307 F. Supp. 3d 1286
M.D. Fla.2018Background
- Crowley purchased an Executive & Organization Liability "claims-made-and-reported" policy (11/1/07–11/1/08) with a six‑year Discovery Period ending 11/1/13 and a relation‑back provision for prior "notice of circumstances."
- DOJ executed a sealed search warrant affidavit in April 2008 that identified employee Tom Farmer as a subject; Crowley notified insurer National Union of the investigation on April 25, 2008 but could not disclose the sealed affidavit.
- Crowley demanded that National Union advance Farmer’s defense costs; National Union declined, treating Crowley’s 2008 submission as a notice of circumstances but not a Claim because Farmer was not identified "in writing" as a target.
- Crowley initiated arbitration (2012) alleging coverage; the arbitrators—without access to the sealed affidavit—held Crowley had not made a Claim under the policy through 2012.
- In Feb. 2013 the government offered Farmer a plea (which would have identified him in writing); National Union agreed to advance costs after that point but Farmer went to trial and was acquitted in 2015; the affidavit was unsealed and Crowley presented it to National Union in 2015 and sued for defense costs dating back to 2008–2013.
- The district court held Crowley’s 2015 claim based on the unsealed affidavit was not precluded by the 2012 arbitration (because the affidavit was new, material evidence), but was untimely under the Policy’s Discovery Period and granted summary judgment for National Union.
Issues
| Issue | Crowley (Plaintiff) | National Union (Defendant) | Held |
|---|---|---|---|
| Whether the 2012 arbitration precludes Crowley’s 2015 suit | Arbitration only decided materials then before panel; affidavit was sealed so the 2015 claim is distinct | Arbitration resolved the same dispute (defense‑fee demand); precludes relitigation | Not precluded: arbitration did not adjudicate the affidavit‑based claim because affidavit was unavailable then |
| Whether the 2015 demand relates back to the 2008 notice of circumstances under the Policy’s relation‑back clause | Yes — the 2015 claim should relate back to the April 25, 2008 notice, making it timely under Discovery Period | No — if it related back it would have been adjudicated earlier; relation‑back cannot revive a claim reported after Discovery Period | Relation back does not make the affidavit‑based claim timely here; the affidavit’s content was new and the claim was first reported in 2015 |
| Whether the claim is timely under the Policy’s Discovery Period (claims‑made rule) | Discovery Period or statute of limitations should be tolled until Crowley could access the affidavit; claim effectively reported in 2008 | Policy’s plain language controls: claims must be reported within the Discovery Period (ended 11/1/13) | Untimely: Crowley’s claim based on the unsealed affidavit was first reported in 2015 after the Discovery Period expired; no coverage for that period |
| Whether the action is time‑barred by the statute of limitations | SOL did not start running until 2015 when affidavit was produced | Alternatively, SOL would have run if claim deemed made in 2008 | Court did not decide SOL issue because policy’s Discovery Period plainly bars the 2015 claim; summary judgment for insurer |
Key Cases Cited
- Baker v. Gen. Motors Corp., 522 U.S. 222 (overview of claim‑preclusion terminology)
- Lozman v. City of Riviera Beach, 713 F.3d 1066 (11th Cir.) (subsequent suit not precluded when based on facts/evidence not in existence during prior suit)
- Dadeland Depot, Inc. v. St. Paul Fire & Marine Ins. Co., 945 So.2d 1216 (Fla. 2006) (binding arbitration award treated like court judgment for preclusion)
- State St. Bank & Tr. Co. v. Badra, 765 So.2d 251 (Fla. 4th DCA 2000) (claim preclusion requires same essential facts; new intervening facts defeat preclusion)
- AMEC Civil, LLC v. Fla. Dep't of Transp., 41 So.3d 235 (Fla. 1st DCA 2010) (breaches known at suit filing should be joined; distinguishable when evidence unavailable)
- Trustmark Ins. Co. v. ESLU, Inc., 299 F.3d 1265 (11th Cir.) (series of contract breaches arising before suit should be litigated together)
- Jennings Constr. Servs. Corp. v. ACE Am. Ins. Co., 783 F. Supp. 2d 1209 (M.D. Fla.) (claims‑made policies require reporting within policy period or no coverage)
- Gulf Ins. Co. v. Dolan, Fertig & Curtis, 433 So.2d 512 (Fla. 1983) (distinguishing claims‑made and occurrence policies)
- Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (federal courts in diversity apply state preclusion rules)