15 Oz Fresh & Healthy Foods LLC v. Underwriters at Lloyd's London Known as Syndicates AML 2001, WBC 5886, MMX 2010 AND SKD 1897 ( 2022 )


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  • USCA11 Case: 21-10949      Date Filed: 10/11/2022   Page: 1 of 6
    [DO NOT PUBLISH]
    In the
    United States Court of Appeals
    For the Eleventh Circuit
    ____________________
    No. 21-10949
    ____________________
    15 OZ FRESH & HEALTHY FOODS LLC,
    Plaintiff-Appellant,
    versus
    UNDERWRITERS AT LLOYD'S LONDON
    KNOWN AS SYNDICATES AML 2001,
    WBC 5886, MMX 2010 AND SKD 1897,
    Defendant-Appellee.
    ____________________
    Appeal from the United States District Court
    for the Southern District of Florida
    D.C. Docket No. 1:20-cv-23407-AHS
    USCA11 Case: 21-10949              Date Filed: 10/11/2022         Page: 2 of 6
    2                          Opinion of the Court                        21-10949
    ____________________
    Before BRANCH, LUCK, Circuit Judges, and SANDS, ∗ District Judge.
    PER CURIAM:
    15 Oz Fresh & Healthy Foods LLC (“15 Oz”) appeals the
    district court’s dismissal with prejudice of its six-count class-action
    complaint against Underwriters at Lloyd’s London Known as
    Syndicates AML 2001, WBC 5886, MMX 2010, and SKD 1897
    (“Underwriters”), concerning insurance coverage under Florida
    law for losses incurred by businesses as a result of the COVID-19
    pandemic.1 Because the parties are well aware of the facts, we will
    not restate them here. Instead, we start with 15 Oz’s pending
    motion to amend its complaint to include additional allegations of
    the parties’ citizenship for purposes of diversity jurisdiction. For
    the reasons below, we grant 15 Oz’s motion to amend its
    complaint, find that subject matter jurisdiction exists, and affirm
    ∗ Honorable W. Louis Sands, United States District Judge for the Middle
    District of Georgia, sitting by designation.
    1 15 Oz’s complaint alleged that it sustained various COVID-19–related
    business losses that were covered by its insurance policy with Underwriters.
    Specifically, 15 Oz brought claims for a declaratory judgment and breach of
    contract on behalf of the business income class (counts one and two), a
    declaratory judgment and breach of contract on behalf of the extra expense
    coverage class (counts three and four), and a declaratory judgment and breach
    of contract on behalf of the civil authority coverage class (counts five and six).
    USCA11 Case: 21-10949            Date Filed: 10/11/2022     Page: 3 of 6
    21-10949                 Opinion of the Court                          3
    the district court’s dismissal of 15 Oz’s complaint for failure to state
    a claim upon which relief can be granted.
    I.       Motion to Amend
    We are “obligated to inquire into subject matter jurisdiction
    sua sponte whenever it may be lacking.” Univ. of S. Ala. v. Am.
    Tobacco Co., 
    168 F.3d 405
    , 410 (11th Cir. 1999). We must confirm
    that we have jurisdiction and that the district court did as well. 
    Id.
    After examining 15 Oz’s complaint, we issued a jurisdictional
    question asking whether the pleadings sufficiently alleged the
    citizenship of the parties so as to invoke diversity jurisdiction in the
    first instance. The parties jointly responded, and 15 Oz filed an
    uncontested motion to amend its complaint to cure the insufficient
    citizenship allegations. We carried the jurisdictional issue and
    pending motion to amend with the case.
    In accordance with 
    28 U.S.C. § 1653
     and our precedent, we
    GRANT 15 Oz’s uncontested motion to amend its complaint. See
    
    28 U.S.C. § 1653
     (“Defective allegations of jurisdiction may be
    amended, upon terms, in the trial or appellate courts.”); Mallory &
    Evans Contractors & Eng’rs, LLC v. Tuskegee Univ., 
    663 F.3d 1304
    , 1305 (11th Cir. 2011) (“Because we suspect there may be
    diversity of citizenship, [appellant] is invited to file in this
    court . . . a motion for leave to amend the complaint to correct the
    deficient allegations of citizenship.”).
    II.        Subject Matter Jurisdiction
    USCA11 Case: 21-10949             Date Filed: 10/11/2022         Page: 4 of 6
    4                          Opinion of the Court                       21-10949
    We must now decide whether 15 Oz’s amended complaint
    alleges sufficient information to establish diversity jurisdiction. We
    hold that it does.
    In pertinent part, 15 Oz’s complaint now alleges that (a) 15
    Oz is a limited liability company organized to do business in Florida
    and (b) Lloyd’s Syndicate AML 2001—one of the defendant-
    syndicates—is comprised of only one capital provider, MS Amlin
    Corporate Member Limited, which is incorporated under the laws
    of England and Wales and has its principal place of business in
    London, England.2 Because 15 Oz brought a class-action
    complaint, we analyze diversity jurisdiction under the Class Action
    Fairness Act of 2005 (“CAFA”). We recognize that there is a
    2 The Lloyd’s of London insurance market is unique. To start, “Lloyd’s is not
    a company; it is a market somewhat analogous to the New York Stock
    Exchange.” Roby v. Corp. of Lloyd’s, 
    996 F.2d 1353
    , 1357 (2d Cir. 1993). Thus,
    Lloyd’s itself does not insure any risk. Individual underwriters,
    known as ‘Names’ or ‘members,’ assume the risk of the
    insurance loss. Names can be people or corporations; they
    sign up for certain percentages of various risks across several
    policies.
    ...
    Names underwrite insurance through administrative entities
    called syndicates, which cumulatively assume the risk of a
    particular policy.
    Underwriters at Lloyd’s, London v. Osting-Schwinn, 
    613 F.3d 1079
    , 1083 (11th
    Cir. 2010).
    USCA11 Case: 21-10949          Date Filed: 10/11/2022      Page: 5 of 6
    21-10949                Opinion of the Court                           5
    complicated question at the intersection of CAFA and one of our
    precedents, Underwriters at Lloyd’s, London v. Osting-Schwinn,
    
    613 F.3d 1079
     (11th Cir. 2010), but we do not address that issue
    today because it is clear that diversity jurisdiction exists under any
    resolution.
    In Osting-Schwinn, we held that Lloyd’s syndicates “fall
    squarely within the class of unincorporated associations for which
    the pleading of every member’s citizenship is essential to
    establishing diversity jurisdiction.” 
    613 F.3d at 1088
     (emphasis
    added). Osting-Schwinn, however, did not consider diversity
    jurisdiction in the class action context. CAFA controls class actions,
    and provides that “an unincorporated association shall be deemed
    to be a citizen of the State where it has its principal place of business
    and the State under whose laws it is organized.” 
    28 U.S.C. § 1332
    (d)(10) (emphasis added).
    That is, the plain language of CAFA requires us to consider
    the principal place of business and state of incorporation of the
    association (syndicate) itself while Osting-Schwinn requires us to
    consider the citizenship of “every” underlying capital-contributing
    member. Compare 
    id.,
     with Osting-Schwinn, 
    613 F.3d at 1088
    .
    Because Lloyd’s Syndicate AML 2001 is a single-member syndicate,
    however, we need not resolve the conflict today. We conclude
    there is diversity jurisdiction under any resolution of the conflict in
    authority, so we proceed to the merits of 15 Oz’s appeal.
    III.   District Court’s Dismissal of 15 Oz’s Complaint
    USCA11 Case: 21-10949         Date Filed: 10/11/2022    Page: 6 of 6
    6                      Opinion of the Court                 21-10949
    We now affirm. Our precedent in SA Palm Beach LLC v.
    Certain Underwriters at Lloyd’s, London—issued while the instant
    case was pending and after the parties submitted their briefs—
    squarely rejects 15 Oz’s argument that Florida law extends
    insurance coverage to business losses and expenses related to the
    COVID-19 pandemic, and it forecloses further consideration of this
    issue. 
    32 F.4th 1347
    , 1359–63 (11th Cir. 2022) (predicting that the
    Florida Supreme Court would follow the “majority view” and
    conclude that business income, extra expense, and civil authority
    provisions, among others, would be inadequate to trigger coverage
    for losses and expenses incurred by businesses caused by COVID-
    19 in similar Lloyd’s insurance policies under Florida law); see also,
    e.g., Commodore, Inc. v. Certain Underwriters at Lloyd’s London,
    
    342 So. 3d 697
    , 698–705 (Fla. 3d DCA 2022) (confirming this
    prediction); Suhaag Garden, Inc. v. Certain Underwriters at Lloyd’s
    London, No. 3D21-1803, -- So. 3d --, 
    2022 WL 3050339
    , at *1 (Fla.
    3d DCA Aug. 3, 2022) (same). In SA Palm Beach, we held that
    losses stemming from the suspension of business operations and
    extra costs incurred because of COVID-19 were insufficient under
    Florida law to trigger insurance coverage because they lacked the
    requisite “tangible alteration of the insured properties.” 32 F.4th at
    1350. So too here.
    MOTION TO AMEND GRANTED. AFFIRMED.
    

Document Info

Docket Number: 21-10949

Filed Date: 10/11/2022

Precedential Status: Non-Precedential

Modified Date: 10/11/2022