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[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit
____________________
No. 21-13496 ____________________
AMERICAN BUILDERS INSURANCE COMPANY, Plaintiff-Appellee, versus SOUTHERN-OWNERS INSURANCE COMPANY,
Defendant-Appellant.
Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 9:20-cv-81357-WM ____________________ USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 2 of 25
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Before WILLIAM PRYOR, Chief Judge, ROSENBAUM, and MARCUS, Circuit Judges. MARCUS, Circuit Judge: Ernest Guthrie fell from a roof and became paralyzed from the waist down, never to walk again. Within months, his medical bills climbed past $400,000, and future costs projected into the mil- lions. Three insurance companies potentially provided coverage for Guthrie. This appeal is a battle between two of them. The primary insurer for Guthrie’s company was Southern- Owners Insurance Company. At the time of the accident, Guthrie was performing subcontracting work for Beck Construction, which had a policy with American Builders Insurance Company and an excess policy with Evanston Insurance Company. American Build- ers investigated the accident, assessed Beck Construction’s liability, and evaluated Guthrie’s claim. Southern-Owners, in contrast, did little to nothing for months. When push came to shove, Southern- Owners refused to pay any amount to Guthrie to settle the claim, and American Builders and Evanston ponied up a million dollars apiece instead. American Builders then sued Southern-Owners for com- mon law bad faith under Florida’s doctrine of equitable subroga- tion. Along the way, Southern-Owners moved for summary judg- ment, but the district court denied the motion. A federal trial jury heard the case and found in favor of American Builders. After the entry of final judgment, Southern-Owners sought judgment as a USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 3 of 25
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matter of law, or, in the alternative, a new trial. The district court denied those motions, too. On appeal, Southern-Owners chal- lenges the denials of its summary judgment and post-trial motions. After thorough review of the record and with the benefit of oral argument, we affirm. I. A. Ernest Guthrie, an employee of Ernest Guthrie, LLC per- forming work for Beck Construction, slipped from the roof of a house on April 1, 2019, and crashed to the ground. He became paralyzed from the waist down. Guthrie’s lawyer, Stuart Cohen, wrote to Beck Construction to assert the company’s liability and request insurance information. Beck Construction, in turn, put its insurer, American Builders on notice on May 8. American Builders had issued a general liability policy to Beck Construction, with a limit of $1 million for each occurrence. American Builders’ claim specialist investigated the incident by meeting with the company and its outside investigator and collecting hospital records, rehabil- itation facility records, and correspondences about the claim and injuries. Cohen investigated his client’s claim, too. He determined that Beck Construction instructed Guthrie to climb onto the roof without providing any fall protection, while two spotters focused on their phones. Guthrie had already sustained $400,000 in medical expenses, and Cohen calculated Guthrie’s claim at $4 million to $5 USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 4 of 25
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million, even if Guthrie were partially liable. On September 5, Co- hen demanded that American Builders pay its $1 million policy limit within thirty days in exchange for a release of Beck Construc- tion from liability. American Builders requested an extension, and Cohen granted ten days, placing the deadline on October 14. Cohen conditioned that demand on the lack of other availa- ble insurance. But, as it turns out, there were two other relevant policies: Evanston provided an excess policy worth $1 million per occurrence to Beck Construction, and Southern-Owners -- which would become the defendant in the instant bad-faith case -- sold Ernest Guthrie, LLC a policy that covered $1 million. Southern- Owners’ policy contained an endorsement naming Beck Construc- tion as an additional insured for any work Ernest Guthrie, LLC per- formed for Beck Construction, and making its policy the primary insurer for claims arising from Beck Construction’s work. During American Builders’ investigation, it discovered these additional policies. So, on September 12, it tendered the defense of and indemnity for Guthrie’s claim to Southern-Owners. In its let- ter to Southern-Owners, American Builders attached the certificate of insurance listing Beck Construction as an additional insured on Ernest Guthrie, LLC’s policy; the initial notice of the claim to American Builders; and Cohen’s September 5 demand letter. A couple weeks later, on September 25, Southern-Owners’ counsel sent letters to Cohen, American Builders, and Beck Construction, requesting additional incident reports, medical records, workers’ compensation records, potentially applicable insurance policies, USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 5 of 25
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applicable construction contracts, and transcripts or recordings of statements by Guthrie and Beck Construction. She also asked Co- hen for a forty-five-day extension on the September 5 demand. Two days later, Cohen provided Southern-Owners with Guthrie’s medical records and bills, American Builders’ insurance policy, and correspondences from Cohen to American Builders in May and June that explained the accident. Cohen did not respond to the forty-five-day extension request, but, that same day, Ameri- can Builders requested an extension for American Builders until November 4, which Cohen granted. In his letter granting the ex- tension, Cohen explained that he recently became aware that Southern-Owners and Evanston might also provide coverage for the accident. Because of this new information, Guthrie would now only execute a release of American Builders that reserved his rights to pursue claims against either Evanston or Southern-Owners. On October 10, American Builders retained counsel to ad- dress Cohen’s new stipulation. Working quickly, the attorney con- cluded in a few days that Guthrie’s claim was worth around $20 million to $30 million, far exceeding any applicable policy’s cover- age even if Beck Construction were largely not responsible. On October 14, he then informed Cohen that American Builders was prepared to pay its $1 million policy limit but that it could not ac- cept Cohen’s new stipulation because it provided only a partial re- lease. During the early weeks of October, the record does not re- flect that Southern-Owners did anything, other than request USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 6 of 25
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extensions. But on October 18 -- over a month after receiving no- tice of Guthrie’s injury -- Southern-Owners contacted the lawyer that American Builders had retained for Beck Construction to set up an interview with Russell Beck, the company’s principal. South- ern-Owners and the attorney spent the rest of October and all of November trying to set up a time to talk. On November 25, still struggling to set up a meeting with Beck, Southern-Owners wrote Cohen, describing the setback and noting that it had no written documentation on the claim. South- ern-Owners also requested until December 20 to respond to the September 5 demand letter. That same day, Southern-Owners told American Builders that it would agree to a defense of Beck Con- struction under a reservation of rights, but only after it spoke with someone from Beck Construction and completed its investigation. The letter noted that Southern-Owners’ policy included an em- ployer liability exclusion, which might bar coverage. American Builders passed along the contents of that letter to Beck Construc- tion the same day. Also on November 25, Beck Construction’s law- yer offered November 26 or 27 for an interview with Beck, but Southern-Owners declined because this was not enough notice. He then proposed a telephone conference, but Southern-Owners demanded an in-person meeting. Meanwhile, Cohen continued his attempts to secure pay- ment for Guthrie. On November 18, he wrote to Evanston’s claims manager, attaching the September 5 demand letter, the medical records, and other relevant documents, and made a new demand: USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 7 of 25
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a $2 million payout in exchange for a complete release of both American Builders and Evanston, with a decision due by December 18. American Builders received a copy of the November 18 de- mand letter two days later. On December 10, nearly three months after it received no- tice of the claim, Southern-Owners finally met with Beck. Beck told Southern-Owners that Ernest Guthrie, LLC employed Guth- rie; Guthrie was performing subcontracting work for Beck Con- struction; the other people on site were not responsible for spotting Guthrie; Guthrie did not request fall protection; and Guthrie ad- mitted that he “f*cked up” and “stepped off the roof.” Based on that conversation, Southern-Owners believed it had a strong liabil- ity defense. One week later, Southern-Owners decided it should talk with the other two workers present. At that time, Southern- Owners’ counsel was “in the process of reaching out” to them. Also on December 10, Evanston told American Builders’ counsel -- who was no longer involved in the case -- that it planned to tender its full policy to Guthrie, even though it was not the pri- mary insurer. After reactivating his file, counsel saw the Novem- ber 18 demand letter. With only eight days until that letter’s dead- line, he once again worked fast, reviewed the 2,700-page file, and concluded that American Builders should tender its policy limit to avoid a bad-faith claim. On December 17, after internal discussions, American Build- ers decided to tender its limit. It then called Cohen to request a one-day extension and discuss the Southern-Owners policy. It USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 8 of 25
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learned that Guthrie did “not wish to pursue coverage under the [Southern-Owners] Policy and desire[d] to move forward with set- tlement without involving [Southern-Owners], directly.” Ameri- can Builders’ counsel’s understanding was that Cohen and Guthrie simply wanted the payout and did not care where the money came from. The next day, American Builders’ counsel notified Southern- Owners of the November 18 demand letter. Since Southern-Own- ers was listed as the primary insurer, counsel believed that South- ern-Owners had a primary obligation to pay, so he reached out to give Southern-Owners a chance to step up before American Build- ers did. Additionally, Southern-Owners’ policy required an insured receive consent before accepting any settlement. Counsel did not want American Builders -- standing in the shoes of Beck Construc- tion -- to breach Southern-Owners’ contract by tendering payment without consent. Southern-Owners confirmed that it would not tender its coverage by the December 19 deadline. American Build- ers’ counsel then told Southern-Owners that American Builders would be paying its policy limit. Later that day, he wrote to South- ern-Owners’ counsel to confirm that American Builders was forced to pay the policy because Southern-Owners would not, and that American Builders would seek equitable subrogation against Southern-Owners. American Builders paid the policy on December 19, and Guthrie provided a release for Beck Construction, American Build- ers, and Evanston the next day. At that point, Southern-Owners -- USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 9 of 25
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having only conducted one interview with Beck -- ended its inves- tigation. B. American Builders sued Southern-Owners in Florida state court for common law bad faith under Florida’s doctrine of equita- ble subrogation. Southern-Owners removed the case to the United States District Court for the Southern District of Florida based on diversity jurisdiction. Southern-Owners later moved for summary judgment, in part because it claimed its policy did not cover Guth- rie’s injury. The district court denied the motion. The parties then consented to the jurisdiction of a magistrate judge, who oversaw a three-day jury trial. After the close of Amer- ican Builders’ evidence, Southern-Owners moved for judgment as a matter of law under Federal Rule of Civil Procedure 50(a). South- ern-Owners’ only argument was that American Builders intro- duced no evidence that proved Guthrie attempted to settle with Southern-Owners. The court denied the motion. After the close of all evidence, the jury returned a verdict in favor of American Builders, and the district court entered final judgment for $1,091,240.82. Southern-Owners then filed a renewed motion for judgment as a matter of law under Rule 50(b), or, in the alternative, a motion for a new trial under Rule 59. This time, Southern-Own- ers argued that it could not have settled Guthrie’s demand, and that American Builders, standing in the insured’s shoes, breached Southern-Owners’ contract by failing to receive its consent before settling with Guthrie. The district court denied those motions. USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 10 of 25
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This timely appeal followed. II. “We review de novo the denial of a motion for judgment as a matter of law under Federal Rule of Civil Procedure 50, viewing the evidence in the light most favorable to the non-moving party.” St. Louis Condo. Ass’n, Inc. v. Rockhill Ins. Co., 5 F.4th 1235, 1242 (11th Cir. 2021). “We review a ruling on a motion for a new trial for abuse of discretion,” giving deference to the district court “where a new trial is denied and the jury’s verdict is left undis- turbed.” McGinnis v. Am. Home Mortg. Serv., Inc., 817 F.3d 1241, 1255 (11th Cir. 2016) (citation and quotation marks omitted). “We review a district court’s decision on summary judgment de novo,” viewing the evidence and drawing all inferences in the light most favorable to the non-moving party. Smith v. Owens, 848 F.3d 975, 978 (11th Cir. 2017). A. The first and most significant issue in this appeal is whether American Builders proved a bad faith claim. Taking the evidence in the light most favorable to American Builders, a reasonable jury could have found (as it did) both that Southern-Owners acted in bad faith and that its bad faith caused American Builders to pay its policy. Moreover, American Builders did not breach Southern- Owners’ contract and relieve Southern-Owners of its good-faith duties. The district court did not err in denying Southern-Owners’ Rule 50(b) motion. USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 11 of 25
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1. Under controlling Florida law, “the critical inquiry in a bad faith [action] is whether the insurer diligently, and with the same haste and precision as if it were in the insured’s shoes, worked on the insured’s behalf to avoid an excess judgment.” Harvey v. GEICO Gen. Ins. Co., 259 So. 3d 1, 7 (Fla. 2018). Additionally, any “damages claimed by an insured in a bad faith case ‘must be caused by the insurer’s bad faith.’” Id. (citation omitted). That is, the bad faith conduct must “directly and in natural and continuous se- quence produce[] or contribute[] substantially to producing such [damage], so that it can reasonably be said that, but for the bad faith conduct, the [damage] would not have occurred.” Id. at 11 (quot- ing Fla. Std. Jury Instr. (Civ.) 404.6(a)). The bad faith inquiry “is determined under the ‘totality of the circumstances’ standard,” id. at 7, and we focus “not on the ac- tions of the claimant but rather on those of the insurer in fulfilling its obligations to the insured,” Berges v. Infinity Ins. Co., 896 So. 2d 665, 677 (Fla. 2004). That said, a claimant’s actions -- such as a de- cision not to offer a settlement -- remain relevant in assessing bad faith. See Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12, 14 (Fla. 3d DCA 1991); Pelaez v. Gov’t Emps. Ins. Co., 13 F.4th 1243, 1254 (11th Cir. 2021). Insurers have obligations “to advise the insured of settlement opportunities, to advise as to the probable outcome of the litigation, to warn of the possibility of an excess judgment, and to advise the insured of any steps he might take to avoid [the] same,” as well as to “investigate the facts, give fair USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 12 of 25
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consideration to a settlement offer that is not unreasonable under the facts, and settle, if possible, where a reasonably prudent person, faced with the prospect of paying the total recovery, would do so.” Bos. Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla. 1980). These “obligations . . . are not a mere checklist,” however, and, as the Florida Supreme Court has explained, “[a]n insurer is not absolved of liability simply because it advises its insured of set- tlement opportunities, the probable outcome of the litigation, and the possibility of an excess judgment.” Harvey, 259 So. 3d at 7. Moreover, insurance companies occasionally have an af- firmative duty to offer settlements. “Bad faith may be inferred from a delay in settlement negotiations which is willful and with- out reasonable cause.” Powell, 584 So. 2d at 14. Thus, “[w]here liability is clear, and injuries so serious that a judgment in excess of the policy limits is likely,” the insurer must “initiate settlement ne- gotiations.” Id. “In such a case, where ‘[t]he financial exposure to [the insured] [i]s a ticking financial time bomb’ and ‘[s]uit c[an] be filed at any time,’ any ‘delay in making an offer under the circum- stances of this case even where there was no assurance that the claim could be settled could be viewed by a fact finder as evidence of bad faith.’” Harvey, 259 So. 2d at 7 (alterations in original) (cita- tion omitted). At the end of trial, the district court properly and thoroughly instructed the jury on bad faith. The court charged the jury to con- sider “all of the circumstances” in determining whether the insurer “use[d] the same degree of care and diligence as a person of USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 13 of 25
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ordinary care and prudence should exercise in the management of his own business,” “investigate[d] the facts, . . . and “settle[d], if possible, where a reasonably prudent person faced with the pro- spect of paying the total recovery would do so.” Moreover, the district court instructed the jury on causation, observing, among other things, that bad faith must “directly and in natural and con- tinuous sequence produce[] or contribute[] substantially to produc- ing” any damage, though it “need not be the only cause.” On this record, there was enough evidence to allow the jury to reasonably find that Southern-Owners acted in bad faith because it delayed acting on its duty to investigate and settle Guthrie’s claim. American Builders notified Southern-Owners of the acci- dent on September 12, and Cohen furnished the company with all relevant documents on September 27. Among those documents were proof of Guthrie’s paraplegic status and medical bills already exceeding $400,000 and correspondences between Cohen and American Builders, laying out Cohen’s theory of Beck Construc- tion’s liability. Right off the bat, Southern-Owners had little work left because the pertinent information landed in its lap. Those doc- uments painted a picture of “injuries so serious that a judgment in excess of the policy limits [was] likely.” Powell, 584 So. 2d at 14. All that remained was a meeting with Beck, who could have helped inform Southern-Owners whether “liability [was] clear.” Id. In- stead of meeting with Beck, though, Southern-Owners dawdled. It did nothing for several weeks before finally reaching out to Beck Construction’s lawyer. Then, when Southern-Owners finally did USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 14 of 25
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speak with counsel, it delayed reasonable offers to interview Beck for nearly two months, turning down an in-person meeting for be- ing last-minute and a phone interview for not being in person. Af- ter finally meeting with Beck in early December, Southern-Owners decided it needed to follow up with the two other workers on site that day. But it delayed again, providing no evidence that it reached out to them for at least another two weeks. As of Decem- ber 18, Southern-Owners still had not contacted them -- even though Southern-Owners had requested until December 20 to re- spond to Cohen’s September 5 demand. With no time to spare, Southern-Owners was in essentially the same position it was in on September 27. That body of evidence could lead a reasonable jury to con- clude that Southern-Owners delayed its investigation instead of at- tempting “to resolve the coverage dispute promptly” or using “dil- igence and thoroughness.” Pozzi Window Co. v. Auto-Owners Ins., 446 F.3d 1178, 1188 (11th Cir. 2006) (quoting State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 63 (Fla. 1995)). And, in that delay, a jury could reasonably find that Southern-Owners com- pletely neglected its “affirmative duty to initiate settlement negoti- ations,” Powell, 584 So. 2d at 14, while Guthrie’s hospital bills climbed due to his traumatic injury. A reasonable jury could also find that Southern-Owners’ bad faith caused American Builders’ damages. See Harvey, 259 So. 3d at 7. When American Builders informed Southern-Owners of Co- hen’s November 18 demand, Southern-Owners refused to pay USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 15 of 25
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because it was still investigating the claims. Evanston had already tendered its $1 million policy on December 10, but the demand re- quested $2 million, so the next million needed to come from either Southern-Owners or American Builders. After Southern-Owners balked, American Builders had no choice but to tender payment. Southern-Owners’ delay in investigating and settling led to its ina- bility to tender an offer on December 18. As a result, a reasonable jury could find (as it did) that American Builders’ damages stemmed directly and naturally from Southern-Owners’ bad faith. See id. at 11. In defense, Southern-Owners points the finger at Guthrie and Cohen. It focuses on their two settlement demands, neither of which named Southern-Owners, and on Cohen’s statement that he and Guthrie had no interest in negotiating with Southern-Owners directly. However, “[t]he lack of a formal offer to settle does not preclude a finding of bad faith.” Powell, 584 So. 2d at 14. Instead, under Florida law, it “is merely one factor to be considered.” Id. A jury could find that even though Guthrie and Cohen never made an offer to Southern-Owners, this did not wipe Southern-Owners’ hands clean. What’s more, Southern-Owners was left to explain why its own actions were not in bad faith, rather than focusing on just the claimant’s actions. Harvey, 259 So. 3d at 7. Of course, “there’s a difference between focusing on a claimant’s actions, which would be improper, and factoring a claimant’s actions into the totality of the circumstances analysis, which is not improper.” Pelaez, 13 F.4th at 1254 (emphasis in original). In this case, though, USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 16 of 25
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Southern-Owners flipped Florida law on its head and exclusively focused on Guthrie and Cohen’s actions. 2. In the alternative, Southern-Owners argues that a reasona- ble jury should have found that it had no duty to act in good faith because American Builders breached Southern-Owners’ contract by not receiving consent before settling the claim. 1 As we see it, this affirmative defense fails, for two separate reasons. For starters, a reasonable jury could find that American Builders’ failure to re- ceive consent did not substantially prejudice Southern-Owners. What’s more, a reasonable jury could also find that Southern-Own- ers did not act diligently or in good faith in attempting to obtain consent.
1 Southern-Owners argued that a reasonable jury would have found in its fa- vor on this affirmative defense for the first time in its Rule 50(b) motion. But “[d]istrict courts lack authority to grant a Rule 50(b) motion on a ground not previously raised in a Rule 50(a) motion prior to the submission of the case to the jury.” Johnston v. Borders, 36 F.4th 1254, 1270 n.31 (11th Cir. 2022). American Builders, however, did not raise this lack of authority in district court and thus “fail[ed] to raise the inadequacy of [the] Rule 50(a) motion in response to [the] Rule 50(b) motion.” Howard v. Walgreen Co., 605 F.3d 1239, 1243 (11th Cir. 2010). By not raising the argument in the trial court, American Builders “forfeited [its] right to raise waiver on appeal.” Id. More- over, none of the exceptions to forfeiture apply, and American Builders does not argue otherwise. Thus, we consider this argument forfeited, and turn to the merits of the affirmative defense. USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 17 of 25
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Southern-Owners’ contract with Beck Construction pro- vided that “[n]o insured will, except at the insured’s own cost, vol- untarily make a payment, assume any obligation, or incur any ex- pense, other than for first aid, without our consent.” “[T]his lan- guage requires the insured to obtain the insurer’s consent before settling.” Am. Reliance Ins. Co. v. Perez, 712 So. 2d 1211, 1213 (Fla. 3d DCA 1998). That is, “while an insured is free to enter into a reasonable settlement when its insurer has wrongfully refused to provide it with a defense to a suit, . . . the insured is not similarly free to independently engage in such settlements where, as here, the insurer had not declined a defense to suit.” First Am. Title Ins. Co. v. Nat’l Union Fire Ins. Co., 695 So. 2d 475, 477 (Fla. 3d DCA 1997); see also Am. Reliance Ins. Co., 712 So. 2d at 1212–13. The Florida Supreme Court requires an insurer to establish three things in order to succeed on this affirmative defense: (1) a lack of consent; (2) substantial prejudice to the insurer; and (3) dil- igence and good faith by the insurer in attempting to receive con- sent. See Ramos v. Nw. Mut. Ins. Co., 336 So. 2d 71, 75 (Fla. 1976); Mid-Continent Cas. Co. v. Am. Pride Bldg. Co., 601 F.3d 1143, 1149–50 (11th Cir. 2010). The first element has a few exceptions. The insured may settle without obtaining consent if the insurer “wrongfully refused to provide [the insured] with a defense to a suit,” First Am. Tit. Ins. Co., 695 So. 2d at 477, or offers a condi- tional defense that the parties cannot agree upon, Taylor v. Safeco Ins. Co., 361 So. 2d 743, 746 (Fla. 1st DCA 1978). Moreover, even if the insured was obliged to obtain consent, the failure to do so is USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 18 of 25
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not an affirmative defense unless the insurer also establishes sub- stantial prejudice and evinces good faith in bringing about the co- operation of the insured. Ramos, 336 So. 2d at 75. As the Florida Supreme Court put it: This Court . . . emphasized that to constitute the breach of a policy, the lack of cooperation must be material and the insurance company must show that it was substantially prejudiced in the particular case by failure to cooperate. Furthermore, . . . the insurer must show that it has exercised diligence and good faith in bringing about the cooperation of its insured and must show that it has complied in good faith with the terms of the policy. Id. (citations omitted). We start with the first element: lack of consent. Over the objection of Southern-Owners, the district court instructed the jury to decide “whether American Builders Insurance Company volun- tarily made a payment without obtaining Southern-Owners Insur- ance Company’s prior consent, or whether American Builders In- surance Company was legally obligated to make such payment.” Both parties agree that American Builders never received consent before paying. Instead, they debate only whether American Build- ers needed to obtain consent because its payment was not “volun- tary.” USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 19 of 25
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American Builders argued to the jury that its payment was involuntary because Southern-Owners unreasonably withheld consent and forced American Builders to either pay without con- sent or face a bad faith suit itself. The theory went this way: when Southern-Owners told American Builders that it would not tender payment, American Builders “involuntarily” paid “because of cir- cumstances beyond [its] control,” since the “situation requir[ed] immediate response to protect its legal interests.” See Rolyn Cos. v. R & J Sales of Tex., Inc., 412 F. App’x 252, 255 (11th Cir. 2011) (quotation marks and citation omitted). Southern-Owners re- sponded that it could not have unreasonably withheld consent be- cause American Builders had already decided to pay. The jury was told by Southern-Owners that American Builders made its decision voluntarily and before seeking any consent. We need not settle whether American Builders made a vol- untary payment under Florida law because Southern-Owners also bore the burden to prove two additional things -- substantial prej- udice and good faith -- in order to sustain its affirmative defense, and the jury could reasonably have found that Southern-Owners failed to prove either. Turning first to prejudice, the district court instructed the jury that Southern-Owners “must establish that [American Build- ers’] breach of the consent provision was material and caused de- fendant to suffer substantial prejudice.” See Ramos, 336 So. 2d at 75. Southern-Owners provided no evidence of substantial preju- dice. In fact, its claim adjuster (John Blaser) unambiguously USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 20 of 25
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testified that he did not know how Southern-Owners was preju- diced by American Builders’ decision to pay. When first asked whether Southern-Owners suffered any prejudice, the claim ad- juster responded “maybe.” And when asked if he had any facts of prejudice, he simply replied, “Not that I’m aware of at this time.” We are unpersuaded by Southern-Owners’ claim that it has been prejudiced. For starters, Southern-Owners argues it was “blindsided” by American Builders’ decision to pay on December 18 because it was not aware of Cohen’s November 18 demand. This argument has several flaws. To begin, American Builders may have decided to pay before it called Southern-Owners, but it did not plan to tender payment until after learning whether Southern- Owners decided to pay instead. The evidence was sufficient to es- tablish that American Builders’ payment was contingent on South- ern-Owners’ decision. Moreover, this argument overlooks that, by the December 18 phone call with American Builders, Southern- Owners should have been ready to decide whether it would pay anyway because it had asked for an extension on its own investiga- tion until December 20. Lastly, it ignores the company’s long months of delay. An insurer must have a reasonable time to inves- tigate the claim, see Bos. Old Colony, 386 So. 2d at 785, but the evidence adduced at trial strongly suggested that Southern-Owners largely sat on its thumbs. Southern-Owners also says that the $1,091,240.92 judgment entered by the district court turned Southern-Owners into a judg- ment debtor in an amount greater than its policy limits, resulting USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 21 of 25
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in substantial prejudice. But Southern-Owners forfeited this argu- ment by not raising it in district court. See Blue Martini Kendall, LLC v. Miami Dade County, 816 F.3d 1343, 1349 (11th Cir. 2016). Regardless, a post-trial judgment does not affect “the rights of the insurer in defense of the cause.” Ramos, 336 So. 2d at 75. The judgment could not have affected Southern-Owners’ defense be- cause it came after Southern-Owners decided not to provide cov- erage. Finally, as we have already detailed at length, a reasonable jury could (and did) plainly find that Southern-Owners did not “show that it [had] exercised diligence and good faith.” Id. Amer- ican Builders did everything when it came to investigating Guth- rie’s claim and deciding whether the insured should make a pay- ment, all while Southern-Owners sat back and watched. The Flor- ida Supreme Court has been clear on this point: without good faith, an insurer may not avail itself of an affirmative defense based on an insured’s failure to cooperate. See id. The long and short of it is that, on this record, the evidence is not “so overwhelmingly in favor of [Southern-Owners] that a reasonable jury could not” have ruled for American Builders on bad faith and against Southern-Owners on breach of contract. Mid- dlebrooks v. Hillcrest Foods, Inc., 256 F.3d 1241, 1246 (11th Cir. 2001). We see no error in the denial of Southern-Owners’ Rule 50(b) motion. B. USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 22 of 25
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Next up is Southern-Owners’ claim that the district court abused its discretion in denying the motion for a new trial. South- ern-Owners offers four reasons: (1) it did not act in bad faith be- cause it was not offered an opportunity to settle; (2) any bad faith did not cause American Builders’ damages; (3) American Builders breached its contract; and (4) generally, it did not act in bad faith. All four of these arguments are retreads of the arguments for judgment as a matter of law that we have already rejected. The district court did not abuse its discretion in denying a new trial. For a new trial, Southern-Owners must show “the verdict ‘[was] against the clear weight of the evidence or . . . result[ed] in a mis- carriage of justice.’” Chmielewski v. City of St. Pete Beach, 890 F.3d 942, 948 (11th Cir. 2018) (citation omitted). As we’ve already explained in some detail, sufficient evidence existed for a rational jury to find that: (1) Southern-Owners delayed in its investigation and neglected to act on its affirmative duty to settle, Powell, 584 So. 2d at 14; (2) Southern-Owners’ bad faith caused American Builders to suffer damages, Harvey, 259 So. 3d at 7, 11; and (3) American Builders did not breach because Southern-Owners did not establish substantial prejudice or good faith, Ramos, 336 So. 2d at 75. The limited evidence favoring Southern-Owners -- its multiple requests for extensions of time and the details from the Beck interview -- does not amount to “the clear weight of the evi- dence.” Chmielewski, 890 F.3d at 948 (citation omitted). USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 23 of 25
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The jury’s verdict was not against the clear weight of the evidence, and the district court did not abuse its discretion in deny- ing Southern-Owners’ Rule 59 motion. C. The last issue raised is whether the district court erred in denying Southern-Owners’ summary judgment motion because its policy purportedly did not cover Guthrie’s injuries. We will not consider this issue for two separate reasons. First, during oral argument, Southern-Owners maintained for the first time that a purely legal issue denied at summary judg- ment is appealable after trial. Oral Argument at 24:00–27:45. Southern-Owners said nothing about this in its briefing to our Court. “We do not consider arguments raised for the first time at oral argument.” Hernandez v. Plastipak Packaging, Inc., 15 F.4th 1321, 1330 (11th Cir. 2021). Second, and in any event, Southern-Owners is incorrect. Our circuit has no such legal-issue exception to the general rule that “a party may not appeal an order denying summary judgment after there has been a full trial on the merits.” Carrizosa v. Chiquita Brands Int’l, Inc., 47 F.4th 1278, 1339 (11th Cir. 2022) (quotation marks and citation omitted); see also Ortiz v. Jordan, 562 U.S. 180, 183–84 (2011) (“May a party . . . appeal an order denying summary judgment after a full trial on the merits? Our answer is no.”). In Ortiz, the Supreme Court left open the question whether an “issue of a ‘purely legal nature’ . . . is preserved for appeal by an USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 24 of 25
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unsuccessful motion for summary judgment.” 562 U.S. at 190 (ci- tation omitted). Other circuits are split on the answer to that ques- tion.2 Both before and after Ortiz, however, we have repeatedly and broadly held that “this Court will not review the pretrial denial of a motion for summary judgment after a full trial and judgment on the merits.” Lind v. United Parcel Serv., Inc., 254 F.3d 1281, 1286 (11th Cir. 2001); see also Akouri v. Fla. Dep’t of Transp., 408 F.3d 1338, 1347 (11th Cir. 2005) (“[W]e have held that, after a full trial and judgment on the merits, we will not review the pretrial denial of a motion for summary judgment.”); Pensacola Motor Sales Inc. v. E. Shore Toyota, LLC, 684 F.3d 1211, 1219 (11th Cir. 2012) (same); Scott v. United States, 825 F.3d 1275, 1282 (11th Cir.
2 The Second, Third, Sixth, Seventh, Ninth, Tenth, D.C., and Federal Circuits allow appeals of purely legal arguments denied at summary judgment. See, e.g., Rothstein v. Carriere, 373 F.3d 275, 284 (2d Cir. 2004); Pennbarr Corp. v. Ins. Co. of N. Am., 976 F.2d 145, 149–55 (3d Cir. 1992); McPherson v. Kelsey, 125 F.3d 989, 995 (6th Cir. 1997); Chemetall GMBH v. ZR Energy, Inc., 320 F.3d 714, 719–20 (7th Cir. 2003); Pavon v. Swift Transp. Co., 192 F.3d 902, 906 (9th Cir. 1999); Ruyle v. Cont’l Oil Co., 44 F.3d 837, 841–42 (10th Cir. 1994); Feld v. Feld, 688 F.3d 779, 783 (D.C. Cir. 2012); United Techs. Corp. v. Chro- malloy Gas Turbine Corp., 189 F.3d 1338, 1344 (Fed. Cir. 1999). The Eighth Circuit allows appeals of decisions “based on [the] resolution of a preliminary legal issue,” like statute of limitations, estoppel, or standing. Kirk v. Schaeffler Grp. USA, Inc., 887 F.3d 376, 384 (8th Cir. 2018). The First, Fourth, and Fifth Circuits do not allow appeals of any denials of summary judgment after a trial on the merits, unless the issues are preserved in a Rule 50 motion. See, e.g., Ji v. Bose Corp., 626 F.3d 116, 127–28 (1st Cir. 2010); Chesapeake Paper Prods. Co. v. Stone & Webster Eng’g Corp., 51 F.3d 1229, 1237 (4th Cir. 1995); Feld Motor Sports, Inc. v. Traxxas, L.P., 861 F.3d 591, 596 (5th Cir. 2017). USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 25 of 25
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2016) (same); St. Louis Condo. Ass’n., 5 F.4th at 1242 (same); Car- rizosa, 47 F.4th at 1339 (same). AFFIRMED.