Transamerica v. Institute of London Underwriters

• Decision Date: 22 November 2005
• Docket Number: No. 04-15363.,04-15363.
• Citation: 430 F.3d 1326
• Parties: TRANSAMERICA LEASING, INC., Plaintiff-Appellant, v. INSTITUTE OF LONDON UNDERWRITERS, Yorkshire Insurance Company, Ltd. "C" Account, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

430 F.3d 1326

TRANSAMERICA LEASING, INC., Plaintiff-Appellant, v. INSTITUTE OF LONDON UNDERWRITERS, Yorkshire Insurance Company, Ltd. "C" Account, et al., Defendants-Appellees.

No. 04-15363.

United States Court of Appeals, Eleventh Circuit.

November 22, 2005.

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Kieron F. Quinn, Martin E. Wolf, Quinn, Gordon & Wolf, LLP, Towson, MD, Philip A. Allen, III, Garbett, Bronstein, Stiphany & Allen, P.A., Miami, FL, for Plaintiff-Appellant.

Douglas L. Grundmeyer, Derek A. Walker, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, LA, Richard G. Rumrell, Rumrell, Wagner & Costabel, LLP, St. Augustine, FL, Joseph H. Lang, Jr., Sylvia H. Walbolt, Carlton Fields, P.A., Tampa, FL, for Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before HULL, MARCUS and HILL, Circuit Judges.

MARCUS, Circuit Judge:

This appeal is before us for the second time. The first time we reversed the district court's entry of partial summary judgment in favor of Transamerica Leasing, Inc. ("Transamerica"). On remand, and after a jury found in favor of the Plaintiff Transamerica, the district court entered judgment as a matter of law in favor of the defendant insurance underwriters (the "Underwriters"). After thorough review, we affirm.

I

The facts of this case have been extensively reported, and we assume the reader's familiarity with those decisions. See Transamerica Leasing, Inc. v. Inst. of London Underwriters, 267 F.3d 1303 (11th Cir.2001) ("Transamerica I"); Transamerica Leasing, Inc. v. Inst. of London Underwriters, 338 F.Supp.2d 1299 (S.D.Fla.2004); Transamerica Leasing, Inc. v. Inst. of London Underwriters, 7 F.Supp.2d 1340 (S.D.Fla.1998). Most relevant to the current appeal are these facts. Transamerica is a lessor of ocean cargo containers and related equipment. In the early 1990s, Transamerica leased equipment to C.A. Venezolana de Navigacion ("CAVN"), a Venezuelan government shipping line. CAVN used the equipment, including containers, trailers, and chassis, to move cargo on routes around the world. CAVN was responsible for insuring the equipment, which it did by obtaining policies from Underwriters.

Sometime around July 1994, CAVN lost a substantial number of the items it had leased from Transamerica. CAVN filed for protection under Venezuelan bankruptcy law in October 1994, and much of the lost equipment was never found. Transamerica submitted insurance claims for the lost equipment in November 1994. Underwriters denied coverage, stating:

Due to the volume of claims intimated against C.A.V.N. under the above policies, the age of several of the claims and the total lack of assistance insurers have received from C.A.V.N. in identifying the number of claims lodged with them, insurers hereby formally decline cover in respect of any claims of whatsoever nature that may fall for their consideration under any of the policies referred to above.

Insurers hereby repudiate cover under the above policies due to late notification and failure by CAVN to disclose material facts to underwriters at each and every renewal subsequent to bankruptcy proceedings in the Venezuelan Supreme Court.

Underwriters refused to pay, and Transamerica initiated the suit giving rise to this appeal.

Plainly, there was some ambiguity as to Transamerica's status under the various insurance contracts. Transamerica took the position that it was an additional assured, while Underwriters argued that it was only a loss payee. The district court originally granted partial summary judgment on that issue, concluding that Transamerica was an assured.¹ Additionally, the district court rejected the argument that the policies were voided by alleged misrepresentations made by CAVN. Instead, the district court found that the policies were severable, so that even if CAVN failed to disclose material facts when renewing, the policies continued to provide coverage for Transamerica.

A panel of this Court reversed the district court's order of summary judgment, holding that there were material questions of fact concerning Transamerica's status under the contracts that necessitated a jury trial. Specifically, we instructed the trial court in these terms:

We REVERSE the district court and REMAND for trial. In summary, the jury must determine whether Transamerica is an additional assured, a loss payee, or both. If the jury finds that Transamerica is an additional assured, or both an additional assured and a loss payee, then CAVN's alleged non-disclosure does not affect Transamerica's coverage because the Policy is severable. If, on the other hand, the jury finds that [Transamerica]² is merely a loss payee, then the jury must decide whether CAVN's alleged non-disclosure violates the doctrine of uberrimae fidei.

Transamerica, 267 F.3d at 1312. On remand, and after trial, a jury found that Transamerica was indeed a loss payee, and not an additional assured, and awarded damages in the amount of $783,226, plus interest.

At trial, Underwriters moved for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50 at the close of Transamerica's case, again at the close of its own case, and finally at the close of the evidence. Each of those motions were denied. Underwriters still again timely moved for judgment as a matter of law after the jury returned its verdict, arguing, among other things, that under English law, a loss payee does not have standing to sue on a contract. The district court agreed and granted Underwriters' motion.³

Transamerica timely appealed, arguing that 1) the district court was prohibited from considering the standing issue based on the law of the case doctrine and the mandate rule; 2) Underwriters waived the standing issue; 3) Underwriters should be judicially estopped from arguing that Transamerica cannot recover under the contract because it is a loss payee; and 4) the district court erred in excluding certain evidence.⁴ We remain unpersuaded and consider each argument in turn.

II

We review de novo a district court's order granting a motion for judgment as a matter of law, applying the same standard as the district court. Cleveland v. Home Shopping Network, Inc., 369 F.3d 1189, 1192 (11th Cir.2004). We review application of the law of the case doctrine de novo. Alphamed, Inc. v. B. Braun Med., Inc., 367 F.3d 1280, 1285 (11th Cir.2004). We review the district court's application of judicial estoppel for abuse of discretion, Parker v. Wendy's Int'l, Inc., 365 F.3d 1268, 1271 (11th Cir.2004), and examine the trial court's evidentiary rulings for abuse of discretion. Palmer v. Bd. of Regents of the Univ. Sys. of Ga., 208 F.3d 969, 973 (11th Cir.2000).

Transamerica's main argument on appeal is that the district court was prohibited from considering the standing question because of the law of the case doctrine or the mandate rule. "Under the `law of the case' doctrine, the findings of fact and conclusions of law by an appellate court are generally binding in all subsequent proceedings in the same case in the trial court or on a later appeal." Heathcoat v. Potts, 905 F.2d 367, 370 (11th Cir.1990) (internal quotation marks and citation omitted). "[W]hile the doctrine encompasses only those issues previously determined, the law is clear that it comprehends things decided by necessary implication as well as those decided explicitly." Wheeler v. City of Pleasant Grove, 746 F.2d 1437, 1440 (11th Cir.1984) (internal quotation marks and citations omitted). The doctrine's central purposes include bringing an end to litigation, protecting against the agitation of settled issues, and assuring that lower courts obey appellate orders. See United States v. Williams, 728 F.2d 1402, 1406 (11th Cir.1984).

The mandate rule "is nothing more than a specific application of the `law of the case' doctrine." Piambino v. Bailey, 757 F.2d 1112, 1120 (11th Cir.1985). This rule dictates that a trial court, "upon receiving the mandate of an appellate court, may not alter, amend, or examine the mandate, or give any further relief or review, but must enter an order in strict compliance with the mandate." Id. at 1119. "Although the trial court is free to address, as a matter of first impression, those issues not disposed of on appeal, it is bound to follow the appellate court's holdings, both expressed and implied." Id. (citations omitted).

Transamerica argues that the district court was not free to address the question of whether, as a loss payee, it had standing to bring a claim under the policy. In Transamerica I, we instructed that the jury should decide whether CAVN's alleged non-disclosure violated the doctrine of uberrimae fidei (which requires that an insured fully and voluntarily disclose to the insurer all facts material to a calculation of the insurance risk) if it first found that Transamerica was a loss payee. 267 F.3d at 1312. According to Transamerica, our instructions necessarily reflected that we had decided that a loss payee could, in fact, maintain a claim. We disagree.

The law of the case doctrine applies only if our prior opinion determined, explicitly or by necessary implication, that a loss payee has standing to sue. First, we easily conclude that our prior decision never explicitly determined the issue. Underwriters did not raise the issue in their appellate briefs, and we did not consider it in our ruling. Second, it is similarly clear that the issue was not implicitly decided in Transamerica I. Standing to sue was not addressed in the district court order granting summary judgment, and neither party discussed it in its appellate brief. Indeed, had either party attempted to address standing in the prior appeal, we undoubtedly would have declined to reach the issue precisely because it was not addressed by the district court.

Transamerica nevertheless urges that we must have implicitly ruled upon standing in our prior opinion because...