Case: 11-16176 Date Filed: 01/09/2013 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-16176
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D. C. Docket No. 1:09-cv-03620-WSD
JONATHAN ROSEN,
Plaintiff-Appellant,
versus
AMERICAN GUARANTEE & LIABILITY INSURANCE COMPANY,
ZURICH AMERICAN INSURANCE COMPANY,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(January 9, 2013)
Before TJOFLAT and BLACK, Circuit Judges, and MOTZ,* District Judge.
PER CURIAM:
*
Honorable J. Frederick Motz, United States District Judge for the District of Maryland,
sitting by designation.
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This case arises from a Settlement and Release Agreement (Settlement
Agreement) resolving an earlier bad faith action between Jonathan Rosen and his
former insurer, American Guarantee and Liability Insurance, a wholly owned
subsidiary of Zurich American Insurance Company (collectively, Zurich). Rosen
asserted ten counts1 in a Complaint related to alleged violations of a “no
detriment” provision contained in the Settlement Agreement, and the district court
granted final summary judgment2 to Zurich. On appeal, Rosen asserts the district
court erred in finding that: (1) Zurich did not breach the Settlement Agreement;
(2) Zurich did not fraudulently induce Rosen to enter into the Settlement
Agreement; and (3) no reasonable juror could have found that Zurich committed
any predicate acts sufficient to support Rosen’s claims that Zurich violated, or
conspired to violate, Georgia’s RICO Act. After reviewing the record and the
1
The ten counts include: (1) fraud in the inducement to enter into a settlement
agreement, (2) fraud in the inducement to renew Rosen’s 2008-09 enrollment in the Protective
Errors & Omissions (E&O) program, (3) fraud in the creation and distribution of the May 2008
loss run that included costs associated with Rosen’s litigation, (4) violations of Georgia’s RICO
Act, (5) conspiracy to violate Georgia’s RICO Act, (6) breach of the settlement agreement,
(7) negligent administration of the Protective E&O Life Insurance Program, (8) negligence per
se, (9) attorneys’ fees under O.C.G.A. § 13-6-11, and (10) punitive damages.
2
The district court granted Zurich’s motion for summary judgment on all of Rosen’s
claims except the alleged breach of the Settlement Agreement in May 2008, and the attorneys’
fees related to that count. However, Rosen later moved to dismiss with prejudice the remaining
claims, and the district court granted that motion, ordering that its earlier Opinion and Order
granting summary judgment in part become final and that final judgment be entered in favor of
Zurich.
2
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parties’ briefs, and having had the benefit of oral argument, we affirm the district
court’s grant of summary judgment.3
The no detriment provision of the Settlement Agreement provides:
IT IS FURTHER UNDERSTOOD AND AGREED that the terms of
this Release and the terms of the settlement of this claim shall not be
used to the detriment of the Parties, shall remain confidential, and
shall not be disclosed to any person not a party or privy to this
settlement except as may be required by law.
Rosen attempts to use parol evidence from the negotiation of the Settlement
Agreement to show the no detriment provision was meant to apply not only to the
terms of the Settlement Agreement itself, but also to the existence of the Loretta
Griffin action and the existence of the bad faith action and its settlement.
The no detriment provision is not ambiguous. The no detriment provision
applies to the terms of the settlement only. See First Data POS, Inc. v. Willis, 546
S.E.2d 781, 784 (Ga. 2001) (“Whenever the language of a contract is plain,
unambiguous, and capable of only one reasonable interpretation, no construction
is required or even permissible, and the contractual language used by the parties
must be afforded its literal meaning.”). As the district court noted, this is the only
3
“We review de novo a grant of summary judgment.” Univ. of Ala. Bd. of Trustees v.
New Life Art, Inc., 683 F.3d 1266, 1271 (11th Cir. 2012). “We will affirm if, after construing the
evidence in the light most favorable to the non-moving party, we find that no genuine issue of
material fact exists and the moving party is entitled to judgment as a matter of law.” Id.
(quotations omitted).
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logical interpretation. If we accepted Rosen’s interpretation, Zurich would not be
permitted to consider Rosen’s claim history and adjust his premium based on risk
in underwriting future policies. As written, the no detriment provision prohibits
only the use of the terms of the Settlement Agreement, not the underlying conduct
that led to the Settlement Agreement.
The district court was correct in concluding Zurich did not breach the
Settlement Agreement by: (1) proposing a premium increase to Protective Life
Insurance Company in December 2007, or (2) refusing to allow Rosen to
participate in the Old Mutual Errors and Omissions Program. There is no
evidence these actions were based on the terms of the Settlement Agreement.
Thus, Zurich did not violate the plain language of the no detriment provision.
Further, the district court’s conclusion that Zurich did not fraudulently
induce Rosen to enter into the Settlement Agreement was correct. Generally, a
breach of a promise contained in a contract cannot amount to actual fraud because
to hold otherwise would mean that any breach of contract amounts to fraud.
TechBios, Inc. v. Champagne, 688 S.E.2d 378, 380-81 (Ga. Ct. App. 2009).
“However, an exception to this rule exists where a promise as to future events is
made with a present intent not to perform or where the promisor knows that the
future event will not take place.” Id. at 381 (quotations omitted). As Rosen
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cannot show that Zurich did not perform as promised in the Settlement
Agreement,4 Zurich’s actions cannot support a finding of fraud in the inducement
of the contract.
The district court also did not err in concluding that no reasonable juror
could have found that Zurich committed any predicate acts sufficient to support
Rosen’s claims that Zurich violated, or conspired to violate, the Georgia RICO
Act. See O.C.G.A. § 16-14-1, et seq. The element of intent necessary to support a
finding that Zurich’s actions constituted the RICO predicate crimes of theft by
taking, O.C.G.A. § 16-8-2; theft by deception, id. § 16-8-3; or mail and wire fraud,
18 U.S.C. § 1341; is more rigorous than the intent necessary to support a finding
that Zurich committed civil fraud. Compare Brown v. State, 692 S.E.2d 9, 11 (Ga.
Ct. App. 2010) (explaining “[t]he evidence must show that the requisite intent to
deprive the owner of the property was present at the time of the taking” for theft
by taking), Avery v. Chrysler Motors Corp., 448 S.E.2d 737, 739 (Ga. Ct. App.
1994) (stating “[t]heft by deception requires that the person committing the crime
does ‘know[] or believe[]’ that the created impression (which itself must have
4
The district court considered Zurich’s inclusion of the amount of settlement in the May
2008 loss run (which it found to be a breach of the Settlement Agreement), but concluded this
breach, without more, did not create an issue of material fact regarding whether Zurich
fraudulently misrepresented its intentions to perform under the contract. On appeal, Rosen does
not include argument that the May 2008 loss run itself was enough to show fraud in the
inducement.
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been intentionally created or confirmed) is false”), and United States v. Kreimer,
609 F.2d 126, 128 (5th Cir. 1980) (stating the mail fraud statute requires proof
“not only that there was fraudulent activity but also that the defendant had a
‘conscious knowing intent to defraud’”), with Avery, 448 S.E.2d at 739
(explaining the lesser intent necessary for civil fraud, as civil fraud “may be shown
by a fraudulent or reckless representation ‘even if the party making the
representation does not know that such facts are false’”). Because Rosen is unable
to create a genuine issue of material fact that Zurich had the lesser intent to
commit civil fraud, it follows that he is also unable to create a genuine issue of
material fact that Zurich had the intent to commit any predicate acts under
Georgia’s RICO Act.
As to Rosen’s claim that Zurich and Insurance Specialities Services, Inc.
conspired to violate Georgia’s RICO Act, a “plaintiff must show a direct nexus
between at least one of the predicate acts listed under the RICO Act and the injury
[the plaintiff] purportedly sustained.” Schoenbaum Ltd. Co. v. Lenox Pines, LLC,
585 S.E.2d 643, 655 (Ga. Ct. App. 2003) (quotations omitted). A plaintiff must
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show the predicate act actually harmed him, not a third party. See id. Rosen
cannot show the purported conspiracy harmed him in any cognizable manner, and
thus does not have standing for his RICO conspiracy claim.
AFFIRMED.
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