Alea London Limited vs America Home Services, Inc.
638 F.3d 768
| 11th Cir. | 2011Background
- Alea London Limited insured American Home Services, Inc. (AHS) under a Georgia-law governed CGL policy for July 2002–July 2003.
- A third-party marketing firm sent roughly 300,000 faxes for AHS, including one to FastSigns, allegedly violating the TCPA.
- FastSigns sued AHS in Georgia state court for TCPA violations, seeking statutory damages, treble damages for willful/knowing conduct, class certification, and attorneys’ fees under Georgia law.
- Alea defended AHS in the state court for six years and the district court later held Alea must defend/indemnify, and that a $500 per-claimant Advertising Injury deductible applied, among other rulings.
- The district court also ruled that TCPA treble damages were punitive and thus excluded by the policy, and that attorneys’ fees were not covered as “damages” under the policy.
- The Eleventh Circuit affirmed in part (deductible and attorneys’ fees) and reversed in part (treble damages exclusion), remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the $500 per-claimant deductible apply to Advertising Injury? | AHS argues deductible does not apply to Advertising Injury. | Alea argues deductible applies to all Advertising Injury coverage. | Deductible applies to Advertising Injury |
| Are TCPA treble damages covered given the policy's punitive damages exclusion? | Aleas notion that treble damages are punitive should be excluded. | Alea contends treble damages fall under punitive/exemplary damages exclusion. | Treble damages are not categorically punitive; ambiguity favors coverage; exclusion not dispositive |
| Are attorneys’ fees awarded to FastSigns covered under the policy? | Fees fall within policy costs/expenses | Fees are not damages and not within covered costs | Attorneys’ fees are not covered as damages |
Key Cases Cited
- PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401 (U.S. 2003) (treble damages defy simple compensatory/punitive labeling)
- Chandler v. United States ex rel. Chandler, 538 U.S. 119 (U.S. 2003) (treble damages context requires statute-specific analysis)
- Penzer v. Transp. Ins. Co., 545 F.3d 1303 (11th Cir. 2008) (TCPA treble damages linked to willful/knowing conduct; not automatically punitive)
- Williams Gen. Corp. v. Stone, 279 Ga. 428 (Ga. 2005) (Georgia punitive-damages standard; treble damages not always equivalent)
- Colonial Lincoln-Mercury Sales, Inc. v. Molina, 152 Ga. App. 379 (Ga. Ct. App. 1979) (ambiguous contract terms construed against drafter)