Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-Marine Ass'n
| Decision Date | 06 December 1993 |
| Docket Number | 91-5913,Nos. 91-5223,NON-MARINE,N-MARINE,s. 91-5223 |
| Citation | 8 F.3d 760 |
| Parties | GOLDEN DOOR JEWELRY CREATIONS, INC., a corporation and Suisse Gold Assayer & Refinery, Inc., a corporation, Plaintiffs, Leach & Garner Company, Plaintiff-Intervenor-Appellee, Cross-Appellant, Westway Metals Corp., Plaintiff-Intervenor-Appellee, Cross-Appellant, 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, Cross-Appellees, Sanford Credini and Lawrence Systems, Inc., Defendants-Intervenors. LEACH & GARNER COMPANY, Plaintiff-Appellee, Cross-Appellant, v. Peter Frederick WRIGHT, Defendant-Appellant, Cross-Appellee. GOLDEN DOOR JEWELRY CREATIONS, INC., a corporation and Suisse Gold Assayer & Refinery, Inc., a corporation, Plaintiffs, Leach & Garner Company, Plaintiff-Intervenor-Appellee, Westway Metals Corp., Plaintiff-Intervenor-Appellee, 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. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Henry Burnett, Fowler, White, Burnett, Hurley Banick & Strickroot, Sam Daniels, David B. Pakula, Paul, Landy, Beiley & Harper, P.A., Miami, FL, for Peter F. Wright and Lloyds Underwriters.
Timothy J. Armstrong, Coral Gables, FL, for Jewelers Mut. Ins.--amicus curiae.
Ronald B. Hamilton, Cozen & O'Connor, Philadelphia, PA, for Leach & Garner.
Joseph L. Rebak, Tew & Garcia-Pedrosa, Miami, FL, for Westway Metals Corp.
Appeals from the United States District Court for the Southern District of Florida.
Before TJOFLAT, Chief Judge, EDMONDSON, Circuit Judge, and DYER, Senior Circuit Judge.
This case involves a jewelers' block insurance policy issued by defendants-appellants Lloyds Underwriters Non-Marine Association and underwriters Peter Wright, et al. (collectively "Lloyds"). The district court reformed the insurance policy and granted the motions for summary judgment filed by intervenor-plaintiffs (and appellees) Leach & Garner Company ("Leach") and Westway Metals Corporation ("Westway") (collectively, "consignors"). See Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters, 748 F.Supp. 1529 (S.D.Fla.1990) ("Golden Door I "). 1 Lloyds appealed. 2
The most important of the ten issues the parties have raised on appeal is whether the district court erred in its determination that the insurance contract should be reformed. Each of the other issues is either subsumed by the discussion of that issue or rendered moot by our determination of that issue. 3 As we hold that summary judgment in favor of consignors was improper, we vacate the final judgment entered on their behalf and remand the case for further proceedings.
In part I, we delineate the relevant facts supporting this appeal, taking them in the light most favorable to appellants. In part II, we examine the law of reformation in Florida, particularly as it relates to the contract of insurance at issue in this case, and determine that reformation of the contract was improper.
This case was brought first in Florida state court 4 on May 5, 1983, by two Florida companies, Golden Door Jewelry Creations, Inc. ("Golden Door") and Suisse Gold Assayer & Refinery, Inc. ("Suisse Gold"), to collect on a jewelers' block insurance policy issued by their insurer, defendant Lloyds. Golden Door and Suisse Gold alleged in their two-page complaint that, due to a February 10, 1983, armed robbery, they had suffered gold stock losses of $4,271,547.45 and $5,594,770.67, respectively. They asserted that they had complied with all preconditions of the insurance policy but that Lloyds had denied payment. Thus, each claimed damages consisting of their respective losses as well as interest computed from the day of the robbery.
The Parties.
The original plaintiffs, Suisse Gold and Golden Door, were two corporations sharing common offices in a building located in North Miami. The two businesses were maintained as separate entities even though they shared common ownership: Sanford Credini and his wife, Jeni, each owned fifty percent of the stock in each company. Suisse Gold's business largely involved the purchase of scrap gold, which it then refined and sold. Golden Door, on the other hand, purchased refined gold which it then resold along with objects it manufactured from gold.
Intervenor-plaintiff (and appellee) Leach is a Massachusetts corporation that fabricates and distributes gold and other precious metals. Leach consigned gold to Golden Door pursuant to a consignment agreement and alleges that it lost over $1 million of its own gold in the theft; it also claims damages for more than $1.5 million of gold used to secure Golden Door's debts. Leach is not mentioned in any of the insurance policies under which consignors claim coverage in this case.
Intervenor-plaintiff (and appellee) Westway also consigned gold pursuant to a consignment agreement; it, however, consigned its gold to Suisse Gold. Westway alleges that it lost almost $5 million of gold (either its own or that used by Suisse Gold to secure debts) in the theft. Unlike Leach, Westway is designated as a loss payee in two endorsements to the policies.
Lawrence Systems, Inc. ("Lawrence") is also mentioned as a loss payee on a policy endorsement. Lawrence was a field warehousing company hired by Golden Door as a bailee/warehouser.
Defendant Lloyds is an insurer based in the United Kingdom. Defendant Peter Wright, an underwriter for Lloyds, is the leading underwriter on the policies here at issue. He likewise represents the other Lloyds underwriters who are listed, by number, on the policies.
The Insurance Policies.
In the late winter of 1981, Jesse Schwartz (an employee of Suisse Gold and/or Golden Door) ordered, through Suisse Gold and Golden Door's broker, Great Northern Brokerage Corporation, a jewelers' block policy from Lloyds. This first policy, which expired on March 16, 1982, was renewed as policy No. 552/243017600; the policy named the assured to be "Sanford Redin [sic] doing business as Golden Door and/or Maxi and/or Suisse Gold Assayer." Jewelers' block policies such as this one are "all risk" policies, meaning that the jewelry stock of each company, as well as jewelry delivered to or entrusted to the assured by both dealers and non-dealers, was covered against most losses (subject to certain enumerated exclusions).
The policy coverage was modified by two excess policies and various endorsements. The first endorsement, originally applied to the 1981-82 insurance contract and then extended to the renewal policy here at issue, added a Loss Payee Clause that states:
It is hereby understood and agreed that losses, if any, shall be payable to the assured and Chase Manhattan Bank, 1411 Broadway, New York, NY as their interest may appear.
All other terms and conditions remain unchanged.
(This endorsement applied solely to claims made by Golden Door.)
During the spring and summer of 1982, two excess policies were added to the base policy. The first, No. 552/243017700, dated April 13, 1992, added excess coverage on all three companies, Suisse Gold, Maxi, and Golden Door. An endorsement to this excess policy, effective September 13, 1982, increased coverage on Suisse Gold only to $6,000,000; the coverage on Golden Door and Maxi was left unchanged. The second excess policy, No. 552/243030200, increased the coverage on Golden Door to $6,000,000 on June 22, 1982; and on Suisse Gold to $3,000,000 on August 12, 1982, and then to $6,000,000 on September 13, 1982. Provisions in each of the excess coverage policies mandated that the excess coverage was subject to the provisions of the original policy.
With respect to these excess policies, two final endorsement provisions are relevant. The first, numbered 552/243030201 and attached to the second excess policy, is dated July 20, 1982, and states as follows:
It is understood and agreed that losses (if any) collected under this policy shall be payable to Lawrence Systems, Inc., 52 Executive Park, South Atlanta, Georgia, in their capacity as first mortgagee, as interests may appear.
Id., exhibit E. The second provision is included on both the September 13, 1982, endorsement to policy No. 552/243017700 and the August 12, 1982, endorsement to policy No. 552/243030201. The provision states that Westway Metals Corp., 464 Hudson Terrace, Englewood Cliffs, New Jersey 07632, is included as a loss payee, but only with respect to the Suisse Gold coverage increases.
The Robbery.
On February 10, 1983, a then-unknown burglar struck the Miami warehouse, making off with some $9 million of goods in the possession of the companies and of the companies' field warehouser, Lawrence. Lloyds refused payment on the claim, and in May of 1983, Golden Door and Suisse Gold sued.
On January 12, 1988, Sanford Credini was indicted on charges of, inter alia, conspiracy, insurance fraud, theft, and embezzlement stemming from the 1983 theft. He fled to Germany, was extradited, and pled guilty to a conspiracy offense before the United Stated District Court for the Southern District of Miami.
The History of this Lawsuit.
Lloyds filed its first two motions for summary judgment on August 15, 1985, but all proceedings were stayed for some two years so that the parties could conduct discovery. At the conclusion of discovery, Lloyds renewed its first two motions for summary judgment and ultimately filed five subsequent motions, all for summary judgment. The district court denied all but one of these motions; it granted the remaining motion in...
To continue reading
Request your trial
-
Sun Ins. Co. of New York v. Hercules Securities Unlimited, Inc.
...Country Club v. Home Ins. Co., 262 N.Y. 189, 186 N.E. 439; Waltman v. Cantor, 57 Misc.2d 276, 292 N.Y.S.2d 549; Golden Door Jewelry Creations v. Lloyds Underwriters, 8 F.3d 760, revg. 758 F.Supp. 708 and 748 F.Supp. 1529; 10A Couch on Insurance 2d § 42:705 [rev ed]; 5A Appleman, Insurance L......
-
Nissel v. Certain Underwriters at Lloyd's of London
...cited by Nissel (which was decided under the substantive law of Florida) compels a contrary conclusion. (See Golden Door v. Lloyds Underwriters (11th Cir.1993) 8 F.3d 760, 766-768). DISPOSITION The judgment is affirmed. Lloyds shall recover its costs on KLEIN, P.J., and ALDRICH, J., concur.......
-
Mt. Hawley Ins. Co. v. Miami River Port Terminal, LLC
...conduct, accident, inadvertence, and"—the ground sought here by MRPT—"mutual mistake." Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non–Marine Ass'n , 8 F.3d 760, 765 (11th Cir. 1993). In this context, "[a] mistake is mutual when the parties agree to one thing and then, due to......
-
Cincinnati Ins. Co. v. Quorum Mgmt. Corp.
...; seeRosenthal v. First Nat'l Fire Ins. Co., 74 Fla. 371, 77 So. 92, 94 (1917) ; see alsoGolden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non–Marine Ass'n, 8 F.3d 760, 765–67 (11th Cir.1993). "Clear and convincing evidence" is evidence that "produces in the mind of the trier of fa......