Case: 13-15414       Date Filed: 03/05/2015      Page: 1 of 6


                                                                         [DO NOT PUBLISH]



                      IN THE UNITED STATES COURT OF APPEALS

                               FOR THE ELEVENTH CIRCUIT

                           __________________________________

                                      No. 13-15414
                           __________________________________

                          D.C. Docket No. 8:12-cv-02928-RAL-EAJ



CULBREATH ISLES PROPERTY OWNERS ASSOCIATION, INC.,
ORLINE M. SIDMAN,
FLORIDA POLICYHOLDERS, LLC,
                                                                          Plaintiffs-Appellants,

                                            versus

TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,

                                                                           Defendant-Appellee.

                           __________________________________

                         Appeals from the United States District Court
                              for the Middle District of Florida
                          ___________________________________

                                        (March 5, 2015)

Before WILLIAM PRYOR and JORDAN, Circuit Judges, and WALTER,* District Judge.

WALTER, District Judge:



*
 Honorable Donald E. Walter, United States District Judge for the Western District of
Louisiana, sitting by designation.
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       This appeal follows the district court’s grant of summary judgment in favor of

Defendant-Appellee Travelers Casualty & Surety Company of America (“Travelers”). On

cross-motions for summary judgment, the question before the district court was whether an

insurance policy issued by Travelers to Plaintiff-Appellant Culbreath Isles Property Owners

Association, Inc. (“Culbreath”) indemnified Culbreath for its liability for attorney’s fees incurred

by, and awarded to, individuals who Culbreath unsuccessfully sued. This Court is asked the

same question on appeal. Following a review of the record and with the benefit of oral argument,

we REVERSE the district court and REMAND for further proceedings consistent with this

opinion.

I.     BACKGROUND

       a. The Policy

       The relevant insurance policy was a Non-Profit Management and Organization Liability

Policy (“the Policy”) issued by Travelers to Culbreath for the period of February 20, 2009 to

February 20, 2010. In pertinent part, the Policy provides “Liability Coverage” such that:

       [t]he Insurer will pay on behalf of the Insureds Loss up to the available maximum
       aggregate Limit of Liability set forth in item three of the Declarations which is
       incurred by the Insureds as the result of any Claim first made against the Insureds
       during the Policy Period or the Discovery Period, if purchased, for a Wrongful
       Act.

       The Policy also defines the following terms:

       A “Wrongful Act” is:

       any error, misstatement, misleading statement, act, omission, neglect, or breach of
       duty committed or attempted, or allegedly committed or attempted, by the Insured
       Organization or by one or more Insured Persons, individually or collectively, in
       their respective capacities as such, including but not limited to any Wrongful
       Employment Practices.



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       “Claim” (as defined by the Policy and modified by the Endorsement) means:

       1)      a written demand for monetary or non-monetary relief;
       2)      a civil proceeding commenced by the service of a complaint or similar
       pleading;
       3)      a criminal proceeding commenced by a return of an indictment; or
       4)      a formal administrative or regulatory proceeding commenced by the
       filing of a notice of charges, formal investigative order or similar document,
       against an Insured for a Wrongful Act, including an appeal therefrom.

       And, finally, the Policy defines “Loss” as:

       the total amount . . . which any Insured becomes legally obligated to pay as the
       result of all Claims first made against any Insured during the Policy Period for
       Wrongful Acts including, but limited to, damages (including punitive or
       exemplary damages where insurable under applicable law), judgments,
       settlements and Defense Costs . . . .

       b. Facts

       The relevant facts are not in dispute, and the parties agreed at the district court level that

this matter was ripe for resolution through summary judgment proceedings.

       Culbreath functions as a homeowners’ association. In October 2008, Culbreath filed two

separate lawsuits in Florida’s Thirteenth Judicial Circuit Court against property owners, Phyllis

Kirkwood and Nancy and Richard Lewis, alleging violations of Culbreath’s bylaws. Culbreath

initiated both lawsuits pursuant to section 720.305, Florida Statutes, which contains a “prevailing

party” attorney’s fee provision.1 Culbreath was unsuccessful in each of the lawsuits, which

resulted in fee judgments against Culbreath for the amount of fees incurred by the homeowners

in defending the lawsuits. Pursuant to the Policy, Culbreath sought coverage for its liability for

1
  Chapter 720 of Florida Statutes governs actions at law and/or in equity to redress alleged
failures or refusals to comply with the provisions of Chapter 720 or the governing documents of
the community, whether the action is brought by the association or by any member against those
listed in section 720.305(1)(a)-(d). That section further provides that “[t]he prevailing party in
any such litigation is entitled to recover reasonable attorney's fees and costs.” Fla. Stat. §
720.305(1).


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the fee judgments, which Travelers denied.



II.       STANDARD OF REVIEW

          “This Court reviews the granting of summary judgment de novo, applying the same legal

standards which bound the district court.” Whatley v. CNA Ins. Companies, 

,

1313 (11th Cir. 1999). Because federal jurisdiction over this matter is based on diversity, Florida

law governs the determination of the issues on appeal. Davis v. National Medical Enterprises,

Inc., 

, 1319 n. 6 (11th Cir. 2001). In insurance coverage cases under Florida law,

courts look at the insurance policy “as a whole and give every provision its full meaning and

operative effect.” Hyman v. Nationwide Mut. Fire Ins. Co., 

, 1186 (11th Cir.

2002) (citing Dahl–Eimers v. Mutual of Omaha Life Ins. Co., 

, 1381 (11th Cir.

1993) and Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 

, 941 (Fla.

1979)).

III.      DISCUSSION

          Appellants are Culbreath, Orline M. Sidman, and Florida Policyholders, LLC.2 For

purposes of this appeal, the appellants’ positions are in alignment; therefore, for ease of

discussion, we will hereinafter refer only to Culbreath as representative of all appellants.

          In Florida, insurance contracts are construed in accordance with the plain language of the

policies as bargained for by the parties. Auto-Owners Ins. Co. v. Anderson, 

, 34

2
  Sidman is the personal representative of the estate of Phyllis Kirkwood. Florida Policyholders,
LLC was formed by Kirkwood’s former lawyers, two principals of the law firm Buell & Elligett,
P.A., who represented Kirkwood in the lawsuit brought against Kirkwood by Culbreath. Once
the Kirkwood fee judgment was issued against Culbreath, Culbreath assigned its rights against
Travelers to Kirkwood and her lawyers, Buell & Elligett, P.A. The lawyers, in turn, assigned
their rights against Travelers to Florida Policyholders, LLC.


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(Fla. 2000). It is undisputed that the Policy at issue was broadly drafted, specifically in its

definitions of the terms “wrongful act” and “loss.” Indeed, counsel for Travelers specifically

conceded at oral argument that the definition of “wrongful act” was broadly drafted. Culbreath

contends that the underlying suits filed by Culbreath were wrongful acts committed by

Culbreath, the insured; those wrongful acts led to the homeowners’ claims for attorneys’ fees

and costs against the insured; and those claims led to losses - the fee and cost judgments - which

should be covered under the plain language of the Policy. Travelers’ representative Melissa

Morin admitted that the lawsuits brought by Culbreath against the homeowners were “wrongful

acts” under the Policy. Although Travelers likely never intended to provide the type of coverage

sought by Culbreath, Culbreath is correct that both the plain language of the Policy and

Travelers’ admissions require that conclusion.

       In this case, the loss at issue arose from the homeowners’ liability for the attorneys’ fees

incurred in defending the unsuccessful lawsuits brought by Culbreath. The language of the

Policy provides liability coverage “on behalf of the Insureds Loss . . . which is incurred by the

Insureds as the result of any Claim first made against the Insureds during the Policy Period . . .

for a Wrongful Act.” A wrongful act is defined by the Policy as “any error, misstatement,

misleading statement, act, omission, neglect, or breach of duty” committed by any insured party.

The plain language of the Policy was drafted broadly, thereby allowing each of the instant

lawsuits to qualify as “any error . . . or act” of the insured. As mentioned, Travelers’

representative Melissa Morin admitted that the lawsuits brought by Culbreath were, in fact,

“wrongful acts” under the Policy. Once Travelers conceded this point, it could no longer form a

plausible argument that the fee judgments at issue were not covered under the Policy. A claim,




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as defined by the Policy and endorsement thereto, includes “a written demand for monetary or

non-monetary relief . . . against an Insured for a Wrongful Act[.]” Clearly, a plain reading of the

Policy mandates inclusion of the fee judgments as written demands for monetary relief. Again,

Morin stipulated that such claims had been made against Culbreath as a result of the lawsuits

initiated by Culbreath. And, finally, the Policy’s broad definition of loss is satisfied by

Culbreath’s legal obligation to pay the homeowners’ attorneys’ fees as a result of Culbreath’s

decision to pursue lawsuits against the homeowners under section 720.305. Accordingly, based

on Travelers’ admission that Culbreath’s lawsuits against the homeowners qualified as wrongful

acts under the Policy, we find that the losses attributable thereto must be covered under the

Policy.

IV.       CONCLUSION

          For the foregoing reasons, we REVERSE the district court’s judgment in favor of

Travelers and REMAND for further proceedings consistent with this opinion.




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