Foremost Signature Insurance Company, MI v. Sojo Design, LLC
18-14599
| 11th Cir. | Dec 4, 2019Background
- Sojo Design, LLC (architect) was sued by Silverboys, LLC in Florida state court over alleged torts related to a Bahamas vacation home project.
- Sojo tendered the claim to its insurer, Foremost Signature Insurance; Foremost defended under a reservation of rights and later filed a federal declaratory-judgment action (S.D. Fla.) seeking a declaration of no duty to defend.
- The district court granted Foremost summary judgment; Sojo appealed.
- While the appeal was pending the state-court plaintiffs voluntarily dismissed the original state complaint and later filed a different federal complaint alleging RICO and other expanded claims.
- Sojo did not incur out-of-pocket defense costs (Foremost defended under reservation).
- Sojo asserted (outside the record) that a separate Hiscox policy had been exhausted during Foremost’s defense; the exhaustion was not part of the record before the court.
Issues
| Issue | Plaintiff's Argument (Sojo) | Defendant's Argument (Foremost) | Held |
|---|---|---|---|
| Whether the voluntary dismissal of the underlying state action moots Sojo’s appeal of the insurer’s declaratory judgment | Dismissal moots declaratory action because underlying complaint changed and duty to defend must be re-evaluated under any new complaint | Dismissal does not moot the appeal; district-court ruling remains a live controversy and still controls Foremost’s duty | Case is moot; appeal dismissed; district-court judgment vacated and case remanded with instructions to dismiss |
| Whether Sojo’s lack of out-of-pocket defense costs preserves a live controversy (reimbursement claim) | Sojo argued exhaustion of other coverage could create a claim; sought preservation | Foremost: Sojo paid no costs out of pocket, so no concrete reimbursement claim exists | Sojo did not incur out-of-pocket costs; no reimbursement right exists to preserve the appeal |
| Whether the alleged exhaustion of a separate Hiscox policy prevents mootness | Exhaustion could create a collateral claim against Foremost and avoid mootness | Foremost disputed relevance; urged dismissal | Court declined to consider Hiscox exhaustion because it was outside the record and parties had opportunity to develop it below |
| Whether deciding the appeal would determine Foremost’s duty to defend in the subsequently filed federal complaint | Sojo argued the decision could affect Foremost’s duty across related suits | Foremost argued the decision is dispositive of its duties in related litigation | Court held duty to defend is complaint-specific under Florida law; the new federal complaint alleges different facts/claims, so the decision would not control duty in that action |
Key Cases Cited
- Lewis v. Continental Bank Corp., 494 U.S. 472 (1990) (articulates vacatur/remand practice when cases become moot on appeal and when exceptions apply)
- Jones v. Fla. Ins. Guar. Ass'n, 908 So.2d 435 (Fla. 2005) (insurer’s duty to defend is determined from allegations in the complaint)
- Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So.2d 810 (Fla. 1st DCA 1985) (original complaint cannot determine duty to defend once another complaint is filed)
- James River Ins. Co. v. Ground Down Eng’g, Inc., 540 F.3d 1270 (11th Cir. 2008) (duty to defend depends on pleadings’ allegations)
- Lime Tree Village Community Club Ass’n v. State Farm Gen. Ins. Co., 980 F.2d 1402 (11th Cir. 1993) (duty to defend looks to whether complaint’s allegations potentially bring claim within coverage)
- Trizec Properties, Inc. v. Biltmore Const. Co., 767 F.2d 810 (11th Cir. 1985) (coverage determined by complaint allegations even if later facts show no coverage)
- Rothman v. Gregor, 220 F.3d 81 (2d Cir. 2000) (judicial notice of public pleadings permitted)