Case: 17-14844 Date Filed: 08/26/2019 Page: 1 of 23
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-14844 ________________________
D.C. Docket No. 0:16-cv-62168-MGC
PHILADELPHIA INDEMNITY INSURANCE COMPANY, a foreign Corporation,
Plaintiff-Counter Defendant-Appellee,
versus
SABAL INSURANCE GROUP, INC., a foreign Corporation, IAN MARSHALL NORRIS,
Defendants-Counter Claimants-Appellants.
Appeal from the United States District Court for the Southern District of Florida ________________________
(August 26, 2019)
Before MARCUS, BLACK, and WALKER, ∗ Circuit Judges.
∗ John M. Walker, Jr., United States Circuit Judge for the Second Circuit, sitting by designation. Case: 17-14844 Date Filed: 08/26/2019 Page: 2 of 23
WALKER, Circuit Judge:
This appeal concerns a Directors & Officers liability insurance policy (the
“Policy”) that Defendants-Counterclaim Plaintiffs-Appellants Sabal Insurance
Group, Inc. (“Sabal Insurance Group”) purchased from Plaintiff-Counterclaim
Defendant-Appellee Philadelphia Indemnity Insurance Company (“PIIC”).
Following an investigation by the Miami-Dade County Office of the Inspector
General regarding the business dealings of Sabal Insurance Group and its President
and CEO Ian M. Norris (“Norris” and together with Sabal Insurance Group,
“Sabal”), Norris was arrested, and Norris and Sabal Insurance Group were charged
with grand theft. Norris and Sabal Insurance Group settled the charges with the
State of Florida pursuant to a Stipulated Settlement Agreement (“SSA”), in which
they agreed to make various payments to the alleged victim and other entities.
Thereafter, Sabal claimed indemnification for these payments from PIIC under the
Policy. PIIC denied coverage, and then filed a declaratory judgment action against
Sabal. Sabal answered and counterclaimed on the basis that PIIC breached the
Policy by refusing to indemnify Sabal. The parties then cross-moved for summary
judgment, and on September 28, 2017, the district court (Marcia G. Cooke, Judge)
granted PIIC’s motion for summary judgment and denied Sabal’s motion for
summary judgment. Sabal has appealed, arguing that the district court erred in its
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disposition of both motions for summary judgment. For the reasons set forth
below, we AFFIRM the judgment of the district court.
I. BACKGROUND
We begin by setting out the relevant provisions of the Policy, the facts
pertaining to the charges against Sabal, the facts of Sabal’s claim under the Policy,
and the procedural history of this case.
A. Relevant Provisions of the Policy
The Policy requires that PIIC pay “Loss from Claims” for “D&O Wrongful
Acts” while the Policy is in effect. App’x at 38. A “D&O Wrongful Act”
includes “any actual or alleged . . . act, error, omission, misstatement, misleading
statement, neglect, or breach of duty committed or attempted by” the insured.
App’x at 38. A “Claim” includes “a criminal proceeding commenced by a return
of an indictment.” App’x at 44. There is no dispute that the criminal proceeding at
issue in this case qualifies as a Claim under the Policy.
“Loss” includes “Damages” and “Defense Costs,” but does not include,
among other things, “matters deemed uninsurable under the law to which this
Policy shall be construed” or “criminal or civil fines or penalties imposed by law.”
App’x at 46. The Policy also includes the following exclusion:
The Underwriter shall not be liable to make any payment for Loss in connection with any Claim made against the Insured:
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A. arising out of, based upon or attributable to such Insured gaining any profit, remuneration or advantage to which they were not legally entitled; however, this exclusion shall only apply if a final and non- appealable judgment or adjudication establishes the Insured committed such act or omission;
B. arising out of, based upon or attributable to any dishonest or fraudulent act or omission or any criminal act or omission by such Insured; however, this exclusion shall only apply if a final and non- appealable judgment or adjudication establishes the Insured committed such act or omission.
App’x at 48. The parties do not dispute that the amounts at issue in this case
are either Damages or Defense Costs under the Policy but do dispute
whether one or more of these exclusions applies.
B. The Charges Against Sabal
Like PIIC, Sabal is an insurance agency, and it provided a workers’
compensation and general liability insurance policy to Quality Aircraft Services
(“QAS”), paid for by the Miami-Dade Aviation Department (“MDAD”). MDAD
was concerned that it was being overcharged by Sabal, and it initiated an
investigation, which was carried out by the Miami-Dade County Office of the
Inspector General over the course of thirty months. Following the investigation,
Norris was arrested, and Norris and Sabal Insurance Group were charged with
grand theft under a five-count information. Under the alleged scheme, Sabal
overcharged QAS/MDAD by creating invoices with fraudulently inflated
premiums. PIIC alleges that the investigation determined that Sabal fraudulently
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obtained over $416,000; however, the amount obtained within the statute of
limitations was $180,807.87. Sabal Insurance Group and Norris settled the charges
with the State of Florida in the SSA, which required Sabal Insurance Group and/or
Norris to make the following three payments:
1. Payment to Miami Dade County Aviation Department in the amount of $183,807.87
2. A Donation payable to the Denise Moon Memorial Fund at The Miami Foundation in the amount of $100,000.00. Both Sabal and IAN MARSHALL NORRIS stipulate that neither will claim this money as a charitable deduction on any income tax return.
3. Costs of Investigation payable to the Miami-Dade County Aviation Department in the amount of $20,000.00
App’x at 103. We refer to these payments as the “Payment to MDAD,” the
“Donation,” and the “Costs of Investigation,” respectively.
C. The Claim
On September 23, 2014, Sabal notified PIIC that it had received a subpoena
from the Miami-Dade State Attorney’s Office. In response, on October 15, 2014,
PIIC issued a reservation of rights letter accepting the subpoena as a Claim under
the Policy and reserving its rights under the Policy. Sabal then received and
notified PIIC of a second subpoena, and on November 3, 2014, PIIC issued a
second reservation of rights letter accepting the second subpoena as a Claim under
the policy and reserving its rights under the Policy. On January 13, 2015, PIIC 5 Case: 17-14844 Date Filed: 08/26/2019 Page: 6 of 23
issued an updated reservation of rights letter advising Sabal that PIIC deemed the
criminal information that had been filed to relate back to the Claim originally
commenced by the subpoenas and reserving its rights under the Policy. PIIC
funded Sabal’s defense, and throughout 2015 responded to several questions from
Sabal regarding coverage under the Policy. In November 2015, Sabal’s defense
counsel asked whether PIIC would agree to indemnify Sabal for any payment to
Florida of the money it was accused of stealing. PIIC responded that it would not
indemnify Sabal for such payments for various reasons, including that restitution is
not damages but a criminal sanction and was therefore not a covered Loss under
the Policy.
On February 19, 2016, Sabal’s counsel sent PIIC the proposed final SSA and
asked PIIC to advise within one business day whether it had any objections to the
proposed agreement or would request any changes. PIIC responded that it was not
prepared to review the agreement and advise as to coverage in that timeframe but
agreed not to object to the settlement on the basis that PIIC failed to provide its
consent to the settlement, as required by the Policy. On March 10, 2016, PIIC
issued a “Denial of Indemnity Coverage” letter to Sabal refusing to indemnify
Sabal for the payments made pursuant to the SSA.
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D. Procedural History
PIIC filed a declaratory judgment action against Sabal in the district court
for the Southern District of Florida asserting that it was not obligated to indemnify
Sabal under the Policy for the payments Sabal made under the SSA. Sabal
answered with affirmative defenses of waiver and estoppel and counterclaimed that
PIIC breached the Policy by refusing to indemnify Sabal. After the parties cross-
moved for summary judgment, the district court, on September 28, 2017, granted
PIIC’s motion for summary judgment and denied Sabal’s motion for summary
judgment. This appeal followed.
II. DISCUSSION
On appeal, Sabal argues that the district court erred in: (i) granting PIIC’s
motion for summary judgment on its declaratory claim that the Policy does not
obligate it to indemnify Sabal for the payments it made under the SSA, (ii) denying
Sabal’s motion for summary judgment on its breach of contract counterclaim, and
(iii) granting PIIC’s motion for summary judgment regarding Sabal’s affirmative
defenses. For the reasons set forth below, we affirm the district court’s grant of
PIIC’s motion for summary judgment and denial of Sabal’s motion for summary
judgment.
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A. Standard of Review
We review de novo the district court’s decision to grant one party’s motion
for summary judgment and to deny the other party’s motion for summary
judgment. Boardman Petrol., Inc. v. Federated Mut. Ins. Co., 135 F.3d 750, 752
(11th Cir. 1998). In doing so, we “consider all facts and reasonable inferences in
favor of the nonmoving party, and apply the same legal standards used by the
district court.” Galindo v. ARI Mut. Ins. Co., 203 F.3d 771, 774 (11th Cir. 2000).
“Summary judgment properly is granted when the evidence before the district
judge shows that there is no genuine issue concerning any material fact and that the
moving party is entitled to judgment as a matter of law.” Id.
“The interpretation of an insurance contract is also a matter of law subject to
de novo review.” LaFarge Corp. v. Travelers Indem. Co., 118 F.3d 1511, 1515
(11th Cir. 1997). In a diversity action, we apply the substantive law of the forum
state, id. (citing Erie R.R. v. Tompkins, 304 U.S. 64 (1938)), which in this case is
Florida. In this regard, we are not limited to the law as stated by Florida’s
Supreme Court. “Absent a decision by the highest state court or persuasive
indication that it would decide the issue differently, federal courts follow decisions
of intermediate appellate courts in applying state law.” Galindo, 203 F.3d at 775.
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B. Indemnification for Amounts Paid Pursuant to the SSA
The district court concluded that the payments made by Sabal pursuant to
the SSA are not collectively a covered Loss under the Policy because, (i) as a
matter of Florida law, insurance contracts do not insure the restitution of ill-gotten
gains, and (ii) the payments made by Sabal under the SSA are “clearly
restitutionary in nature.” Philadelphia Indem. Ins. Co. v. Sabal Ins. Grp., Inc., No.
16-62168-CIV, 2017 WL 4310700, at *4 (S.D. Fla. Sept. 28, 2017). On appeal,
Sabal challenges both conclusions. While we agree with the district court’s
reasoning regarding the Payment to MDAD and the Costs of Investigation, we
affirm the district court’s conclusion that the Donation is not a covered Loss under
the Policy based on different reasoning. We address each of these payments in
turn.
i. Payment to MDAD
1. Coverage of the Restitution of Ill-Gotten Gains
The first issue is whether, as matter of Florida law, an insurance contract
excludes the restitution of ill-gotten gains. The district court concluded that it
does, citing to an unpublished Eleventh Circuit opinion, CNL Hotels & Resorts,
Inc. v. Twin City Fire Ins. Co., 291 F. App’x. 220 (11th Cir. 2008) (unpublished
opinion). CNL Hotels addressed whether an insurance policy covered payments
made to settle disputes between a company and its shareholders following a
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corporate merger involving the company. Id. at 222. In that case, we concluded
that “loss” under an insurance contract does not include the restitution of ill-gotten
gains and that “[t]he return of money received through a violation of law, even if
the actions of the recipient were innocent, constitutes a restitutionary payment, not
a ‘loss.’” Id. at 223. We reach the same conclusion in this case.
“It is axiomatic in the insurance industry that one should not be able to
insure against one’s own intentional misconduct,” and Florida courts recognize
exceptions to this general rule “only in individualized cases where innocent third
parties were involved or it appeared unlikely that the wrongful act could have been
produced by the prospect of coverage.” Ranger Ins. Co. v. Bal Harbour Club, Inc.,
549 So. 2d 1005, 1007 (Fla. 1989). In this case, the payments by Sabal were made
to resolve alleged intentional misconduct, and it is likely that the prospect of
coverage under the Policy would have tended to encourage the alleged wrongful
act.
Sabal nevertheless argues that Florida law permits insurance contracts to
cover restitution, and points to Mitchel v. Cigna Prop. & Cas. Ins. Co., 625 So. 2d
862, 863 (Fla. Dist. Ct. App. 1993). In that case, the Third District Court of
Appeal concluded that the insurance contract at issue did cover a restitution
payment imposed as part of the settlement of criminal charges. Id. 863–65.
Mitchel is factually distinguishable from the present case, however, because it dealt
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with restitution in the form of compensation for damage the insured caused to a
coral reef with his boat, not the restitution of ill-gotten gains. Id. at 863. Mitchel
also therefore does not run afoul of the axiom stated in Ranger.
Public policy considerations also counsel against interpreting the Policy as
covering the restitution of ill-gotten gains. As described by the Florida Supreme
Court, when “determining whether a particular policy of civil liability insurance is
opposed to public policy, we look to two factors: the conduct of the insured (is it a
type that will be encouraged by insurance?), and the purpose served by the
imposition of liability for that conduct (is it to deter wrongdoers or compensate
victims?).” Ranger, 549 So. 2d at 1007. “An examination of the first factor leads
to the determination of whether the existence of insurance will directly stimulate
commission of a wrongful act, and an examination of the second factor leads to the
determination of whether deterrence or compensation should be given priority.”
Id.
In this case, the first factor favors excluding coverage, because extending
coverage under an insurance contract to the restitution of ill-gotten gains could
encourage commission of a wrongful act. The second factor also favors excluding
coverage, because excluding coverage would deter wrongdoing, while allowing
coverage would only compensate the wrongdoer. Public policy considerations,
therefore, reinforce the axiom that “one should not be able to insure against one’s
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own intentional misconduct,” id., and together compel our conclusion that
insurance contracts are not, as a matter of Florida law, permitted to insure the
restitution of ill-gotten gains.
Sabal next argues that even if the restitution of ill-gotten gains cannot be
insured under Florida law, under this Policy a payment is only the restitution of ill-
gotten gains if it is determined to be so by a final and non-appealable judgment or
adjudication. In other words, Sabal argues that we must read the Policy’s
exclusionary provision into the coverage provision, either because the two
provisions must be considered in pari materia or because if the exclusionary
provision is not read into the coverage provision, it would make the coverage
provision superfluous. Neither argument has merit.
As a threshold matter, we agree with the district court’s refusal to read the
exclusionary provision into the coverage provision on the basis that “Florida law
clearly states that an exclusionary provision does not apply unless there is coverage
in the first instance.” Philadelphia Indem. Ins. Co., 2017 WL 4310700, at *5.
Without coverage there is nothing from which to exclude. “This statement of the
law is undeniable—the existence or nonexistence of an exclusionary provision in
an insurance contract is not at all relevant until it has been concluded that the
policy provides coverage for the insured’s claimed loss.” Siegle v. Progressive
Consumers Ins. Co., 819 So. 2d 732, 740 (Fla. 2002). In this case, because the
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policy does not provide coverage for the restitution of ill-gotten gains, there is no
need to look to the exclusionary provision. Sabal argues that the district court’s
reliance on Siegle was misplaced because the policy in that case did not include an
exclusion to be read in the context of the entire contract, and therefore its rule only
applies to contracts that do not have an exclusionary provision. But Siegle states a
general legal principle, not a statement of law limited to specific facts.
Regarding Sabal’s argument that the coverage and exclusionary provisions
should be read together, Sabal is correct that “[a]lthough exclusionary clauses
cannot be relied upon to create coverage, principles governing the construction of
insurance contracts dictate that when construing an insurance policy to determine
coverage the pertinent provisions should be read in pari materia.” State Farm Fire
& Cas. Co. v. CTC Dev. Corp., 720 So. 2d 1072, 1074–75 (Fla. 1998) (citations,
internal quotation marks, and brackets omitted). However, “courts generally apply
in pari materia only when a legal text is ambiguous.” United States v. Warren,
820 F.3d 406, 408 (11th Cir. 2016). Here, the coverage provision is unambiguous,
so there is no need to turn to other sections of the Policy to interpret it. In addition,
Sabal’s reading of the coverage provision would add a condition that is not
included in the plain language of the Policy. “When an insurance contract is not
ambiguous, it must be given effect as written.” Siegle, 819 So. 2d at 735.
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Sabal’s argument that the coverage provision would be superfluous if it is
not considered together with the exclusionary provision is equally without merit.
In making this argument, Sabal relies on a district court decision from Minnesota:
U.S. Bank Nat. Ass’n v. Indian Harbor Ins. Co., 68 F. Supp. 3d 1044 (D. Minn.
2014). That court was persuaded that if it interpreted the exclusionary provision
regarding matters uninsurable under the law as precluding coverage for a payment
based on a settlement resolving claims for restitution, “it would nullify the Ill-
Gotten Gains Provision that precludes coverage for a payment based only on a
final adjudication determining that the claims warrant restitution. So to interpret
the two provisions consistently, the Court must read the Uninsurable Provision to
bar coverage for a payment that a final adjudication in the underlying action
determined is restitution.” Id. at 1050. We are unpersuaded. Although “‘in
construing insurance policies, courts should read each policy as a whole,
endeavoring to give every provision its full meaning and operative effect,’” U.S.
Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 877 (Fla. 2007) (quoting Auto–
Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000)), these two provisions
are not duplicative because there could be circumstances in which the claim is
deemed uninsurable by law but the insured has not committed a criminal act.
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For these reasons, we agree with the district court in this case that, as a
matter of Florida law, insurance contracts do not insure the restitution of ill-gotten
gains. Sabal’s arguments to the contrary are unavailing.
2. Whether the Payment to MDAD is Restitution
The second issue we must consider is whether the $183,807.87 Payment to
MDAD is the restitution of ill-gotten gains. We conclude that it is.
In support of its argument that the payment under the SSA is not restitution,
Sabal points to the following facts. Under the SSA, the State of Florida agreed to
“nolle prose [sic] all charges contained in the Information” as to Norris and Sabal
Insurance Group. App’x at 103. The SSA also stated that the parties “are aware of
the risks of litigation and the chances of success or failure, and desire to settle all
charges in the Information now pending and to end all charges in the Information,”
App’x at 102, and that Sabal’s payments would be made “[w]ithout there being
any admission of guilt by either Norris or Sabal [Insurance Group] and solely for
purposes of compromise and case resolution.” App’x at 103. The district court
dismissed these statements by citing our unpublished decision in CNL Hotels for
the proposition that the SSA “is not binding on any third party or this Court,”
Philadelphia Indem. Ins. Co., 2017 WL 4310700, at *4 (citing CNL Hotels, 291 F.
App’x. at 224), and concluded that the payment was “clearly restitutionary in
nature,” id. at *5.
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“The word ‘restitution’ is generally understood as being synonymous with
‘restoration’ and ‘indemnification.’” J.O.S. v. State, 668 So. 2d 1082, 1085 (Fla.
Dist. Ct. App. 1996), approved, 689 So. 2d 1061 (Fla. 1997). “[T]he purpose of
[criminal] restitution is twofold (1) to compensate the victim and (2) to serve the
rehabilitative, deterrent, and retributive goals of the criminal justice system.”
Kirby v. State, 863 So. 2d 238, 242 (Fla. 2003). “For [criminal] restitution to be
deemed reasonable, it must bear a significant relationship to the convicted offense.
A factor in determining whether a significant relationship exists is whether there is
a causal connection between the criminal conduct and the loss claimed by the
victim.” L.H. v. State, 803 So. 2d 862, 863 (Fla. Dist. Ct. App. 2002) (internal
citations omitted).
With these standards in mind, we agree with the district court that the
Payment to MDAD is restitution. It was made to resolve a criminal information
charging Sabal with grand theft, and the amount of the Payment to MDAD is equal
to the amount of Sabal’s alleged ill-gotten gains that accrued within the statute of
limitations. It is clear to us from the language of the SSA and the surrounding
circumstances that the purpose of the Payment to MDAD is to make MDAD whole
for losses that accrued within the statute of limitations period. The provisions of
the SSA in which Sabal did not admit guilt are irrelevant, because the admission of
guilt is not required for a payment to be the return of ill-gotten gains.
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On appeal, Sabal argues that Eleventh Circuit case law does not support the
proposition that an unproven allegation constitutes an uninsurable claim. Sabal
first points to Int’l Ins. Co. v. Johns, 874 F.2d 1447, 1455 (11th Cir. 1989), for the
proposition that “[w]ithout a finding that the gains were in fact ill-gotten, the
insurer could not deny coverage or disclaim the loss.” Appellant’s Br. at 37. But
this statement does not appear in the opinion. And Johns did not address the
restitution of ill-gotten gains, but rather the question of whether money paid to
executives under a golden parachute was corporate waste. 874 F.2d at 1450. Sabal
next cites Limelight Prods., Inc. v. Limelight Studios, Inc., 60 F.3d 767 (11th Cir.
1995), arguing that the case stands for the proposition that “damages” under an
insurance policy includes ill-gotten profits. Limelight is also factually
distinguishable. That case considered recovery of ill-gotten profits under the
Lanham Act, which are “the presumed equivalent of plaintiff’s own lost profits”
and therefore “merely another form of damages that the statute permits to be
presumed because of the proof unavailability in these actions.” Id. at 769.
Sabal also makes a policy argument that settlements are favored under
Florida law, implying that settlements will be discouraged if we find the payments
under the SSA to be restitution. Although the District of Minnesota was convinced
by this argument, U.S. Bank, 68 F. Supp. 3d at 1050, we agree with the Seventh
Circuit that it “can’t be right” that if a case is settled before an entry of judgment,
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“the insured is covered regardless of the nature of the claim against it.” Level 3
Commc’ns, Inc. v. Federal Ins. Co., 272 F.3d 908, 911 (7th Cir. 2001). Doing so
would create an artificial distinction between parties who have settled criminal
cases and parties who have not, and would allow wrongdoers to recoup the
proceeds of their wrongdoing simply by entering into a settlement agreement. See
id. at 911–12.
For these reasons, we agree with the district court that the payment to
MDAD under the SSA is the restitution of ill-gotten gains and therefore not a Loss
that is covered by the Policy.
ii. Donation
Without discussing the issue, the district court also considered the Donation
under the SSA to be restitution. The Donation does not restore any ill-gotten
gains, however. It was paid to a third-party charitable foundation, rather than the
victim of Sabal’s alleged crime. In addition, the amount of the Donation,
$100,000, does not have a clear connection to the $235,192.13 that Sabal allegedly
stole beyond the statute of limitations period. For these reasons, the Donation is
not restitution.
Nevertheless, we agree that the Donation is not a covered Loss under the
Policy. Loss under the Policy also excludes “criminal or civil fines or penalties
imposed by law,” and the Donation is such a penalty. App’x at 46. Under Florida
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law, “a penalty or fine involves punishment which is not designed to effect
compensation for or restoration of the damages caused by a specific act.” Mitchel,
625 So. 2d at 864. Unlike damages, “[a] penalty need have no causal connection
with the wrong inflicted. In a penal statute the penalty is inflicted by a law for its
violation.” Hyman v. State, Dep't of Bus. Regulation, Div. of Pari-Mutuel
Wagering, 431 So. 2d 603, 605 (Fla. Dist. Ct. App. 1983) (quoting Porter v.
Montgomery, 163 F.2d 211, 215 (3d Cir. 1947) (internal quotation marks
omitted)). Therefore, “a remedial provision designed to effect restitution rather
than to punish and deter wrongdoing is not a penalty.” Id. at 605. Viewed in this
light, the Donation is plainly a penalty. Although the parties call this payment a
“Donation,” it is neither voluntary nor tax deductible.
Sabal argues that the Donation cannot be a “fine or penalty imposed by law”
because only the judiciary can order criminal restitution and the criminal charges
in this case were not adjudicated. This distinction is immaterial. The SSA was
entered into between Sabal and the State of Florida, explicitly for the purpose of
resolving felony charges, and was “accepted and ratified” by the court. App’x at
109. Therefore, the Donation that was imposed by the SSA is a penalty imposed
by law.
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iii. Costs of Investigation
Unlike the Donation, we agree with the district court that the Costs of
Investigation in the amount of $20,000 is restitution. The Costs of Investigation
was paid to MDAD, the alleged victim, even though the investigation was
conducted by the Miami-Dade County Office of the Inspector General, not
MDAD. In addition, the notation on Sabal’s check for the Costs of Investigation
indicates that this amount, like the Payment to MDAD, is a “settlement.” App’x at
115. For the same reasons that the Payment to MDAD is not a covered Loss under
the Policy, the Costs of Investigation is not a covered Loss under the Policy.
C. Sabal’s Breach of Contract Counterclaim
The district court denied Sabal’s motion for summary judgment on its breach
of contract counterclaim because a breach of contract cause of action requires “that
there actually be coverage under the Policy.” Philadelphia Indem. Ins. Co., 2017
WL 4310700, at *6. On appeal, Sabal argues that the district court erred in
granting summary judgment to PIIC on Sabal’s breach of contract claim because
the Policy “unambiguously covers indemnification for the payments made to settle
the State’s action.” Appellant’s Br. at 47. However, because we reject Sabal’s
argument that these payments are covered under the Policy, we agree with the
district court that Sabal’s breach of contract claim fails.
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D. Sabal’s Affirmative Defenses
Finally, Sabal argues that the district court erred in granting summary
judgment to PIIC on Sabal’s affirmative defenses because disputed issues of
material fact remain. Specifically, Sabal argues that “there is a factual dispute as
to whether PIIC is estopped to deny coverage, waived its right to deny coverage or
otherwise ratified the terms of the Stipulated Settlement Agreement.” Appellant’s
Br. at 48.
This alleged factual dispute revolves around an email exchange between
Sabal and PIIC regarding the SSA. On February 19, 2016, Sabal’s counsel sent
PIIC’s counsel a draft version of the SSA, requested that PIIC advise “whether
PIIC sees anything objectionable or requests any changes” and stated that “Mr.
Norris asked that I pass on to you his request that PIIC, based upon Mr. Norris’s
review of the applicable policy, fund the payments to be made by Sabal referenced
in paragraph 2(d) of the proposed agreement.” App’x at 398. PIIC’s counsel
responded on the same day as follows:
Congratulations on the nolle prose [sic]. The settlement agreement arrived at 2:47 pm Friday and you are looking for a response by early afternoon one business day later. PIIC is not prepared to review this and advise as to coverage in that time frame. PIIC will agree not to interpose any objection to the document or to the amounts agreed to be paid on the basis that PIIC’s written consent to the settlement was not obtained. (Part 6, section III B) Otherwise we will review it as soon as reasonably possible and advise.
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Further to our review please forward all revisions and versions of the agreement as referenced below. We will likely have questions concerning the settlement.
App’x at 406. Sabal’s counsel then responded: “My time sensitive inquiry is not
requesting a coverage opinion; only seeking objections to terms. The separate
inquiry as to coverage by Mr. Norris should be addressed with Mr. Norris and
should not hold up settlement on Tuesday. Two different issues.” App’x at 408.
Although Sabal and PIIC cite two different sources in the record for this
email exchange, the text is the same in both. Thus, there is no disputed issue of
fact. Rather, the dispute is a legal question of whether this email exchange
constitutes an agreement by PIIC “not to object to the use of the document to
resolve the underlying case, or to object to the amounts agreed to be paid.”
Appellant’s Br. at 48. But the plain language of PIIC’s email shows that it is not
such an agreement. PIIC agreed not to “interpose any objection” only “on the
basis that PIIC’s written consent to the settlement was not obtained” and explicitly
stated that it could not “advise as to coverage.” App’x at 406. That coverage was
not implicated by PIIC’s response was confirmed by Sabal’s reply. Therefore,
there is no factual dispute regarding the waiver and estoppel defenses, and the
district court did not err in finding otherwise.
22 Case: 17-14844 Date Filed: 08/26/2019 Page: 23 of 23
E. Conclusion
For these reasons, we AFFIRM the district court’s grant of PIIC’s motion for
summary judgment and its denial of Sabal’s motion for summary judgment.
AFFIRMED.