348 F.3d 1298 (11th Cir. 2003), 02-16511, Cast Steel Products, Inc. v. Admiral Ins. Co.
|Citation:||348 F.3d 1298|
|Party Name:||Cast Steel Products, Inc. v. Admiral Ins. Co.|
|Case Date:||October 28, 2003|
|Court:||United States Courts of Appeals, Court of Appeals for the Eleventh Circuit|
Thomas Corley Smith, Callaway, Braun, Riddle & Hughes, P.C., F. Bradley Hassell, Eubank, Hassell & Associates, PA, Daytona Beach, FL, for Plaintiff-Appellant.
Mitchel Chusid, Ritter & Chusid, Patrick Patrissi, English, McCaughan & O'Bryan, P.A., Boca Raton, FL, for Defendant-Appellee.
Appeal from the United States District Court for the Middle District of Florida.
Before BLACK and FAY, Circuit Judges, and JORDAN [*], District Judge.
FAY, Circuit Judge:
Cast Steel Products, Inc. ("Cast Steel") appeals an adverse summary judgment granted to Admiral Insurance Company ("Admiral") on Cast Steel's action for a declaration that either (or both) of its 1999 and 2000 "claims-made" professional liability policies with Admiral covered a defective product claim that accrued at the conclusion of the 1999 policy period but was not reported until the start of the 2000 policy period. The district court found that neither policy provided coverage for the claim because the claim had not both accrued and been reported to Admiral during the same policy period. Cast Steel argues on appeal that the 1999 Professional Liability Policy ("99 Policy") is ambiguous with respect to coverage of the 1999 claim upon renewal of the 99 Policy in 2000. Specifically, Cast Steel contends that because the 99 Policy automatically extends the claims reporting period upon cancellation or non-renewal of the policy, but is silent as to whether renewal of the policy would provide the same reporting extension, an unresolved ambiguity exists in the policy that precluded the district court from granting summary judgment.
We agree that the 99 Policy is ambiguous. We further find that, because under Florida law an ambiguity in an insurance policy must be construed in favor of the insured so as not to deny coverage, summary judgment should have been granted to Cast Steel. Swire Pacific Holdings, Inc. v. Zurich Ins., Co., 845 So.2d 161, 165 (Fla.2003). Accordingly, we REVERSE the district court's order granting summary judgment in Admiral's favor, and REMAND to the district court with instruction to enter summary judgment in Cast Steel's favor as to the 99 Policy.
Cast Steel is a Florida corporation in the business of supplying castings and components to the mining and waste energy industries. In early 1999, it purchased professional liability insurance from Admiral, a surplus lines insurer headquartered in Delaware, through Admiral's designated surplus lines broker in the state of Florida, Gary Markel. 1 The 99 Policy had a retroactive effective date of January 6, 1999 and an expiration date of January 6, 2000, at 12:01 a.m. Cast Steel subsequently renewed the 99 Policy, and the renewal policy had an effective date of January 6, 2000, and expiration date of January 6, 2001 ("00 Policy"). 2 Both policies, by their terms, were "claims-made" policies, which meant that each policy purported to cover only those claims which had both accrued and were reported to Admiral during the policy period indicated on the face of the policy.
Sometime in early 1999, Cast Steel was awarded a contract to provide 130 pallet cars to Hibbing Taconite ("Hibbing"), an iron ore mine located in Hibbing, Minnesota, for the purchase price of $5.5 million. Cast Steel delivered the cars in June 1999. Soon thereafter, in August 1999, Hibbing reported significant problems with the wheels of the cars, which, after some investigation, Cast Steel determined to be caused by defective design of the bearings. On October 21, 1999, Hibbing prepared an incident report and formally reported its claim to Cast Steel. Cast Steel immediately advised Ayers/Sierra of the Hibbing claim and asked that the proper claim paperwork be prepared. In an unfortunate twist of fate, Ayers/Sierra failed to submit the Hibbing claim to Admiral until January 6, 2000--just hours after the 99 Policy had expired.
On February 10, 2000, Admiral sent Cast Steel a reservation of rights letter and began investigating the Hibbing claim. 3 After four months of investigation by an independent claims adjuster, Admiral sent Cast Steel a letter denying coverage under all policies.
This suit followed on July 25, 2001. Cast Steel originally brought the action in Florida state court, seeking, inter alia, a declaration that at least one of the various policies obligated Admiral to cover the Hibbing claim. Admiral removed the action to the Middle District of Florida on diversity grounds and, in July 2002, Cast Steel moved for summary judgment on the 99 Policy. Admiral's own summary judgment motion followed. On October 24, 2002, the district court entertained oral argument and in November granted summary judgment to Admiral, finding that none of the policies provided coverage to Cast Steel.
Specifically, the district court determined that Cast Steel failed to comply with the 99 Policy's notice requirement when it failed to report the Hibbing claim during the 99 Policy period. As to the 00 Policy, the...
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