General Star National Insurance Company v. MDLV LLC, et al.

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 23-11064
____________________
GENERAL STAR NATIONAL INSURANCE COMPANY,
Plaintiff-Appellant,
versus
MDLV LLC,
d.b.a. One Sotheby's International Realty,
HELIAC, INC.,
GLEB KLIONER,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Southern District of Florida
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2 Opinion of the Court 23-11064
D.C. Docket No. 1:21-cv-24284-FAM
____________________
Before R OSENBAUM , NEWSOM , and L UCK , Circuit Judges.
PER CURIAM:
This duty-to-defend action arises from an underlying lawsuit
involving a real-estate transaction. Heliac, Inc., a real-estate hold-
ing company, owned a condominium property in South Florida. It
enlisted MDLV, LLC, d/b/a One Sotheby’s International Realty
(“One Sotheby’s”) and its agent Gleb Klioner to help it sell the prop-
erty. Heliac sued One Sotheby’s and Klioner. It alleged that
Klioner made misrepresentations to induce Heliac to sell its prop-
erty so Klioner could earn a commission and that he later con-
verted the sale proceeds for his own use.
One Sotheby’s, insured by General Star National Insurance
Company, sought coverage for its defense against the Heliac law-
suit. In the action before us, General Star sought a declaratory
judgment that various exceptions in One Sotheby’s insurance pol-
icy preclude coverage. Two of those exceptions are at issue on ap-
peal: the conversion exclusion (which precludes coverage for
claims arising out of any disputes involving conversion) and the fu-
ture-value exclusion (which precludes coverage for claims arising
out of any guarantee or promise of future status, performance, or
valuation).
Florida law requires General Star to defend One Sotheby’s
in the Heliac action if any of Heliac’s claims, as alleged, fall partially
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23-11064 Opinion of the Court 3
or potentially within the scope of the policy’s coverage and outside
an exception. The district court concluded that at least two counts
in the Heliac lawsuit come within One Sotheby’s policy’s coverage
and lie outside the two exceptions at issue on appeal. We agree.
Therefore, we affirm the district court’s decision.
I.
General Star issued a Real Estate Errors and Omissions Lia-
bility Insurance Policy to One Sotheby’s, effective from November
30, 2020, through November 30, 2021 (the “Policy”). The Policy
provides professional liability coverage for the real-estate broker-
age as follows:
The Company will pay on behalf of the Insured all
sums which the Insured shall become legally obli-
gated to pay as Damages for Claims first made against
the Insured during the Policy Period and first re-
ported to the Company in writing during the Policy
Period or applicable Extended Reporting Period, aris-
ing out of any act, error, omission or Personal Injury
in the rendering of or failure to render Professional
Services by an Insured[.]
But the Policy also contains several exclusions, including, as
relevant here, one for damages arising out of disputes involving
conversion and one for damages arising from guarantees or prom-
ises of future performance or valuation:
The Company has no obligation under this Policy to
pay Damages or Claims Expenses or to provide a de-
fense, in connection with any Claim(s):
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4 Opinion of the Court 23-11064
A. Under any part of this Policy if based on or arising
out of the following: . . .
2. Any disputes involving any Insured’s fees,
commissions or charges, the failure to pay or
collect premium, escrow or tax money, or the
conversion, misappropriation, commingling or
embezzlement of funds or other property.
However, in the event a Claim is made against
an Insured seeking both the return of escrow
money and alleging an act, error, omission or
Personal Injury in the performance of Profes-
sional Services covered under this Policy, the
Company will defend such Claim without any
obligation to reimburse the Insured for the
payment of monies held as escrow: . . .
16. Any guarantee or promise of future status,
performance or valuation in the course of per-
forming Professional Services by the Insured.
Heliac filed a lawsuit against One Sotheby’s and Klioner for
actions they allegedly undertook or omitted while the Policy was
in effect. In its relevant pleading, Heliac alleged that the following
actions took place. Heliac was a real-estate holding company
whose only principals were two Russian citizens who reside in Rus-
sia. Heliac bought a condominium at 9701 Collins Avenue, Unit
502S, Bal Harbour, Florida, in the St. Regis building. To manage
their property, Heliac retained Gleb Klioner, a real-estate agent
well-known in South Florida’s Russian-speaking community. To
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23-11064 Opinion of the Court 5
facilitate his management of the condominium, Heliac gave
Klioner access to Heliac’s operating account.
Later, One Sotheby’s hired Klioner. Once Klioner worked
for One Sotheby’s, Heliac entered into a listing agreement with
One Sotheby’s. Under that agreement, One Sotheby’s listed the
condominium for almost six-million dollars. Nothing relevant to
this case happened for some time after that.
But according to Heliac’s allegations, several years later, be-
tween December 2020 and February 2021, Klioner “continuously
advised” Heliac to sell the condominium “immediately” because of
what Klioner described the relevant market conditions to be. More
specifically, Klioner made these statements to Heliac:
• The real estate market in Miami Beach, Florida, was on the
verge of crashing;
• The drop in the condominium’s value by as much as 60 to 70%
was imminent;
• It would be nearly impossible to sell the condominium beyond
mid-March 2021;
• The U.S. economy was on the verge of crashing at any moment;
• The U.S. stock market was on the verge of crashing at any mo-
ment;
• Heliac had to sell the condominium urgently, or it would lose
money because it would become unable to sell the property.
Heliac alleges that Klioner made these statements “while having
superior knowledge of the real estate market,” and knowing that
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6 Opinion of the Court 23-11064
Heliac’s principals were generally underinformed about the real-
estate market in this country.
In December 2020, Klioner presented Heliac with a $3.8 mil-
lion offer on the condominium. But that offer fell “significantly”
below the unit’s list price and, as Heliac alleged, below market price
as well. So despite pressure from Klioner, Heliac refused to sell for
$3.8 million.
Heliac asserts that after it declined to sell, on January 27,
2021, Klioner converted $20,000 from Heliac’s operating account
to his personal account. This was the first time Klioner allegedly
converted Heliac’s funds.
The next month, in February 2021, Klioner presented an-
other offer for the condominium to Heliac, this time for $4.2 mil-
lion. This offer still fell below the price Heliac wanted to accept for
the unit. But after enduring what it characterized as “merciless[]”
pressure from Klioner for over two months, Heliac’s principals ac-
quiesced to the sale on February 8, 2021.
From that date, Heliac instructed Klioner to deposit the pro-
ceeds into its bank account in Switzerland. But Klioner said that he
could only deposit the proceeds into Heliac’s operating account in
Florida, which only Klioner could access in person. Klioner also
advised that the sale could be completed in a timely matter only if
Heliac executed a corporate resolution granting him full authority
to sign all closing documents on Heliac’s behalf. Klioner never in-
formed Heliac that the closing documents could be executed
through an online notary.
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23-11064 Opinion of the Court 7
Heliac went through with the sale on March 10, 2021. In
reliance on Klioner’s disbursement instructions, Heliac arranged
for $3,885,023.02 to be wired from the closing agent’s escrow ac-
count into Heliac’s operating account. A week later, on March 17,
2021, Heliac alleged, Klioner secretly wired nearly all the pro-
ceeds—$3,734,277.21—from Heliac’s operating account to his per-
sonal account without Heliac’s knowledge or permission. This was
the second time Klioner allegedly converted Heliac’s funds.
About nine days after that, on March 26, 2021, Heliac pro-
vided Klioner with wire-transfer instructions to send the condo-
minium sale proceeds to Heliac’s principals’ account at the Swiss
bank. Klioner did not do so. Instead, for the next two-and-a-half
months—until June 7, 2021, Klioner gave Heliac’s principals vari-
ous false reasons for the bank’s inability or refusal to approve the
transfer of the sale proceeds. Eventually, though, Klioner admitted
to Heliac that he had converted the sale proceeds for his own use.
Klioner still has not returned the converted proceeds.
Heliac’s First Amended Complaint asserted five counts
against One Sotheby’s, two of which are relevant on appeal: negli-
gent misrepresentation (Count I) and negligent employee training
(Count III). In Count I, Heliac alleged that Klioner apparently be-
lieved the alleged misrepresentations of material fact he made to
Heliac about the then-current state of the real-estate market were
true, even though he and One Sotheby’s “should have known” they
were false. According to the complaint, One Sotheby’s and Klioner
“intended and expected Heliac to rely on Klioner’s
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8 Opinion of the Court 23-11064
misrepresentations to induce Heliac to sell the St. Regis Condo and,
consequently, collect a commission from the sale of the St. Regis
Condo as soon as possible.” Count I sought to recover the con-
verted sale proceeds and the difference between the market price
of the condominium and its actual sale price (“market-value dam-
ages”). This Count did not seek any damages related to the first
alleged conversion.
Count III alleged that One Sotheby’s owed Heliac a duty to
adequately train its associates and that it breached this duty. In He-
liac’s view, this duty included ensuring that associates like Klioner
properly advised clients of market value and market conditions, re-
frained from pressuring clients, informed clients of applicable clos-
ing procedures, followed client instructions, and did not “overstep”
by taking unauthorized action in real-estate transactions. Heliac
asserted that Klioner’s handling of the condominium sale made it
“evident” that One Sotheby’s had failed to adequately train him in
these alleged obligations. As a direct result of One Sotheby’s failure
to train Klioner, Heliac said, it suffered market-value damages “and
the loss of the St. Regis Condo sale proceeds.” Like Count I, Count
III did not seek recovery of the first set of funds converted.
General Star initially denied coverage for the Heliac lawsuit.
But later, it agreed to defend One Sotheby’s under a reservation of
rights. After that agreement, General Star filed this coverage action
seeking a declaration that it owed no duty to defend or indemnify
One Sotheby’s in the Heliac litigation.
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23-11064 Opinion of the Court 9
In response, One Sotheby’s filed a motion for judgment on
the pleadings in this action. The district court adopted the magis-
trate judge’s report and recommendation agreeing with One So-
theby’s that Counts I and III of the Heliac complaint fell within the
Policy’s scope of coverage and outside the exclusions. Gen. Star
Nat’l Ins. Co. v. MDLV, LLC, No. 21-24284-CIV, 2023 WL 2436148, at
*1 (S.D. Fla. Jan. 5, 2023), R&R adopted, No. 21-24284-CIV, 2023 WL
2388518 (S.D. Fla. Feb. 3, 2023). As to the conversion exclusion, the
court concluded that the complaint could be fairly read to allege
that Klioner did not decide to convert the sale proceeds until after
the sale had already occurred. Id. at *5. So, the court reasoned,
“the preceding actions—and the damages caused by the market dif-
ferences—could not have arisen from the conversion[,]” and the
counts did not fall under the conversion exception to coverage. Id.
at *5. As to the future-value exclusion, the court construed the
plain meanings of “guarantee” and “promise” narrowly and rea-
soned that the allegations in the complaint did not come “solely
and entirely within the policy exclusion.” Id. at *6.
For its part, General Star filed a motion for partial summary
judgment on issues identical to those in One Sotheby’s motion for
judgment on the pleadings. Again adopting the magistrate judge’s
separate report and recommendation, the district court denied
General Star’s motion. Gen. Star Nat’l Ins. Co. v. MDLV, LLC, No. 21-
24284-CIV, 2023 WL 449385, at *1 (S.D. Fla. Jan. 10, 2023), R&R
adopted, No. 21-24284-CIV, 2023 WL 418873 (S.D. Fla. Jan. 26, 2023).
It explained that it had already decided the issues General Star
raised in One Sotheby’s motion for judgment on the pleadings,
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10 Opinion of the Court 23-11064
applying a standard of review that was more favorable to General
Star than the one applicable under General Star’s motion for partial
summary judgment. Id.
The district court later entered final judgment, declaring
that General Star had a duty to defend One Sotheby’s in the Heliac
lawsuit for claims against One Sotheby’s.1
II.
We review de novo an order granting judgment on the plead-
ings. Perez v. Wells Fargo Nat’l Ass’n, 774 F.3d 1329, 1335 (11th Cir.
2014). Judgment on the pleadings should be granted when no ma-
terial facts are in dispute “and the moving party is entitled to judg-
ment as a matter of law.” Cannon v. City of W. Palm Beach, 250 F.3d
1299, 1301 (11th Cir. 2001). In assessing a motion for judgment on
the pleadings, we accept as true all material facts that the non-mov-
ing party’s pleading alleges, and we view those facts in the light
most favorable to the non-moving party. Perez, 774 F.3d at 1335.
We review de novo the interpretation of an insurance con-
tract. Chalfonte Condo. Apartment Ass’n Inc. v. QBE Ins. Corp., 561 F.3d
1267, 1274 (11th Cir. 2009). Because this action arises under our
diversity jurisdiction and the Policy was delivered to One Sotheby’s
in Florida, substantive Florida law governs our interpretation of the
insurance contract. Fioretti v. Massachusetts Gen. Life Ins. Co., 53 F.3d
1 As for Heliac’s claims against Klioner, the district court entered default judg-
ment for General Star against Klioner for failure to answer or otherwise plead
to the summons and complaint that General Star served on him.
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23-11064 Opinion of the Court 11
1228, 1235 (11th Cir. 1995) (explaining that Florida follows the doc-
trine of lex loci contractus, which, in the absence of a choice-of-law
provision in the contract, directs the court to follow the law of the
state in which the contract was made).
Florida has several rules we must apply in determining
whether the Policy provides any coverage for Sotheby’s One. We
set them forth below.
Under Florida law, “the duty to defend is broader than the
issue of coverage.” Mid-Continent Cas. Co. v. Royal Crane, LLC, 169
So. 3d 174, 180 (Fla. Dist. Ct. App. 2015). Florida applies the “eight
corners” rule, looking only to the underlying complaint for which
coverage is sought and the policy when deciding whether a duty to
defend exists. Travelers Indem. Co. of Conn. v. Richard Mckenzie &
Sons, Inc., 10 F.4th 1255, 1261 (11th Cir. 2021). When a complaint,
fairly read, “alleges facts that are partially within and partially out-
side the coverage of an insured’s policy,” the insurer must defend
that entire suit. Sunshine Birds & Supplies, Inc. v. U.S. Fid. & Guar.
Co., 696 So. 2d 907, 910 (Fla. Dist. Ct. App. 1997). And “[i]f the
allegations of the complaint leave any doubt as to the duty to de-
fend,” we must resolve that doubt in the insured’s favor. Mid-Con-
tinent Cas. Co., 169 So. 3d at 181 (citing Lime Tree Vill. Cmty. Club
Ass’n v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir.1993)).
When, as here, an insurer relies on an exclusion to deny cov-
erage, the insurer bears the burden to show that the complaint’s
allegations fall “solely and entirely within the policy exclusion and
are subject to no other reasonable interpretation.” Deshazior v.
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12 Opinion of the Court 23-11064
Safepoint Ins. Co., 305 So. 3d 752, 755 (Fla. Dist. Ct. App. 2020). If a
policy’s text is “plain and unambiguous,” we must give that lan-
guage “the meaning it clearly expresses.” N. Pointe Cas. Ins. Co. v. M
& S Tractor Servs., Inc., 62 So. 3d 1281, 1282 (Fla. Dist. Ct. App. 2011)
(citation omitted). But if an exclusionary provision is “ambiguous
or otherwise susceptible to more than one meaning,” we construe
that provision in the insured’s favor because, generally, the insurer
drafts the policy. Mid-Continent Cas. Co., 169 So. 3d at 182.
A.
With these standards and rules of construction in mind, we
turn to the Policy. We begin by noting that the parties do not dis-
pute that, without consideration of the Policy’s exceptions, He-
liac’s allegations are subject to coverage under the Policy. That is,
Heliac’s allegations involve “Damages for Claims first made against
the Insured during the Policy Period . . . arising out of any
act . . . in the rendering of or failure to render Professional Services
by an Insured[,]” subject to the parties’ disputes about applicable
exceptions.
We therefore consider whether the conversion exclusion re-
moves Heliac’s allegations from coverage. The relevant provision
states that General Star has no obligation “to pay Damages or
Claims Expenses or to provide a defense in connection with any
Claim(s)[] [u]nder any part of this Policy if based on or arising out
of . . . [a]ny disputes involving any Insured’s . . . conversion . . . of
funds[.]” (Emphasis omitted from original). Although the district
court described this language as “written broadly,” it concluded
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23-11064 Opinion of the Court 13
that the Heliac lawsuit could be fairly read to allege that Klioner did
not decide to convert the funds until after the sale of the condo-
minium. Gen. Star Nat’l Ins. Co., 2023 WL 2436148, at *4–5. Under
that interpretation, the court said, Klioner’s actions through the
time of sale “could not have arisen from the conversion.” General
Star argues that in reaching this conclusion, the district court ig-
nored the word “involving” in the conversion exclusion’s text; be-
cause part of the lawsuit “involve[es]” conversion, Heliac’s claims
are excluded from policy coverage.
We disagree. As we’ve mentioned, under Florida law, we
construe insurance contracts in accordance with their “plain mean-
ing.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528,
532 (Fla. 2005). And to be sure, Florida courts have broadly inter-
preted language like “arising out of,” “based on,” and “involving.”
Id. at 539–40 (interpreting “arising out of ” as “originating from,”
“having its origin in,” growing out of,” “flowing from,” incident
to,” or “having connection with”); Houston Specialty Ins. Co. v. Fen-
stersheib, 632 F. Supp. 3d 1318, 1332 (S.D. Fla. 2022) (finding that
“based on” “fit[s] snugly” with the definition of “arising out of ”);
State v. Elder, 975 So. 2d 481, 483 (Fla. Dist. Ct. App. 2007) (defining
“involve” as “to draw in as a participant,” to “implicate,” “to relate
closely,” to “connect,” “to have an effect on,” to “concern directly,”
to “affect”).
But even when we read the term “involving” broadly, it must
be read in tandem with the phrase “arising from.” As a result, we
cannot say that the claims in Counts I and III necessarily
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14 Opinion of the Court 23-11064
“originat[ed] from,” “gr[e]w out of,” or “flow[ed] from” a dispute
“connect[ed]” to conversion. The complaint can be fairly read to
allege that Klioner negligently made the misrepresentations at the
root of each claim for the purpose of inducing a sale and earning a
commission, not as part and parcel of a conversion scheme. So a
jury could find One Sotheby’s liable for market-value damages re-
lated to Klioner’s negligent misrepresentations and One Sotheby’s
negligent training of Klioner, without also necessarily also finding
it liable for conversion and the lost sale-proceeds damages.
And that is the whole ballgame. Because a jury could hold
One Sotheby’s liable without also finding conversion, the claims at
issue in this case do not necessarily “aris[e] from” a dispute “involv-
ing” conversion, and General Star has a duty to defend.
To hold otherwise would unravel Florida’s jurisprudence re-
quiring coverage for the insured when a complaint even partially
falls under coverage and outside of exclusions. Sunshine Birds &
Supplies, Inc., 696 So. 2d at 910. Florida law commands that we
parse a single lawsuit for different bases of liability, so “[i]f the facts
alleged show any basis for imposing liability upon the insured that
falls within policy coverage, the insurer has a duty to defend.” Lime
Tree Vill. Cmty. Club Ass’n, Inc., 980 F.2d at 1405–06 (emphasis added)
(finding a duty to defend where the complaint “set forth grounds,”
other than intentional acts excluded from policy coverage, “upon
which Lime Tree could be held liable”).
And when a complaint alleges multiple causes of action and
multiple types of damages, with some based on acts that the policy
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23-11064 Opinion of the Court 15
does not exclude, we must parse each basis of liability separately.
Id. at 1405 (distinguishing “a single cause of action based wholly on
acts expressly excluded by the policy” from a complaint setting
forth multiple grounds for liability). Therefore, we consider
whether each basis of liability, rather than the lawsuit as a whole,
is “based on or arising out of . . . [a]ny disputes involving . . . con-
version.” And if a basis exists for establishing liability that does not
involve conversion at all, General Star has a duty to defend.
Before we delve into the allegations of the Heliac complaint
to show why it alleges a dispute that does not “involv[e]” conver-
sion, we pause briefly to discuss the meaning of “dispute” in the
Policy. The Policy does not expressly define the term. Still, though,
its terms otherwise inform the meaning of the word.
We start with the ordinary meaning of the term “dispute.”
Deutsch v. Geico Gen. Ins. Co., 284 So. 3d 1074, 1076 (Fla. Dist. Ct.
App. 2019) (“When a term in an insurance policy is undefined, it
should be given its plain and ordinary meaning, and courts may
look to legal and non-legal dictionary definitions to determine such
a meaning.”). Black’s Law Dictionary defines “dispute” to mean “[a]
conflict or controversy, esp. one that has given rise to a particular
lawsuit.” (11th ed. 2019). Here, as we’ve noted, the conversion ex-
clusion relieves General Star of the “obligation under this Policy to
pay Damages or Claims Expenses or to provide a defense, in con-
nection with any Claim(s) . . . [u]nder any part of this Policy if
based on or arising out of . . . [a]ny disputes
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16 Opinion of the Court 23-11064
involving . . . conversion . . . .” (Emphasis added). That is, the Pol-
icy employs the plural of “dispute”—“disputes.”
We think that has significance. First, a lawsuit is not neces-
sarily a single “dispute.” Rather, it can involve multiple “disputes,”
meaning multiple “conflict[s] or controvers[ies].” Because that is
so, that one particular “dispute” within a lawsuit “involv[es]” con-
version does not necessarily mean that all “disputes” within the
case necessarily “involv[e]” conversion. And that is precisely the
case here.
Counts I and III allege facts and seek damages that do not
necessarily arise from any dispute involving conversion. Count I
expressly avers that One Sotheby’s and Klioner, “as its sales associ-
ate, intended and expected Heliac to rely on Klioner’s misrepresen-
tations to induce Heliac to sell the St. Regis Condo and, conse-
quently, collect a commission from the sale of the St. Regis Condo as soon
as possible.” (Emphasis added). One fair reading of the complaint
alleges that Klioner made the misrepresentations to secure a com-
mission, not to further a conversion scheme. True, Count I also
asserts at a different point that without the sale, “Heliac’s funds
could not have been converted.” But these allegations can be fairly
read to suggest that the dispute involving the conversion of the sale
proceeds “ar[ose] out of ” Klioner’s misrepresentations made in an
effort to procure a commission, not the other way around.
Count III turns to the misrepresentations as evidence of a
failure to train Klioner, but it similarly flows from a theory of neg-
ligence and Klioner’s desire to earn a commission, not for the
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23-11064 Opinion of the Court 17
purpose of furthering a conversion scheme. See Mactown, Inc. v.
Cont’l Ins. Co., 716 So. 2d 289, 291 (Fla. Dist. Ct. App. 1998) (finding
that a negligent retention claim did not fall under a coverage exclu-
sion for battery where the plaintiffs in the underlying suit brought
claims for respondeat superior liability for battery and negligent re-
tention).
Heliac, the master of its complaint, could have alleged that
Klioner made the misrepresentations with the goal of persuading
Heliac to sell so that he could eventually convert the funds, but it
did not. Hill v. BellSouth Telecomms., Inc., 364 F.3d 1308, 1314 (11th
Cir. 2004). Rather, Heliac set out distinct grounds for liability in its
complaint: negligence (negligent misrepresentations and negligent
employee training) and intentional acts (conversion). Lime Tree Vill.
Cmty. Club Ass’n, Inc., 980 F.2d at 1405. And negligent misrepresen-
tations made for the purpose of securing a quick commission and
the resulting market-value damages are not merely incidental to a
conversion that happened post-sale. Guideone Elite Ins. Co. v. Old
Cutler Presbyterian Church, Inc., 420 F.3d 1317, 1328 (11th Cir. 2005)
(finding it “difficult to categorize a multi-crime episode, which in-
cluded a kidnapping, an assault and battery, and a robbery, as simply
incident to a rape,” which was excluded from coverage). Nor can
we say that the negligent acts would not have occurred “but for”
the conversion, because the negligent misrepresentations were mo-
tivated by the desire to secure a commission, not enable conver-
sion. Id.
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18 Opinion of the Court 23-11064
Whether One Sotheby’s is eventually found liable under a
negligence or conversion scheme theory does not matter to
whether General Star as a duty to defend under the Policy: “[T]he
duty to defend arises even where ‘there has been a suggestion made
that the purported negligent allegations are really allegations of in-
tentional acts in disguise.’” Hartford Acc. & Indem. Co. v. Beaver, 466
F.3d 1289, 1297 (11th Cir. 2006). “[S]o long as the complaint can
reasonably be read as alleging that the [plaintiffs’] injuries were neg-
ligently caused, even if it also may arguably be read as alleging that
the injuries were intentionally caused, the doubt must be resolved
in favor of finding a duty to defend.” Id. Here, as we’ve explained,
should Heliac’s complaint proceed to trial, a jury could find One
Sotheby’s liable for negligent misrepresentation and negligent
training, and not conversion. As a result, the negligent-misrepre-
sentation and negligent-training claims do not necessarily arise
from a dispute involving conversion.
The damages alleged are also distinct: the market-value
damages and the lost-sale proceeds. General Star argues that the
market-value damages are necessarily connected to conversion.
Again, we disagree. Counts I and III allege that as a result of
Klioner’s misrepresentations and One Sotheby’s failure to ade-
quately train Klioner, Heliac was damaged to the extent of “the dif-
ference between the market price of the St. Regis Condo and its sale price,
and the loss of the St. Regis Condo sale proceeds.” (Emphasis
added). As we’ve noted, though, the complaint ties the market-
value damages to Klioner’s alleged misrepresentations that Heliac
said induced it to sell its condominium for significantly less than it
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23-11064 Opinion of the Court 19
was worth. And that brings us back to the purpose Heliac alleges
for Klioner’s alleged misrepresentations: to secure a commission.
So the market-value damages Heliac sought did not “arise
out of ” the conversion, but rather, out of the allegedly pressured
sale of the condominium, which, in turn, Heliac asserts resulted
from Klioner’s desire to earn a commission. And while General
Star may suggest that market-value damages are a novel theory of
recovery, we must resolve any uncertainty about coverage in favor
of One Sotheby’s. Carithers v. Mid-Continent Cas. Co., 782 F.3d 1240,
1246 (11th Cir. 2015) (holding that the insurer “was required to of-
fer a defense in the underlying action unless it was certain that there
was no coverage for the damages sought” where there was an un-
resolved split amongst courts as to whether the underlying theory
for damages was viable). Where a jury could find One Sotheby’s
liable for negligent misrepresentation and negligent training but
not conversion, it could also make One Sotheby’s pay the market-
value damages but not the lost sale-proceeds damages. Under the
Policy, then, One Sotheby’s could be made to pay the market-value
damages because they are not “in connection” with a claim “arising
out of . . . [a]ny dispute involving” conversion.
In short, Florida law commands us to consider whether “the
facts alleged show any basis for imposing liability upon the insured
that falls within policy coverage.” Lime Tree Vill. Cmty. Club Ass’n,
Inc., 980 F.2d at 1406 (emphasis added). When we find such basis,
“the insurer has a duty to defend.” Id. Here, it’s true that conver-
sion certainly “punctuates” the allegations in the Heliac complaint.
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20 Opinion of the Court 23-11064
But “it [i]s but one of the many” injuries (such as market-value
damages) Heliac’s complaint alleges. Guideone Elite Ins. Co., 420 F.3d
at 1328. A jury could find One Sotheby’s guilty of negligent mis-
representation and negligent training while also finding that no
conversion occurred. That theory of liability would involve no
conversion whatsoever, in the claims or the market-value damages
paid on those claims. As a result, at least one basis for liability—
negligent misrepresentation or negligent training, and the resulting
market-value damages—exists that does not arise out of a dispute
involving conversion. Because Counts I and III can fairly be read
to at least partially fall under coverage and outside of exceptions,
the conversion exception does not absolve General Star of its duty
to defend One Sotheby’s from the Heliac Lawsuit.2
B.
The future-value exclusion similarly fails to apply to at least
some of the allegations in the Heliac complaint, so it also does not
relieve General Star of the duty to defend.
We again begin with the text of the exclusion. The future-
value exclusion bars coverage for claims “based on or arising out
of . . . [a]ny guarantee or promise of future status, performance or
valuation in the course of performing Professional Services by the
2 General Star has forfeited its argument, raised for the first time in its reply
brief on appeal, that the Policy’s exclusion for damages that arise out of “[a]ny
disputes involving any Insured’s fees, commissions or charges” also precludes
coverage for the market-value damages. United States v. Whitesell, 314 F.3d
1251, 1256 (11th Cir. 2002).
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23-11064 Opinion of the Court 21
Insured.” The Policy does not define “Guarantee” and “promise,”
so we give the words their “plain and ordinary meaning” by look-
ing to legal and nonlegal dictionary definitions. Deutsch, 284 So. 3d
at 1076.
“Promise” and “guarantee” have varying definitions. But
both terms suggest that the speaker binds herself to some future
action or responsibility. Merriam Webster’s defines “promise” as “a
declaration that one will do or refrain from doing something spec-
ified,” or “a legally binding declaration that gives the person to
whom it is made a right to expect or to claim the performance or
forbearance of a specified act.” Promise, MERRIAM -WEBSTER ’S
ONLINE DICTIONARY (last visited Feb. 7, 2024), https://www.mer-
riam-webster.com/dictionary/promise [https://perma.cc/Z48N-
V4QJ]; Gen. Star Nat’l Ins. Co., 2023 WL 2436148, at *6 (giving addi-
tional definitions for promise: “reason to expect something;” “to
pledge to do, bring about, or provide”; “warrant, assure”; or “to
give ground for expectation.”).
Reasonable definitions of “guarantee” also evoke the impo-
sition of an obligation, conditional on some future happening or
nonhappening. Guarantee, MERRIAM -WEBSTER ’S ONLINE
DICTIONARY , (last visited Feb. 7, 2024), https://www.merriam-
webster.com/dictionary/guarantee [https://perma.cc/GZ9A-
N25B] (defining “guarantee” as “an assurance for the fulfillment of
a condition” such as securing another’s possession or assuring the
quality or length of use of a product with a promise of reimburse-
ment); Gen. Star Nat’l Ins. Co., 2023 WL 2436148, at *6 (citing the
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22 Opinion of the Court 23-11064
same definition); see also condition, MERRIAM -WEBSTER ’S ONLINE
DICTIONARY (last visited Feb. 7, 2024), https://www.merriam-web-
ster.com/dictionary/condition [https://perma.cc/VV9F-6CEF]
(defining “condition” as “a premise upon which the fulfillment of
an agreement depends[,]” “a provision making the effect of a legal
instrument contingent upon an uncertain event[,]” and “something
essential to the appearance or occurrence of something else[,]”
such as a prerequisite).3
Under a reasonable, plain reading of either word, none of
the statements Klioner made to induce the sale of the condomin-
ium qualify as “promises” or “guarantees.” The statements pre-
dicted future happenings (the crash of the market, the drop in
value of the condo, the inability to sell in the future, the loss of
3 Some definitions of “promise” and “guarantee” overlap. E.g., promise,
O XFORD ENGLISH D ICTIONARY (last visited Feb. 7, 2024)
https://www.oed.com/dictionary/promise_n?tab=mean-
ing_and_use#28177403 [https://perma.cc/JN33-ZNB2] (defining “promise”
as “guaranteeing that a specified thing will or will not happen.”). But under
Florida law, we must “give meaning to each and every word” in a contract.
Equity Lifestyle Properties, Inc. v. Fla. Mowing and Landscape Serv., Inc., 556 F.3d
1232, 1242 (11th Cir. 2009). So to the extent possible, we avoid treating “prom-
ise” and “guarantee” as redundant of each other, giving each word an inde-
pendent meaning. Id. Read distinctly, a “promise” involves the assurance to
act to bring about a condition or to be responsible for that condition; but a
“guarantee,” under at least one reasonable interpretation, is the assurance that
an obligation will be triggered if (and only if) a condition occurs. In other
words, one reasonable way of distinguishing between “promises” and “guar-
antees” is that “guarantees” are conditional, but “promises” are not.
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23-11064 Opinion of the Court 23
Heliac’s money), but they did not bind or commit Klioner or One
Sotheby’s to performance or forbearance of a specific act.
Klioner did not promise to sell the condominium at a specific
price; he merely predicted that Heliac would lose money in the fu-
ture, which required no action or obligation on his part. He also
did not promise to forbear from selling the condominium in the
future; rather, Klioner stated that the market—not Klioner—would
prevent Heliac from selling the unit. Nor did Klioner suggest that
he or One Sotheby’s would become responsible for the effects of
the happenings he predicted. He did not promise to continue
working with Heliac even if the market dropped, or guarantee that
Heliac would make more on a sale at the time of his statements
than it would have in several months, or Klioner or One Sotheby’s
would cover the difference. These statements were predictions of
future value, and they may or may not have been “material” in
terms of how they affected Heliac’s behavior. But Klioner did not
commit to performing or taking on an obligation related to these
predictions, so they were not “promises” or “guarantees.” As a re-
sult, the future-value exclusion does not apply and does not relieve
General Star of its duty to defend.
III.
For the foregoing reasons, we affirm the district court’s or-
ders granting One Sotheby’s motion for judgment on the pleadings
and denying General Star’s motion for summary judgment.
AFFIRMED.
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