AIX Specialty Insurance Company v. Shaneka Everett, et al

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-12386
Non-Argument Calendar
____________________
AIX SPECIALTY INSURANCE COMPANY,
Plaintiff-Appellant,
versus
SHANEKA EVERETT,
1207 MLK LIQUORS, INC.,
d.b.a. Hollywood Nights South,
Defendants-Appellees.
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2 Opinion of the Court 21-12386
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 8:19-cv-02533-CEH-AAS
____________________
Before W ILSON, J ILL PRYOR , and ANDERSON, Circuit Judges.
PER CURIAM:
After Shanika Everett sustained serious injuries at a club
operated by 1207 MLK Liquors, Inc. d/b/a Hollywood Nights
South (“Hollywood”), she sued Hollywood in state court. Holly-
wood’s insurer, AIX Specialty Insurance Company, then filed this
declaratory judgment action, seeking a declaration that it owed
no duty to defend Hollywood. The district court determined that
AIX owed a duty to defend, and AIX appealed. After careful re-
view, we affirm.
I.
In 2016, when Everett was on the premises of the club that
Hollywood operated, she was struck by a bullet and sustained in-
juries from the gunshot wound. Everett later sued Hollywood in
Florida state court, claiming that it was negligent for failing to
protect an invitee on its premises from a reasonably foreseeable
criminal attack. Everett alleged that she was injured while on Hol-
lywood’s premises when she was “shot by a Projectile (to wit: a
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21-12386 Opinion of the Court 3
bullet).” Doc. 40-2 at 2.1 But the complaint contained no further
factual allegations about the circumstances of the shooting.
Hollywood had a commercial general liability insurance
policy from AIX. Under the terms of the policy, AIX agreed to
“pay those sums that [Hollywood] becomes legally obligated to
pay as damages because of ‘bodily injury’ . . . to which this insur-
ance applies.” Doc. 40-1 at 34. The policy provided that AIX had
“the right and duty to defend [Hollywood] against any ‘suit’ seek-
ing those damages.”
Id.
The policy set forth exclusions that limited the scope of
coverage. One of those exclusions—the firearms exclusion—is
relevant for our purposes. Under that exclusion, the policy afford-
ed no coverage “for any injury, death, claims, or actions occa-
sioned directly or indirectly or as an incident to the discharge of
firearms by person or persons on or about the insured premises.”
Id. at 29.
In the state court action, AIX agreed to provide Hollywood
with a defense subject to a reservation of rights. AIX filed this ac-
tion naming Hollywood and Everett as defendants and seeking a
1 “Doc.” numbers refer to the district court’s docket entries.
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4 Opinion of the Court 21-12386
declaration it owed no duty to defend or indemnify Hollywood in
the state court litigation.2
In this lawsuit, Everett and AIX filed cross motions for
summary judgment. AIX argued that based on the policy’s fire-
arms exclusion it owed no duty to defend or indemnify Holly-
wood. AIX focused on the exclusion’s language stating that it
barred coverage for any injury “occasioned directly or indirectly
or as an incident to the discharge of firearms.”
Id. According to
AIX, Everett’s injuries were occasioned by a shooting because be-
ing struck by a bullet was a but-for cause of her injuries.
Everett argued that AIX owed a duty to defend and indem-
nify. Relying on the plain language of the policy, she argued that
there was another requirement for the exclusion to bar coverage:
the victim had to be injured in an incident that involved the dis-
charge of
multiple firearms. She pointed to the text of the exclu-
sion, which referred to the “discharge of firearms (
plural)” on the
insured’s premises. Doc. 42 at 11 (emphasis in original). Because
the complaint in the state court action alleged that she was in-
jured from a single projectile, Everett reasoned, the exclusion did
not bar coverage, and AIX owed a duty to defend.
2 Although AIX served Hollywood’s registered agent with process, Holly-
wood failed to file an answer or other responsive pleading. Upon a motion
from AIX, the clerk issued an entry of default against Hollywood.
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21-12386 Opinion of the Court 5
In its summary judgment order, the district court addressed
the scope of AIX’s duty to defend and indemnify. First, the court
determined that AIX owed a duty to defend Hollywood. The
court explained that to resolve whether AIX owed a duty to de-
fend the court must look solely to the factual and legal theories
alleged in Everett’s state court complaint. If the complaint alleged
facts that could fairly and potentially bring the suit within policy
coverage, the district court said, AIX owed a duty to defend.
The district court considered the scope of the firearms ex-
clusion. The court explained that insurance contracts are con-
strued according to their plain meaning and that exclusions must
be strictly construed against the insurer. Looking to the text of the
exclusion, the court explained that it excluded coverage for inju-
ries resulting from the discharge of “firearms.” Doc. 55 at 18. Be-
cause the exclusion used the plural form of firearm, the district
court concluded that the exclusion barred coverage only when a
person was injured in an incident that involved the discharge of
multiple firearms. The district court then looked to the substance
of Everett’s state court complaint, which simply alleged that Ev-
erett was shot by a bullet but did not address whether the incident
involved multiple weapons or a “single firearm.”
Id. at 20. Be-
cause Everett’s complaint “allege[d] facts which create
potential
coverage under the [p]olicy,” the court determined that AIX owed
a duty to defend.
Id. (emphasis in original).
Second, the district court considered whether AIX owed a
duty to indemnify Hollywood. The court explained that an insur-
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6 Opinion of the Court 21-12386
er’s duty to indemnify is determined by the facts adduced at trial
or developed through discovery in the underlying litigation. Be-
cause a resolution of an insurer’s duty to indemnify is premature
when the underlying litigation remains pending, the district court
declined to address the merits of the issue and stayed the case
pending judgment in the state court action.
This is AIX’s appeal.3
II.
We review de novo the district court's grant of summary
judgment, and its interpretation of an insurance contract.
Em-
3 While this appeal was pending, we issued a jurisdictional question asking
the parties to address whether the district court’s order, which resolved AIX’s
duty to defend but not the duty to indemnify, was immediately appealable.
We conclude that it is.
We have appellate jurisdiction to review a district court’s nonfinal order
when it grants an injunction.
See 28 U.S.C. § 1292(a)(1). Under § 1292(a)(1),
we may “[s]ometimes” review a district court order awarding a declaratory
judgment, even though it did not expressly impose an injunction, so long as
the order has “the practical effect of granting or denying [an] injunction[].”
James River Ins. Co. v. Ultratec Special Effects Inc., 22 F. 4th 1246, 1252 (11th
Cir. 2022) (internal quotation marks omitted)
. The district court’s order here
plainly meets this standard. By granting Everett’s cross-motion for summary
judgment and declaring that AIX owes a duty to defend Hollywood in the
state court litigation, the order effectively requires AIX to pay Hollywood’s
defense costs and thus sufficiently resembles an injunction.
See id. at 1251–
52;
Nat’l Union Fire Ins. Co. of Pittsburgh v. Sahlen, 999 F.2d 1532, 1535
(11th Cir. 1993).
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21-12386 Opinion of the Court 7
broidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am., 845 F.3d
1099, 1105 (11th Cir. 2017).
III.
An insurance policy typically requires an insurer both to
indemnify an insured against any damages award based on a
claim covered by the policy and to defend the insured in any ac-
tion against it to recover these damages.
EmbroidMe.com,
845 F.3d at 1107. Under Florida law,4 “an insurer’s duty to defend
an insured is separate and distinct from the question whether it
has a duty to indemnify the latter against the imposition of dam-
ages.”
Id. An insurer’s duty to defend “is determined solely by the
allegations in the complaint” in the underlying action.
Farrer v.
U.S. Fid. & Guar. Co., 809 So. 2d 85, 88 (Fla. Dist. Ct. App. 2002)
.
In contrast, an insurer’s duty to indemnify “is determined by the
facts adduced at trial or during discovery” in the underlying ac-
tion.
Id.
In deciding whether an insurer owes a duty to defend, Flor-
ida law looks to whether the underlying complaint on “its face
alleges a state of facts that fails to bring the case within the cover-
age of the policy.”
McCreary v. Fla. Residential Prop. & Cas. Joint
Underwriting Ass’n, 758 So. 2d 692, 695 (Fla. Dist. Ct. App. 1999)
(internal quotation marks omitted). When the policy contains ex-
4 The parties agree that Florida law governs our interpretation of the insur-
ance policy in this diversity action.
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8 Opinion of the Court 21-12386
clusions from coverage, no duty to defend is owed when the un-
derlying “complaint alleges facts that clearly bring the entire cause
of action within a policy exclusion.”
Baron Oil Co. v. Nationwide
Mut. Fire Ins. Co., 470 So. 2d 810, 815 (Fla. Dist. Ct. App. 1985).
Because the existence of a duty to defend turns upon the allega-
tions in the underlying complaint, an insurer may have a duty to
defend its insured even when the complaint’s allegations turn out
to be “factually incorrect,” “meritless,” or based on an “unsound”
legal theory.
Jones v. Fla. Ins. Guar. Ass’n, 908 So. 2d 435, 443
(Fla. 2005);
State Farm Fire & Cas. Co. v. Higgins, 788 So. 2d 992,
996 (Fla. Dist. Ct. App. 2001). “Any doubts regarding the duty to
defend must be resolved in favor of the insured.”
Jones, 908 So. 2d
at 443.
When interpreting an insurance contract under Florida
law, we construe the terms of the contract according to their
“plain meaning, with any ambiguities construed against the insur-
er and in favor of coverage.”
Penzer v. Transp. Ins. Co., 29 So. 3d
1000, 1005 (Fla. 2010) (internal quotation marks omitted). “In
general, exclusionary clauses are strictly construed in a manner
that affords the insured the broadest possible coverage.”
Indian
Harbor Ins. Co. v. Williams, 998 So. 2d 677, 678 (Fla. Dist. Ct.
App. 2009).
The question before us in this appeal is whether the district
court erred when it concluded that AIX owed a duty to defend its
insured, Hollywood. This question turns on the interpretation of
the firearms exclusion. In its appellant’s brief, AIX exclusively fo-
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21-12386 Opinion of the Court 9
cuses its arguments on why there was a sufficient connection be-
tween Hollywood’s premises and Everett’s injury to satisfy the
exclusion’s requirement that the injury be occasioned directly or
indirectly or as an incident to a shooting.
The problem here is that the district court’s ruling rested
on a different ground, one that AIX does not challenge. The dis-
trict court interpreted the exclusion as barring coverage only
when there was an incident that involved the discharge of multi-
ple weapons. Because the complaint here alleged that the incident
involved the discharge of a single weapon, the district court con-
cluded that AIX owed a duty to defend. On appeal, AIX, which is
represented by counsel, raises no challenge to the district court’s
interpretation; it advances no argument that the language of the
firearms exclusion also bars coverage when an incident involves
the discharge of a single firearm. It thus has abandoned any chal-
lenge to the district court’s interpretation of the policy.
See
PDVSA US Litig. Tr. v. Lukoil Pan Americas, LLC, 991 F.3d 1187,
1193 (11th Cir. 2021) (“[A] party abandons an issue by not briefing
it.”);
Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 680 (11th
Cir. 2014).
To be sure, AIX makes a passing reference to whether the
firearm exclusion bars coverage when an incident involves the
discharge of only a single firearm when it states that “it is imma-
terial” for the exclusion “whether the underlying incident in-
volved a single bullet or multiple gunshots.” Appellant’s Br. at 3.
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10 Opinion of the Court 21-12386
But “simply stating that an issue exists, without further argument
or discussion, constitutes abandonment of that issue” and pre-
cludes us from considering it on appeal.
Singh v. U.S. Att’y Gen.,
561 F.3d 1275, 1278 (11th Cir. 2009).
Our rule on abandonment is based in the “party presenta-
tion principle,” which recognizes that in our “adversarial system
of adjudication . . . we rely on the parties to frame the issues for
decision” and it generally “is inappropriate for a court to raise an
issue
sua sponte.”
United States v. Campbell, 26 F.4th 860, 872
(11th Cir. 2022) (en banc) (internal quotation marks omitted). Be-
cause AIX abandoned any argument that the district court erred
in interpreting the exclusion as requiring the discharge of multiple
firearms, it follows that the district court’s judgment that AIX
owed a duty to defend Hollywood must be affirmed.5
AFFIRMED.
5 Because we conclude that AIX abandoned any challenge to the district
court’s ruling, we do not reach the question of whether the district court
properly interpreted the policy. We recognize that the question of whether
AIX owed a duty to indemnify remains pending before the district court.
Nothing in this opinion forecloses AIX from arguing to the district court that
it owes no duty to indemnify Hollywood because the exclusion bars cover-
age for an incident involving even a discharge of a single firearm.
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