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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-16248
Non-Argument Calendar
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D.C. Docket No. 1:15-cv-21333-JAL
SELECTIVE INSURANCE COMPANY OF THE SOUTHEAST,
a Foreign Corporation,
Plaintiff - Appellant,
versus
WILLIAM P. WHITE RACING STABLES, INC.,
Florida corporation,
Defendant - Appellee,
JAMES RIVERA, et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(December 13, 2017)
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Before HULL, WILSON, and ROSENBAUM, Circuit Judges.
PER CURIAM:
This is an action by an insurer, Selective Insurance Company of the
Southeast (“Selective”), seeking a declaration that it owes no duty to defend its
insured, William P. White Racing Stables (“White Racing”), against a lawsuit filed
by one of White Racing’s former employees, James Rivera. The district court
found a duty to defend and entered a partial declaratory judgment in favor of White
Racing. After careful review, we reverse and remand for entry of judgment in
favor of Selective.
I.
Rivera was a professional jockey who was grievously injured by an accident
at the Calder Race Track in Miami Gardens, Florida, in November 2008. Rivera
was riding a two-year-old filly named Flyfly Fly Delilah at full gallop during a
workout when the horse suddenly collapsed, taking Rivera to the ground with it.
The accident left Rivera paralyzed from the neck down. Rivera believes that
Flyfly Fly Delilah was not fit to be exercised or raced due to an injury, which had
been covered up through steroids and other medications.
After the accident, Rivera sued White Racing, the Calder Race Track, and
several veterinarians. Rivera alleged that the negligence of nearly all defendants
caused his injuries. Significantly, however, Rivera did not state a similar
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negligence claim against White Racing. Instead, Rivera alleged that White Racing
was liable for damages caused by its failure to preserve Flyfly Fly Delilah’s
remains after the accident so that the horse could be tested for performance-
enhancing drugs. In particular, Rivera’s fourth amended complaint 1 stated two
specific counts against White Racing: (1) a claim under the Florida Worker’s
Compensation Statute for failure to cooperate in investigating and prosecuting
Rivera’s claims against a third-party tortfeasor, see Fla. Stat. § 440.39(7) (Count
VIII); and (2) a claim for spoliation of evidence (Count IX).
Selective insured White Racing under both a worker’s compensation policy
and an employer’s liability policy. Selective provided Rivera benefits under the
worker’s compensation policy for his injuries. But Selective maintained that it had
no duty to defend White Racing against Rivera’s lawsuit because it did not fall
within the terms of the liability policy’s coverage for damages arising from “bodily
injury by accident.”
To that end, Selective filed this declaratory-judgment action seeking a
declaration that it owed no duty to defend. Selective argued that Rivera’s claims
against White Racing were solely for economic losses—not bodily injury—
flowing from its alleged breach of its duties to preserve evidence after the accident.
1
The fourth amended complaint was the operative pleading when this declaratory
judgment action was filed. Although Rivera has since filed a fifth amended complaint, the
parties represent that it is, for present purposes, materially indistinguishable from the fourth
amended complaint. Accordingly, we refer to the fourth amended complaint as the operative
pleading.
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In response, White Racing conceded that the two specific counts stated
against it were not covered by the liability policy. Nevertheless, White Racing
maintained that Selective owed a duty to defend because the factual allegations in
Rivera’s complaint could support a negligence claim against White Racing for
Rivera’s injuries.
On cross-motions for summary judgment, the district court agreed with
White Racing and entered a partial declaratory judgment requiring Selective to
defend White Racing against Rivera’s lawsuit. Selective now appeals that
decision.
II.
We review de novo the district court’s grant of summary judgment.
Liebman v. Metropolitan Life Ins. Co., 808 F.3d 1294, 1298 (11th Cir. 2015).
Summary judgment is appropriate where, viewing the evidence and drawing all
reasonable inferences in favor of the party opposing summary judgment, “there is
no genuine issue of material fact and the moving party is entitled to judgment as a
matter of law.” Id.; Fed. R. Civ. P. 56(a).
Because this action was filed in federal court on the basis of diversity
jurisdiction, state law controls as to any issue not governed by the Constitution or
treaties of the United States. Mid-Continent Cas. Co. v. Am. Pride Bldg. Co., LLC,
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601 F.3d 1143, 1148 (11th Cir. 2010). The parties agree, as do we, that Florida
law governs this insurance-contract dispute.
“Our objective is to determine the issues of state law as we believe the
Florida Supreme Court would.” State Farm Fire & Cas. Co. v. Steinberg, 393
F.3d 1226, 1231 (11th Cir. 2004). We are, therefore, bound by decisions of the
Florida Supreme Court, as well as decisions from Florida’s intermediate appellate
courts unless there is some persuasive indication that the Florida Supreme Court
would decide the issue differently. Id.; Davis v. Nat’l Med. Enters., Inc., 253 F.3d
1314, 1319 n.6 (11th Cir. 2001). We are also bound by our own decisions
interpreting state law “absent a later decision by the state appellate court casting
doubt on our interpretation of that law.” EmbroidMe.com, Inc. v. Travelers Prop.
Cas. Co. of Am., 845 F.3d 1099, 1105 (11th Cir. 2017).
Under Florida law, an insurer’s duty to defend is distinct from and broader
than its duty to indemnify. Mid-Continent Cas. Co., 601 F.3d at 1148–49. “The
duty to defend depends solely on the facts and legal theories alleged in the
pleadings and claims against the insured.” Lawyers Title Ins. Corp. v. JDC (Am.)
Corp., 52 F.3d 1575, 1580 (11th Cir. 1995); see also Steinberg, 393 F.3d at 1230.
For the duty to defend to arise, the initial pleadings must “fairly bring the case
within the scope of coverage.” State Farm Fire & Cas. Co. v. Tippett, 864 So. 2d
31, 35–36 (Fla. Dist. Ct. App. 2003). That is, “[t]he allegations within the
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complaint must state a cause of action that seeks recovery for the type of damages
covered by the insurance policy in question.” Id. “If the allegations in the
complaint state facts that bring the injury within the policy’s coverage, the insurer
must defend regardless of the merit of the lawsuit.” Amerisure Ins. Co. v. Gold
Coast Marine Distribs., Inc., 771 So. 2d 579, 580 (Fla. Dist. Ct. App. 2000). In
other words, the “insurer must defend even if facts alleged are actually untrue or
legal theories unsound.” Lawyers Title Ins. Corp., 52 F.3d at 1580. Any doubt
about the duty to defend must be resolved in favor of the insured. Trizec Props.,
Inc. v. Biltmore Constr. Co., Inc., 767 F.2d 810, 812 (11th Cir. 1985).
III.
Looking solely to the specific claims Rivera asserted against White
Racing—(1) spoliation and (2) failure to cooperate under Fla. Stat. § 440.39—no
duty to defend arises, as both parties agree. The Florida Supreme Court has held
that a liability policy applying to “bodily injury by accident” does not provide
coverage for claims against an insured for breaching a duty to preserve evidence.
Humana Worker’s Comp. Servs. v. Home Emergency Servs., Inc., 842 So.2d 778,
781 (Fla. 2003). The damage that flows from a breach of a duty to preserve
evidence “is the resulting inability to prove a cause of action.” Id. Such spoliation
claims, according to the Court, “seek[] compensation not for the bodily injury . . .
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sustained in [the accident] but, rather, for [the] loss of a probable expectancy of
recovery in the underlying suit.” Id.
Rivera’s fourth amended complaint sought recovery against White Racing
solely for breaching its duties to preserve critical evidence and impairing his ability
to prove his claims against the other defendants. As a result, the liability policy
applying to “bodily injury by accident” does not provide coverage for these claims.
See id. Because Rivera does not “seek recovery for the type of damages covered
by the insurance policy in question,” there is no duty to defend. See Tippett, 864
So.2d at 35–36.
Despite this straightforward and largely undisputed analysis, White Racing
maintains that Selective owed a duty to defend. According to White Racing, the
duty to defend is determined by the totality of the factual allegations in the
complaint, irrespective of the specific counts pled, with all doubts resolved in favor
of the insured. The district court agreed, reasoning that the state of facts alleged in
the complaint could support a finding of negligence against White Racing for
Rivera’s injuries.
In response, Selective strenuously objects that the duty to defend cannot be
based on a theoretical claim that was not actually pled. Selective also asserts that
no negligence claim against White Racing could be pursued because of a worker’s
compensation exclusion in the liability policy.
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No case from this Court or the Florida courts is directly on point. Our
review of relevant authority indicates that, on the one hand, allegations that support
alternative theories of liability, some covered by the policy and some not, still
trigger the duty to defend. See Baron Oil Co. v. Nationwide Mut. Fire Ins. Co.,
470 So. 2d 810, 813–14 (Fla. Dist. Ct. App. 1985) (“If the complaint alleges facts
showing two or more grounds for liability, one being within the insurance coverage
and the other not, the insurer is obligated to defend the entire suit.”); see also Lime
Tree Village Cmty. Club Ass’n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402,
1405 (11th Cir. 1993) (finding a duty to defend because “[t]he factual allegations
set forth grounds, other than intentional acts and discrimination, upon which Lime
Tree could be held liable”). Moreover, courts are not bound by the labels the third-
party plaintiff places on her claims. See Tippett, 864 So.2d at 35 (“[W]ording
alone in a pleading does not create a duty to defend, regardless of its artfulness.”).
But on the other hand, insureds generally may not trigger the duty to defend
by invoking theories of liability that were not alleged in the complaint. See
Chicago Title Ins. Co. v. CV Reit, Inc., 588 So. 2d 1075, 1076 (Fla. Dist. Ct. App.
1991) (“[W]hether or not a duty to defend exists arises from the allegations of the
complaint itself, not on some conclusions drawn by the insured based upon a
theory of liability which has not been pled.” (citations omitted)); cf. ABC Distrib.,
Inc. v. Lumbermens Mut. Ins. Co., 646 F.2d 207, 209 (5th Cir. May 29, 1981)
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(rejecting an insured’s argument that the court could “examine whether an alternate
theory at trial might support a recovery within the coverage of the insurance
policy,” but noting that a different rule may apply in “the instance of a homedrawn,
pro se complaint”)2; Nat’l Union Fire Ins. Co. v. Lenox Liquors, Inc., 358 So.2d
533, 535–36 (Fla. 1977) (holding that an insurer was not required to defend
because, despite a stipulation that the case would have been tried on “negligence
grounds rather than willful conduct,” the complaint alleged only intentional acts of
the insured, which were not covered by the policy).
This case occupies somewhat of a middle ground between these two broad
principles. The “state of facts” alleged arguably could support a claim that White
Racing’s negligence contributed to Rivera’s bodily injuries. See Lenox Liquors,
358 So.2d at 535 (stating that the duty to defend arises “where the complaint
alleges a state of facts within the coverage of the insurance policy”). Yet perhaps
due to complications arising from Rivera’s receipt of worker’s compensation
benefits, the complaint quite clearly does not seek recovery against White Racing
for those injuries. In these circumstances, we cannot conclude that the Florida
Supreme Court would find a duty to defend based on the mere theoretical
possibility that Rivera could seek recovery against White Racing for his injuries at
some later time. See Steinberg, 393 F.3d at 1231.
2
This Court adopted as binding precedent all Fifth Circuit decisions prior to October 1,
1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
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Rivera’s counseled fourth amended complaint does not “fairly bring the case
within the scope of coverage.” See Tippett, 864 So. 2d at 35. Although the general
rule for the duty to defend is often phrased broadly, the inquiry focuses on whether
the complaint “seeks recovery for the type of damages covered by the insurance
policy in question.” Id. at 35–36 (emphasis added). The insurer must defend the
lawsuit, regardless of its merit, only “[i]f the allegations in the complaint state facts
that bring the injury within the policy’s coverage.” Amerisure Ins. Co., 771 So. 2d
at 580. The insurer “is not required to defend if it would not be bound to
indemnify the insured even though the plaintiff should prevail in his action.”
Capoferri v. Allstate Ins. Co., 322 So. 2d 625, 627 (Fla. Dist. Ct. App. 1975).
The fourth amended complaint makes clear that the injury for which Rivera
sought to recover damages was the inability to prove a cause of action, caused by
White Racing’s alleged breach of its duties to preserve evidence after the accident.
As we have established above, and as both parties agree, Florida law is clear that
those damages are not covered by a liability policy that applies to “bodily injury by
accident.” See Humana Worker’s Comp. Servs., 842 So. 2d at 781. Because
Rivera does not seek recovery against White Racing for damages arising from
“bodily injury by accident,” Selective would not be bound to indemnify White
Racing if Rivera prevailed in his lawsuit. Accordingly, Selective has no duty to
defend White Racing against Rivera’s claims. See Capoferri, 322 So. 2d at 627.
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The district court erred in finding a duty to defend “based upon a theory of
liability which has not been pled.” See Chicago Title Ins., 588 So.2d at 1076. The
extraneous allegations that arguably support a negligence claim relating to the
accident do not bring the requested damages within the scope of the policy. See
Amerisure Ins. Co., 771 So. 2d at 580. Even accounting for caselaw that allows
courts to evaluate alternative theories of liability that are plausibly suggested by,
but not expressly alleged in, a complaint, that principle would not apply in this
case. Cf. Baron Oil Co., 470 So. 2d at 813–14. The possible negligence claim
constructed by White Racing is entirely distinct from, not an alternative to, the
spoliation claims alleged in the complaint. See Humana Worker’s Comp. Servs.,
842 So. 2d at 781. The former seeks recovery for damages arising from bodily
injury based on actions before the accident, while the latter seek recovery “for [the]
loss of a probable expectancy of recovery in the underlying suit” based on actions
or omissions after the accident. Id. White Racing cites no authority, beyond
restating the general rule, supporting its view that the duty to defend arises in
similar circumstances.
And if Rivera raised a bodily-injury negligence claim later in the
proceeding, as suggested by the district court, the duty to defend could arise at that
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time. 3 See Grissom v. Commercial Union Ins. Co., 610 So. 2d 1299, 1307 (Fla.
Dist. Ct. App. 1992) (“If it later becomes apparent (such as in an amended
complaint) that claims not originally within the scope of the pleadings are being
made, which are now within coverage, the insurer upon notification would become
obligated to defend.”); see also ABC Distrib., Inc., 646 F.2d at 209 (stating that the
duty to defend could arise “when [an] alternate and arguably covered theory is
advanced”). But for the reasons explained above, we cannot conclude that
Selective is required to defend now based on that hypothetical possibility.
In sum, we conclude that the district court erred in finding a duty to defend
based on Rivera’s fourth amendment complaint. Because the basis for Rivera’s
action against White Racing was for spoliation of evidence, it is not covered by the
liability policy. 4 See Humana Worker’s Comp. Servs., 842 So.2d at 781. And
since there is no duty to defend, there is no duty to indemnify. See Fun Spree
Vacations, Inc. v. Orion Ins. Co., 659 So.2d 419, 422 (Fla. Dist. Ct. App. 1995)
(“Since Orion had no duty to defend the insureds, correspondingly, there is no duty
to indemnify them nor to pay the consent judgment.”).
3
We do not say that it would, as that question is not before us. We further note that the
way in which the claim was raised might determine the outcome: the Florida Supreme Court has
held that it may violate due process to raise a new theory of liability at trial that is “nowhere
framed in the pleadings.” Tamiami Trail Tours, Inc. v. Cotton, 463 So. 2d 1126, 1128 (Fla.
1985).
4
Because we conclude that there is no duty to defend based on the allegations in the
complaint, we need not consider Selective’s arguments that the worker’s compensation exclusion
bar negated any duty that it would have had to defend a possible negligence claim.
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Accordingly, we REVERSE the partial declaratory judgment in favor of
White Racing, and we REMAND for entry of judgment in favor of Selective.
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