Intervest Construction of Jax, Inc. v. General Fidelity Insurance
662 F.3d 1328
11th Cir.2011Background
- ICI and its closely related entity sued General Fidelity over coverage under the General Fidelity Policy for Ferrin's injuries from an attic-stair accident during ICI's construction.
- Custom Cutting indemnified ICI for its negligence under a subcontract; North Pointe insured Custom Cutting and paid $1,000,000 to settle ICI's indemnification claim.
- Ferrin settled for $1.6 million; North Pointe funded $1 million, and ICI and Custom Cutting contributed $300,000 each to Ferrin afterward.
- The dispute centers on whether North Pointe's payment counts toward the General Fidelity policy's $1 million self-insured retention (SIR) and whether ICI must cover the remaining $600,000, and on the transfer-of-rights clause.
- The district court ruled in favor of General Fidelity based on the SIR language; the Eleventh Circuit certified Florida-law questions due to unsettled Florida law.
- Two certified Florida-law questions ask who may apply indemnification payments to the SIR and who has priority under the transfer-of-rights provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can indemnification payments reduce the SIR? | ICI argues indemnity funds can satisfy the SIR. | General Fidelity contends only payments made by the insured count toward the SIR, excluding third-party indemnity. | Certified questions to resolve Florida law on SIR offset. |
| Who has priority to recover under the transfer of rights after indemnity payments? | ICI contends the transfer of rights does not abrogate the made-whole doctrine and gives ICI priority to balance against General Fidelity. | General Fidelity asserts the transfer-of-rights provision controls and may grant it priority over ICI. | Certified questions to determine priority under Florida law. |
Key Cases Cited
- Bordeaux, Inc. v. Am. Safety Ins. Co., 186 P.3d 1188 (Wash. Ct. App. 2008) (made-whole doctrine preserved by contract language and priority rules)
- Zinke-Smith, Inc. v. Fla. Ins. Guar. Ass'n., 304 So.2d 507 (Fla. 4th Dist. Ct. App. 1974) (distinguishes self-insurance vs. primary insurance for SIR)
- Young v. Progressive Se. Ins. Co., 753 So.2d 80 (Fla. 2000) (explains self-insurance vs. primary insurance concepts)
- Schonau v. GEICO Gen. Ins. Co., 903 So.2d 285 (Fla. 4th Dist. Ct. App. 2005) (made-whole doctrine generally prioritizes insured recovery)