Kevin Jumlist, et al. v. Prime Insurance Co., et al.

[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10614
____________________
KEVIN JULMIST, et al,
Plaintiffs-Appellants,
versus
PRIME INSURANCE CO., et al,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:21-cv-01416-SCJ
____________________
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22-10614 Opinion of the Court 2
Before J ORDAN, NEWSOM , and E D CARNES, Circuit Judges.
ED CARNES, Circuit Judge:
On February 19, 2013, Dr. Nedra Dodds performed a
surgical liposuction procedure on April Jenkins at CJL Healthcare,
LLC (the Clinic) in Georgia. Jenkins died that same day. Four
months after her death, on June 20, 2013 at the same clinic, Dr.
Dodds performed a surgical liposuction procedure on Erica
Beaubrun, who died that night.
Initially, two lawsuits resulted from those two deaths. On
August 5, 2013, Hal Jenkins, who is April’s father and the
administrator of her estate, filed a lawsuit in Georgia state court
against the Clinic and Dodds. We’ll call that the Jenkins estate
lawsuit. Almost a year later, on June 16, 2014, Kevin Julmist, who
is the father of Erica Beaubrun’s two minor children, filed a lawsuit
in Georgia state court against Dodds, the Clinic, and Opulence
Aesthetic Medicine (the Clinic’s doing-business-as name). To
simplify things, we’ll call that the Beaubrun estate lawsuit even
though technically it is not.1
1 Julmist filed that lawsuit not as the personal representative of Beaubrun’s
estate but instead as “next friend” and “natural parent” of her children. See
City of Dalton v. Cochran, 55 S.E.2d 907, 910 (Ga. Ct. App. 1949) (“The purpose
of a guardian ad litem or next friend is to furnish a person suit juris to carry on
the litigation for the minor’s benefit.”); see also Till v. Hartford Accident & Indem.
Co., 124 F.2d 405, 408 (10th Cir. 1941) (explaining that unlike a guardian ad
litem, who is appointed by the court, “[a] next friend is one who, without
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The appeal before us involves the Beaubrun estate lawsuit
indirectly, but it does not directly involve the claims that were
brought in that lawsuit. Instead, it arises from the Clinic’s
assignment to the Beaubrun estate of some of the Clinic’s claims
against its insurance companies after a consent judgment in the
amount of $60,000,000 was entered in favor of the Beaubrun estate
and against the Clinic in the estate’s lawsuit.
For purposes of the present lawsuit, which is a dispute about
insurance coverage and its limits, the Beaubrun estate and the
Clinic essentially became co-plaintiffs, advancing the same claims
and asserting the same arguments against the insurers. When we
refer to those two parties collectively, we’ll simply call them the
plaintiffs.
The lawsuit that arose from the death of Dodds’ other
patient at the Clinic (the Jenkins estate lawsuit) is only tangentially
related to this appeal. That lawsuit is relevant only because of the
effect it had on the aggregate amount of coverage available under
the insurance policy that covered the Clinic and Dr. Dodds. (She is
not a party to this appeal.) That insurance policy contained a
diminishing limits provision.2 Under that provision, the cost of
being regularly appointed guardian, represents” a plaintiff who is a minor).
But referring to it as the Beaubrun estate’s lawsuit does not affect any of the
issues before us and links the name of the lawsuit to the decedent instead of
using the different name and capacity of Julmist.
2 Diminishing limits provisions create “an arrangement where defense
expenses incurred by the insurer decrease[] the amount of liability coverage.”
Nicholas A. Marsh, Note, “Bonded & Insured?”: The Future of Mandatory
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22-10614 Opinion of the Court 4
defending the Clinic and Dr. Dodds from the Jenkins estate lawsuit
not only diminished the $50,000 amount available for the Jenkins
estate’s claim to coverage, but it also diminished the total amount
of coverage available under the policy, which was capped at
$100,000. Likewise, under that same provision, the cost of
defending the Clinic and Dr. Dodds from the Beaubrun estate
lawsuit diminished the $50,000 amount available for the Beaubrun
estate’s claim to coverage and also diminished the $100,000 total
amount of coverage available under the policy.
The bottom line for this appeal is that under the terms of
the policy, the defense of the Jenkins and the Beaubrun estates’
lawsuits exhausted the Clinic’s insurance coverage. The policy’s
declarations page unambiguously specifies a $50,000 limit for any
professional liability claims and a $100,000 policy aggregate limit
for any and all of those claims combined. In other words,
defending the Beaubrun estate lawsuit diminished the amount of
coverage available for that claim, and defending both the Beaubrun
and the Jenkins estates’ lawsuits diminished the aggregate limit
until there was no coverage left.
I. Factual Background and Procedural History
Insurance Coverage and Disclosure Rules for Kentucky Attorneys, 92 Ky. L.J. 793,
814 (2004); cf. James E. Mercante, Article, Hurricanes and Act of God: When the
Best Defense Is A Good Offense, 18 U.S.F. Mar. L.J. 1, 13 (2006) (“There are some
marine policies with ‘wasting’ or ‘diminishing’ limits meaning that the liability
limits are diminished by legal fees. These are not uncommon and in such a
policy, as the cost of defense rises, the available funds for settlement are
reduced.”).
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22-10614 Opinion of the Court 5
As mentioned, the Jenkins estate lawsuit was filed first. For
that reason, we will first provide the highlights of its procedural
history and then discuss the history of the Beaubrun estate lawsuit.
A. The Jenkins Estate Lawsuit
The Jenkins estate lawsuit was filed in August 2013, and the
Clinic’s insurer, Prime Insurance Co., defended the Clinic and
Dodds under a reservation of rights. A couple of months after the
lawsuit was filed, David McBride, who worked for Prime, tendered
a settlement offer from Prime of $50,000 to the Jenkins estate, but
the estate rejected that offer.
In April 2014, the Jenkins estate demanded $100,000 from
Prime, which counteroffered $39,000, an amount that was $11,000
less than it had offered through McBride earlier. The reason
Prime’s second offer was for only $39,000 of coverage apparently
was that under the diminishing limits provision, defending the
Jenkins estate lawsuit had diminished the total amount available by
$11,000. The Jenkins estate rejected that offer.
On May 6, 2014, Prime notified the Clinic that the policy’s
Professional Liability Limit of $50,000 for a single claim had been
depleted defending the Jenkins estate lawsuit. And in July 2014 a
Georgia state court entered an order authorizing Prime to
withdraw from representing the Clinic and Dodds in the Jenkins
estate lawsuit.
Dodds was dismissed as a party, and the Jenkins estate’s case
proceeded to trial, during which the Clinic was not represented by
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22-10614 Opinion of the Court 6
counsel. A default judgment was entered against the Clinic, and in
December 2018 a jury awarded the Jenkins estate $60,000,000 in
damages.
B. The Beaubrun Estate Lawsuit
In a letter dated June 11, 2014, Prime’s counsel wrote this to
counsel for the Beaubrun estate:
As you know, I represent Prime Insurance Company
which insured CLJ Healthcare with respect to the
above-referenced claim [referring to a claim number].
The policy is the same policy at issue in the Jenkins v.
CLJ Healthcare claim. The policy has a $50,000
professional liability limit, with a $100,000 aggregate.
The aggregate has been depleted by defense of the
Jenkins claim. Prime hereby tenders the $50,000
professional liability limit to your client in exchange
for a release of all claims against CLJ Healthcare and
its employees and agents.
(It’s not entirely clear why, if Prime had spent more than the
$100,000 aggregate policy limit, it still offered the Beaubrun estate
the $50,000 policy limit, but we have set out exactly what the June
11, 2014 letter said.)
The Beaubrun estate rejected Prime’s $50,000 offer for two
reasons. First, the estate believed that the policy provided $100,000
in coverage, which would mean that the offer was for less than the
amount of coverage available. Second, the estate objected to the
release of claims against a nurse anesthetist who allegedly failed to
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22-10614 Opinion of the Court 7
properly monitor Beaubrun. (That second objection is not
involved in this lawsuit.)
After the Beaubrun estate rejected Prime’s $50,000 offer, on
June 16, 2014, the estate filed a Georgia state court lawsuit against
Dodds, the Clinic, and Opulence Aesthetic Medicine (the Clinic’s
doing-business-as name). The lawsuit claimed that Dodds was
liable for professional negligence and that the Clinic and Opulence
Aesthetic Medicine were liable under a theory of respondeat
superior. In the “damages,” section of its complaint, the estate
sought “to recover for the full value of the life of Erica Beaubrun,
for her wrongful death, and all other elements of damages allowed
under Georgia law.” Among other things, the estate specifically
sought damages for pain and suffering and for funeral expenses. It
also sought attorney’s fees and costs. Prime defended the named
defendants in that lawsuit for a period of time.
But on January 27, 2015, Prime sent Dodds and the Clinic a
letter stating that “[t]he limit of insurance available through [the]
policy issued by Prime is $50,000 per claim, with an aggregate limit
of $100,000.” (The reference to “per claim,” in context, is not to a
legal claim asserted in the underlying lawsuit against the insureds
but is to their claim for coverage under the policy. There was a
Jenkins “claim” and a Beaubrun “claim” for coverage.) Prime’s
letter to Dodds and the Clinic stated that the $50,000 “per claim
limit of liability” had already been “completely depleted” in
providing a defense in the Beaubrun “matter.” It added that the
$50,000 per claim limit had also been expended “in relation to the
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22-10614 Opinion of the Court 8
claims of ” the Jenkins estate against the defendants. The result was
that the combined expenditures in defending the insureds against
the two lawsuits exhausted the aggregate $100,000 policy limit. For
that reason, Prime stated it was withdrawing its defense in the
Beaubrun “matter.”
1. The Utah Declaratory Judgments
On January 27, 2015, the same day that Prime sent its letter
to the Clinic and Dodds telling them that the policy limits were
exhausted, Prime filed a declaratory judgment action against them
in state court in Utah, where Prime’s principal place of business
was. The action sought a judgment that:
(a) Prime has no obligation to provide for Dr. Dodds’
and/or [the Clinic’s] defense in the Jenkins or
Bea[u]brun claims beyond the $50,000 Professional
Liability limit applicable to each of those claims.
(b) Prime is entitled to withdraw its defense of Dr.
Dodds and [the Clinic] in the Jenkins lawsuit
inasmuch as it ha[d] incurred in excess of $50,000 in
defending that matter.
(c) Prime is entitled to withdraw its defense of Dr.
Dodds and [the Clinic] in the Bea[u]brun claim
inasmuch as it ha[d] incurred in excess of $50,000 in
defending that matter.
The complaint did not seek any declaratory relief based on the
aggregate policy limit provision. Instead, it relied solely on the
$50,000 policy limit per claim provision and sought declaratory
relief based only on that provision.
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Prime served Dodds and the Clinic with the complaint in the
declaratory judgment action, but neither of them filed an answer
or otherwise responded. After default was entered, Prime sought
a default judgment against Dodds and the Clinic on the Jenkins
claim and on the Beaubrun claim. It asked the court to declare that
it had no obligation to defend or indemnify Dodds and the Clinic
against any claims brought by the Jenkins or the Beaubrun estates.
The Utah state court first entered an order granting default
judgment against Dodds and the Clinic in regard to the Jenkins
claim for coverage. That order stated that Prime had no obligation
to defend or indemnify Dodds or the Clinic on the Jenkins claim
beyond $50,000, and because Prime had already incurred expenses
of more than $100,000 defending both the Jenkins and Beaubrun
claims, it had no obligation to indemnify Dodds or the Clinic for
the $60,000,000 judgment entered in the Jenkins lawsuit.3
In April 2019, after the Utah district court had entered the
Jenkins declaratory judgment but before it entered judgment on
the Beaubrun claim, the Beaubrun estate submitted to Prime a
demand for $100,000 to settle the Beaubrun claim and release
3 It is unclear why the Utah state court granted Prime declaratory relief on the
$100,000 aggregate limits provision as well as on the $50,000 policy limit per
claim provision when Prime requested relief only on the $50,000 policy limit
per claim provision. In any event, it does not matter because, as we will
explain later, the declaratory judgment granted by the Utah state court does
not affect our analysis.
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Dodds and the Clinic. The next month Prime responded that based
on the policy limits, there was no remaining coverage.
A few months after that, in July 2019, the Utah state court
entered an order granting Prime’s motion for default judgment
against Dodds and the Clinic on the Beaubrun claim. The order
stated that Prime had no obligation to defend Dodds or the Clinic
“in the Bea[u]brun claim beyond the $50,000 Professional Liability
limit applicable to that claim.” It also stated: “[i]nasmuch as Prime
incurred in excess of $50,000 in defending the Bea[u]brun claim,
and also incurred in excess of $100,000 total in defending the
Jenkins and Bea[u]brun claims, it has no further obligation to
defend [the Clinic] or Dr. Dodds in the Bea[u]brun lawsuit.”
About two weeks after that, on July 31, 2019, Prime filed in
Georgia state court a notice and a petition seeking to domesticate
the Utah judgment against Dodds and the Clinic. On September
16, 2019, the Georgia state court entered an order domesticating
that judgment. The order declared that (1) beyond the $50,000
professional liability limit, Prime had no obligation to defend or
indemnify Dodds or the Clinic against the Beaubrun claim; (2) it
had no obligations under the policy once the $100,000 aggregate
limit had been exhausted; and (3) it had no obligation for the
Beaubrun “judgment” because it had spent more than $50,000
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defending the Jenkins claim and more than $100,000 total
defending the Jenkins and Beaubrun claims.4
2. Judgment in the Beaubrun Estate Lawsuit
On January 22, 2020, with the parties’ consent, the Georgia
state court ordered Dodds’ dismissal in the Beaubrun estate’s
lawsuit that was pending there. And on February 13, 2020, a
consent judgment in the amount of $60,000,000 was entered in
favor of the Beaubrun estate and against the Clinic in that lawsuit.
C. The Parties in the Present Lawsuit
To recap, the plaintiffs in the present lawsuit are the
Beaubrun estate and the Clinic. And the defendants are Prime
Insurance Co., Prime Holdings Insurance Services, Inc. (d/b/a
Claims Direct Access), and Evolution Insurance Brokers, LC
(collectively, the insurers). Prime issued the insurance policy to the
Clinic; Prime Holdings (Claims Direct) is a related entity; Evolution
is the broker that sold that policy to the Clinic.
Claims Direct’s employee David McBride allegedly advised
the Clinic during the defense of the Beaubrun lawsuit. The
complaint describes McBride as “an adjuster acting on behalf of
Claims Direct.” In their brief to this Court, the insurers describe
him as Claims Direct’s Senior Vice President and Corporate
Attorney. But McBride was not named as a defendant.
4 The order referred to the Beaubrun “judgment,” even though the consent
judgment in the Beaubrun estate lawsuit wasn’t entered until after the Utah
declaratory judgment and the Georgia state court order domesticating it.
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D. The Claims in the Present Lawsuit
In their complaint, the Beaubrun estate and the Clinic
asserted the following claims against the defendants: Count 1
breach of duty against Claims Direct; Count 2 breach of contract
against Prime; Count 3 negligence against Prime and Claims
Direct; (the complaint has no Count 4); and Count 5 unauthorized
sale of surplus lines insurance against Prime and Evolution.
Counts 6 and 7 sought punitive damages and attorney’s fees against
all the defendants.
Count 1, the breach of duty claim against Claims Direct,
alleged that McBride had held himself out as protecting the Clinic’s
interests when he was actually protecting Prime’s interests. The
specific allegations were that McBride breached a duty by failing to
pass along to Prime the Beaubrun estate’s $100,000 settlement
demand, and that he also assisted Prime during the Utah
declaratory judgment proceedings by signing an affidavit for it
stating that the policy limits were exhausted.
Count two, the breach of contract claim against Prime,
alleged that it had breached the policy by asserting that the limit
for defending the Beaubrun claim was $50,000 instead of $100,000
and by asserting that the limit had been exhausted. Count three
alleged that Prime was negligent in refusing the Beaubrun estate’s
demand for $100,000 and that Prime and Claims Direct were
negligent by not informing the Clinic of that demand. Count five,
the unauthorized sale of surplus lines insurance claim against
Prime and Evolution, alleged that the sale of the policy was
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22-10614 Opinion of the Court 13
unauthorized in Georgia because, among other things, it did not
include the “standard” surplus lines disclosure.
The insurers removed the case to federal district court where
they moved to dismiss the complaint. The court granted that
motion.
The district court decided that counts one, two, and three
(the breach of duty, breach of contract, and negligence claims) all
failed because they relied on an incorrect interpretation of the
policy’s limits, and the Utah default judgment collaterally estopped
litigation of whether the policy had a $100,000 limit for the
Beaubrun claim. The court also decided that the count one breach
of duty claim was barred by a four-year statute of limitations. It
dismissed count five after determining that the Georgia Surplus
Lines Insurance Act does not provide a private cause of action.
Finally, the court decided that the derivative claims for punitive
damages and attorney’s fees failed because the substantive claims
on which they were based failed.
The Beaubrun estate and the Clinic appeal the judgment
dismissing their complaint.
II. Standard of Review
We review de novo the grant of a motion to dismiss,
accepting the factual allegations in the complaint as true and
construing them in the light most favorable to the non-movants.
Bourff v. Rubin Lublin, LLC, 674 F.3d 1238, 1240 (11th Cir. 2012). The
district court considered the insurance policy that the insurers
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attached to their motion to dismiss without converting their
motion into one for summary judgment. That was appropriate
because the policy is “(1) central to [the Beaubrun estate’s and the
Clinic’s] claim[s] and (2) undisputed,” meaning that “the
authenticity of the document is not challenged.” Day v. Taylor, 400
F.3d 1272, 1276 (11th Cir. 2005). “Because insurance policies are
considered contracts, interpretation of insurance policy language
is also a matter of law, subject to de novo review.” Hegel v. First
Liberty Ins. Corp., 778 F.3d 1214, 1219 (11th Cir. 2015) (cleaned up).
III. Discussion
As we’ve noted, Prime’s principal place of business is in
Utah. Prime sold the policy to the Clinic through Evolution
Insurance Brokers. Evolution is organized under the laws of Utah.
The Clinic is located in Georgia. The fact that Prime and Evolution
are out-of-state insurers matters here because the Clinic purchased
a surplus lines policy from them.
A. The Policy
The insurance policy that covered the Clinic and Dr. Dodds
is a surplus lines policy. Surplus line insurers are authorized to sell
insurance in Georgia so long as they comply with certain
requirements, including selling the insurance through a licensed
surplus lines broker.5 See Kay-Lex Co. v. Essex Ins. Co., 649 S.E.2d
602, 609 (Ga. Ct. App. 2007).
5 The Georgia Code defines surplus line insurance as “any property and
casualty insurance permitted in a state to be placed through a surplus line
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According to the plaintiffs, Evolution was not licensed as a
surplus lines insurance broker in Georgia, and the policy did not
include the standard disclosure that Georgia law requires for
surplus lines policies. See Ga. Code § 33-5-20.1(8) (defining a
surplus lines broker as “an individual who is licensed in this state to
sell, solicit, or negotiate insurance on properties, risks, or exposures
located or to be performed in this state with nonadmitted
insurers”); see also id. § 33-5-26 (requiring disclosures for surplus
lines policies).
The coverage period of the policy that Prime issued to the
Clinic and Dodds was December 22, 2012 to December 22, 2013,
and the premium was $3,991.52. The declarations page lists
“$100,000 Policy Aggregate” and “$50,000 Professional Liability.”
It is a healthcare services professional liability policy providing
coverage for “Wrongful Acts relating to the providing of Your
Services.”
The Limits of Liability section in the policy states that
“[e]ach Wrongful Act Limit of Liability listed on the Declarations
is the most we will pay for any combination of Damages and/or
Claim Expenses because of all Damages arising or allegedly arising
broker with a nonadmitted insurer eligible to accept such insurance.” Ga.
Code § 33-5-20.1(7). The governing regulations describe it as “a policy placed
with an insurer that is not licensed (or ‘admitted’) in [Georgia], but is
nonetheless eligible to provide insurance on property or liability insurance
protection to citizens of [Georgia] through specially licensed agents or brokers
known as surplus lines brokers.” Ga. Comp. R. & Regs. 120-2-89 app. A.
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out of any one Wrongful Act.” The policy also caps payouts on
multiple claims against the insured in this way:
Multiple Claims by one or more parties arising out of
a single Wrongful Act or series of related Wrongful
Acts resulting in, or allegedly resulting in, Damages
suffered by a single resident at an Insured’s facility or
under the Insured’s care, shall be considered a single
Claim for purposes of this Policy, and as a single
Claim shall be subject to the Limit of Liability listed
on the Declarations for a single Claim.
The policy provides: “A single Wrongful Act, or the accumulation
of more than one Wrongful Act during the Policy Period, may
cause the per event limit and/or the annual aggregate maximum
limit to be exhausted at which time the Insured will have no further
benefits under the Policy.” And “[n]otwithstanding anything
contained in this Policy to the contrary, the Insurer’s financial
obligation imposed by the coverage with respect to all Claims
hereunder shall not exceed the amount specified on the
Declarations as the aggregate Limit of Liability.” That’s a $100,000
cap on coverage for “all Claims.”
The policy gives Prime “both the right and the duty to
provide for [the Insured’s] defense with respect to a Claim covered
by the Policy.” But Prime’s duty to defend its Insured ends “[w]hen
the applicable Limits of Liability of the Policy are exhausted by
payment of Damages and/or Claim Expenses.”
Then there’s the diminishing limits feature of the policy. See
supra n.2. According to the policy’s plain terms, claim expenses
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come out of the policy’s limits. The policy defines “Claim
Expenses” to include “[a]ll fees, costs, and expenses charged by any
lawyer or other service provider designated by the Insurer to
represent the Insured” and “[a]ll other fees, costs, and expenses . . .
resulting from the investigation, adjustment, defense, and appeal
of a Claim.” It sets the “Limit(s) of Liability” as the “maximum
amount the Insurer will be obligated to pay for an otherwise
covered Claim, including payment for Claim Expenses, Damages,
or any other sums due under this Policy, the amount of which is
set forth on the Declarations.” And “[a]ll Claim Expenses reduce
the available Policy Limits.”
B. Count One: Statute of Limitations on
the Breach of Duty Claim
Count one alleges that Claims Direct breached a duty to the
Clinic. The district concluded that the claim was barred by the
statute of limitations.
1. The Alleged Duty
The complaint itself doesn’t name the duty to the Clinic that
Claims Direct allegedly breached. In their brief to us the plaintiffs
say it was the breach of a fiduciary duty. And the factual allegations
of the complaint focus on the advice that was given (or allegedly
should have been but was not given) to the Clinic by Claims
Direct’s employee McBride (who is not named as a defendant).
The complaint alleges that McBride failed to communicate
to the Clinic an April 26, 2019 settlement offer from the Beaubrun
estate. He was allegedly protecting the insurers’ interests while
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giving advice that made the Clinic believe he was protecting its
interests. And McBride allegedly did not explain to the Clinic that
defending the Beaubrun lawsuit would cost more than $50,000,
which was the policy limit for the claim. Finally, in the Utah
declaratory judgment action, he assisted Prime’s lawyers. He
allegedly did so “through signing an affidavit for use in support of
Prime’s contention that the available policy limits were exhausted.”
According to the complaint, “McBride, as an agent for Claims
Direct Access, filed an affidavit regarding the amount of
attorney[’]s fees and expenses incurred in its ‘defense’ of the
Beaubrun matter.”
The district court determined that the Georgia four-year
statute of limitations for breach of fiduciary duty or legal
malpractice applied, not Georgia’s six-year statute of limitations for
breach of contract.6 It then concluded that McBride’s alleged
actions and inaction that were the basis for this claim occurred
outside of that four-year period.
The plaintiffs contend that Georgia’s six-year statute of
limitations for breach of contract should apply to this claim. They
now specify that while the claim is one for breach of fiduciary duty,
“the underlying conduct” for the claim is a breach of contract, so
6 In their briefs to this Court, the parties accept the district court’s position that
Georgia law applies, and each cites decisions of that state’s courts on the
statute of limitations issue relating to the breach of duty claim. We will accept
their implicit agreement that Georgia law applies to the issue without deciding
whether they are both right (or both wrong) about choice of law.
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the six-year statute of limitations should apply. And they argue that
there was a continuing series of breaches based on McBride’s
conduct.
The Georgia statute of limitations for breach of “simple
contracts in writing” is six years. Ga. Code § 9-3-24. That six-year
limit also applies when “an implied promise to perform
professionally pursuant to a written agreement for professional
services” is written into a contract by law and that promise is
broken. Newell Recycling of Atlanta, Inc. v. Jordan Jones & Goulding,
Inc., 703 S.E.2d 323, 325 (2010).
A four-year limitations period “applies where no sufficiently
written contract exists and a cause of action can therefore be based
solely on the breach of an express oral or implied promise.” Id.
(citing the four-year limitations period in Ga. Code § 9–3–25, which
applies to the breach of “any implied promise or undertaking”).
Then there’s the hybrid situation where a written contract exists,
and a party to it alleges that implied duties were breached. See
Newell Recycling, 703 S.E.2d at 325. To determine whether the six-
year period applies in a hybrid situation, courts must look to
whether “any implied duties” that were allegedly breached “would
have grown directly out of the existence of the written contract
itself.” Id. (emphasis added).
The district court determined that the insurance policy was
not a “complete written agreement for professional services.” It
observed that the policy did not assign any specific responsibilities
to Claims Direct or its employee McBride for defending the insured
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or counseling the insured about mounting a defense. The court
reasoned that McBride’s actions “cannot reasonably be understood
as services that were directly contemplated in and arose out of the
Policy.” Instead, his alleged actions were incidental to the policy
and ref lect asserted failures to provide what amounted to “legal or
business advice.” In the court’s view, that means whatever advice
McBride provided or failed to provide, his professional services did
not “grow immediately out of the Policy” and the insurer’s
obligations under the terms of that contract.
We agree that if there was a duty that McBride’s actions or
omissions breached, it did not “grow out of ” the written contract.
See Ga. Code Ann. § 9-3-24; Newell Recycling of Atlanta, 703 S.E.2d
at 325. The contract was an insurance policy, not a contract for
professional services. And the six-year statute of limitations for
breach of contract found in Ga. Code Ann. § 9-3-24 refers only to
“liabilities resting in or growing out of written contracts, not
remotely or ultimately, but immediately.” Newell Recycling of
Atlanta, 703 S.E.2d at 325 (quotation marks omitted).
At most, McBride’s alleged breaches are of a fiduciary duty
that is incidental to the policy. Any obligations he had to provide
advice or guidance or to provide those services in a certain manner
did not “grow[] . . . immediately” out of the policy. Id. (quotation
marks omitted). The district court correctly concluded that a four-
year statute of limitations applies to the breach of fiduciary duty
claim.
2. When the Claim Accrued
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The next step is determining whether the claim accrued
outside of the four-year statute of limitations period. Under
Georgia law, “[t]he statute of limitation for a cause of action for
breach of fiduciary duty is triggered by a wrongful act
accompanied by any appreciable damage.” Hendry v. Wells, 286 Ga.
App. 774, 779, 650 S.E.2d 338, 343 (2007). And Georgia courts have
rejected the “continuing tort theory” for breach of fiduciary duty
claims. See Corp. of Mercer Univ. v. Nat’l Gypsum Co., 368 S.E.2d 732,
733 (Ga. 1988) (stating that “[t]he continuing tort theory . . . is
limited to cases in which personal injury is involved”); Allen v.
Columbus Bank & Tr. Co., 534 S.E.2d 917, 921 (Ga. Ct. App. 2000)
(rejecting an argument that the mismanagement of a trust is a
continuing tort “inasmuch as the [Georgia] Supreme Court has
ruled that the continuing tort theory is applicable only to cases
involving personal injury”).
The district court determined that the earliest alleged breach
of duty arose from “McBride’s advice or counsel—or lack thereof,”
which occurred before the Beaubrun estate’s state court lawsuit was
filed on June 16, 2014. McBride’s actions, or inaction, and Claims
Direct’s and McBride’s alleged breaches related to their assistance
with the Utah declaratory judgment action in 2015, all occurred
more than four years before the present lawsuit was filed on March
12, 2021. So the statute of limitations barred the breach of duty
claim.
The plaintiffs point to McBride’s alleged conduct in 2019.
They assert that he failed to pass along to the Clinic an April 2019
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settlement demand for $100,000 from the Beaubrun estate, and
that the same year he signed an affidavit that Prime could use in
the Utah declaratory judgment action to establish that the policy
limits had been exhausted.
It is true that “each act of alleged breach of fiduciary duty
that causes damage creates a new cause of action for that specific
act.” Godwin v. Mizpah Farms, LLLP, 766 S.E.2d 497, 505 (Ga. Ct.
App. 2014). But McBride’s alleged failure to convey to Prime the
Beaubrun estate’s $100,000 settlement demand in 2019 was directly
related to the settlement negotiations in 2014 and the filing of the
declaratory judgment action in 2015, which were outside the four-
year statute of limitations. The Beaubrun estate’s 2019 demand for
$100,000 and Prime’s rejection of it were a continuation of the
estate’s June 2014 rejection of the $50,000 tender and its insistence
that the policy provided $100,000 in coverage for the Beaubrun
claim. Any refusal to provide $100,000 or pass along information
relating to that demand is the same allegedly wrongful act and not
a new, separate basis for a claim in 2019.
As we mentioned, the Georgia Supreme Court has limited
any “continuing tort theory” to personal injury claims, see Corp. of
Mercer Univ., 368 S.E.2d at 733, and a breach of fiduciary duty claim
that occurs outside the statute of limitations cannot be revived by
asserting that it was based on “continuing” conduct. If there is a
new and distinct breach of duty, that may start the limitations clock
running anew, see Godwin, 766 S.E.2d at 505, but that isn’t what the
plaintiffs have alleged.
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Instead, they’ve alleged a breach of duty that had two
components. The first involved the June 2014 refusal to settle with
the Beaubrun estate for the aggregate limit of the Clinic’s policy
($100,000). The second component was McBride’s supplying an
affidavit in the Utah declaratory judgment action in 2019 stating
that the policy limits had been exhausted.
The alleged breach that is the second component is a
continuation of the alleged breach that is the first component.
Providing an affidavit supporting a paid-out defense that has
already been asserted is not materially different for these purposes
from seeking a declaratory judgment that policy proceeds have
been fully paid out. The time for filing the breach of fiduciary duty
claim began to run when the 2015 declaratory judgment action was
filed, which was more than four years before the plaintiffs filed the
present lawsuit in 2021.
It follows that the district court correctly dismissed the
count one breach of fiduciary duty claim as barred by the four-year
statute limitations. See Gonsalvez v. Celebrity Cruises Inc., 750 F.3d
1195, 1197 (11th Cir. 2013) (“A Rule 12(b)(6) dismissal on statute of
limitations grounds is appropriate if it is apparent from the face of
the complaint that the claim is time-barred.”) (quotation marks
omitted).
C. Counts Two and Three: the Utah Declaratory Judgment
and the Claims Dependent on the Policy Limit
Count two alleges that Prime breached the policy by failing
to provide $100,000 in coverage. Count three alleges that Claims
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Direct and Prime negligently failed to accept a demand for
$100,000, offering only $50,000.
Those two counts hinge on whether the policy provided a
$100,000 or a $50,000 limit for the Beaubrun claim. The district
court dismissed them after determining that the plaintiffs were
collaterally estopped from contending that the policy has a
$100,000 limit for the Beaubrun claim, after that issue was fully
litigated and decided in favor of the defendants in the Utah
declaratory judgment action.7 That judgment, and the Georgia
one domesticating it, declare that the professional liability limit for
the Beaubrun claim was $50,000 and that because that limit had
been exceeded, Prime had no further obligation to defend or
indemnify the Clinic or Dodds against the Beaubrun claim.
1. The Policy Limits
It doesn’t matter whether collateral estoppel applies to the
policy limits issue underlying the claims in counts two and three
because those claims are foreclosed by the plain language of the
policy anyway. For that reason, we need not and do not address
collateral estoppel.
The policy provides: “This Agreement is entered into in the
State of Utah and the Agreement, and any rights, remedies, or
obligations provided for in this Agreement, shall be construed and
7 The court also determined that the count one claim for breach of fiduciary
duty was subject to collateral estoppel for the same reason. Because we’ve
concluded that count one is barred by the four-year statute of limitations, we
do not address collateral estoppel as to it either.
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enforced in accordance with the laws of Utah.”8 Utah courts
interpret insurance policies as they do other contracts: “if the
language within the four corners of the contract is unambiguous,
the parties’ intentions are determined from the plain meaning of
the contractual language.” Benjamin v. Amica Mut. Ins. Co., 140 P.3d
1210, 1213 (Utah 2006) (quotation marks omitted). Under Utah
law, policy terms are given their “usually accepted meanings” and
are construed “in light of the insurance policy as a whole.” Utah
Farm Bureau Ins. Co. v. Crook, 980 P.2d 685, 686 (Utah 1999). “Policy
terms are harmonized with the policy as a whole, and all provisions
should be given effect if possible.” Id.
The Prime policy language is unambiguous. In its
Declarations section under a heading titled “Professional Liability”
the policy states: “$100,000 Policy Aggregate” and “$50,000
Professional Liability.” And in the Limits of Liability section the
policy states that:
Each Wrongful Act Limit of Liability listed on the
Declarations is the most we will pay for any
combination of Damages and/or Claim Expenses
because of all Damages arising or allegedly arising out
of any one Wrongful Act. Multiple Claims by one or
more parties arising out of a single Wrongful Act or
8 Although the parties agreed that Georgia law applied to determine the statute
of limitations for the breach of duty claim, see supra n.6, they don’t say whether
they think Utah law or Georgia law should apply to construction of the terms
of the policy. Because the policy clearly states that Utah law governs
construction of its terms, and neither party suggests it should not, we will
apply it in interpreting the terms of the policy.
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22-10614 Opinion of the Court 26
series of related Wrongful Acts resulting in, or
allegedly resulting in, Damages suffered by a single
resident at an Insured’s facility or under the Insured’s
care, shall be considered a single Claim for purposes
of this Policy, and as a single Claim shall be subject to
the Limit of Liability listed on the Declarations for a
single Claim.
The Beaubrun estate’s claim, which stems from Erica Beaubrun’s
death following a liposuction procedure at the Clinic, is a single
claim under the Policy. That means it is subject to the $50,000 limit
of liability.
2. The Expert’s Affidavit
We are unpersuaded by the plaintiffs’ attempt to redirect our
attention to an affidavit they obtained from a lawyer who is an
author of insurance treatises, in which he purports to enlighten us
on why the policy’s limit provisions should be construed in the
plaintiffs’ favor. In Utah the interpretation of an insurance policy
is a question of law. Mellor v. Wasatch Crest Mut. Ins. Co., 201 P.3d
1004, 1007 (Utah 2009). The same is true in Georgia. See, e.g.,
Magnetic Resonance Plus, Inc. v. Imaging Sys. Int’l, 543 S.E.2d 32, 34
(Ga. 2001) (quoting Ga. Code Ann. § 13–2–1). And probably in
every other state too.
We have repeatedly said, in a number of contexts, that we
do not need, want, or accept expert testimony on questions of law.
See, e.g., Commodores Ent. Corp. v. McClary, 879 F.3d 1114, 1128–29
(11th Cir. 2018) (“[Q]uestions of law are not subject to expert
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22-10614 Opinion of the Court 27
testimony.”); Myers v. Bowman, 713 F.3d 1319, 1328 (11th Cir. 2013)
(explaining that questions of law, like whether a use of force is
excessive, are not subject to expert testimony); Newland v. Hall, 527
F.3d 1162, 1208 (11th Cir. 2008) (explaining that when determining
the reasonableness of an attorney’s conduct, “statements from
other attorneys are not dispositive; indeed, they have little weight
in our analysis.”); Provenzano v. Singletary, 148 F.3d 1327, 1332 (11th
Cir. 1998) (“[I]t would not matter if a petitioner could assemble
affidavits from a dozen attorneys swearing that the strategy used
at his trial was unreasonable. The question is not one to be decided
by plebiscite, by affidavits, by deposition, or by live testimony. It is
a question of law to be decided by the state courts, by the district
court, and by this Court, each in its own turn.”); see also Montgomery
v. Aetna Cas. & Sur. Co., 898 F.2d 1537, 1541 (11th Cir. 1990).9
9 In the land of the law, it seems, there is always an exception or two to nearly
every rule, no matter how emphatically the rule is stated or how close to
universally it applies. So it is here. The exception is that expert testimony on
foreign law is permitted. See Pierce v. Indseth, 106 U.S. 546, 551 (1883) (“The
general rule as to the proof of foreign laws is that . . . unwritten law must be
proved by the testimony of experts, that is, by those acquainted with the
law.”); Baloco ex rel. Tapia v. Drummond Co., 640 F.3d 1338, 1349 (11th Cir. 2011)
(relying on expert testimony to interpret Columbian law); Ramsay v. Boeing
Co., 432 F.2d 592, 599–602 (5th Cir. 1970) (relying on expert testimony to
interpret Belgian law); Shapleigh v. Mier, 83 F.2d 673, 676 (5th Cir. 1936) (“The
law of Mexico . . . remains foreign law to be proven as a fact when written by
production of copies of the Constitution and statutes, and in other respects by
the testimony of experts.”) (emphasis added), aff’d, 299 U.S. 468 (1937). But
neither Georgia nor Utah law is the law of a foreign state.
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Every federal judge takes an oath of office swearing to
“administer justice . . . and . . . faithfully and impartially discharge
and perform all the duties” of a judge “under the Constitution and
laws of the United States.” 28 U.S.C. § 453. And under the
Constitution, “[i]t is emphatically the province and duty of the
judicial department to say what the law is.” Marbury v. Madison, 5
U.S. 137, 177 (1803). We will not cede that province or delegate our
duty to say what the law is to non-judges with opinions that can be
called forth for hire.
Because we interpret the plain language of the insurance
policy to mean that the policy limit is $50,000 for a claim of
professional liability, the Beaubrun estate’s argument to the
contrary fails. And counts two and three of the complaint fail with
it.
D. Count Five: Georgia Surplus Lines Insurance Claim
The district court also dismissed count five, which is a claim
against Prime and Evolution for the unauthorized sale of surplus
lines insurance. The court concluded the Georgia Surplus Lines
Insurance Act (GSLIA) provides no private cause of action. It also
determined that the claim had been abandoned because the
plaintiffs did not respond to the insurers’ argument that the GSLIA
does not provide a private cause of action.
Section 33-5-26(b) of the GSLIA states that “[n]o surplus
lines policy or certificate . . . shall be delivered in this state unless a
standard disclosure form or brochure explaining surplus lines
insurance is attached to or made a part of the policy or certificate.”
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Ga. Code Ann. § 33-5-26(b). Georgia Rules and Regulations 120-2-
89 provides that “[a]ny insurer or surplus lines broker failing to
comply with the requirements of this Regulation Chapter shall be
subject to such penalties as may be appropriate under the insurance
laws of this State.” Ga. Comp. R. & Regs. 120-2-89-.04.
The plaintiffs allege that the policy did not have the required
disclosure and assert that the lack of this disclosure enabled
Evolution and Prime to “exploit internal ambiguities within the
Policy to their advantage,” and that the Clinic has “sustained
damages” (in the form of the $60,000,000 consent judgment)
“resulting from the substandard policy of insurance.” They also
assert that Evolution was not authorized to sell insurance in
Georgia.
The insurers contend that the GSLIA does not provide a
private cause of action. The plaintiffs failed to address that
contention in the district court, and they don’t address it in their
briefs to this Court. Instead, they contend only that the “regulating
of insurers and the requirement that insurers and/or insurance
brokers be licensed in Georgia to transact insurance business is a
long-standing policy decision of our state.” They argue that
because the State of Georgia has not “taken any corrective or
disciplinary action” against the defendants, we should engraft a
private cause of action onto the GSLIA in order to serve “public
policy.” But they point to no authority supporting a private cause
of action for failing to comply with the GSLIA’s disclosure
requirements.
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The insurers respond that Georgia law does not provide a
private cause of action and that, even if it did, it would not result
in unlimited liability coverage. Instead, they note that even if the
policy did not contain a disclosure,10 the sole remedy for that failure
would be a penalty imposed by the Georgia Insurance
Commissioner. See Ga. Comp. R. & Regs. 120-2-89-.04; cf. Tyson v.
Scottsdale Indem. Co., 805 S.E.2d 138, 143 (Ga. Ct. App. 2017)
(finding no support for the assertion that “an insurer’s failure to
comply with [the surplus lines insurance statutes] renders a policy
unenforceable”). The insurers also argue that the Clinic’s liability
for a $60,000,000 consent judgment “has nothing to do with”
whether the policy had the proper surplus lines disclosure.
The district court was correct to dismiss count five. Georgia
law provides no private cause of action for the unauthorized sale
of surplus lines insurance. And we are not in the business of
engrafting additional remedy provisions onto state (or federal for
10 The policy contains a disclosure page about its status as a surplus lines policy.
At oral argument, counsel for the insurers pointed out that the policy did
contain a surplus lines disclosure, but conceded that the disclosure in the
Policy did not exactly track the language in Ga. Comp. R. & Regs. 120-2-89
app. A, as required by that section. See Ga. Comp. R. & Regs. 120-2-89-.03(a).
As counsel correctly stated, however, the proper remedy for failing to comply
with that section comes in the form of penalties from the Georgia Insurance
Commissioner, not a judicially imposed private cause of action. See Ga.
Comp. R. & Regs. 120-2-89-.04.
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that matter) statutes. As written, the GSLIA provides the plaintiffs
no relief.11
AFFIRMED.
11 In counts six and seven of the complaint, the plaintiffs seek punitive damages
and attorney’s fees, but because all their substantive claims fail, they have no
basis for that relief, and the district court correctly dismissed those counts. (As
mentioned before, the complaint contained no count four.)
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