*3 CARNES, Bеfore JORDAN and JULIE GOLDBERG,* Judges, Judge. Circuit
CARNES, Judge: Circuit JULIE dispute between appeal
This concerns insured, its' insurer. The (“Em- EmbroidMe.com, Inc. plaintiff broidMe”), in federal district was sued * Goldberg, sitting by designation. United Honorable Richard W. Judge, States Court Trade International deny coverage based on alleged infringe- who seeks copyright
court based EmbroidMe, it had an Luckily particular ment. Travelers of its on that defense policy with defendant reliance
insurance days becoming Casualty Company thirty of America aware its Property within Here, (“Travelers”) agreed to Travelers first communi- in which existence. pay pre- EmbroidMe should the latter be cated EmbroidMe refusal thirty-nine days of claim. The type liable on tender af- deemed provided general speaking further ter with EmbroidMe’s duty to counsel about the claim. EmbroidMe ar- seeking damages on Travelers’ notification gues lawsuit thirty-day statutory a claim. was made after the such (albeit by only a few elapsed deadline had Notwithstanding of this the existence *4 days), pay up prе- it must now these notify not to policy, EmbroidMe chose legal expenses that never author- tender against of the claim filed it or Travelers ized. request that Travelers Em- In- with a on the suit. rejected broidMe defense court The district EmbroidMe’s stead, furo concluding EmbroidMe retained law and argument, Travelers’ re- on its in litigated the case own district expenses fusal to of EmbroidMe reimburse amassing eighteen months, court for over had not which it consented did $400,000 exceeding finally legal bills before meaning constitute a notifying litigation Travelers of the and statutory for an insur- period that the time tendering the claim for indemnifica- both er to its insured of its purposes. Upon receipt reason, tion and defense apply. did For that notification, agreed this Travelers granted the court Travelers’ motion potentially provided indemnification summary judgment, and denied and, so, being claim it further competing agree broidMe’s motion. We going for- agreed to defend EmbroidMe with the аffirm its rul- district court and refused, however, to reim- ward. Travelers ing. legal for the bills it had
burse EmbroidMe I. BACKGROUND during lengthy period of time on its own. litigation chose to handle Specializing “embroidery, garment in fact, provisions In make clear apparel, printing, promotional custom obligated that Travelers was not products, printing personalized screen and that its in insured incurred than gifts more 300 resource centers litigating a claim covered unless States, and throughout the United Canada had first consent sured obtained Travelers’ Australia,” is, according to EmbroidMe generate expenses. those website, largest promotional “the world’s products Homepage, http://
Because EmbroidMe had not obtained franchise.” (nor (last permission even Dec. informed www.embroidme.com accessed 2016). it), 2010, Software, against April the claim In filed JCW (“JCW”) very large copyright infringe- omission would seem fore- LLC filed EmbroidMe, any argument against alleging close that it entitled to ment lawsuit past imprоperly reimbursement fees. that the latter had distributed copies Manager” insists that it is of the former’s EmbroidMe nonetheless “Fast reimbursement, relying program on a in of a entitled software violation requires agreement. Florida statute settlement during litigation. For with be Although was insured established EmbroidMe liability policy example, should be established that under a insurance liability arose out of the particular EmbroidMe’s potentially covered dishonest, fraudulent, specified in commission of a or litigation at issue duty right wrongful both the malicious act a breach that Travelers had contract, damages litigation, imposed then EmbroidMe such would not be covered not contact Travelers EmbroidMe did request or to that Travel- the policy. the claim tender duty of In- representation. assume its ers In addition Travelers’ reservation stead, it firm McHale retained Florida law issues, rights which was as Slavin”) Slavin, (“McHale P.A. & & “coverage analysis” contained the above represеntation. handle the section, also included a section the letter Thereafter, addressing until Octo- counsel issues.” from June 2010 “defense section, acknowledged all of the letter Trav- paid McHale ber fees, “right including to defend notice Travelers elers’ & Slavin’s appoint counsel.” litigation pending. But that there was even eighteen willingness to then on 2011—some letter indicated Travelers’ October continuing to filing complaint attorneys consider use months after the previously retained against it—EmbroidMe tender that EmbroidMe decided *5 factors, rates, underlying including its and noted that and defense Travelers in infringement “any to Travelers. A influence reten- copyright suit would tion But the letter made clear case handler and EmbroidMe’s decisions.” Travelers’ pay only post-tender the claim three would Counsel discussed Travelers General costs, meant days which refused later. $405,- for to reimburse EmbroidMe 21, 2011, for- November which was On spent legal had on fees 989.841 the latter ty-twо days after EmbroidMe tendered copyright infringe- tendering before thirty-nine claim to and Travelers claim to Travelers October ment Travelers days parties spoke, after the 2011. rights” sent a “reservation EmbroidMe positions on duty Having expressed the above As to there was a
letter. whether parame- of the litigation, in the the issues defend EmbroidMe defend, duty Travelers as- agreed al- ters its Travelers that because JCW’s in defense of EmbroidMe against appeared to sumed the legations EmbroidMe infringement lawsuit and soon injury” copyright policy’s fall within the “web-site McHale & Slavin allegations imposed on thereafter contacted provision, those firm to it would EmbroidMe. discuss retain duty Travelers a to defend whether representation EmbroidMe continue its Notwithstanding obligation its Although opinion of the litigation. in the litigation, in Travelers EmbroidMe well-qualified to handle dicated, firm was “coverage analysis” in section forward, going of EmbroidMe letter, right to the defense that it reserved he handler noted that pro- Travelers’ case challenge obligation its ultimately billing the firm’s damages imposed would have discuss any vide retaining it. It took a formally facts rates before against should certain EmbroidMe court, Em- above comes briefs ure in the text In in the district 1. documents filed Court, is therefore in this expended broidMe filed claimed to have EmbroidMe opinion. $417,989.84 figure purposes of this fig- we use pre-tender legal fees. pay it to position firm and for the law Travelers was while agree- pre-tender to final terms a retainer fees and costs that come ment, into on they formally entered which to tender- EmbroidMe Nonetheless, Travelers February ing and without its claim Travelers them paid McHale & Slavin’s A permission. couple of months latter’s costs incurred after the date fees and later, of con- EmbroidMe filed breach Travel- tender claim.2 EmbroidMe’s suit in court Travelers tract state refused, however, McHale & ers fees seеking reimbursement per hour rate it had Slavin the $400 Asserting diversity jurisdiction, costs. charging prior to Travel- been EmbroidMe the suit to the Travelers removed federal Instead, entry into the case. the re- ers’ in the Southern District district court ultimately agreement arrived at ob- tainer Florida. ligated pay only per $315 party summary a motion for filed Each hour. judgment. Essentially, these were motions 1, 2012, shortly On after Travel- March images of other. mirror each into the formal retainer ers had entered estopped contended that Travelers was Slavin, agreement & with McHale pay pre-tender its denying stating a letter to broidMe sent fees and costs its communication disagreement with Travelers’ refusal denial made after the deadline fees, pay pre-tender as set out in set for notification of defenses Travelers’ November reservation “Claims Administration Statute.” Florida’s rights willing to take letter. Not Travelers’ (1983). response § Fla. Stat. 627.426 answer, for an earlier “no” support summary judg- and in of its own sought repeatedly change motion, ment Travelers contended mind as decision had set excluding it from provisions re- November letter. sponsibility pay legal fees incurred Meanwhile, flurry of activity was oc- *6 prior approval its con- without curring litigation in the filed exclusion, not stituted a defense cov- second, filed a related broidMe. JCW suit erage of In support, a claim. Travelers in June 2012. In against EmbroidMe addi- Supreme Court of noted tion, copy- district court dismissed has clear that the Claims Adminis- made infringement in claims made applies only tration to Statute original given 2010 that had action rise defenses, not to exclusions. coverage for EmbroidMe “web under site, Travelers, injury” agreed The court with poli- the insurance district Ultimately, the cy. granting summary judgment district court directed motion its in engage JCW and EmbroidMe media- ruling required and that Travelers not was lawsuits, tion of the 2010 2012 both and to pay legal expenses that EmbroidMe had 14, August on both cases settled unilatеrally prior tendering incurred above, Throughout all the con- Travelers during the time Travelers tinued EmbroidMe a defense. when chosen handle its EmbroidMe had by no settlement, defense with involvement Shortly after the Travelers Travelers.3 reiterating appeal sent a its This EmbroidMe followed. letter 2, EmbroidMe, 2012, According paid September shortly which Travelers was after $300,000 litigation EmbroidMe settled with JCW. approximately post-tender out in at- 2011, torney’s fees and costs between October parties’ appeals discovery 3. As to rul- claim, EmbroidMe first when tendered ings magistrate judge, by made a the district
1105 OF III. II. DISCUSSION STANDARD REVIEW granted The court district Travelers’ grant We review the or denial summary judgment, motion for ruling that for summary judgment a de novo. motion not to pay Travelers was Cos., Inc., Brewton v. Bank legal that expenses EmbroidMe incurred 1339, (11th Cir. F.3d 777 prior tendering Travelers, the claim to Mais v. Bu (citing Coast Collection Gulf during period time which Inc., (11th reau, 1110, Cir. F.3d chose to handle alone its defense of the 2014)). An a policy' insurance contract litigation, JCW by involvement or interpretation of the lan and therefore assistance from Travelers. The con- court in guage ruling such a constitutes a cluded that the insurance express- contract law, on question is also which ly expenses by excluded an in- novo Hegel Liberty to de review. v. First agreement sured absent of Travelers (11th Corp., Ins. 778 F.3d Cir. pay expenses. Further, those the above 2015) (citing Graber v. Nat'l Clarendon coverage, constituted an exclusion from 819 So.2d 4th Ins. DCA not a to coverage that other- was 2002)). by provided policy. wise This distinc- tion significant because had Because this action was removed pretender refusal pay court on diversity federal basis of been considered be a cover- state as to jurisdiction, law controls claim, age the Florida Claims Admin- governed by issue the Constitution (“CAS”) istration in would kick Statute of the United treaties States. Mid-Conti and require that Travelers have notified Co., LLC, v. Am. Bldg. nent Cas. Co. Pride of this defense within the time 2010). (11th 601 F.3d Cir. statute, provided limits which agree, we, parties as do Florida law that did not do. But because Travelers relied governs dispute. address we exclusion, When law, of state we issues are therefore bound notify EmbroidMe within the failure to appel issued period decisions state’s time the statute did not set However, relying estop late courts. when have issued we unap- ground refusing precedential interpreting decision proved expenses. our rule re precedent state decision, quires we follow absent *7 appeal Accordingly, resolution by appellate a decision later the state was required turns on Travelers whether casting interpretation on court doubt our asserting to the CAS its comply with when Church, Inc. that law. World Harvest v. pre- to EmbroidMe for refusal reimburse Mut. Ins. Guideone 586 F.3d company the tender fees chose (11th 2009). Roboserve, Cir. Ltd. v. Accord agree that Travelers relied incur. We Foods, Inc., 940 Tom’s F.2d exclusion, in its (11th 1991); pre-tender Cir. le- Nеwell Harold EmbroidMe’s pay refusal Shaffer Co., Inc., (5th Leasing gal expenses, F.2d and therefore does 1974). Although not control. there is Cir. judge’s ruling, magistrate appealed concluded but we need not that also that
court
given
clearly
was neither
nor
issue
our
order
erroneous
con-
address that
affirmance of
it,
granting summary judg-
denying all other
district
order
trary to
and affirmed
court's
Travelers,
remaining motions as
EmbroidMe has
ment to
moot.
indemnify
for
addressing
promises
of this
ers
EmbroidMe
squarely
the facts
case
case,
by
interpretation
it
guided
damages
are
for
becomes liable. Fur-
we
which
ther,
given
“right
has
two
and
duty
that Florida law
to these
has a
Travelers
disputes involving
seeking
their def-
company
terms in other
suits
defend” the
dam-
review,
on that
we
policy.
inition. Based
conclude
ages that
are covered
from cover-
policy
here excludes
Beyond
duty
imposing
Travelers
expenses incurred
age
indemnify
against damages
EmbroidMe
of the
Trav-
apprоval
without the
insurer.
it,
also
policy
assessed
address-
policy provision
on this
con-
elers’ reliance
payment
responsibility
es
for the
exclusion,
of a policy
the assertion
stitutes
expenses arising
litiga-
from defense
Further,
coverage.
a defense
that
tion.. The
indicates
Travelers
position
contrary
to con-
broidMe’s
tends
cover
incurs.” It fur-
expenses [it]
will
“all
of an
concepts
flate the
ther
that EmbroidMe will not
makes clear
duty to timely convey
and
defend
any expenses
it
be
that
reimbursed
coverage defense.
own,
elects to
absent the con-
incur on
expenses.
sent
to those
Spe-
Travelers
Policy
A. The Terms
Insurance
cifically,
provides that “no in-
From Reim-
Precluded EmbroidMe
will,
insured’s
except
sured
own
at
Attorney’s
That
bursement
Fees
cost, voluntarily
payment,
amake
assume
Obtaining
Without
It Incurred
First
any expense,
any obligation, or incur
other
Consent
aid,
than for
our
first
without
consent.”
that it
argues
is entitled
added).
(emphasis
amplifying
Further
of the almost half million
reimbursement
exclusion,
listing
in the section
those ex-
attorney’s
fees
it incurred
dollars
penses
responsible,
Travelers
which
advising
to ever
Travelers
it
will
policy provides
pay
that Travelers
litiga-
it in
wanted
expenses incurred by
reasonable
“[a]ll
damages
it for any
tion and
request
to assist us in
our
it as a result of
imposed on
the covered
investigation or
of the claim
language
policy,
claims. The clear
‘suit’, including
earnings up
actual loss of
however,
asser-
contradicts EmbroidMe’s
off
day
of time
because
$250
entitled to
tion that it is
reimbursement
added).
work.” (emphasis
legal fees.4
pre-tender
liability policy
language
poli-
The commercial
entered
the clear
fairly
cy
into
EmbroidMe is
not common sense—would alert
—if
It
straight-forward.
unsophisticated
provides,
even
most
that,
sued,
specified monetary caps,
reality
that Travelers
if
not expect
could
will
those
its insurer
pay
sums
EmbroidMe be-
to reimburse
obligated
damages
legally
unilaterally
comes
as
incurred unless
in-
fees
bodily injury,
damage,
property
permis-
sured had first obtained Travelers’
advertising injuries,
expenses.
sion
incur
personal
those
*8
short,
cluding
injuries.
hardly
Travel-
unsophisticated
web-site
is
an
insured. When
duty
policy
pay
contends that even
states
had the
hold that an insurer has
to
put
not
EmbroidMe on notice that Travelers
pre-tender
we
defense costs. Because
con-
obliged
pay any expenses
was not
policy
clude
here disallowed
reim-
clearing
EmbroidMe incurred without first
fees,
pre-tender
bursement of these
we
Travelers,
expenses with
those
both Florida
argument.
do not decide Travelers’ broader
persuasive authority
law and
other
from
very expensive
on its own
against any damages
embarked
insured
award based
prolonged
underlying litiga-
on a
policy
claim
covered
but also to
tion, purposefully electing
not to
defend the
against
insured
action
defending
seek Travelers’ assistance in
Thus,
damages.
recover these
it is well-
case,
knowledge
it did so with full
settled under Florida law that an insurer’s
provisions
forbade reimburse-
duty to
separate
defend an insured is
incurring.
ment of the
it was
Cf.
question
distinct from the
whether it has a
Perez,
Am. Reliance Ins. Co. v.
712 So.2d duty to indemnify
the latter
(Fla.
1211,
1998) (policy
3d DCA
imposition
damages.
Mid-Continent
provision prohibiting an
insured
vol Cas.Co.,
(citations
tion between to defend insured, notwithstanding uncertainty indemnify and its its insured for any damages ultimately will awarded damages for which the held policy, be under the liable. may ultimately having shield itself Governing B. Florida Standards indemnify by providing the insured a de Duty Duty to Defend versus the fense of its under reservation Indemnify an Insured coverage. contest Id. Such a conditional urgent question An policy typically insurance re “resolves quires only postpones who shall defend and resolution
1108 Inapplicability to Trav- of the CAS C. of shall question who contingent of the Id, of of Reimbursement elers’ Denial (internal omit- citation any judgment.” Attorney’s Incurred Fees Without ted). Permission Its not its breach An insurer does 1. The CAS offering to defend under duty to defend Yet, an Id. In allowed to assert rights. of order be a reservation insur policy’s that an contesting concerned the insurance might be of in against a reservation coverage under of a claim made er who defends of sured, in its defense liability comply must with rights will be half-heаrted case, require liability requires law does the CAS. The CAS pre a defense. Id. In accept its insured within a such insurer to stead, period the insurer de of defense that the decision scribed time con rights of its support under a reservation denial fend intends assert being to the insured obligation transfers to cover the structively In “if Id. in per the case. It states power to defend the insured. made reser under a offers to defend part: the insurer tinent right rights, the insured has vation (2) per- liability A insurer shall be its own reject and hire the defense coverage par- based on a deny mitted defense,” with attorneys and control coverage defense unless: ticular to later seek jeopardizing its (a) liability days after the 30 Within for liabili from the insurer indemnification or known insurer knew should have Telecomm., Inc. ty. (quoting Id. BellSouth no- written Fla., Inc., 930 v. Tower So.2d Church & rights to as- of reservation tice (Fla. 2006)); 668, DCA 671 3d given to defense is sert Enter., Royal Ill. v. Oak Indem. Co. of by registered or the named insured (M.D. 1358, Inc., F.Supp.2d 1370 Fla. 344 to the last known сertified mail sent Co., 2004) 361 (citing Taylor v. Ins. Safeco by hand insured or address 1978)). 743, (Fla. But 745 1st DCA So.2d delivery; and actually reject the insur the insured must (b) compliance Agüero Iglesias days ex. rel. 60 er’s defense. Within (Fla. (a) receipt 898 or of a sum- paragraph Am. Ins. 927 So.2d First naming (finding persuasive complaint Travel 3d DCA. mons and Enter., defendant, Royal Indem. Co. III. v. Oak ers as a whichever sured (M.D. Inc., later, F.Supp.2d in no case than but later 2004)). trial, days Fla. the insurer: before notice to the named insured 1. Gives addition, if provides an insurer mail by registered certified inadequate a defense so the insurer insured; to defend the refusal can be to have “forced” the insured said counsel, from the a non- the insured 2. Obtains obtain its own then n willbe entitled following full agreement to recover all reasonable waiver specific facts at the disclosure costs and fees incurred Ill., provisions upon which Indem. trial level. Travelers Co. of defense is asserted F.Supp.2d (citing at 1369 Carrousel Con duties, cessions, Ass’n, obligations, and liabili- Fla. Inc. v. Ins. Guar. 1986)). during fol- of the insurer ties 3d *10 lowing pendency subject November letter was sent more than 30 days5 after Travelers had litigation; or been alerted to fact EmbroidMe had incurred independent 3. Retains counsel expenses.6 Accordingly, if Travelers’ mutually agreeable is which to the request denial EmbroidMe’s for reim- parties. Reasonable fees legal expenses bursement of could be con- may agreed upon counsel be be- coverage strued as a denial of based or, parties agree- if no tween the coverage defense, then Travelers’ failure reached, ment shall be set notify to so EmbroidMe within dead- the court. lines set the CAS meant was 627.426(2). § Fla. Stat. estopped contesting from request Translating, thirty days of within becom- reimbursement. defense, ing aware of a a liability if grounds for Travelers’ give insurer must its insured written no- $400,000+ to pay pretender refusal tice that it is reserving deny legal expenses generated by EmbroidMe based that defense. In addi- defense, a coverage constituted then Trav- tion, thereafter, sixty days within the lia- elers notified too late of that EmbroidMe bility insurer must take one of the three CAS, under the and would be steps listed above. estopped relying grounds on those letter, In its November Travel- If, justify non-payment. however, the basis EmbroidMe, ers informed among other for Travelers’ refusal Em- reimburse things, of its to pay refusal defense ex- cannot broidMe be as a characterized cov- penses EmbroidMe erage ap- then the CAS does not tendering the claim to Travelers with- ply, and we are free to enforce the terms obtaining matter, the latter’s consent. But this on this which terms Depending able, however, using. on the date one assumes ue was not Travelers to have become aware Em- formalize the continued retention of this broidMe time, intended Travelers to reimburse period sixty-day counsel within the fees, it for the earlier the letter was part least because of the crеated situation days days sent either 39 or 42 after this by EmbroidMe when it entered into a retain- Travelers, knowledge imputed could be agreement lawyers er with these without first obtaining Specifically, Travelers’ consent. complied 6. Whether Travelers with one of the negotiated hourly rate required by three conditions be hourly with this firm that was above the well performed days giving within 60 after notice willing rate that Travelers was is more to assess on the difficult odd facts of Thus, agreed ultimately pay, in fact provided this case. Travelers a defense to broidme’s own to obtain failure Travelers’ through the conclusion of the lit- hiring consent to the initial this law firm igation obviously so there need to inability was a factor finalize notify declining EmbroidMe that it was continued the firm's retention within the 60- obtaining a defense. As to a non- day period. EmbroidMe, agreement waiver the lat- Nevertheless, fail, as Travelers did within the sign agreement, ter declined to a non-waiver 30-day period, first EmbroidMe of its accepted albeit it nonetheless Travelers' de- pay previously-incurred attorney’s refusal to throughout litigation. Finally, fense as to fees, if that refusal constitutes independent, retained whether Travelers mu- CAS, counsel, so, to the then Travelers did tually agreeable certainly did 30-day agreeing not meet the time limit of the statute very to retain the counsel that Em- Thus, convey litigate pri- that defense. we do not have broidMe had chosen to the action involving import in the case of Travelers’ conduct resolve during 60-day period. counsel EmbroidMe which wished to contin- time *11 damages the latter be- any for obtaining reim- insured from
foreclose duty to is pay. hable to The comes of these fees. bursement cases entirely concept and an different below, we conclude explained As alleged an breach that have considered has an insurer question whether the stan- duty employed have a different legal expenses for an insured rеimburse dard than does the CAS. in- permission the incurred without tendering surer, the prior even To Reimburse Travelers’ Refusal latter, un- not—at least the does claim to Legal Expenses For Prior broidMe a policy of this the terms der —constitute Pro- Not Constitute a Refusal to Did conclusion neces- coverage question. That Coverage Therefore Its vide And ground for sarily that the insurer’s means Refusing for Did not Consti- Grounds duty to reimburse disclaiming the above Coverage a Defense tute defense, coverage a not constitute does operate therefore the CAS does noted, only in the CAS kicks As contesting right from the estop the insurer timely when an insurer has faded to this reimbursement un- of the insured coverage defense. The of a its insured policy. the der liability for its consequence to a insurer insurer’s inabili violation the CAS is the lines, Along these Florida same as a ty particular to use that defense provi between a law makes distinction indemnifying insured ground to avoid coverage рolicy subject to a de sion of a damages the latter has been found for an provision constitutes fense then, pay. Typically, a violation liable coverage. According exclusion mean that the insurer will be the CAS will coverage assertion of a duty to in estopped contesting its comes within the CAS and defense any damages demnify the insured limits, corresponding time but question here is imposed. have been The provision coverage that a excludes is policy policy’s prohibi assertion of the whether subject or to the CAS’s deadlines even incurring tion on an insured’s notice be requirement given. to its prior approval of is a without the precluding here policy reim something or different. coverage litigation expenses bursement by an insured without the consent addressing the mean- The seminal case insurer within the exclusion cate falls is ing coverage of a defense under the CAS coverage classifica gory, not the Company v. Block Marina AIU Insurance tion. 1989). Investment, Inc., case, liability policy In that contained logical if conclu-
Finally, extended coverage express an exclusion dam- sion, argument essentially EmbroidMe’s custody of age to property in liability duty to de- conflates a Although an endorsement duty indemnify sured. its insured with its fend point policy had been written at some dur- insured should the latter be deemed relationship liability ing the insurance injuries by the liable for covered property in duty for such the insured’s policy. The had later been examining custody, focus of that endorsement has been the cases noted, policy not in As an eliminated from the and was alleged breach the CAS. negli- alleged act timely notify operation when insurer must Thus, par- gence by the insured arose. any potential defense that intends was not in ticular denial of to cover assert fact, and, covered court held that an insurer’s “failure to event, expressly comply requirement excluded. with the of the [CAS] insurеd, agreed AIU it would defend the will not an insurer from disclaiming bar Marina, litigation, Block it did but so liability ... where sought to a reservation of its to expressly excluded otherwise unavail- Then, assert a two defense. able under the or under existing trial, weeks before the insurer switched law.” Id. *12 course even to and refused defend the applying Courts Florida law have fol-
insured. But the insurer’s notification had
holding
lowed Block Marina’s
an in-
of
provisions
run afoul
the time limitation
comply
surer who fails to
with the CAS’s
CAS,
that,
of the
if
which meant
the CAS
requirements
notification
is not estopped
applied,
required
the insurer
would be
by that
from
refusing
statute
later
to make
insured,
indemnify its
notwithstanding that
payment on a
matter excluded
poli-
not
policy
damages
did
cover the
See,
cy.
Danny’s
Svc.,
e.g.,
Backhoe
LLC v.
question
issue. So the
before the Florida
Co.,
508,
Auto Owners Ins.
116 So.3d
511
Supreme Court was whether the insurer’s
(Fla.
(notice
2013)
1st DCA
requirement
defense to the
insured’s claim constituted
only applies
under CAS
where insurer as-
cоverage
subject
to the CAS. The
coverage
serts
to coverage
not,
Supreme Court
answered that
did
exists;
express-
otherwise
where
policy
reasoning as follows.
ly
coverage of
property,
excluded
rental
The court first observed that
effect
apply);
the CAS does not
Max Specialty
ruling
of a
chal-
precluding the insurer’s
Exch.,
v. A
Ins. Co.
Clear Title & Escrow
lenge
provide coverage
would be to
to the
LLC,
1191,
(M.D.
114 F.Supp.3d
1196
Fla.
insured for something
policy
had
2013) (non-compliance with CAS did not
“expressly
coverage.
from
Block
excluded”
estop
indemnifying
insurer from
based on
Marina, 544
So.2d at
The court did
expressly
act that
criminal
was
excluded
not
giving
read the CAS as
an insured
policy);
Ins. Co.
Hartford
of
coverage
explicitly
that was
from
excluded
Telecomm., Inc.,
Midwest v. BellSouth
policy
“simply because an insurer fails to
(Fla.
2002) (insurer’s
So.2d 234
4th DCA
comply with
the terms
Id.
[CAS].”
policy provision
containing
assertion
explained
The court
that the CAS is
anti-stacking clаuse that limited insurer’s
estoppel provision
tended to work as an
liability
amount of
for each accident did
exists,
such that
coverage
where
the insur-
not
a denial of
was
constitute
estopped
challenging
er is
from
that cover-
CAS);
therefore not
to the
Almen
age
on a
based
defense to what would
dral v.
Nat’l Ins.
Sec.
704 So.2d
obligation
otherwise be its
to cover the
(Fla.
1998) (where
DCA
3d
uninsured
claim. But
insur-
regardless of whether the
expressly
motorist
excluded
CAS,
er
can-
has violated
statute
policy,
insurer’s
terms
failure
ad-
coverage”
not be used
“create or extend
requirements
exist,
here
CAS did not bar it
that otherwise does not
which is
disclaiming liability);
from
Scottsdale Ins.
what
if
happen
would
the CAS could cre-
Ass’n, Inc.,
Prop.
Co. v. Deer Run
Owner’s
express
ate
contradiction
(Fla.
1994) (where
Indeed,
4th
3. Beville settle the case and recover relies on and in- support Beville in insurer both the costs of defense argument of its that for the The court Travelers violated the demnification settlement. belatedly time limits when it CAS’s ad- further observed question to the consent. If the answer to was broidMe was uncertain answer “no,” question. why it is not clear the same answer apply pre-tender would not to EmbroidMe's disputed Actually, the insured assertion. incurring exрenses. of these If answer to presented he had insured testified that question only long "no” was so as Travel- agent early papers to his insurance the suit complied had ers with the CAS once it litigation; agent that he admitted had running learned that EmbroidMe was its own insured, had met with the who mentioned litigation operation, independent it is not litigation pre- who pending some but never CAS, all how clear whose time limitations paperwork. purposes any him For sented triggered periods typically are an initial deciding summary for the insured's motion insurer, agent’s tender of the claim to the would even judgment, testi- the court assumed mony operate in such a Counsel for Em- to be context. accurate. coverage, non-compliance right deny consequence reserved its (based on required by the CAS ei- with its failure meet the CAS the insurer agree- 30-day deadline to assert de- from the insured ther obtain fenses) inability those terms should be ultimate proceed ment to under so rely deny coverage to mutually acceptable counsel to on those defenses to to furnish damages against the claim. Hav- EmbroidMe awarded defend the insured neither, But Travelers did ing the court concluded it. done damages right proceed demnification the insured had ultimately paid, former the is not an issue owed the so own and the insurer here. of defense. costs Indeed, of appeal insurer owed the another district court
As to whether during question directly the costs of the defense has addressed this more Beville, in of time than and that court held that period six-month before did lawsuit, it of Administration is not had notified “the Claims Statute sured costs, for-these fees and as any responsibility insurer denied award suggests, preclu- failure to the Beville court but the expenses based the insured’s ” policy provision requiring ‘coverage sion of Travelers In comply with the defenses.’ Enter., Inc., pending litigation Royal as dem. Ill. v. Oak written notice Co. of (M.D. practicable. F.Supp.2d soon as The court likewise 344 Fla. Jacksonville, unpersuasive, given (citing argument found this Fans & Stoves Fla. is, applicability Surety of the CAS. That hav v. Aetna Cas. & 1989)). right Stoves, ing of its 1st DCA In Fans & asserted reservation untimely willingness on this no deny coverage based the insurer indicated its de case, mutually having tice failed to obtain fend the but reserved its agreeable represent involving as to counts counsel the insured contest litigation, Although in the the insurer violated the intentional torts. it notified the breach, insured, Based on this the court held the insurer failed the no CAS. send *15 for by registered that the insurer was tice mail and it not ob did litigation being mutually-agreeable, independent the tain coun costs suit, litigation. notified of the sel to defend the which meant the had run afoul of the insurer CAS. potential arguments There are several objected insured had to the counsel named a contention that Beville that undermine by attorney insurer the and hired its own present resolution of controls the case. litigation. Following the con hаndle First, grapples Beville never with the trial, won, of clusion which the insured of question supports how the text the CAS attorney’s sued to recover the costs, opposed the award of defense as counsel, expended hiring fees it in its own merely requiring coverage of a disputed relying non-compliance on the insurer’s claim, to an insured who seeks reimburse- with the CAS. of provides, ment the former. The as CAS violation, only for rejected sanction The trial court the insured’s inability deny “to coverage argument, concluding surer’s based that an at insured’s particular coverage torney’s defense.” The cov- fees to a case “were erage by defenses in type damages contemplated by reserved of coverage this case asserted lack of for a and that not author statute the statute did appellant attorney fraudulent act for a breach of contract ize to hire his own by then, Arguably only expense.” EmbroidMe. appellеe’s So.2d at 1179. The of that full and Appeals agreed, Court of imbursement enhanced First District makes no reference rate. noting CAS] “[the fees, only express penalty for attorney leaving question But aside being to noncompliance pre insurer’s an underpinning able Beville and the coverage denying clude distinction, factual above-described we will ” coverage on a defense.’ particular ‘based that, Beville, per nevertheless assume Accordingly, it affirmed. also Scotts See potentially permits the reimburse Prop. v. Deer Run Owner’s dale Ins. Co. of previously-incurred attorney’s ment
Ass’n, Inc., 4th just of a fees—not the loss defense to an 1994) (insurer’s non-compliance with obligation to its menu —within denying it from estop did not the CAS non-compliance. so, sanctions Even of at request for reimbursement insured’s Beville does not warrant reimbursement of torney’s opposing party fees to its because attorney’s present fees in the case. As set coverage con “the lack an insured’s above, a violation the CAS does not obligation pay attorney’s fees is tractual estop asserting an an insurer from exclu which, ‘coverage coverage not a defense’ to sion, opposed coverage as condition, but for some breach of otherwise Indeed, otherwise exists. Block Ma exist.”). would rina, Supreme Florida Court made it approach In were we follow the clear that an violation of the CAS Stoves, opposed in Fans to that taken & as coverage does not entitle an insured to Beville, taken we would conclude policy. matters that are excluded the CAS does not mention reim- coverage defense, Beville addressed attorney’s fees as a conse- bursement gen which was the insurer’s assertion of a non-compliance, quence award policy provision requiring eral an insured (on such fees which there exists exten- provide prompt notice of a to its lawsuit independent body of sive see non-compliance An insurer. insured’s not a infra) remedy provided provision gives an insurer a statute. coverage that otherwise exists. Beville Second, held, it, there is a factual distinction be- never nor could that an insured Beville, this case and Beville. the was entitled to on matters that tween expressly policy. court noted that even if the CAS were not are And excluded require explained, we applicable, would still reimburse- as have earlier Travelers is defense; previously-incurred relying it is ment the insured’s relying fees because there had been “no on an con exclusion *16 expenses policy provision express that the in tained in the that suggestion insured’s defending period prior notifying ly the reimbursement [for excludes unilaterally or in some that an incurs without insurer] were unreasonable insured pro at of the insurer. That way prejudiced prior the carrier.” 825 So.2d consent Here, will, however, except оbvi- vision states that “no insured Travelers was cost, voluntarily ously prejudiced by at that own EmbroidMe’s decision insured’s case, any obligation, payment, to start of its on its make a assume aid, terms, than for bothering any expense, to tell incur other first without Travelers. attorneys provision This clear Specifically, paid its without our consent.” voluntary payments substantially higher hourly ly a than made rate excludes per the insurer’s ultimately agreed pay insured without coverage, from re- It an exclusion lawyers, same and EmbroidMe seeks mission. is 1116 majority dispute opinion. EmbroidMe Court at the end is no that there IV(2)(d) policy provides that
disregarded it. Section will, except at that insured’s “[n]o cannot resurrect cov- CAS Because the cost, voluntarily payment, own make a as- explicitly been excluded and erage that has any obligation, any expense, sume or incur at here consti- issue provision because the aid, [Travel- other than first without exclusion, not con- Beville is tutes such at (emphasis consent.” D.E. 52-1 27 ers’] EmbroidMe is entitled trolling and added). in- phrase “except that legal expenses that reimbursement this policy own cost” makes sured’s lan- permission of Travel- incurred without guage to a exclusion. As tantamount ers. it, voluntary payments provi- I read n CONCLUSION responsible is sion means that the insured (other for the costs it than for first incurs that does not conclude We aid) without the consent and that enforcing from apply prevent or indemnification is available liability insurance provision of the a Am. Reliance for such costs. See Ins. Co. obtaining from that excludes Perez, 1211, (Fla. v. 1212-13 So.2d 3d fees chose reimbursement 1998) (holding requesting DCA that the same volun- prior to incur Travelers to pending tary it in payments provision precluded cover- litigation. therefore AFFIRM the dis- age a claim We where insured settled consent); court. Rolyn trict without the insurer’s Texas, Companies, v. R Inc. & J Sales of JORDAN, Judge, concurring Circuit Inc., (11th Fed.Appx. Cir. judgment. 2011) law, (concluding, under Florida construction Florida’s The Court’s voluntary payments same Statute, Fla. Claims Administration Stat. from precluded recovering re- 627.426, me, § sense to but runs makes pair costs it incurred before con- seeking Fourth District’s decision counter perform repairs). sent the insurer to Beville, Ins. v. Fire Co. Nationwide Mut. Accord Bend Mu. Ins. C. v. Arbor West 2002) 999,1003-04 4th (7th LLC, Homes 703 F.3d 1096-97 (holding insured’s failure 2013) law, (holding, Cir. under Indiana proper notice of claim constituted “cover- voluntary payments provi- same CAS, age defense” under the precluded coverage sion where the insured for insured’s settled a claim without insurer’s con- pre-notice expenses it did sent); Lafarge Corp. v. Ins. Cas. Hartford CAS). comply say that Our cases Co., (5th 61 F.3d Cir. we are bound follow decision (concluding, under Texas a volun- Florida court appellate intermediate unless tary payments provision precluded persuasive there indication being liable surer for defense costs Supreme would decide the Court tender see, differently, e.g., issue McMahan claim); Insua v. Scottsdale Ins. *17 Toto, (11th 2002), Cir. F.3d 737, 743-44, Cal.App.4th 129 Cal.Rptr.2d I think distinguish- is do Beville (2002) (ruling, California under able. voluntary payments the same provi- I sion solely typically would resolve the case on the “bars reimbursement pre-tender alternative rationale articulated based the reason- Foudy, Plaintiff-Appellant, ... Toni ing that until the defense tendered (internal defend”) quo- there is v. omitted). tation marks Pierce, City of Policeman Fort Jason majority (1- is the rule. See 8 New This Braun, Jane and John Does Appleman Library on Insurance Law Edi- 10), Defendants-Appellees. 20.04(3)(b) (LexisNexis § tion 15-14646, 15-14659, No. No. No. majority (recognizing, criticizing, the but of Appeals, United Court States rule). voluntary pay- And because this Eleventh Circuit. exclu- ments constitutes sion, apply. See AIU the CAS does not Date Filed: 01/09/2017 Ins, Inv., Inc., v. Marina Co. Bloch (Fla. 1989). 998,1000 FOUDY, Foudy, Toni
Shaun Plaintiffs-Appellants,
v. INDIAN COUNTY SHERIFF’S RIVER
OFFICE, Deryl Loar, Sheriff his capacity
official as the Sheriff County Indian River Office Sheriff's capacity, and in his individual David individually, Carlson, Bailey, in Eric dividually, Finnegan, John individual al., ly, Defendants-Appellees, et
Greg Long, individually, al.,
et Defendants. Foudy, Foudy, Toni Shaun Plaintiffs-Appellants, Lucie, City of Richard Port St. S. Giac Ryan cone, Camara, Steve Michael Connor, Ghobrial, al., Meyer Defen et
dants-Appellees. Plaintiff, Foudy,
Shaun