931 F.3d 1112
11th Cir.2019Background
- Crowley Maritime (and subsidiary Crowley Liner) had a claims-made D&O/executive liability Policy with National Union covering Claims first made during Nov. 1, 2007–Nov. 1, 2008 and a six-year Discovery Period through Nov. 1, 2013.
- In April 2008 an FBI/DOJ antitrust investigation produced a sealed 48‑page affidavit identifying employee Thomas Farmer; a search warrant was executed that month but the affidavit remained sealed until 2015.
- Crowley’s broker sent National Union an April 25, 2008 notice describing the investigation; National Union treated it as a notice of circumstances (section 7(c)) but declined coverage because no person had been identified in writing as a target in materials then available.
- Arbitration (closed Dec. 31, 2012; award Jan. 29, 2013) held that materials submitted through that date did not constitute a Claim under the Policy; National Union later accepted Crowley’s Feb. 2013 notice of a Plea Offer as a Claim effective Feb. 18, 2013 and covered post‑Feb. 2013 defense costs.
- The sealed affidavit was unsealed April 24, 2015; Farmer was acquitted in May 2015. Crowley then (July 22, 2015) demanded reimbursement for $2.54M in pre‑Feb. 2013 defense costs; National Union refused and summary judgment followed for insurer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the affidavit’s substantive content constituted a "Claim" under the Policy | The affidavit, once considered, identified Farmer in writing and thus satisfied the Policy’s Claim definition | Insurer did not press that point at summary judgment; argued Claim could not be treated as "made" until insured knew its contents | Court: affidavit’s content would qualify as a Claim, but the case turns on reporting and timing, not this element |
| When the Claim based on the affidavit was "first made" against Farmer | April 2008, when the affidavit was presented to the magistrate (even if sealed) | 2015, when the affidavit was unsealed and its contents became known to Crowley | Court: need not decide; assumed arguendo Claim was made in April 2008 but resolved case on reporting failure |
| Whether Crowley timely reported the affidavit-based Claim to National Union under §7(a) | April 2008 notice sufficed (or alternatively later notices should relate back) | No qualifying notice was given before the Discovery Period closed Nov. 1, 2013; later 2015 notice was untimely | Held for National Union: Crowley did not timely report; arbitration precludes any claim of reporting through Dec. 31, 2012, and no new information about the affidavit was reported before Nov. 1, 2013 |
| Whether arbitration precludes Crowley from relitigating reporting before Dec. 31, 2012 and whether Crowley waived relation‑back arguments | Arbitration was limited and did not consider the sealed affidavit; res judicata/issue preclusion should not bar later suit | Arbitration is entitled to preclusive effect on the specific issue actually litigated (whether materials before arbitrators constituted a Claim) | Held: issue preclusion applies to the period through Dec. 31, 2012; Crowley also expressly waived any §7 relation‑back arguments, so no retroactive coverage for pre‑Feb. 2013 costs |
Key Cases Cited
- Gulf Ins. Co. v. Dolan, Fertig & Curtis, 433 So. 2d 512 (Fla. 1983) (describes the essence of claims‑made policies as notice within the policy period)
- Brown v. R.J. Reynolds Tobacco Co., 611 F.3d 1324 (11th Cir. 2010) (explains distinctions between claim preclusion and issue preclusion under Florida law)
- Dadeland Depot, Inc. v. St. Paul Fire and Marine Ins. Co., 945 So. 2d 1216 (Fla. 2006) (arbitral determinations may have preclusive effect in later proceedings)
- Sierra Club, Inc. v. Leavitt, 488 F.3d 904 (11th Cir. 2007) (standard of review for summary judgment)
- Hyman v. Nationwide Mut. Fire Ins. Co., 304 F.3d 1179 (11th Cir. 2002) (begin contract interpretation with policy language)
- Tech. Coating Applicators, Inc. v. U.S. Fid. and Guar. Co., 157 F.3d 843 (11th Cir. 1998) (interpretation of insurance contracts)