that, when relevant, the degree of similarity between concurrent state and federal proceedings is a significant consideration in deciding whether to entertain an action under the Declaratory Judgment Act. In this case, the district court properly took into account that similarity in its consideration of the Ameritas guideposts. The court explained that the district court's perspective may not be the only way to view the two proceedings at issue, but it is a permissible way to look at them, and that is enough to constitute a reasonable exercise of discretion. View "National Trust Insurance Co. v. Southern Heating and Cooling Inc." on Justia Law

In the underlying action, a citrus grove owner filed suit against defendant in Florida state court, alleging claims for breach of contract, breach of fiduciary duty, and an equitable accounting. Almost a year later, and two days after finding out that defendant had an insurance policy issued by Travelers, the owner moved to amend the complaint to add a claim for negligence. After the motion was granted, Travelers disclaimed coverage. In state court litigation, the owner and defendant entered into a settlement agreement.Travelers filed this declaratory judgment action seeking a declaration that, based on the insurance policy's provision, it had not duty to defend or indemnify defendant against the owner's claims. The Eleventh Circuit affirmed the district court's grant of summary judgment in favor of Travelers. The court concluded that, because the insurance policy excluded coverage for the damages alleged in the owner's amended state court complaint, Travelers had no duty to defend or indemnify, and the Coblentz agreement is unenforceable for that reason. View "The Travelers Indemnity Company of Connecticut v. Richard McKenzie & Sons, Inc." on Justia Law

The Association sought to recover for the damage caused by Hurricane Irma from its insurer, Rockhill. After Rockhill denied coverage and the parties went to trial before a jury, the Association received a little over $2.6 million—a fraction of the $16 million it initially asked for. Both parties appealed, Rockhill challenged the final judgment entered in favor of the Association, and the Association challenged the damages award.The Eleventh Circuit affirmed, concluding that it need not discuss the merits of Rockhill's summary judgment challenge because the court's precedent clearly bars review of an order denying summary judgment after a full trial and judgment on the merits. In regard to the three remaining issues on appeal, the court concluded that the district court did not abuse its discretion by striking Rockhill's expert; the district court did not abuse its discretion by denying Rockhill's Daubert motion; and Rockhill did not preserve its challenge to the denial of its motion for judgment as a matter of law.In regard to the Association's cross-appeal, the court concluded that the evidence is sufficient to support the jury's preexisting damage finding. The court also concluded that Rockhill's failure to comply with Florida Statute 627.701(2) does not render the hurricane deductible unenforceable. View "St. Louis Condominium Association, Inc. v. Rockhill Insurance Co." on Justia Law

The Eleventh Circuit affirmed the district court's grant of summary judgment in favor of Progressive in a third-party bad-faith action brought by plaintiff. Plaintiff claimed that Progressive was collaterally estopped by a previous action against the driver of the vehicle that hit plaintiff's vehicle, permanently injuring her and killing her son, from arguing that it had no opportunity to settle her claims within policy limits.Applying Florida law, the court concluded that, at bottom, it agreed with the district court's endorsement of the magistrate judge's detailed and well-reasoned factual findings and legal conclusions that Progressive did not act in bad faith. In this case, the day that Progressive learned of the accident, it concluded that it should offer the full bodily-injury policy limits to plaintiff and her son's estate; while the driver's criminal proceedings were ongoing, Progressive stayed in touch with plaintiff, informing her that it was ready to settle at her discretion; and after receiving plaintiff's counsel's unilateral offer to settle, Progressive's claims examiner, in-house counsel, and outside counsel promptly moved to satisfy his time-limited demands. The court explained that, under Florida law, an overbroad release can create a factual dispute regarding bad faith, but the totality of the circumstances and Progressive's release did not support a finding that Progressive acted in bad faith. View "Eres v. Progressive American Insurance Co." on Justia Law

In this dispute over an illegal stranger-originated life insurance (STOLI) policy, the district court found that the AIG Policy at issue lacked an insurable interest at its inception and was therefore void under Delaware Code Annotated Title 18, 2704(a), which, in relevant part, governs the purchase of a life insurance policy on the life of another person.The Eleventh Circuit affirmed the district court's decision allowing the Estate to recover the policy's proceeds under section 2704(b) and finding that the policy was void. However, the court reversed the district court's decision to strike Berkshire's counterclaims for fraudulent and negligent misrepresentations. The court deferred its decision on the remaining issues in this case pending certification of two questions to the Supreme Court of Delaware. The court stated that Berkshire may be entitled to the premiums it paid and the district court erred by striking its misrepresentation counterclaims. The court reserved judgment on the questions of whether the district court properly calculated prejudgment interest to which the Estate is entitled. View "Estate of Malkin v. Wells Fargo Bank, NA" on Justia Law

The district court held on summary judgment that, under Eleventh Circuit precedent, federal maritime law requires strict compliance with captain and crew warranties in a marine insurance policy. The district court concluded that, because Ocean Reef breached those warranties, there was no coverage for the loss of its yacht under a policy issued by Travelers.The Eleventh Circuit applied Wilburn Boat Co. v. Firearm’s Fund Ins. Co., 348 U.S. 310, 316 (1955), and concluded that there does not exist entrenched federal maritime rules governing captain or crew warranties in this case. Therefore, Florida law applies to determine the effect of Ocean Reef's breaches. The court reversed and remanded for further proceedings. View "Travelers Property Casualty Company of America v. Ocean Reef Charters LLC" on Justia Law