[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 11-15062 ELEVENTH CIRCUIT
Non-Argument Calendar JUNE 26, 2012
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:09-cv-00633-CG-B
CATEGORY 5 MANAGEMENT GROUP, LLC,
llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellant,
versus
NATIONAL CASUALTY INSURANCE COMPANY,
ACE AMERICAN INSURANCE COMPANY,
COLONEL MCCRARY TRUCKING, INC.,
llllllllllllllllllllllllllllllllllllllll Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
________________________
(June 26, 2012)
Before WILSON, PRYOR, and KRAVITCH, Circuit Judges.
PER CURIAM:
Plaintiff, Category 5 Management Group, LLC (CAT 5), appeals the grant
of summary judgment in favor of all Defendants: Colonel McCrary Trucking
(CMT), National Casualty Insurance Company (NCIC), and ACE American
Insurance Company (ACE). CAT 5 argues on appeal that the district court should
have found that CMT, NCIC, and ACE breached the contracts by not defending or
indemnifying CAT 5 in the underlying lawsuit.1 After reviewing the briefs and the
record, we affirm the district court.
I. Background
In June 2007, CMT entered into a subcontract with CAT 5 to remove debris
in Louisiana following Hurricane Katrina. In July 2007, Joe Edward Johnson, an
employee of CMT working in Louisiana, borrowed a truck owned by CMT to
attend a court hearing in Alabama. As Johnson drove back to Louisiana, he
allegedly drove through a red light on Highway 59 in Alabama and collided with a
Mini Cooper containing Tracy Lee Stuart, Celena Sprinkle, and Breana F. Stuart, a
three-year-old child (the Sprinkles). Celena and Breana suffered severe injuries.
In August 2007, the Sprinkles filed suit against Johnson, R.D. Construction,
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CAT 5 also appeals the district court’s denial of its summary judgment motion. In light
of our decision to affirm the district court, that appeal is rendered moot.
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Inc. (RDC), CMT, and four fictitious parties in Alabama state court. In December
2007, the Sprinkles amended their complaint to include claims against CAT 5 and
other parties for negligence and/or wantonness and negligent and/or wanton
hiring, training, supervision, and entrustment. In October 2008, NCIC and ACE
paid their policy limits of $1,000,000.00 and $4,000,000.00, respectively, to settle
the Sprinkles’ claims against Johnson, CMT, and RDC. CAT 5 was not involved
in the settlement. CAT 5 separately settled with the Sprinkles for $6,000,000.00
and filed a cross-claim against CMT, NCIC, and ACE alleging several causes of
actions including breach of contract against NCIC and ACE for failing to defend
and indemnify CAT 5 and breach of contract against CMT for failing to indemnify
CAT 5. Alabama state court severed CAT 5’s suit and Defendants removed the
suit to the Southern District of Alabama.
II. Standard of Review
We review a district court’s grant of summary judgment de novo, viewing
all evidence and drawing all reasonable inferences in favor of the non-moving
party. Owen v. I.C. Sys., Inc., 629 F.3d 1263, 1270 (11th Cir. 2011). Summary
judgment is appropriate where “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see
also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552 (1986).
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III. Choice of Law
“Federal courts sitting in diversity apply the forum state’s choice-of-law
rules.” Boardman Petroleum, Inc. v. Federated Mut. Ins. Co., 135 F.3d 750, 752
(11th Cir. 1998). Alabama law requires the application of the law of the state
wherein the contract was executed. Pines v. Warnaco, Inc., 706 F.2d 1173, 1176
n.3 (11th Cir. 1983) (citing Harrison v. Ins. Co. of N. Am., 318 So. 2d 253, 257
(Ala. 1975)). The last act of execution, the receipt and acceptance of the NCIC
and ACE policies, occurred in Georgia; therefore, we apply Georgia law. See
Indus. Chem. & Fiberglass v. N. River Ins. Co., 908 F.2d 825, 829 n.3 (11th Cir.
1990).
Section 6.18 of the contract between CMT and CAT 5 requires the
application of Louisiana law. Therefore, we apply Louisiana law when
interpreting the contract between CMT and CAT 5.
IV. NCIC and ACE’s Duty to Defend and Indemnify
A. Duty to Defend
Under Georgia law, to determine whether an insurer is obligated to defend
an insured, we look to the allegations contained in the complaint to discern
whether a liability covered by the policy was asserted. Atlanta Postal Credit
Union v. Int’l Indem. Co., 494 S.E.2d 348, 350 (Ga. Ct. App. 1998). “[T]he issue
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is whether a claim has been asserted which falls within the policy coverage and
which the insurer has a duty to defend.” Id.
The NCIC policy defines “insureds” to include “[a]nyone liable for the
conduct of an ‘insured’ described above but only to the extent of that liability.”
The ACE policy provides: “The Definitions, Terms, Conditions, Limitations, and
Exclusions of the UNDERLYING INSURANCE [i.e., the NCIC policy], in effect
at the inception date of this policy, apply to this coverage unless they are
inconsistent with the provisions of this policy.” Under Georgia law, “liable for the
conduct of an insured” is synonymous with vicarious liability; therefore, NCIC
and ACE only have a duty to defend and indemnify CAT 5 for claims of vicarious
liability. Id. at 352; Aetna Cas. & Sur. Co. v. Empire Fire & Marine Ins. Co., 442
S.E.2d 778, 781 (Ga. Ct. App. 1994).
In determining whether the Sprinkles’ complaint filed in Alabama State
Court alleged vicarious liability claims against CAT 5, we look to Alabama law.
See Lifestar Response of Alabama, Inc. v. Admiral Ins., 17 So. 3d 200, 213 (Ala.
2009). Alabama is a notice pleading state, which requires that the complaint must
“provide fair notice to adverse parties of the claim against them and the grounds
upon which it rests.” Simpson v. Jones, 460 So.2d 1282, 1285 (Ala. 1984); see
also Surrency v. Harbison, 489 So. 2d 1097, 1104 (Ala. 1986).
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Although the complaint need not expressly state that CAT 5 was vicariously
liable to the Sprinkles, it must at least give notice of vicarious liability. Here, no
such notice was given to CAT 5. The five counts alleged against CAT 5 are for its
own actions, not the actions of Johnson or any other party involved in the original
case. Count one is a negligence claim based on CAT 5’s alleged non-delegable
contractual duty to ensure that employees meet safety standards. Count two
alleges that CAT 5 was negligent when it hired Johnson without performing a
background check and that Johnson was under CAT 5’s supervision. Counts three
and four allege that CAT 5 negligently trained and supervised Johnson. Finally,
Count five alleges that CAT 5 negligently entrusted Johnson with a vehicle. All of
these claims are allegations against CAT 5 for its own negligent actions.
Therefore, the Sprinkles’ complaint does not give notice to CAT 5 that it could be
held vicariously liable for any individual’s actions and summary judgment was
properly granted by the district court to NCIC and ACE.2
B. Duty to Indemnify
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CAT 5 contends that the state trial court’s decision to not grant summary judgment in
favor of CAT 5 shows that the state court found that CAT 5 could be held vicariously liable.
However, all that the state court’s order denying summary judgment stated in its entirety was:
“After reviewing all the pleadings and hearing oral argument, this Court finds that there are
genuine issues of material fact which preclude the entry of summary judgment.” Because CAT
5’s motion for summary judgment included arguments regarding vicarious and direct liability
and the Sprinkles’ motion only included arguments regarding direct liability, we find the state
court’s order inconclusive.
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An insurer’s duty to defend and duty to indemnify are separate obligations,
and we are not limited to only the complaint and the policy in deciding whether
there is a duty to indemnify. City of Atlanta v. St. Paul Fire & Marine Ins. Co.,
498 S.E.2d 782, 785 (Ga. Ct. App. 1998). However, the NCIC and ACE policies
state that only parties held vicariously liable for the actions of the insured will be
covered by the policies. None of the extrinsic evidence provided by the parties
leads us to conclude that CAT 5 could have been held vicariously liable rather
than directly liable. Therefore NCIC and ACE did not have a duty to indemnify
CAT 5 in the underlying lawsuit, and we affirm the district court.
V. CMT’s Duty to Indemnify
Under Louisiana law, a contract will not be construed to indemnify a party
for its own negligent acts “unless such an intention is expressed in unequivocal
terms.” Perkins v. Rubicon, Inc., 563 So.2d 258, 259 (La. 1990). Section 8.1 of
the contract between CMT and CAT 5 states: “The Sub-contractor shall save and
hold Contractor . . . harmless against all suits, claims, damages and losses for
injuries to persons or property arising from or caused by errors, omissions or
negligent acts of the Subcontractor, . . . or its employees.” (emphasis added). The
contract does not unequivocally state that CMT will indemnify CAT 5 for CAT
5’s own negligent acts. The Sprinkles’ complaint, as stated above, alleged direct
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liability claims against CAT 5 and not vicarious liability claims. Therefore, CMT
is not required to indemnify CAT 5, and we affirm the district court’s grant of
summary judgment in favor of CMT.
VI. Conclusion
We find that the Sprinkles did not allege that CAT 5 was vicariously liable.
The Sprinkles only alleged that CAT 5 was directly liable for its own negligence.
Therefore, NCIC and ACE did not have a duty to defend or indemnify CAT 5 and
CMT did not have a duty to indemnify CAT 5 under the subcontract.
AFFIRMED.
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