113 F.4th 1312
11th Cir.2024Background
- Constantin, a commercial accounting firm, purchased professional services liability insurance from Chubb, specifically for “management consulting for the financial community.”
- The insurance policy covered claims arising from services in "banking finance, accounting, risk and systems analysis, design and implementation, asset recovery and strategy planning for financial institutions."
- Constantin performed an audit for Schratter Foods, a food company (not a financial institution); mistakes in the audit led to a lawsuit and liability.
- Constantin assigned its insurance rights to the plaintiffs (ECB parties), who then sought coverage from Chubb for the underlying liability.
- The dispute focused on whether the phrase “for financial institutions” limits coverage for “accounting” services only to those performed for financial institutions.
- The district court granted summary judgment to Chubb, holding the policy did not cover Constantin’s liability because Schratter Foods was not a financial institution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does "for financial institutions" limit "accounting" in policy? | Should apply only to last listed items (asset recovery, strategy); no comma before phrase, so not a broad modifier | Modifies all listed services (including accounting and others); series-qualifier canon applies | Yes, it limits all listed services, including accounting, to those performed for financial institutions |
| Should the last-antecedent canon apply to phrase construction? | Applies, so modifier covers only last listed items | Series-qualifier canon is controlling for parallel lists | Series-qualifier canon is applicable; last-antecedent canon is not dispositive |
| Is the contract ambiguous, invoking contra proferentem? | Yes; ambiguous, thus should be construed in favor of insured | No; plain meaning clear, and both parties are sophisticated entities | Not ambiguous; contra proferentem does not apply—and in any case, not for sophisticated parties |
| Did procedural waiver bar plaintiff's arguments on appeal? | Canon-based arguments properly raised on appeal | Arguments waived by not timely raising in district court | Arguments regarding canons could be made on appeal, as they support earlier positions |
Key Cases Cited
- Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 948 A.2d 1285 (N.J. 2008) (plain meaning typically controls insurance contracts; ambiguities construed against drafters only if truly ambiguous)
- State v. Gelman, 950 A.2d 879 (N.J. 2008) (last-antecedent canon; qualifying phrases refer to last antecedent unless contrary intent)
- Oxford Realty Grp. Cedar v. Travelers Excess & Surplus Lines Co., 160 A.3d 1263 (N.J. 2017) (contra proferentem applies only to genuinely ambiguous contracts and not to sophisticated parties)
- Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242 (11th Cir. 2005) (summary judgment and diversity jurisdiction standard of review)