WILLIAM S. DUFFEY, Jr., District Judge.
This matter is before the Court on Defendant Zurich American Insurance Company and Defendant American Guarantee and Liability Insurance Company's (collectively, "Zurich") Motion for Summary Judgment [172], Plaintiff Jonathan D. Rosen's ("Rosen") Motion for Partial Summary Judgment [176], Zurich's Motion for an Oral Hearing on its Motion for Summary Judgment [175], Zurich's Motion and Amended Motion for Leave to File a Surreply [214, 215], Rosen's Motion to Exclude Testimony of Stephen Darr [169], and Rosen's Motion to Exclude Testimony of Marshall Reavis, III, Ph.D. [170].
This lawsuit arises from a Settlement and Release Agreement (the "Settlement Agreement") that resolved an earlier lawsuit between Rosen and his former insurer, Zurich. The Settlement Agreement provides that "the terms of this Release and the terms of the settlement of this claim shall not be used to the detriment of the parties, shall remain confidential, and shall not be disclosed to any person not a party or privy to this settlement except as may be required by law." Rosen asserts a scattershot of claims against Zurich including that Zurich breached the Settlement
During the periods relevant to this lawsuit, Rosen was the CEO and chairman of Entaire Global Companies, Inc. ("Entaire"), as well as a board member for several Entaire subsidiaries. (Rosen I Dep. 10:2-12:10). Entaire provides retirement programs to business professionals and executives. (Id.). Rosen was also the principal of Wealth Builders Foundation for Economic Planning ("Wealth Builders"), a corporation that provides personal financial consulting services. (Id.).
In 2001, Rosen entered into an agency contract with Protective Life Insurance Company ("Protective Life Insurance"),
Between 2002 and 2008, Rosen purchased E & O Insurance through a program that Protective Life Insurance sponsored for its agents (the "Protective E & O Program" or "Program"). (DSMF ¶¶ 2, 35; RDSMF ¶ 2). The Protective E & O Program was administered by Insurance Specialties Services, Inc. ("ISSI"),
When participants joined the Program, ISSI issued a certificate of insurance that Zurich had approved, but it was not ISSI's practice to send the actual insurance policy. (Pl.'s Statement Undisputed Material Facts ("PSMF") [176-2] ¶¶ 9-11; Defs.' Resp. Pl.'s Statement Undisputed Material Facts ("RPSMF") [188-1] ¶ 10). Agents were eligible for coverage under the Protective E & O Program only if they maintained an active agency contract with Protective Life Insurance. (DSMF ¶ 32; RDSMF ¶ 32). In the certificates of insurance issued for policy years 2002-2003 through 2006-2007, "Covered Agents"
In July 2006, Loretta Griffin sued Rosen and several others, alleging that she was damaged by a financial product she purchased through Entaire (the "Griffin Action"). (DSMF ¶ 4; RDSMF ¶ 4). Zurich, under a reservation of rights, provided indemnity and defense for Rosen and the other defendants under the Protective E & O Program and similar programs, and allowed Rosen to select a law firm to represent him individually. (DSMF ¶ 5; RDSMF ¶ 5). Zurich did not, however, timely pay Rosen's defense firm, which Rosen alleges caused his defense counsel to cease providing defense services and to threaten to withdraw as Rosen's counsel. (DSMF ¶ 7; RDSMF ¶ 7; Pl.'s Resp. Mot. Summ. J. 12). The Griffin Action settled in August 2007, with Zurich paying $202,000 in indemnity on Rosen's behalf. (DSMF ¶ 6; RDSMF ¶ 6).
In June 2007, before the Griffin Action settled, Rosen, another defendant in the Griffin Action, and two Entaire entities that were also Griffin defendants filed a lawsuit against Zurich in Georgia state court, alleging that Zurich's failure to timely pay defense legal fees in the Griffin Action was done in bad faith (the "Bad Faith Action"). (Pl.'s Resp. Mot. Summ. J. Ex. X). Zurich failed to answer Rosen's complaint in the Bad Faith Action and was found by the trial court to be in default. (Rule Nisi and Notice of Bench Trial on Plaintiffs' Damages, Pl.'s Resp. Mot. Summ. J. Ex. M). A bench trial on the issue of damages was scheduled for March 25, 2008. (Id.).
On December 13, 2007, Rosen, Rosen's counsel, Entaire's corporate counsel, and Zurich's counsel met to discuss settling the Bad Faith Action. (DSMF ¶ 12; RDSMF ¶ 12). According to declarations from Rosen, Rosen's counsel, and Entaire's corporate counsel, Rosen stated at the meeting that he would only settle the Bad Faith Action if Zurich agreed not to use any facts relating to the Griffin Action or Bad Faith Action to Rosen's detriment. (Rosen Aff. ¶ 19; Veith Aff. ¶ 6; Bahr Aff. ¶ 22).
On December 21, 2007, Zurich's counsel sent the following email to Rosen's counsel:
(Email from Brad Marsh, Dec. 21, 2007, 6:01 PM, Pl.'s Resp. Mot. Summ. J. Ex. N).
On January 21, 2008, Zurich approved the modified draft agreement, which contained the confidentiality and no-detriment provisions added by Rosen's counsel, and the Bad Faith Action was settled for $350,000. (DSMF ¶ 17). The agreement, titled "SETTLEMENT AND RELEASE AGREEMENT," states in relevant part:
(Settlement Agreement, Pl.'s Resp. Mot. Summ. J. Ex. O).
The parties dispute the effective date of the Settlement Agreement. (RDSMF ¶ 17). Rosen contends the Settlement Agreement memorialized the "deal for $350,000 with the other mutual terms" that Zurich accepted on December 21, 2007. (Id.). Zurich argues that on December 21, 2007, the parties only agreed to the settlement amount, that Rosen's counsel added the confidentiality and no-detriment provisions to the draft agreement during later negotiations, and that Zurich did not agree to those additional provisions until it accepted the finalized agreement on January 21, 2008. (Defs.' Mot. Summ. J. 14-15).
On October 2, 2007, representatives from Protective Life Insurance, ISSI, and Zurich met to discuss the premium for the Protective E & O Program for the February 2008 to February 2009 period. (DSMF ¶ 20; RDSMF ¶ 20). At the meeting, Zurich presented a "loss run," which reflects all the losses incurred by the Program over a particular period (the "October 2007 Loss Run"). (DSMF ¶ 21; RDSMF ¶ 21). The October 2007 Loss Run included approximately $900,000 in defense and indemnity costs that Zurich attributed to Rosen for the Griffin Action. (Smith I Dep. 322:6-:18). None of the attendees of the meeting recall discussing Rosen or the Griffin Action during the October meeting, and Zurich indicated at that time that the premiums for the February 2008 to February 2009 period would not substantially change. (DSMF ¶ 21; RDSMF ¶ 21; see also Smith I Dep. 321:20-322:4).
Smith told Paul Eder ("Eder") of Protective Life Insurance about the proposed premium increase and relayed Zurich's inquiry about the importance of Rosen to Protective Life Insurance's business. (Smith IV Dep. 162:12-163:11). As a result of the proposed premium increases and the inquiry about Rosen, Protective Life Insurance examined Rosen's past performance and found that he had not produced any business for Protective Life Insurance in the past six years. (DSMF ¶ 26; RDSMF ¶ 26). On January 4, 2008, Eder informed Smith of ISSI that Protective Life Insurance was terminating Rosen's contract. (DSMF ¶ 29).
The open enrollment period for the Protective E & O Program's February 2008 to February 2009 term began, approximately, in January 2008. (DSMF ¶ 30; RDSMF ¶ 30). On February 26, 2008, ISSI sent Plaintiff a second renewal notice for the Program, in which only contracted agents of Protective Life Insurance could participate. (DSMF ¶¶ 30, 32; RDSMF ¶ 30, 32). On February 27, 2008, Protective Life Insurance mailed a letter to Rosen terminating Rosen's agency contract. (DSMF ¶ 33; RDSMF ¶ 33). The letter stated that the termination was effective February 8, 2008. (DSMF ¶ 34). According to the terms of Rosen's agency contract with Protective Life Insurance, the termination of the contract was effective only upon mailing of the termination notice. (Id.). Zurich asserts that Rosen was eligible to renew his coverage under the Protective E & O Program when ISSI sent the renewal notice on February 26, 2007, because Protective Life Insurance did not effectively terminate Rosen until it mailed the termination notice on February 27, 2007. (Id.).
Rosen completed and returned the Protective E & O Program renewal notice, and ISSI processed Rosen's premium payment on March 4, 2008. (DSMF ¶ 36; RDSMF ¶ 36). After Rosen received his termination notice from Protective Life Insurance, he contacted ISSI and on March 26, 2008, Rosen received a refund of the premium payment he made. (DSMF ¶¶ 38-39; RDSMF ¶¶ 38-39). Rosen contends that ISSI was on notice that Protective Life Insurance had terminated Rosen's agency contract, and that ISSI knew that its renewal notice falsely stated that
After Rosen was terminated by Protective Life Insurance and no longer eligible for the Protective E & O Program, he sought alternative E & O Insurance through a similar program sponsored by Old Mutual (the "Old Mutual E & O Program"), and underwritten by Zurich. (DSMF ¶¶ 40-41; RDSMF ¶¶ 40-41). On March 27, 2008, Zurich denied Rosen's application for coverage under the Old Mutual E & O Program. (DSMF ¶ 42; RDSMF ¶ 42). Zurich cited several reasons for its decision to decline coverage, but a significant factor was that Rosen had sued Zurich for bad faith. (DSMF ¶¶ 43-44). Rasool stated at the time that, "[i]n light of the fact that we had problems with Mr. Rosen while he was enrolled in the Protective Life Agents' E & O Program, we are not inclined to permit him to enroll in the [Old Mutual E & O Program]." (Email from Rasool dated Mar. 19, 2008, 3:16 PM, Pl.'s Resp. Mot. Summ. J. Ex. U). Rasool also testified that an individual's past bad faith suit against Zurich would be a consideration in the decision whether to insure that individual, and that Zurich "tend[s] to shy away from people who appear to be litigious." (Rasool Dep. 118:1-119:4).
After Zurich declined his application, Rosen searched for alternative E & O Insurance coverage in April and May 2008. (DSMF ¶¶ 45, 47; RDSMF ¶¶ 45, 47). Because he could not obtain coverage personally as he had under the Protective E & O Program, Rosen sought coverage for Wealth Builders, of which he was the principal and primary shareholder. (RDSMF ¶¶ 46). As part of this application process, Rosen asked ISSI to provide him with his loss run from the Protective E & O Program. (DSMF ¶ 49; RDSMF ¶ 49). ISSI in turn requested the loss run from Zurich. (DSMF ¶ 49; RDSMF ¶ 49).
On May 1, 2008, Zurich generated a new loss run (the "May 2008 Loss Run"). (DSMF ¶ 49). Rosen argues he did not seek a new loss run, only a copy of the loss run that Zurich had created in December 2007. (RDSMF ¶ 49). The May 2008 Loss Run included the defense and indemnity costs of the Griffin Action, the $350,000 to settle the Bad Faith Action, and additional attorneys' fees incurred by Zurich in defending the Bad Faith Action. (DSMF ¶ 50; RDSMF ¶ 50). It is unusual and inaccurate to include the costs of a bad faith lawsuit in an E & O Insurance loss run because the bad faith costs are not incurred as part of the coverage responsibilities under the insurance policy. (Smith IV Dep. 151:3-:14; Rasool Dep. 101:7-:20). Zurich contends that the inclusion of the settlement amount from the Bad Faith Action in the May 2008 Loss Run resulted from a coding error. (Koller II Dep. 89:13-:23).
After giving the May 2008 Loss Run to prospective insurers, Rosen later obtained E & O Insurance coverage from a company called XL, at a rate significantly higher than he had previously paid. (DSMF ¶ 52; RDSMF ¶¶ 52, 54). Rosen told the XL representative that a portion of the costs associated with the May 2008 Loss Run
Rosen claims that Zurich's actions constituted criminal conduct. Specifically, Rosen claims that when Zurich induced Rosen to sign the Settlement Agreement, it committed theft, by deception, of his bad faith cause of action. Rosen further claims that Zurich committed theft by deception, mail fraud, and wire fraud when ISSI incorrectly billed Rosen for the February 2008 to February 2009 coverage period. Rosen alleges that these are not isolated criminal acts, but part of a pattern of criminal racketeering activity. In support of the racketeering allegations, Rosen alleges that Zurich and ISSI, with the assistance of Protective Life Insurance, have engaged in a practice of selling illusory insurance coverage. Rosen asserts that Zurich and ISSI have committed numerous instances of theft by taking, theft by deception, mail fraud, and wire fraud, by failing to partially refund premiums to former Protective Life Insurance agents who became ineligible for the Protective E & O Program during a coverage period, and by renewing former Protective Life Insurance agents who were not eligible for insurance coverage.
In January 2009, Protective Life Insurance performed an audit to determine whether any of the participants in the Protective E & O Program failed to qualify as Protective Life Insurance agents and thus were ineligible for the Program. (PSMF ¶ 21; RPSMF ¶ 21). This initial audit suggested that for the February 2008 to February 2009 policy period, 383 individuals who were ineligible for coverage had paid premiums to participate in the Program. (PSMF ¶ 22; RPSMF ¶ 22). In response, ISSI mailed letters to those agents informing them that they were not eligible to renew for the February 2009 to February 2010 policy period. (PSMF ¶ 22; RPSMF ¶ 22). Rosen claims the letter falsely stated that those agents had coverage through the remainder of the coverage period, when their coverage had actually ended upon the termination of their contract with Protective Life Insurance. (PSMF ¶ 23). Rosen alleges that Zurich continues to retain premium payments made by agents for insurance coverage for which they were not eligible, which, according to Rosen, is a criminal act. (PSMF ¶ 28).
Zurich argues that further investigation has revealed that the number of ineligible but enrolled agents was greatly overstated by Protective Life Insurance's January 2009 audit. (Defs.' Statement Additional Material Facts [188-4] ¶¶ 1-2). The original audit simply identified agents associated with terminated agency contracts, but Zurich states this was inaccurate because an agent may hold multiple contracts with Protective Life Insurance or related entities, and termination of one contract does not make the agent ineligible for the Protective E & O Program if other contracts are still active. (Id. ¶¶ 3-4). According to Zurich, further investigation has revealed that the actual number of ineligible agents enrolled in the Program is much smaller than the 2009 audit suggested, although Zurich does not quantify the number of ineligible agents that were enrolled in the
On November 23, 2009, Rosen commenced this lawsuit against Zurich, ISSI, and Protective Life Insurance in the Superior Court of Gwinnett County, Georgia. On December 23, 2009, the defendants removed the case to this Court. On January 4, 2010, Rosen filed his Amended Complaint, asserting ten counts: (1) Fraud in the inducement to enter into the Settlement Agreement; (2) Fraud in the inducement to renew Rosen's 2008-2009 enrollment in the Protective E & O Program; (3) Fraud in the creation and distribution of the May 2008 Loss Run that included costs associated with the Griffin Action and Bad Faith Action; (4) Violations of Georgia's RICO Act; (5) Conspiracy to violate Georgia's RICO Act; (6) Breach of the Settlement Agreement; (7) Negligent administration of the Protective E & O Life Insurance Program; (8) Negligence per se; (9) Attorneys' fees under O.C.G.A. § 13-6-11; and (10) Punitive damages.
On May 20, 2010, the Court granted Protective Life Insurance's Motion to Dismiss. On November 16, 2010, the parties stipulated to dismiss ISSI from the case and to dismiss the negligence and negligence per se claims against Zurich. The remaining counts against Zurich are pending, and Zurich has moved for summary judgment on the remaining counts. Rosen has moved for partial summary judgment on the pattern element of his Georgia RICO Act claim. Rosen has also moved to strike the testimony of two of Zurich's expert witnesses. Because the motions to strike are not related to evidence under consideration in the motions for summary judgment, the Court first considers the motions for summary judgment.
Zurich moves for summary judgment on all of Rosen's remaining claims. Rosen moves for partial summary judgment on the "pattern of racketeering activity" element of his Georgia RICO Act claim.
A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Parties "asserting that a fact cannot be or is genuinely disputed must support that assertion by. . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1).
The party seeking summary judgment bears the burden of demonstrating the
The Court must view all evidence in the light most favorable to the party opposing the motion and must draw all inferences in favor of the non-movant, but only "to the extent supportable by the record." Garczynski v. Bradshaw, 573 F.3d 1158, 1165 (11th Cir.2009) (quoting Scott v. Harris, 550 U.S. 372, 381 n.8, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007)) (emphasis in original). "[C]redibility determinations, the weighing of evidence, and the drawing of inferences from the facts are the function of the jury. . . ." Graham, 193 F.3d at 1282. "If the record presents factual issues, the court must not decide them; it must deny the motion and proceed to trial." Herzog, 193 F.3d at 1246. But, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party," summary judgment for the moving party is proper. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Rosen claims Zurich breached the Settlement Agreement by using the existence of the Griffin Action and Bad Faith Action to his detriment in December 2007 in connection with determining the premiums for the Protective E & O Program, by denying his enrollment into the Old Mutual E & O Program in March 2008 as a result of the Bad Faith Action, and by incorporating into the May 2008 Loss Run the amount for which the Bad Faith Action settled. Zurich requests summary judgment on each of Rosen's breach of contract claims.
The parties dispute the proper interpretation of the Settlement Agreement's confidentiality and "no-detriment" provisions, and they dispute when those provisions became effective. Rosen argues that the Settlement Agreement prohibited disclosing and using to either party's detriment the terms of the Settlement Agreement and the existence of and the facts underlying the Griffin Action and Bad Faith Action. Rosen argues that these contractual terms became effective when Zurich accepted the settlement offer on December 21, 2007, and thus the nondisclosure and no detrimental use provisions were enforceable after December 21, 2007.
Zurich claims that the Settlement Agreement only bars the disclosure and detrimental use of the terms of the Settlement Agreement, not the existence and facts of the underlying lawsuits. Zurich further argues that on December 21, 2007, it only agreed to the settlement amount, and that it did not agree to the disclosure and no-detriment provisions until Rosen's counsel added them to the draft agreement in January 2008.
The construction of a contract is a question of law for the court. Am. Empire Surplus Lines Ins. Co. v. Hathaway
If the language of the contract is unambiguous, "the court simply enforces the contract according to the terms, and looks to the contract alone for the meaning." Am. Empire Surplus Lines Ins. Co., 707 S.E.2d at 371 (quoting RLI Ins. Co., 635 S.E.2d at 171). "Unambiguous language must be afforded its literal meaning and plain ordinary words given their usual significance." Perkins v. M & M Office Holdings, LLC, 303 Ga.App. 770, 695 S.E.2d 82, 84 (Ga.Ct.App.2010). Extrinsic parol evidence as to the surrounding circumstances may only be used to aid in the construction of ambiguous language, and "is not admissible to contradict or construe an unambiguous contract." Coleman v. Arrington Auto Sales & Rentals, 294 Ga.App. 247, 669 S.E.2d 414, 416 (Ga.Ct.App. 2008).
The parties dispute the meaning of the phrase, "the terms of this Release and the terms of the settlement of this claim." The information indicated by that phrase must remain confidential and may not be used by either party to the detriment of the other party. Zurich argues that the two uses of "term" refer plainly and unambiguously to the terms of the Settlement Agreement. Rosen contends that only "terms of this Release" refers to the Settlement Agreement and that the phrase "terms of the settlement of this claim" is ambiguous and refers to extra-contractual, oral agreements made by the parties pursuant to the Settlement Agreement. Rosen further argues that the Settlement Agreement does not contain a merger clause, and that the contract should therefore be interpreted with the aid of affidavits from Rosen, Rosen's attorney, and Entaire's attorney, which state the affiants' beliefs that the word "term" referred to the facts and existence of the Griffin Action and Bad Faith Action. The Court disagrees.
Rosen's argument that the Settlement Agreement does not contain a merger clause is belied by the language of the Settlement Agreement itself. The Settlement Agreement provides that "no promise or inducement or agreement not herein expressed has been made by the Parties and that this Release contains the entire agreement between the Parties."
The language "terms of this Release and terms of the settlement of this claim" also is unambiguous. The word "term" refers to "provisions that determine the nature and scope of an agreement." Merriam-Webster's Collegiate Dictionary 1289 (11th ed. 2003) (third definition); see also Black's Law Dictionary (9th ed. 2009) (defining "term" as "[a] contractual stipulation"). Construing the language based in its "plain, ordinary, and popular sense," Nesbitt v. Wilde, 306 Ga.App. 812, 703 S.E.2d 389, 391 (Ga.Ct.App.2010), the language "the terms of this Release and the terms of the settlement of this claim" unambiguously refers to the contractual provisions relating the scope and nature of the Settlement Agreement, which are contained in the Agreement itself.
The terms are plain and straightforward. In return for a payment by Zurich of $350,000 to Entaire Global Companies, Inc., Entaire Global Financial, Inc., Rosen and William R. Muirhead (collectively called the "Releasors"), the Releasors agreed to release Zurich from any claims or other consequences arising from the "incident(s) underlying or giving rise" to the Griffin Action or the Bad Faith Action. As Rosen agreed: "Releasors have previously presented [Zurich] with a claim for damages arising out of the [Griffin Action and Bad Faith Action] and it is the intent of Releasors to release [Zurich] from any and all claims, damages, loss, whether known or unknown, made or which would have been made, which are directly or indirectly related to the [Griffin Action or Bad Faith Action] . . . or the incidents underlying or giving rise to the lawsuits." (Settlement Agreement 1). The terms of the Settlement Agreement then were the agreed exchange of money to resolve the two cases described or claims relating to them and the agreed exchange of releases.
Rosen argues that the phrases "terms of this Release" and "terms of the settlement of this claim" must, to avoid redundancy, have different meanings and that "terms of the settlement of this claim" necessarily refers to the broader conditions under which the parties settled their dispute. Leaving aside the existence of the merger provision and the plain, unambiguous meaning of the language, Rosen's argument is illogical. The contract at issue is titled "Settlement and Release Agreement." The Settlement Agreement serves two essential functions: to state the terms to settle the existing Bad Faith Action and to "release and forever discharge" both parties from all "consequences of the incident(s) underlying or giving rise" to the two lawsuits identified in the Settlement Agreement and any consequences arising from the lawsuits. The language is therefore only reasonably understood as broadly referring to the nature and scope of the agreement to settle the identified lawsuits and the agreement to release all other possible claims related to the identified lawsuits. Pursuant to the unambiguous language of the Settlement Agreement and the terms of the merger clause, both of those individual agreements exist entirely and exclusively within the written Settlement
The Court finds based on the terms of the Settlement Agreement that the agreement is not ambiguous and further finds, as a matter of law, that the Settlement Agreement only restricts the disclosure and detrimental use of the contractual terms of the Settlement Agreement. The Settlement Agreement does not prohibit the disclosure or detrimental use of the underlying facts or existence of the Griffin Action and Bad Faith Action. This is the only sensible interpretation of the Settlement Agreement, especially since the lawsuits and the facts and claims asserted in them are a matter of public record. If Rosen wanted to prohibit use or disclosure of the facts upon which the lawsuits were based, he could have requested language to that effect be included in the Settlement Agreement.
It is against this legal backdrop that the Court considers the specific breach of contract instances alleged by Rosen. Rosen first claims that in December 2007, Zurich engaged in conduct that breached the Settlement Agreement's prohibition on either party acting to the other party's detriment. Rosen specifically alleges that Zurich indicated to Protective Life Insurance that Zurich intended to significantly raise the premiums for the Protective E & O Program and that Zurich directed ISSI to ask Protective Life Insurance whether Rosen was an important agent. This conduct was impermissibly detrimental, Rosen argues, because it caused Protective Life Insurance to terminate Rosen's agency contract in order to secure a smaller premium increase.
Zurich argues it could not have breached the Settlement Agreement because the allegedly improper conduct occurred before it agreed to the no-detriment provision. Because Zurich and Rosen agreed to settle the Bad Faith Action on December 21, 2007, but did not formally agree on the terms in the Settlement Agreement until January 21, 2008, they dispute the effective date of the confidentiality and no-detriment provisions. Zurich argues that on December 21, 2007, it only agreed to the settlement figure, and that it negotiated and agreed upon the confidentiality and no-detriment provisions in January 2008. (DSMF ¶¶ 12-14). On December 21, 2007, however, Zurich's counsel stated that "we have a deal for $350,000 with the other mutual terms we discussed." (Email from Brad Marsh, Dec. 21, 2007, 6:01 PM, Pl.'s Resp. Mot. Summ. J. Ex. N).
There is no evidence that Zurich breached the Settlement Agreement by causing Rosen's termination. Rosen only argues that Zurich caused Protective Life Insurance to terminate his agency contract based on the losses incurred in the Griffin
The only arguable way Zurich could have breached the Settlement Agreement during the premium negotiations would have been if Zurich based the proposed premium increase on the Bad Faith Action settlement amount—a term of the Settlement Agreement. There is, however, no evidence that the amount was disclosed or used to Rosen's detriment. The negotiations between Zurich and Protective Life Insurance were based on the December 2007 Loss Run, which showed increased losses compared to the October 2007 Loss Run. (Smith I Dep. 322:19-323:10). The December 2007 Loss Run revealed that the Protective E & O Insurance Program's losses largely resulted from three substantial claims, of which the Griffin Action was only one and it was not the largest and had not significantly changed from October to December 2007. (Id. at 323:4-:10). The parties agree that the December 2007 Loss Run did not contain the settlement amount of the Bad Faith Action. (DSMF ¶ 23; RDSMF ¶ 23; Smith I Dep. 333:16-336:23). The Court determines that the loss run did not contain any information subject to the confidentiality and no-detriment provision in the agreement reached between the parties.
There simply is no evidence to support that Rosen's termination was based in any way on Zurich's use or disclosure of a term of the Settlement Agreement. Disclosure of facts underlying the publicly filed Griffin or Bad Faith Actions was not a disclosure of the terms of the Settlement Agreement and this did not breach the Settlement Agreement terms. There is no disputed issue of material fact related to Rosen's claim that Zurich breached the contract with respect to Protective Life Insurance's termination of Rosen's agency contract, and the Court grants summary judgment in Zurich's favor on this claimed disclosure.
Rosen next claims that Zurich breached the Settlement Agreement in March 2008, when Zurich refused to allow Rosen to enroll in the Old Mutual E & O Program. The parties do not dispute that the existence of the Bad Faith Action played some role in Zurich's decision to deny Rosen's Old Mutual E & O application. Zurich admits that its decision to decline Rosen's application for the Old Mutual Program was based in part on "the existence of the [Bad Faith] Action
The Settlement Agreement, however, only bars Zurich from using the terms of the Settlement Agreement to Rosen's detriment, not from taking into account the existence of the Bad Faith Action when making future coverage decisions. Rosen has not submitted any evidence showing that Zurich relied on, or in any way used, any term from the Settlement Agreement when it denied Rosen's Old Mutual E & O Program application. Rosen argues only that Zurich relied on the existence of the Bad Faith Action. Consideration of the fact that Rosen filed the Bad Faith Action to determine whether to extend E & O coverage to Rosen in the Old Mutual Program does not, as a matter of law, breach the terms of the Settlement Agreement and Zurich is entitled to summary judgment based on Rosen's claim that Zurich breached the Settlement Agreement in March 2008, by denying coverage to Rosen.
Rosen's next breach of contract claim arises out of the May 2008 Loss Run that Zurich provided to Rosen and that Rosen provided to potential replacement E & O insurance carriers. The parties agree that Zurich included, in the May 2008 Loss Run, the costs of settling and defending the Bad Faith Action. (DSMF ¶¶ 50-51; RDSMF ¶¶ 50-51). Doing so involved using the settlement amount of the Bad Faith Action—a term of the Settlement Agreement—in a way that was detrimental to Rosen, because it substantially raised the reported cost of the claims against Rosen when he was in the Protective E & O Program, in turn possibly increasing the cost of Rosen's replacement E & O Insurance. Zurich does not argue it is entitled to summary judgment because a breach did not occur. Rather, Zurich argues that any damages for this alleged breach are too speculative as a matter of law and thus summary judgment on this breach of contract claim should be granted.
Damages for a breach of contract are those that naturally and usually arise from the breach and which the parties contemplated would occur. Ga.Code Ann. § 13-6-2. "The rule against the recovery of vague, speculative, or uncertain damages relates more especially to the uncertainty as to cause, rather than uncertainty as to the measure or extent of the damages. Mere difficulty at fixing their exact amount, where proximately flowing from the alleged injury, does not constitute a legal obstacle in the way of their allowance." Bollea v. World Championship Wrestling, Inc., 271 Ga.App. 555, 610 S.E.2d 92,
Zurich claims that Rosen cannot prove damages because the representative of XL, from which Rosen ultimately received replacement E & O Insurance, could not say with certainty how much higher Rosen's insurance rates were as a result of the May 2008 Loss Run, which included the cost to settle the Bad Faith Action. Asked by Rosen if a smaller Loss Run would improve Rosen's rates, XL's representative stated, "not by a heck of a lot, really. I mean they would be slightly different but not by a lot." (DSMF ¶ 54). XL's representative said many factors impacted the cost of XL's alternative coverage. (DSMF ¶ 55; RDSMF ¶ 55).
The evidence cited by Zurich supports that the damages arising from Zurich's alleged breach of the Settlement Agreement were not substantial, and that they will be difficult to measure. The question here, however, is not whether the damages are difficult to measure, only whether they reasonably and naturally resulted from the alleged breach. Rosen allegedly sustained damage when Zurich wrongfully used the settlement amount to inflate the reported insurance losses attributable to covering Rosen, which allegedly caused Rosen to pay a higher insurance premium. An increased cost of insurance is the type of harm that reasonably and proximately results from the wrongful disclosure of the settlement terms of a lawsuit involving the same type of insurance. Zurich has not provided evidence that determining the amount of damages would be impossible, rather than merely difficult. Zurich's motion for summary judgment on the breach of contract claim relating to the May 2008 Loss Run must be denied.
Zurich moves for summary judgment on Rosen's claims that Zurich fraudulently induced Rosen to enter into the Settlement Agreement. To assert a claim for fraud under Georgia law, Rosen "must show (i) a false representation or omission of a material fact; (ii) scienter; (iii) intention to induce the party claiming fraud to act or refrain from acting; (iv) justifiable reliance; and (v) damages." TechBios, Inc. v. Champagne, 301 Ga.App. 592, 688 S.E.2d 378, 380 (Ga.Ct.App.2009).
Id. at 380-81 (citations and internal quotation marks omitted).
"Fraudulent intent at the time of contracting can be inferred based on subsequent conduct of the defendant that is unusual, suspicious, or inconsistent with what would be expected from a contracting party who had been acting in good faith." JTH Tax, Inc. v. Flowers, 302 Ga.App. 719, 691 S.E.2d 637, 642 (Ga.Ct.App.2010) (quoting BTL COM Ltd. v. Vachon, 278 Ga.App. 256,
A finding of recklessness may also satisfy the intent element of fraud. "A fraudulent or reckless representation of facts as true when they are not, if intended to deceive, is equivalent to a knowledge of their falsehood even if the party making the representation does not know that such facts are false." Ga.Code Ann. § 51-6-2(a); see also Smiley v. S & J Investments, Inc., 260 Ga.App. 493, 580 S.E.2d 283, 289 (Ga.Ct.App.2003) ("to recklessly represent facts as true to deceive, when it is not known whether or not such facts are true, is fraud as a matter of law"). "[T]here must be some evidence," however, "from which a jury could find that a misrepresentation . . . was recklessly made with the intent of deceiving the opposite party." Perimeter Realty v. GAPI, Inc., 243 Ga.App. 584, 533 S.E.2d 136, 147 (Ga.Ct.App.2000).
Rosen contends that "Zurich, at a minimum, recklessly represented that it would not act to Rosen's detriment." (Pl.'s Resp. Mot. Summ. J. 31).
To show that Zurich entered into the Settlement Agreement without a present intent to perform, Rosen points to conduct by Zurich that Rosen contends is inconsistent with an intent to refrain from using the facts and existence of the Griffin Action and Bad Faith Action to Rosen's detriment. But for the reasons discussed previously in this Order, Rosen's interpretation of the terms of the Settlement Agreement is not factually, or legally, persuasive. Zurich did not fraudulently misrepresent its agreed performances under the Settlement Agreement.
Under the plain terms of the Settlement Agreement, Zurich only potentially
Rosen points to two more bits of evidence to support his claim that Zurich did not intend to fulfill the Settlement Agreement when Zurich entered into it. First, he claims that the Zurich representative who approved and signed the Settlement Agreement directed that the Agreement be placed in Zurich's files, rather than taking affirmative steps to ensure that other Zurich employees complied with the Agreement. This is not conduct that is "unusual, suspicious, or inconsistent with what would be expected from a contracting party who has been acting in good faith," JTH Tax, 691 S.E.2d at 642. Maintaining the Settlement Agreement in a secure place is an appropriate and reasonable way to ensure that its terms are kept confidential. Although the unusual confluence of Rosen's request for his loss run and Zurich's coding error caused the settlement amount to be used in a manner adverse to Rosen's interests, this is not unusual or suspicious conduct, it is not sufficient to create an issue of fact on Zurich's intent to perform under the Settlement Agreement, and a reasonable jury would not find evidence that Zurich intended fraudulently to induce Rosen to enter into the Settlement Agreement.
Rosen next relies on alleged breaches of a Consent Order that he entered into with Zurich in July 2008. (Pl.'s Resp. Mot. Summ. J. Ex. Y ("Consent Order")). The Consent Order enjoined Zurich "from any further dissemination of the [May 2008] Loss Run," enjoined both parties from "casting any slanderous and defamatory aspersions about the other party," and required Zurich to take "all reasonable efforts to retract the Loss Run previously transmitted to any and all third parties." (Consent Order 2). Rosen argues that Zurich breached the Consent Order by failing to remove information about the Griffin Action and Bad Faith Action from Zurich's internal loss run records, and by failing to send a request to ISSI to return or destroy the May 2008 Loss Run. The obligations in the Consent Order are different and broader than those in the Settlement Agreement. Even if Zurich breached the Consent Order, which contained different obligations and was allegedly breached in different ways than those alleged here, such purported breach is not evidence that Zurich lacked intent in December 2007 or January 2008 to perform its obligations under the Settlement Agreement.
Zurich moves for summary judgment on Rosen's claim that ISSI fraudulently induced Rosen to renew his enrollment in the Protective E & O Program for the February 2008 to February 2009 policy period. Rosen specifically claims that ISSI mailed an invoice on February 26, 2008, which told Rosen to "Please pay promptly to avoid a lapse in coverage." (Invoice, Pl.'s Resp. Mot. Summ. J. Ex. R). Rosen contends this statement was fraudulently made because it stated that if Rosen paid his premium, he would receive E & O Insurance coverage and would not have a lapse in coverage. Rosen's position is the statement was fraudulent because the person making it knew Rosen was not eligible for coverage because Protective Life Insurance had terminated his agency contract effective February 8, 2008. While Rosen acknowledges that the statement was made by an ISSI employee, he charges that Zurich is liable for it because even though ISSI is a company separate from Zurich, ISSI is Zurich's agent and under an agency theory of liability, Zurich is liable for ISSI's allegedly false representation. Zurich contends that Rosen has not shown that ISSI's statement was knowingly false or that Rosen suffered any damages from it.
Fraud may be based on a statement that is known to be false and made to deceive or on a statement recklessly representing a fact as true and made to deceive. Smiley, 580 S.E.2d at 289.
It is undisputed that ISSI did not have actual knowledge that Rosen was ineligible for coverage. Eder of Protective Life Insurance told Smith of ISSI that Protective was "terminating" Rosen, but this supports only that Protective Life Insurance intended to end Rosen's agency contract. It does not indicate the contract had been terminated or when it would be terminated. (See Eder II Dep. 95:16-:22; Email from Smith dated Jan. 4, 2008, 12:55 PM, Pl.'s Resp. Mot. Summ. J. Ex. P). The evidence shows that in March 2008—two months after Eder mentioned Rosen's termination and after ISSI solicited and processed Rosen's renewal—Smith and Eder were both unsure of Rosen's status with Protective Life Insurance. Smith asked in March 2008 whether Rosen had been terminated and, if so, when the termination
Rosen alternatively asserts that if ISSI did not know that Rosen had actually been terminated, it was reckless in representing that Rosen would receive coverage in exchange for his premium. (Pl.'s Resp. Mot. Summ. J. 31). The theory is that when ISSI learned that Rosen would be terminated by Protective Life Insurance, ISSI incurred the obligation to remove Rosen from its renewal and billing process. (See id. at 16-17). By not preemptively treating Rosen as a terminated agent, the argument goes, ISSI recklessly stated that Rosen would be eligible for coverage for which he might not have been eligible.
This argument is hollow. It ignores that the single comment made to ISSI that Protective Life Insurance was terminating Rosen did not communicate any information about when termination might occur. Without any way of knowing when Protective Life Insurance would act to terminate Rosen's contract, ISSI could not predict whether it would take days, weeks, or months. Had ISSI refused to extend coverage to Rosen before receiving confirmation whether Rosen's contract had been terminated, it could have exposed itself to additional liability by denying Rosen the opportunity to obtain coverage to which he was entitled. It is also significant that Rosen was one of thousands of agents in the Protective E & O Program. A single suggestion by ISSI's contact at Protective Life Insurance—who himself was unsure in March 2008 whether Rosen's contract had been terminated—that Protective Life Insurance was terminating Rosen, is not sufficient to show that when ISSI mailed the final invoice notice on February 26, 2008, it harbored any doubt it was invoicing for insurance to which Rosen was not entitled.
More fundamentally, Rosen has taken an unreasonable position about what the Invoice actually says. The Invoice's statement that Rosen should pay his premium promptly to avoid a lapse in coverage is a statement only about how to properly comply with ISSI's billing requirements, and to avoid making an untimely payment which could jeopardize his participation in the Protective E & O Program. Rosen has, as he has in this litigation as a whole, taken an aggressive, but unsupported, litigating position that the Invoice made far-reaching promises about Rosen's participation in the Protective E & O Program. This litigation posturing strains credibility. What ISSI sent is simply a form billing invoice. Most people understand an invoice's purpose and the scope of its representations. It is doubtful that Rosen drew the exaggerated conclusions he argues now from the Invoice at the time he received it.
Rosen has also failed to present any evidence that the alleged misrepresentation caused him any damage. Damages are an essential element of a claim for fraud. TechBios, 688 S.E.2d at 380. Rosen has only shown that a charge was temporarily placed on his credit card on March 4, 2008, and then refunded about twenty-two days later—on March 26, 2008. Rosen has not offered any evidence or argument showing how this temporary and brief charge to his credit card damaged him.
To the extent Rosen complains of conduct by ISSI, Rosen seeks to hold Zurich liable under an agency theory. (Pl.'s Resp. Mot. Summ. J. 31). Assuming ISSI was an agent of Zurich, there is nothing to suggest that ISSI had actual authority to enroll ineligible agents in the Protective E & O Program. There also is not any evidence that Zurich ratified ISSI's unauthorized act to bill Rosen: ISSI never even transmitted Rosen's premium payment to Zurich, (Smith Aff. dated Jan. 12, 2011, ¶ 6), and there is no evidence that Zurich even knew the invoice was sent. It certainly did not accept or retain the premium fully knowing all the material facts. Ellis v. Fuller, 282 Ga.App. 307, 638 S.E.2d 433, 436 (Ga.Ct.App.2006).
One could suppose that Rosen intended to claim that Zurich is vicariously liable for ISSI's conduct in sending the premium notice on the theory that ISSI had apparent authority to enroll ineligible agents into the Protective E & O Program. See, e.g., Capital Color Printing, Inc. v. Ahern, 661 S.E.2d 578, 586-87 91 (Ga.App. 101, 661 S.E.2d 578, 586-87 (Ga.Ct.App.2008) (applying doctrine of apparent agency). The supposition is illogical. The consequence of ISSI's apparent agency would be to bind Zurich to contracts that ISSI executed on Zurich's behalf. In that was the case, Rosen received coverage for a short time for which he was ineligible and for which he ultimately did not pay any premium.
There is no question of fact whether ISSI made a false statement of fact that was knowingly or recklessly false, or whether Rosen was damaged by any alleged misrepresentation. Summary judgment is required to be granted in Zurich's favor on Rosen's claim that he was fraudulently induced to renew his enrollment in the Protective E & O Program.
Zurich next moves for summary judgment on Rosen's claim that Zurich's inaccurate inclusion in the May 2008 Loss Run of the costs of the Bad Faith Action constituted fraud. To survive summary judgment, there must be some evidence that creates a question of fact whether Rosen justifiably relied on the May 2008 Loss Run. TechBios, 688 S.E.2d at 380. Rosen does not allege in his Amended Complaint that he relied on the May 2008 Loss Run; he only alleges that unspecified "others" may have relied on it. (Am. Compl. ¶ 250). That is not sufficient to state a claim for fraud. Rosen does not point to any evidence that would allow a reasonable jury to conclude that Rosen relied on the May 2008 Loss Run. Zurich's motion for summary judgment on Rosen's claim that he was defrauded by the May 2008 Loss Run is required to be granted.
Under Georgia's Racketeer Influenced and Corrupt Organizations Act, it is "unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money." Ga.Code Ann. § 16-14-4(a). A "pattern of racketeering activity" means "at least two acts of racketeering activity in furtherance of one or more incidents, schemes, or transactions" that are interrelated. Id. § 16-14-3(8)(A). A "racketeering activity" is the commission, attempt, solicitation of another, or coercing of another to commit a "crime which is chargeable by indictment" under one of forty categories of offenses. Id. § 16-14-3(9)(A)(i)-(xl).
To have standing to bring a civil claim under Georgia's RICO Act, a plaintiff must not only show a pattern of racketeering activity, but also "a direct nexus between at least one of the predicate acts listed under the RICO Act and the injury [the plaintiff] purportedly sustained." Schoenbaum Ltd. Co. v. Lenox Pines, LLC, 262 Ga.App. 457, 585 S.E.2d 643, 655 (Ga.Ct.App.2003) (internal quotation marks omitted). "To establish this nexus, the plaintiff must show that one of the predicate acts directly harmed it, not a third party." Id. To make this showing, Rosen relies on the same conduct underlying his fraud claims.
Rosen alleges that Zurich entered into the Settlement Agreement without a present intent to honor its obligations under the Agreement, that Zurich distributed loss runs that incorrectly included the costs of the Griffin Action and Bad Faith Action, and that ISSI fraudulently induced Rosen to attempt to renew his enrollment in the Protective E & O Program. This conduct, according to Rosen, constituted the crimes of theft by taking, Ga.Code Ann. § 16-8-2, theft by deception, id. § 16-8-3, and mail and wire fraud, 18 U.S.C. §§ 1341, 1343, which are predicate crimes under Georgia's RICO Act that allegedly injured Rosen.
The crimes Rosen accuses Zurich of committing require specific intent to wrongfully deprive another of property. See Brown v. State, 302 Ga.App. 641, 692 S.E.2d 9, ¶ (Ga.Ct.App.2010) (for theft by taking, "[t]he evidence must show that the requisite intent to deprive the owner of the property was present at the time of the taking." (internal quotation marks omitted)); Avery v. Chrysler Motors Corp., 214 Ga.App. 602, 448 S.E.2d 737, 739 (Ga.Ct.App.1994) (unlike civil fraud, theft by deception
The element of intent necessary to support a finding that Zurich committed any of these crimes is at least as rigorous if not more rigorous than the intent necessary to support a finding that Zurich committed civil fraud. See Avery, 448 S.E.2d at 739. Thus, for the same reasons that there are no issues of fact whether Zurich (or ISSI) had the necessary fraudulent intent to support Rosen's claims of fraud, there is no issue of fact whether—and certainly no reasonable juror could believe based on the facts in this case that—Zurich (or ISSI) had the requisite criminal intent necessary for theft by taking, theft by deception, mail fraud, or wire fraud. In the absence of an issue of fact on this required element of the alleged predicate crimes that Rosen claims caused him injury, Rosen does not have standing to bring this claim. Summary judgment is required to be granted in Zurich's favor on Rosen's RICO Act claim. For the same reasons, it is unnecessary to consider Rosen's motion for partial summary judgment on his claim that there is a pattern of racketeering activity. Rosen's motion for partial summary judgment must be denied.
Zurich has moved for summary judgment on Rosen's claim that Zurich and ISSI entered into a conspiracy to violate Georgia's RICO Act. It is unlawful to conspire to violate the substantive provisions of Georgia's RICO Act. Ga.Code Ann. § 16-14-4(c). Defendants may be found liable for violating § 16-14-4(c) if they knowingly and willfully join a conspiracy which itself contains a common plan or purpose to commit two or more predicate acts. S. Intermodal Logistics, Inc. v. D.J. Powers Co., 10 F.Supp.2d 1337, 1360-61 (S.D.Ga.1998). Thus, if Rosen shows that Zurich joined or formed a conspiracy to violate the Georgia RICO Act, Zurich may be found liable for injuries to Rosen caused by co-conspirators in furtherance of the conspiracy. See id. at 1361 ("it does not matter if the defendant himself committed any predicate acts, so long as he knowingly and willfully joins a conspiratorial scheme which contemplates that a co-conspirator will do so"); Pasha v. State, 273 Ga.App. 788, 616 S.E.2d 135, 138 (Ga.Ct.App.2005) (noting that in a conspiracy, conspirators are liable for actions undertaken by co-conspirators).
In support of its motion for summary judgment, Zurich argues there is not any evidence that Zurich knowingly entered into an agreement with ISSI or Protective Life Insurance to commit any of the predicate RICO acts that Rosen claims support his RICO claim. (Defs.' Mot. Summ. J. 30-31). Rosen's claim relies entirely
Rosen also says that he and "the other participants in the [Protective E & O Insurance] Program . . . were never informed that they were or were not members of [the Purchasing Group]." (Id. at 4). Rosen argues that ISSI did not communicate with Rosen about whether Rosen was a member of the Purchasing Group, and Rosen apparently did not receive any communication respecting the existence or activities of the Purchasing Group. (Id. at 6-7). While Rosen points to allegedly false statements made to state insurance regulators and alleged regulatory improprieties, to support the formation of an alleged conspiracy, he has not shown that any acts in furtherance of this alleged conspiracy injured him in any cognizable manner. To avoid summary judgment, Rosen must offer facts showing some act in furtherance of the conspiracy that caused him harm. Rosen has not done so and summary judgment is required to be granted in Zurich's favor on Rosen's claim of a civil conspiracy to violate Georgia's RICO Act.
Zurich moves for summary judgment on Rosen's claims for punitive damages. Punitive damages are not available for breach of contract claims. Ga.Code Ann. § 13-6-10; Paul Dean Corp. v. Kilgore, 252 Ga.App. 587, 556 S.E.2d 228, 234 (Ga.Ct.App.2001) ("It is axiomatic that punitive damages are not recoverable for breach of contract, even if the breaching party acted in bad faith. . . . If, however, there is evidence of fraud, punitive damages can be awarded, as fraud constitutes tortious conduct."). The exclusion of punitive damages for breach of contract claims applies even where the contract is a settlement agreement. Id. (finding that the "breach of the settlement agreement . . . [was] an insufficient basis to sustain an award of punitive damages").
Rosen's only remaining substantive claim is that Zurich breached the Settlement Agreement when Zurich included in the May 2008 Loss Run the settlement amount term from the Settlement Agreement. The Court has granted summary judgment against Rosen on his claim that Zurich's dissemination of the May 2008 Loss Run was fraudulent. Because Rosen's breach of contract claim cannot as a matter of law support an award of punitive damages, the Court is required to grant summary judgment in Zurich's favor on Rosen's punitive damages claim.
Zurich also moves for summary judgment on Rosen's claim for attorneys' fees. Georgia law authorizes an award of attorneys' fees "where the defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense." Ga.Code Ann. § 13-6-11. "In contract actions `bad
On a motion for summary judgment, the movant bears the initial burden of demonstrating the absence of a genuine dispute as to any material fact. Zurich has not argued that the evidence is insufficient as a matter of law to support Rosen's claim for attorneys' fees, only that Zurich is entitled to summary judgment on the attorneys' fees claim because it is entitled to summary judgment on each of Rosen's substantive claims. This argument fails because Zurich is not entitled to summary judgment on Rosen's claim that Zurich breached the Settlement Agreement in May 2008. Although some evidence suggests Zurich's purported breach of the Settlement Agreement resulted from an inadvertent coding error rather than a self-interested or sinister motive, (Koller II Dep. 89:13-:23), Zurich has not demonstrated the absence of a disputed material fact on Rosen's attorneys' fees claim. Rosen therefore has no corresponding burden to demonstrate specific facts supporting his claim for attorneys' fees. Zurich's request for summary judgment on Rosen's claim for attorneys' fees is required to be denied.
Rosen moves to exclude two of Zurich's expert witnesses: Stephen B. Darr ("Darr") and Marshall W. Reavis, III, Ph.D. ("Dr. Reavis"). Under Federal Rule of Evidence 702, if "scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise." The proponent of the expert testimony "must show that: (1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue." Maiz v. Virani, 253 F.3d 641, 665 (11th Cir.2001) (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) & City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 562 (11th Cir. 1998)).
Zurich retained Darr as a rebuttal witness to Rosen's expert on the issue of
Rosen also seeks to exclude the expert testimony and expert rebuttal testimony of Dr. Reavis. The scope of Dr. Reavis's expert rebuttal testimony is described by his Expert Rebuttal Report [146-1]. The Court notes that the rebuttal testimony relates to ISSI's conduct as administrator of the Protective E & O Insurance Program and other claims that are no longer pending in this matter. There is nothing in the Rebuttal Report that would assist the jury to understand the evidence or to determine a fact in issue for the remaining claims in this action. Because it appears that Zurich will no longer seek to offer the proposed rebuttal testimony by Dr. Reavis, Rosen's motion to exclude Dr. Reavis's rebuttal testimony is denied as moot.
The scope of Dr. Reavis's direct expert testimony is described by his Expert Report [139-1]. Most of the report relates to claims that are no longer pending in this lawsuit. One opinion, however, requires further discussion. Dr. Reavis opines that the "[t]ransmittal of the [May 2008] Loss Run to ISSI and Protective Life was appropriate because of the confidentiality clause in the Producer Agreement with ISSI and because Protective is an insured and entitled to know the loss history. Further, Rosen specifically requested the Loss Run be transmitted to others." (Reavis Expert Report 3). Dr. Reavis states further that loss runs "are generally available within an insurance company for its use and made available to the producer and sponsoring company." (Id. at 4). Dr. Reavis concludes that, "[b]ased on [his] review of the documents provided to [him,] no one directly connected with the Settlement Agreement did violate the terms of the agreement as Rosen alleges." (Id.).
This proposed testimony consists solely of Dr. Reavis's legal conclusion. "An expert may not, however, merely tell the jury what result to reach. A witness also may not testify to the legal implications of conduct; the court must be the jury's only source of law." Montgomery v. Aetna Cas. & Sur. Co., 898 F.2d 1537, 1541 (11th Cir.1990) (internal citation omitted). Once the Court declares the meaning of the unambiguous terms of the Settlement Agreement as a matter of law, the jury must decide what conduct occurred and whether the conduct breached Zurich's obligations of the Settlement Agreement. The proposed testimony seeks to displace the role of the Court by offering Dr. Reavis's opinion on the scope of the obligations described by the unambiguous language of the Settlement Agreement, which is not allowable under the Rules of Evidence.
For the foregoing reasons,
