Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n
| Decision Date | 28 July 1997 |
| Docket Number | Nos. 95-4731,95-4797,NON-MARINE,N-MARINE,s. 95-4731 |
| Citation | 117 F.3d 1328 |
| Parties | , 11 Fla. L. Weekly Fed. C 223 GOLDEN DOOR JEWELRY CREATIONS, INC., a corporation, and Suisse Gold Assayer & Refinery, Inc., a corporation, Plaintiffs, Leach & Garner Company, Westway Metals Corp., Plaintiffs-Intervenors-Appellees, Capital Bank and Stern Metals, Inc., Plaintiffs-Intervenors, v. LLOYDS UNDERWRITERSASSOCIATION, an association licensed to underwrite insurance in the State of Florida, and Peter Frederick Wright, Defendants-Appellants, Sanford Credini and Lawrence Systems, Inc., Defendants-Intervenors. LEACH & GARNER COMPANY, Plaintiff-Appellee, v. Peter Frederick WRIGHT, Defendant-Appellant. GOLDEN DOOR JEWELRY CREATIONS, INC., a corporation, and Suisse Gold Assayer & Refinery, Inc., a corporation, Plaintiffs, Leach & Garner Company, Westway Metals Corp., Plaintiffs-Intervenors-Appellants, Capital Bank and Stern Metals, Inc., Plaintiffs-Intervenors, v. LLOYDS UNDERWRITERSASSOCIATION, an association licensed to underwrite insurance in the State of Florida, and Peter Frederick Wright, Defendants-Appellees, Sanford Credini and Lawrence Systems, Inc., Defendants-Intervenors. LEACH & GARNER COMPANY, Plaintiff-Appellant, v. Peter Frederick WRIGHT, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., Henry Burnett, Miami, FL, Robert F. Kohlman, Sam Daniels, A.J. Barranco & Associates, P.A., Miami, FL, for Defendants-Appellants.
Ronald B. Hamilton, Cozen & O'Connor, Philadelphia, PA, for Leach & Garner Company.
Joseph L. Rebak, Tew & Beasley, Miami, FL, for Westway Metals Corp.
Henry Burnett, Robert F. Kohlman, Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., Miami, FL, Sam Daniels, A.J. Barranco & Associates P.A., Miami, FL, for Defendants-Appellees.
Appeals from the United States District Court for the Southern District of Florida.
Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and RONEY, Senior Circuit Judge.
In this appeal involving a claim for breach of an insurance contract, we affirm the district court's (1) decision granting summary judgment against the insurer, (2) damage award and (3) denial of supersedeas bond premiums. We reverse and remand for the district court to recalculate the prejudgment interest from the date that the payment became due rather than the date of loss.
Sanford Credini and his wife each owned fifty percent of two companies, Golden Door Jewelry Creations, Inc. (Golden Door) and Suisse Gold Assayer and Refinery, Inc. (Suisse Gold). Credini functioned as the president and "principal operating officer" of both corporations. In addition to common ownership, the businesses shared common office space in Miami, Florida. Suisse Gold purchased scrap gold for refinement and resale. Golden Door purchased refined gold and precious metals, from which it created jewelry and other objects for resale. The businesses often acted in tandem, with Suisse Gold selling most of its output to Golden Door.
Both companies obtained their respective gold supplies from third parties. Leach and Garner Company (Leach) consigned refined gold to Golden Door pursuant to a consignment agreement. Westway Metals Corp. (Westway) entered into a similar consignment agreement for scrap gold with Suisse Gold. Golden Door retained a warehouser, Lawrence Systems (Lawrence), to store the consigned materials. Lawrence stored, and retained in its possession, Leach's and Westway's gold stock in two separate safes on the premises of Golden Door and Suisse Gold, but one representative of Golden Door and Suisse Gold, respectively, also retained access to the gold.
In 1981, Golden Door and Suisse Gold purchased a "jeweller's block policy" from Lloyds Underwriters Non-Marine Association and its representative underwriter, Peter Wright (collectively, Lloyds). The policy insured all jewelry products owned by, delivered to or entrusted to Golden Door or Suisse Gold against all risks, including theft, subject to several exclusions. The policy specifically named the insured as "Sanford [Cr]edin, doing business as Golden Door ... and/or Suisse Gold." Over the next several years, Golden Door and Suisse Gold renewed and amended the policy, adding excess policies and endorsements. These amendments increased the coverage for each company to $6,000,000. One endorsement added Westway as a "loss payee" for coverage afforded to Suisse Gold. Leach was not added as a loss payee.
On February 10, 1983, an unknown party, later identified as Credini, stole $9,000,000 of goods from Golden Door, Suisse Gold and the safes containing Leach's and Westway's gold. Attempting to conceal his theft, Credini initially filed a claim with Lloyds. Upon investigating the claim, however, Lloyds refused payment because it suspected that Credini had been involved in the loss. In 1988, following a flight from jurisdiction and extradition back to the United States, a grand jury indicted Credini, and he pleaded guilty to conspiracy in the United States District Court for the Southern District of Florida.
On May 5, 1983 (prior to Credini's guilty plea), Golden Door and Suisse Gold filed an action for breach of contract against Lloyds in the Circuit Court for the Eleventh Judicial Circuit of Dade County, Florida, seeking to recover under the policy. On June 8, 1983, Lloyds filed a petition for removal to the United States District Court for the Southern District of Florida. Lloyds's answer defended the action on the ground that the loss resulted from the dishonest act of an assured or its employee, an exception to the policy enumerated in Paragraph 5(A). Lloyds also asserted that the assureds' failure to maintain a detailed and itemized list of property precluded coverage pursuant to Paragraph 8(A) of the policy.
On March 13, 1984, Leach intervened as a plaintiff and asserted its right to recover as a consignor-beneficiary. On December 11 On August 15, 1985, Lloyds filed its first motion for summary judgment. Following discovery, Lloyds renewed its motion and the district court issued its first published disposition in this case. The court granted Lloyds's motion for summary judgment in part, barring Credini, Golden Door and Suisse Gold from recovery for violating Paragraph 8(A). Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters, 748 F.Supp. 1529, 1534-35 (S.D.Fla.1990) (Golden Door I). The court denied, however, Lloyds's motions as against Leach and Westway (hereinafter, the Consignors) and granted the Consignors' motions for summary judgment. Golden Door I, 748 F.Supp. at 1536-46. The court held that the Consignors had a direct right of recovery under any of three theories: (1) as third-party beneficiaries; (2) under the legal liability of Golden Door and Suisse Gold (hereinafter, the Insureds); or (3) pursuant to a reformation of the contract giving the Consignors status as loss payees and/or named co-insureds. Golden Door I, 748 F.Supp. at 1537. In its reformation of the policy, the court also rendered the policy defenses inapplicable to the Consignors, thus denying Lloyds's argument of policy defenses and coverage exclusions. Golden Door I, 748 F.Supp. at 1543-46.
1984, Westway also intervened as a plaintiff. 1 Both Leach and Westway filed separate actions against Lloyds on the same grounds. The district court consolidated these actions
Upon Lloyds's motion for reconsideration, the court reaffirmed its holding that the Consignors "entrusted" the goods to the Insureds as required under the policy and that Credini's dishonesty did not preclude the Consignors' ability to recover. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters, 758 F.Supp. 708, 711-15 (S.D.Fla.1991) (Golden Door II). The court also awarded damages to the Consignors and prejudgment interest from the date of loss. Golden Door II, 758 F.Supp. at 721-22. Finally, the district court adopted the recommendation of the Special Master not to strike Lloyds's pleadings despite Lloyds's payments to fact witnesses. Golden Door II, 758 F.Supp. at 723.
On appeal, this court vacated the district court's decision and remanded for further proceedings. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n, 8 F.3d 760 (11th Cir.1993) (Golden Door III). This court first rejected Lloyds's argument that the policy did not include coverage for the legal liability of the Insureds. Golden Door III, 8 F.3d at 765. The panel reversed the district court's reformation of the contract, however, holding that the facts did not support reformation under Florida law and that the Consignors' interest in recovery was subject to the policy's conditions and exclusions. Golden Door III, 8 F.3d at 766-68. We remanded for the district court to determine whether Credini's thievery breached the policy exclusions, thus precluding coverage for all parties under the policy. Golden Door III, 8 F.3d at 768. Finally, this court also declined to address Lloyds's payments to witnesses because the district court had not sufficiently addressed the merits of the claim. Golden Door III, 8 F.3d at 768-69. On August 22, 1994, this court issued a corrected Judgment Mandate awarding Lloyds "costs on appeal to be taxed by the Clerk of this court."
On remand, the district court reaffirmed its prior decisions, albeit on different grounds. The court first adopted in part, and overruled in part, the opinion of the Special Master regarding Lloyds's payments to witnesses. Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n, 865 F.Supp. 1516 (S.D.Fla.1994) (Golden Door IV). The court rejected the Consignors' argument that the payments made to fact witnesses violated 18 U.S.C. § 201(c)(2). Golden Door IV, 865 F.Supp. at 1523-24. The court determined, however, that the payments were unethical and in...
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