International Fidelity Insurance Company v. Americaribe-Moriarity JV
906 F.3d 1329
| 11th Cir. | 2018Background
- Americaribe (general contractor) subcontracted pool work to CPM; subcontract included a general indemnity clause (Section 9.5) mentioning indemnity for "claims, damages, losses and expenses (including, but not limited to attorneys fees)" and a three-day cure/termination notice (Section 12.2(a)).
- Fidelity, as surety, issued a performance bond that incorporated the subcontract and required Americaribe to give notice, declare default/terminate, and agree to pay the balance before Fidelity’s obligations attached; Fidelity had options under §5 to remedy default.
- CPM allegedly defaulted; Americaribe notified CPM and Fidelity, then hired Dillon to begin work and formally declared CPM in default and demanded Fidelity perform under the bond; Fidelity denied liability, asserting Americaribe preempted its opportunity to act.
- Fidelity sued Americaribe for declaratory relief; district court granted summary judgment to Fidelity, holding Americaribe breached the bond and Fidelity had no liability; this court affirmed on the first appeal.
- While the appeal was pending, Fidelity sought attorney’s fees from Americaribe under the subcontract indemnity clause and Fla. Stat. § 57.105(7); the district court awarded $154,536 to Fidelity. Americaribe appealed the fee award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Section 9.5 indemnity clause is a unilateral fee-shifting provision triggering Fla. Stat. § 57.105(7) | Fidelity: the indemnity language (including "attorneys fees") is a contractual basis; §57.105(7) makes one-sided fee clauses reciprocal, so CPM (and thus Fidelity stepping into CPM’s shoes) can recoup fees | Americaribe: Section 9.5 is a general indemnity for third-party claims and does not unambiguously authorize recovery of fees in litigation between contracting parties | Held: Section 9.5 is a general third-party indemnity and not an unambiguous unilateral fee provision; §57.105(7) does not apply; fee award reversed |
| Whether general indemnity can be read to shift first-party litigation fees absent explicit language | Fidelity: broad indemnity wording ("including...attorneys fees") covers the dispute | Americaribe: Florida law presumes indemnities apply to third-party claims; shifting first-party fees requires clear, unambiguous language | Held: Florida precedent presumes indemnities cover third-party claims; absent explicit language, no shifting of first-party fees |
| Whether Ajax/ADF support fee recovery here | Fidelity: cited Ajax and ADF to argue broad indemnity can cover inter-party disputes | Americaribe: those cases are distinguishable (Ajax involved third-party claim; ADF included explicit non-third-party language) | Held: Ajax and ADF are distinguishable and do not support treating this indemnity as a unilateral fee clause |
| Whether surety can recover fees by stepping into subcontractor’s shoes if subcontractor would have been entitled to fees | Fidelity: as surety, it stepped into CPM’s rights and thus can seek fees CPM could have recovered | Americaribe: threshold issue is whether CPM had any fee right under the subcontract | Held: Court did not reach surety-step-in question because CPM had no contractual right to recover fees under Section 9.5; Fidelity cannot recover fees on that basis |
Key Cases Cited
- Dionne v. Floormasters Enters., 667 F.3d 1199 (11th Cir. 2012) (standard for de novo review of contract interpretation)
- Natco Ltd. P’ship v. Moran Towing of Fla., Inc., 267 F.3d 1190 (11th Cir. 2001) (contract interpretation principles in federal courts)
- Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638 (Fla. 1999) (indemnity contracts construed to reflect parties’ intent; indemnity generally for third-party claims)
- Intervest Constr. of Jax, Inc. v. Gen. Fid. Ins. Co., 133 So. 3d 494 (Fla. 2014) (contractual language interpreted by plain meaning and accepted construction rules)
- Century Village, Inc. v. Chatham Condominium Ass’ns, 387 So. 2d 523 (Fla. Dist. Ct. App. 1980) (indemnity clause construed to cover third-party claims, not inter-party litigation fees)
- Penthouse N. Ass’n v. Lombardi, 461 So. 2d 1350 (Fla. 1984) (affirming that indemnity provisions do not necessarily authorize fees in lawsuits between contracting parties)
- MVW Mgmt., LLC v. Regalia Beach Developers LLC, 230 So. 3d 108 (Fla. Dist. Ct. App. 2017) (indemnification silent on first-party claims is normally limited to third-party claims)
- Sholkoff v. Boca Raton Cmty. Hosp., Inc., 693 So. 2d 1114 (Fla. Dist. Ct. App. 1997) (fee provisions must unambiguously state intent and identify matters for which fees recoverable)