Nu-Air Mfg. Co. v. Frank B. Hall & Co. of New York
| Decision Date | 24 July 1987 |
| Docket Number | No. 86-3359,NU-AIR,86-3359 |
| Citation | 822 F.2d 987 |
| Parties | MANUFACTURING COMPANY, a Florida Corporation, Plaintiff-Appellant, v. FRANK B. HALL & CO. OF NEW YORK, a corporation incorporated under the laws of the State of New York, doing business as Intercredit Agency, Aetna Casualty and Surety Company, Inc., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Stuart C. Markman, Winkles, Trombley & Kynes, David Hyman, Tampa, Fla., for plaintiff-appellant.
John F. Rudy, II, Tampa, Fla., for defendants-appellees.
John D. Shofi, Tampa, Fla., for Frank B. Hall & Co.
Henry A. Hubschman, Fried, Frank, Harris, Shriver & Jacobson, Washington, D.C., Robert Paul Parker, Donald W. Stanley, Marlow, Shofi, Smith, Hennen & Smith, Tampa, Fla., for Foreign Credit Ins. Ass'n, et al.
Appeal from the United States District Court for the Middle District of Florida.
Before TJOFLAT and VANCE, Circuit Judges, and ATKINS *, Senior District Judge.
This appeal arises out of a manufacturer's suit against its insurer and insurance broker for misrepresentation, negligence, and breach of contract. The district court granted summary judgment for defendants on all claims. We reverse on all counts.
Nu-Air Manufacturing Co. (hereinafter "Nu-Air") is a Florida Corporation engaged in the business of assembling aluminum goods. In early 1982, Nu-Air negotiated with a Nigerian buyer for the sale of 12 containers of custom-made doors and windows. The Nigerian buyer was to pay half the price by letter of credit and the other half by sight draft upon delivery.
Because of the large size of the order and Nu-Air's unfamiliarity with Nigerian practices, Nu-Air would not accept the order without first obtaining export insurance to cover that portion of the purchase price left unsecured by the letter of credit. Accordingly, Nu-Air designated Intercredit Agency (hereinafter "Intercredit") as its broker. 1 Intercredit, in turn, contacted an export insurer, Foreign Credit Insurance Association (hereinafter "FCIA"). 2
The standard FCIA master policy provides $200,000 in coverage. In order to insure a specific transaction beyond this standard coverage, FCIA will issue a Special Buyer Credit Limit (hereinafter "SBCL"). Nu-Air completed an application for an SBCL in order to increase the $200,000 limit to $371,530.49. Jane Ferry, Intercredit's senior vice president, submitted to FCIA both an application for a master policy and an application for an SBCL.
FCIA frequently approves the master policy and SBCL together because the insured would not want to subscribe to the master policy without the SBCL. Jane Ferry testified that she marked the SBCL application "approved per Michele" after Michele Milone, an FCIA sales representative, telephoned on March 3, 1982 FCIA's approval of both the master policy and SBCL applications. Milone agrees that she telephoned Ferry with a quotation for a master policy, but denies that she communicated FCIA's approval of the SBCL. 3 That same day, Ferry informed Nu-Air that both the master policy and the SBCL had been approved. Nu-Air immediately accepted the Nigerian order, relying on Intercredit's word that insurance coverage was in place. In fact, FCIA had not yet completed the paperwork for the SBCL and had only processed the standard $200,000 master policy.
On March 4, 1982, FCIA delivered to Intercredit a document containing a quotation for a master policy. This document specified a $200,000 limit and made no reference to the SBCL application. One week later, Intercredit forwarded the document to Nu-Air. Jack Healey, Nu-Air's comptroller, reviewed the quotation and executed the document, assuming that FCIA would increase the $200,000 limit to match the $371,530.49 SBCL, which, according to Intercredit, FCIA had already approved. 4 Soon afterwards, Intercredit returned the signed quotation to FCIA, along with Nu-Air's initial deposit towards the premiums. On March 24, 1982, Nu-Air received an FCIA policy. Nu-Air's policy did not include an SBCL endorsement. 5
Because of import restrictions imposed by the Nigerian government, FCIA concluded that it could not issue Nu-Air an SBCL. On March 19, 1982, FCIA orally informed Intercredit, Nu-Air's broker, that FCIA had decided to withdraw Nu-Air's SBCL application. On April 2, 1982, FCIA mailed written confirmation of this decision to Nu-Air. Nu-Air did not receive this confirmation until April 12, 1982. 6 On March 16, 1982, Nu-Air had begun shipping the order to Jacksonville, Florida, the point of departure for Nigeria. By the time Nu-Air received the notice of cancellation, eight of the twelve containers had already been shipped to Jacksonville and Nu-Air had fabricated almost all of the remaining four.
Immediately after learning that FCIA would not issue an SBCL, Nu-Air contacted Ferry at Intercredit. Ferry informed Healey, the Nu-Air officer responsible for obtaining the insurance, that FCIA had not issued an SBCL and that Nu-Air would not have insurance coverage for the transaction. 7 Ferry advised Healey not to make the shipments. Nevertheless, Nu-Air continued to ship the containers to Jacksonville, and on April 30, 1982, Nu-Air shipped the entire order to Nigeria. 8 On August 15, 1982, the Nigerian buyer defaulted on the sight draft. Subsequent demands for payment met with no success.
In early 1983, Nu-Air notified FCIA of the overdue account and filed a claim under the SBCL. FCIA denied the claim, alleging that no coverage existed. FCIA now contends that Nu-Air failed to give notice or pay premiums within the time restrictions of the policy.
On January 30, 1984, Nu-Air filed this lawsuit against Intercredit and FCIA. Counts I and II of Nu-Air's complaint stated claims against FCIA for breach of insurance contract and negligent misrepresentation. Counts III, IV and V stated three separate claims against Intercredit. Count III alleged that Intercredit breached its oral agreement to procure and maintain insurance. Count IV alleged that Intercredit negligently failed to maintain coverage. Count V alleged that Intercredit negligently misrepresented the existence of coverage. The district court granted the defendants' motions for summary judgment on all counts. 9 We reverse on all counts.
We begin by noting that Florida recognizes oral insurance contracts. Collins v. Aetna Ins. Co., 103 Fla. 848, 138 So. 369, 370 (1931); Monogram Products, Inc. v. Berkowitz, 392 So.2d 1353, 1355 (Fla.Dist.Ct.App.1980); Burns v. Consolidated Am. Ins. Co., 359 So.2d 1203, 1207 (Fla.Dist.Ct.App.1978); State Farm Fire & Casualty Co. v. Hicks, 184 So.2d 685, 686 (Fla.Dist.Ct.App.), cert. denied, 189 So.2d 634 (1966). Such a contract, like any other contract, results from an offer and an acceptance of that offer. Rosin v. Peninsular Life Ins. Co., 116 So.2d 798, 801 (Fla.Dist.Ct.App.1960). To be enforceable, the agreement must encompass the following essential terms: subject-matter, risk, amount of insurance, premium, duration of risk and identity of parties. Collins v. Aetna Ins. Co., 138 So. at 370; State Farm Fire & Casualty Co. v. Hicks, 184 So.2d at 686.
Michele Milone relayed to Jane Ferry a policy quotation incorporating all of these essential terms. 10 A jury could find that this oral communication constituted an offer to enter into an insurance contract 11 despite the fact that the parties dispute the term in this offer specifying the amount of insurance. 12 Nu-Air contends that it manifested its assent on March 10, 1982 by sending FCIA an executed document specifying the policy quotation. 13 Nu-Air also sent FCIA an initial deposit on the premiums. 14 Thus a jury could find that a contract was made on that date. See 1 S. Williston, A Treatise On The Law of Contracts section 66 (3d ed. 1957 & Supp.1986); 15 E. Farnsworth, Contracts, 136 (1982). 16
To be sure, the parties dispute an important factual question: whether Michele Milone communicated FCIA's approval of Nu-Air's SBCL application at the same time she gave Jane Ferry the quotation on the master policy. A jury must decide whether FCIA offered to provide the full $371,530.49 in requested coverage or only the $200,000 in coverage that is standard for an FCIA master policy. If the jury believes Michele Milone, it may find that the final contractual term specifying the amount of insurance corresponded to the $200,000 limit that is standard for an FCIA master policy. Alternatively, if the jury believes Jane Ferry, it may find that this term corresponded to the amount specified in Nu-Air's SBCL application. This dispute does not alter our conclusion that a jury could find that a contract was entered into on March 10, 1982.
Courts must determine the terms of a contract by ascertaining the intent of the parties at the time they enter into the agreement. See, e.g., J & S Coin Operated Machines, Inc. v. Gottlieb, 362 So.2d 38, 39 (Fla.Dist.Ct.App.1978). The lower court, nevertheless, held that an agreement to provide the full $371,530.49 in requested coverage would be unenforceable because the master policy contemplated that FCIA would approve the SBCL "by written notification." 17 Although Nu-Air did not receive the final version of the master policy until March 24, the parties may have negotiated with this document in mind. Nevertheless, if FCIA informed Nu-Air that SBCL coverage had already been approved, this understanding became part of the final contract.
Florida law requires that we resolve a conflict between the provisions of an insurance contract so as to afford maximum coverage to the policyholder. See Dyer v. Nationwide Mut. Fire Ins. Co., 276 So.2d 6, 8 (Fla.1973); Oliver v. United States Fidelity & Guar. Co., 309 So.2d 237, 238 (Fla.Dist.Ct.App.), cert. denied, 322 So.2d 913 (1975). This principle applies with even greater force when...
To continue reading
Request your trial
-
Mangold v. Analytic Services, Inc.
...immunized contractor who becomes reckless or malicious in his zeal to expose a government employee. See Nu-Air Mfg. Co. v. Frank B. Hall & Co., 822 F.2d 987, 995 (11th Cir.1987), cert. denied, 485 U.S. 976, 108 S.Ct. 1270, 99 L.Ed.2d 481 (1988). The benefit to effective government of giving......
-
Lovell Mfg., a Div. of Patterson-Erie Corp. v. Export-Import Bank of U.S.
...is consistent with the opinion of the one other court of appeals to have been faced with this issue. In Nu-Air Manufacturing Co. v. Frank B. Hall & Co., 822 F.2d 987 (11th Cir.1987), cert. denied, --- U.S. ---, 108 S.Ct. 1270, 99 L.Ed.2d 481 (1988), the court did not specifically address th......
-
State Nat'l Ins. Co. v. Anzhela Explorer, L.L.C.
...points out, the law of insurance contracts also recognizes oral insurance agreements. See, e.g., Nu–Air Mfg. Co. v. Frank B. Hall & Co. of N.Y., 822 F.2d 987, 990 (11th Cir.1987) (citations omitted). “To be enforceable, the agreement must encompass the following essential terms: subject-mat......
-
Globalnet Financial.Com v. Frank Crystal & Co.
...776 (Fla.1998) ("As a general principle, an insurance broker is an agent of the insured."); see also Nu-Air Mfg. Co. v. Frank B. Hall & Co. of New York, 822 F.2d 987, 997 (11th Cir. 1987) ("When a broker agrees to obtain insurance for a client, the broker becomes the client's agent. As agen......