Those Certain Underwriters v. GMC Land Services , 315 F. App'x 785 ( 2009 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
__________________________ FILED
U.S. COURT OF APPEALS
No.08-10954 ELEVENTH CIRCUIT
FEBRUARY 23, 2009
Non-Argument Calendar
THOMAS K. KAHN
__________________________
CLERK
D. C. Docket No. 06-60325-CV-WPD
THOSE CERTAIN UNDERWRITERS AT LLOYD’S LONDON,
Plaintiff-Appellee,
LONDON MARKET INSURANCE COMPANIES,
Plaintiff,
versus
GMC LAND SERVICES, INC., et al.,
a Florida corporation doing business as Richmond Abstract,
Defendants,
OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY,
a Minnesota corporation,
Defendant-Appellant.
__________________________
Appeal from the United States District Court
for the Southern District of Florida
___________________________
(February 23, 2009)
Before EDMONDSON, Chief Judge, TJOFLAT and BLACK, Circuit Judges.
PER CURIAM:
Defendant-Appellant Old Republic National Title Insurance Company (“Old
Republic”) appeals the grant of summary judgment in favor of Plaintiffs-
Appellees, Those Certain Underwriters at Lloyd’s, London (“Lloyd’s”), in a
declaratory judgment suit seeking to determine insurance coverage under a
professional liability policy issued by Lloyd’s. No reversible error has been
shown; we affirm.
The facts largely are undisputed. Old Republic is a title insurance
underwriter. GMC Land Services of Florida, Inc. (“GMC”) operated as a policy
issuing agent for Old Republic; GMC received and processed applications for title
insurance and issued title insurance policies for Old Republic. Lloyd’s issued a
professional services liability policy to GMC.
On 28 December 2004, GMC closed a real estate sale on a parcel of
property in Pembroke Pines, Florida (the “Property”); by warranty deed filed in the
Broward County Recorder’s Office, the Property was transferred from Jacquelin
Jones Thom to Shekinal Awofadeju. Awofadeju had obtained a mortgage loan of
$456,000 from Aegis Funding Corporation (“Aegis”); GMC issued a title
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insurance policy through Old Republic insuring title to the Property on behalf of
Aegis in the amount of the mortgage.
As of 28 December 2004, the Recorder’s Office reflected that a quitclaim
deed for the Property had been issued on 19 July 2004 and recorded on 28
September 2004; the quitclaim deed purported to transfer the Property from Steven
E. Tovar to Jacquelyn Jones Thom. Tovar later filed an action to clear title.
According to Tovar, his signature on the 19 July 2004 quitclaim deed was forged,
and Thom obtained no title from the purported transfer. Aegis made a claim
against Old Republic on the title insurance policy; and Old Republic paid Aegis
$456,000, the full amount of the title insurance policy. Old Republic then sought
to recover this payment from GMC claiming that GMC had failed to follow
applicable agent guidelines and procedures: specifically, GMC had failed to alert
Old Republic to the existence of the quitclaim deed in the chain of title to the
Property. GMC, in turn, reported the claim to Lloyd’s, its professional services
liability insurer. Lloyd’s disclaimed coverage under the Policy; and Lloyd’s
initiated this declaratory judgment action to determine what obligation, if any, it
had under the professional liability policy to indemnify GMC against claims made
by Old Republic for GMC’s alleged negligence.
Both parties moved for summary judgment below; each advanced the same
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provision of the professional liability policy in support of the motion. That
provision -- entitled “Land Flip Exclusion” -- reads:
This Policy does not apply to Loss in connection with any
Claim:
Based upon or directly or indirectly arising out of or
resulting from: (a) any transaction involving real
property that occurs within six months after a sale,
assignment, transfer or change in ownership involving
such real property, or (b) any failure to comply with
closing instructions relating to a prior sale, assignment,
transfer or change in ownership involving the property
that is the subject of closing.
Applying Florida law,1 the district court determined that the plain language
of the policy excluded coverage: the 28 December 2004 purported sale of the
Property occurred within six months of the 19 July 2004 purported transfer from
Tovar. We agree.
Old Republic argues on appeal -- as it did before the district court -- that the
exclusion has no application because it is triggered only when a valid or legitimate
or actual “sale, assignment, transfer or change in ownership” occurs within the
preceding six-month period. According to Old Republic, the claimed forgery of
the Tovar quitclaim deed was void ab initio; it was a legal nullity and, as a matter
1
This matter is in federal court under diversity jurisdiction; the parties agreed that Florida
law applies.
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of law, was no transaction for purposes of the Land Flip Exclusion.
Whatever may be the status of the Tovar quitclaim deed under principles of
Florida real estate law -- and we assume arguendo that the quitclaim deed was
void ab initio -- the question at the heart of this appeal is one of insurance
coverage and principles of Florida law applicable to the construction of an
insurance policy. As the district court noted correctly, insurance policies must be
read as a whole, Fla. Stat. § 627.419(1). “[I]nsurance contracts are construed
according to their plain meaning,” Taurus Holdings Inc. v. U.S. Fidelity and
Guaranty Co., 913 So.2d 528, 532 (Fla. 2005); and every term should be given “its
full meaning and operative effect.” Auto-Owners Insurance Co. v. Anderson, 756
So.2d 29, 34 (Fla. 2000). “If the relevant policy language is susceptible to more
than one reasonable interpretation, one providing coverage and another limiting
coverage, the insurance policy is considered ambiguous,” id.; and ambiguities are
construed in favor of the insured and strictly against the insurer. Swire Pacific
Holdings, Inc. v. Zurich Insurance Co., 845 So.2d 161, 165 (Fla. 2003). But the
Florida Supreme Court has cautioned that this rule of construction only applies
when a provision is actually ambiguous; “‘if a policy provision is clear and
unambiguous, it should be enforced according to its terms whether it is a basic
policy provision or an exclusionary provision.’” Garcia v. Federal Insurance Co.,
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969 So.2d 288, 291 (Fla. 2007), quoting Taurus Holdings, 913 So.2d at 532.
The insurance provision at issue is time-focused: only property transactions
within a six-month-time-frame are addressed by the Land Flip Exclusion. Taken
in context, we agree with the district court that the plain language of the exclusion
is unambiguous; the policy excludes coverage of any claim directly or indirectly
arising out of any transaction (here, the sale by Thom of the Property to
Awofadeju) within six months after another “sale, assignment, transfer or change
in ownership” (here, the transfer of the Property from Tovar to Awofadeju by
quitclaim deed as recorded in the County Recorder’s Office). Under ordinary
rules of construction -- construing the plain language of the Policy as bargained
for by the parties, see Auto-Owners, 756 So.2d at 33 -- the Policy is susceptible to
only one reasonable interpretation. We reject Plaintiff’s efforts to engraft further
limitations on the plain language of the Policy; the Policy excludes coverage of
claims arising from a sale, assignment, transfer, or change in ownership within the
six-month-time frame whether the sale, assignment, transfer, or change in
ownership is determined later to have been illegitimate, fraudulent, forged or
otherwise of no legal consequence. See Excelsior Insurance Co. v. Pomona Park
Bar & Package Store, 369 So.2d 938, 942 (Fla. 1979) (courts are not to “rewrite
contracts, add meaning that is not present, or otherwise reach results contrary to
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the intentions of the parties”).
AFFIRMED.2
2
Because we conclude the district court granted summary judgment correctly under clause
(a) of the Land Flip Exclusion, we do not consider Lloyd’s argument that clause (b) also would
support summary judgment in its favor.
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