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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-14991
Non-Argument Calendar
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D.C. Docket No. 6:17-cv-00920-RBD-DCI
TMH MEDICAL SERVICES, LLC,
Plaintiff-Appellant,
versus
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA.,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(December 4, 2019)
Before NEWSOM, BRANCH, and GRANT, Circuit Judges.
PER CURIAM:
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TMH Medical Services, LLC appeals from the judgment in favor of
defendant National Union Fire Insurance Company of Pittsburgh, Pa. in this
insurance coverage case. We affirm.
I.
In January 2017, TMH began doing business with a group of entities
operating under the name Synuity. Synuity described itself as a Professional
Employer Organization (PEO) offering a range of staffing and human resources
outsourcing services, including payroll processing, tax remission and reporting,
Workers Compensation and health insurance administration, and employment
practice liability insurance (EPLI). One of the Synuity companies, Platinum-HR,
LLC, provided payroll processing and tax remission and reporting services for
TMH beginning in late January 2017.
In February 2017, TMH received written notice of workplace tort claims by
two of its employees against TMH “and related persons and entities.” TMH
tendered the claims to Synuity, seeking defense costs and indemnity under
Synuity’s EPLI policy with National Union—the policy at issue here. The policy
provided EPLI coverage for specified claims against Synuity and its PEO clients,
under specified conditions.
Apparently recognizing that the policy required, among other things, a
written agreement between Synuity and its PEO client, TMH and Synuity prepared
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a “Service Agreement” using parts of two form contracts provided by Synuity.
The Service Agreement bore an “entered into” date of January 1, 2017, though it
was completed and executed by the parties on March 13, 2017.
National Union agreed to provide a defense for the claims against TMH,
subject to a reservation of rights, but ultimately determined that the claims were
not covered under the policy and declined to provide indemnity for TMH or
participate in the settlement of the claims. TMH filed suit against National Union
in federal court, alleging that the insurer had wrongfully failed to indemnify and
defend TMH for the claims. The parties filed competing motions for summary
judgment, and the district court granted National Union’s motion, denied TMH’s,
and entered judgment for National Union on all of TMH’s claims. This appeal
followed.1
II.
“We review de novo a district court’s rulings on cross-motions for summary
judgment.” Chavez v. Mercantil Commercebank, N.A.,
701 F.3d 896, 899 (11th
Cir. 2012). On each motion, we view the facts in the light most favorable to the
nonmoving party.
Id. Summary judgment is appropriate “if the movant shows that
1
On appeal, TMH presents argument related to its claim for indemnity only. TMH has therefore
abandoned its claim that National Union failed to provide a defense. See Sapuppo v. Allstate
Floridian Ins. Co.,
739 F.3d 678, 681–82 (11th Cir. 2014).
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there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a).
The parties agree that Florida law applies in this diversity-jurisdiction case
involving insurance coverage under a policy that was delivered and executed in
Florida. See Trailer Bridge, Inc. v. Illinois Nat. Ins. Co.,
657 F.3d 1135, 1141
(11th Cir. 2011) (per curiam); State Farm Mut. Auto. Ins. Co. v. Roach,
945 So. 2d
1160, 1163 (Fla. 2006). Questions regarding the interpretation of a contract,
including a contract for insurance, are matters of law that we review de novo. See
Hegel v. First Liberty Ins. Corp.,
778 F.3d 1214, 1219 (11th Cir. 2015); Penzer v.
Transp. Ins. Co.,
29 So. 3d 1000, 1005 (Fla. 2010).
III.
Under Florida law, an insurance contract is interpreted according to the plain
language of the policy. Siegle v. Progressive Consumers Ins. Co.,
819 So. 2d 732,
735 (Fla. 2002). Ambiguous terms are construed in favor of coverage, but “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.” Taurus
Holdings, Inc. v. U.S. Fid. & Guar. Co.,
913 So. 2d 528, 532 (Fla. 2005) (citation
omitted). “In construing insurance contracts, ‘courts should read each policy as a
whole, endeavoring to give every provision its full meaning and operative effect.’”
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Washington Nat. Ins. Corp. v. Ruderman,
117 So. 3d 943, 948 (Fla. 2013) (citation
omitted).
Synuity’s policy with National Union provided EPLI coverage for Synuity’s
PEO clients, “but only with respect to PEO Client Company Claim(s).” Based on
the various definitions and conditions in the policy, this meant that TMH was
entitled to indemnity for its employees’ claims only if—among other conditions—
it leased the claimant-employees from Synuity through a written employee leasing
agreement that was in effect at the time the claims were made. Because TMH did
not have such an agreement with Synuity when it received notice of the claims (or
at any other time), the district court correctly determined that TMH was not
entitled to coverage under the policy.2
The practice of employee leasing is regulated by statute in Florida. It is a
crime for any entity not licensed by the state to operate as an employee leasing
company, and licensed entities may lease employees only through written
agreements that satisfy certain statutory conditions. Fla. Stat. Ann. §§ 468.531;
468.525(3)(a), (4). Among other things, the leasing contract must contain
provisions by which the leasing company (1) reserves “a right of direction and
2
Because we conclude that TMH and Synuity never had a valid employee leasing agreement, we
need not resolve the parties’ dispute about whether TMH’s written agreement with Synuity was
in effect when the claims were made.
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control over leased employees assigned to the client’s location”; (2) assumes
“responsibility for the payment of wages to the leased employees without regard to
payments by the client to the leasing company”; (3) retains “authority to hire,
terminate, discipline, and reassign the leased employees,” subject to the client’s
approval; and (4) confirms that it has “given written notice of the relationship
between the employee leasing company and the client company to each leased
employee it assigns to perform services at the client’s worksite.”
Id.
§ 468.525(4)(a)–(b), (d), (f). TMH had no written agreement with Synuity that
satisfied those terms.
TMH argues that a Synuity brochure that it received on an unspecified date,
along with email correspondence and a letter from TMH to a third-party insurance
company naming Synuity as its insurance agent, constituted a written agreement
for PEO services. The brochure described Synuity as a PEO and outlined some of
the services that Synuity offered, including payroll and benefits administration and
employer risk mitigation services such as EPLI and unemployment insurance. The
email correspondence contained a discussion of TMH’s Workers’ Compensation
and health insurance needs. But none of those writings referenced an employee
leasing arrangement between Synuity and TMH or fulfilled the statutory
requirements for an employee leasing agreement. And in any event, even if read
together, the brochure and correspondence did not evince mutual agreement to any
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specific terms—ultimately, Synuity did not provide either health insurance or
Workers’ Compensation insurance for TMH’s employees. Writings in which the
parties discuss available services but do not specify essential terms do not amount
to a binding agreement under Florida law. See Vega v. T-Mobile USA, Inc.,
564
F.3d 1256, 1272 (11th Cir. 2009); Irby v. Memorial Healthcare Grp.,
901 So. 2d
305, 306 (Fla. Dist. Ct. App. 2005).
Next, TMH contends that the Service Agreement executed by the parties in
March 2017 met the policy’s requirement for a written PEO service agreement.
But regardless of what other PEO services may have been contemplated in the
Service Agreement, it did not meet Florida’s statutory requirements for an
employee leasing agreement—and therefore could not meet the policy’s
requirement for a written agreement to lease the claimants to TMH.3 See Korman
v. HBC Fla., Inc.,
182 F.3d 1291, 1297 (11th Cir. 1999) (“state law is read into and
becomes part of a contract”). The Agreement did not describe a coemployer
relationship between Synuity and TMH, reserve to Synuity any right of direction
and control over leased employees, require Synuity to assume responsibility for
payment of wages regardless of payments to Synuity by TMH, give Synuity
authority to hire, fire, discipline, or reassign leased employees, or require Synuity
3
The Service Agreement contained an express choice-of-law provision stating that it was to be
“governed by and construed in accordance with the laws of the State of Florida.”
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to provide written notice of the relationship between Synuity and TMH to the
leased employees. See Fla. Stat. Ann. § 468.525(4)(a)–(b), (d), (f). To the
contrary, the Agreement reserved exclusive direction and supervision of the
“Contract Personnel” to TMH, gave TMH exclusive authority to make hiring and
retention decisions, provided that Synuity would have no obligation to pay wages
if TMH did not wire payroll funds to Synuity in advance, and said nothing about
providing notice to employees of the contractual relationship between TMH and
Synuity.
TMH points out that the relevant statute permits the client company to retain
“such sufficient direction and control over the leased employees as is necessary to
conduct the client’s business,” and implementing regulations provide that the PEO
need not actually exercise its hiring and firing authority on the jobsite; the “client
shall be allowed to exercise such authority as may be allocated to the client, in
writing, and in conformity with Florida law.” Fla. Stat. Ann. § 468.525(4)(a); Fla.
Admin. Code Ann. r. 61G7-6.001(9). But the contract that TMH and Synuity
entered into did not merely allocate worksite authority between them; it gave TMH
exclusive control of its employees and exclusive authority to hire, fire, and
discipline them. Florida law plainly prohibits an employee leasing arrangement in
which the leasing company surrenders all authority over the employees to the
client and retains none for itself.
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IV.
Because the Service Agreement failed to comply with multiple statutory
requirements for employee leasing contracts, it was not a valid employee leasing
agreement. And because TMH did not have a valid written agreement to lease the
employee-claimants from Synuity, the employees’ claims against TMH were not
covered under Synuity’s EPLI policy with National Union. The district court
therefore correctly denied TMH’s motion for summary judgment and granted
summary judgment in favor of National Union.
AFFIRMED.
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