American Builders Insurance Company v. Southern-Owners Insurance Company
U.S. Court of Appeals for the Eleventh Circuit
American Builders Insurance Company v. Southern-Owners Insurance Company, 56 F.4th 938 (11th Cir. 2023)
American Builders Insurance Company v. Southern-Owners Insurance Company
Opinion
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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13496
____________________
AMERICAN BUILDERS INSURANCE COMPANY,
Plaintiff-Appellee,
versus
SOUTHERN-OWNERS INSURANCE COMPANY,
Defendant-Appellant.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:20-cv-81357-WM
____________________
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2 Opinion of the Court 21-13496
Before WILLIAM PRYOR, Chief Judge, ROSENBAUM, and MARCUS,
Circuit Judges.
MARCUS, Circuit Judge:
Ernest Guthrie fell from a roof and became paralyzed from
the waist down, never to walk again. Within months, his medical
bills climbed past $400,000, and future costs projected into the mil-
lions. Three insurance companies potentially provided coverage
for Guthrie. This appeal is a battle between two of them.
The primary insurer for Guthrie’s company was Southern-
Owners Insurance Company. At the time of the accident, Guthrie
was performing subcontracting work for Beck Construction, which
had a policy with American Builders Insurance Company and an
excess policy with Evanston Insurance Company. American Build-
ers investigated the accident, assessed Beck Construction’s liability,
and evaluated Guthrie’s claim. Southern-Owners, in contrast, did
little to nothing for months. When push came to shove, Southern-
Owners refused to pay any amount to Guthrie to settle the claim,
and American Builders and Evanston ponied up a million dollars
apiece instead.
American Builders then sued Southern-Owners for com-
mon law bad faith under Florida’s doctrine of equitable subroga-
tion. Along the way, Southern-Owners moved for summary judg-
ment, but the district court denied the motion. A federal trial jury
heard the case and found in favor of American Builders. After the
entry of final judgment, Southern-Owners sought judgment as a
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21-13496 Opinion of the Court 3
matter of law, or, in the alternative, a new trial. The district court
denied those motions, too. On appeal, Southern-Owners chal-
lenges the denials of its summary judgment and post-trial motions.
After thorough review of the record and with the benefit of
oral argument, we affirm.
I.
A.
Ernest Guthrie, an employee of Ernest Guthrie, LLC per-
forming work for Beck Construction, slipped from the roof of a
house on April 1, 2019, and crashed to the ground. He became
paralyzed from the waist down. Guthrie’s lawyer, Stuart Cohen,
wrote to Beck Construction to assert the company’s liability and
request insurance information. Beck Construction, in turn, put its
insurer, American Builders on notice on May 8. American Builders
had issued a general liability policy to Beck Construction, with a
limit of $1 million for each occurrence. American Builders’ claim
specialist investigated the incident by meeting with the company
and its outside investigator and collecting hospital records, rehabil-
itation facility records, and correspondences about the claim and
injuries.
Cohen investigated his client’s claim, too. He determined
that Beck Construction instructed Guthrie to climb onto the roof
without providing any fall protection, while two spotters focused
on their phones. Guthrie had already sustained $400,000 in medical
expenses, and Cohen calculated Guthrie’s claim at $4 million to $5
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4 Opinion of the Court 21-13496
million, even if Guthrie were partially liable. On September 5, Co-
hen demanded that American Builders pay its $1 million policy
limit within thirty days in exchange for a release of Beck Construc-
tion from liability. American Builders requested an extension, and
Cohen granted ten days, placing the deadline on October 14.
Cohen conditioned that demand on the lack of other availa-
ble insurance. But, as it turns out, there were two other relevant
policies: Evanston provided an excess policy worth $1 million per
occurrence to Beck Construction, and Southern-Owners -- which
would become the defendant in the instant bad-faith case -- sold
Ernest Guthrie, LLC a policy that covered $1 million. Southern-
Owners’ policy contained an endorsement naming Beck Construc-
tion as an additional insured for any work Ernest Guthrie, LLC per-
formed for Beck Construction, and making its policy the primary
insurer for claims arising from Beck Construction’s work.
During American Builders’ investigation, it discovered these
additional policies. So, on September 12, it tendered the defense of
and indemnity for Guthrie’s claim to Southern-Owners. In its let-
ter to Southern-Owners, American Builders attached the certificate
of insurance listing Beck Construction as an additional insured on
Ernest Guthrie, LLC’s policy; the initial notice of the claim to
American Builders; and Cohen’s September 5 demand letter. A
couple weeks later, on September 25, Southern-Owners’ counsel
sent letters to Cohen, American Builders, and Beck Construction,
requesting additional incident reports, medical records, workers’
compensation records, potentially applicable insurance policies,
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21-13496 Opinion of the Court 5
applicable construction contracts, and transcripts or recordings of
statements by Guthrie and Beck Construction. She also asked Co-
hen for a forty-five-day extension on the September 5 demand.
Two days later, Cohen provided Southern-Owners with
Guthrie’s medical records and bills, American Builders’ insurance
policy, and correspondences from Cohen to American Builders in
May and June that explained the accident. Cohen did not respond
to the forty-five-day extension request, but, that same day, Ameri-
can Builders requested an extension for American Builders until
November 4, which Cohen granted. In his letter granting the ex-
tension, Cohen explained that he recently became aware that
Southern-Owners and Evanston might also provide coverage for
the accident. Because of this new information, Guthrie would now
only execute a release of American Builders that reserved his rights
to pursue claims against either Evanston or Southern-Owners.
On October 10, American Builders retained counsel to ad-
dress Cohen’s new stipulation. Working quickly, the attorney con-
cluded in a few days that Guthrie’s claim was worth around $20
million to $30 million, far exceeding any applicable policy’s cover-
age even if Beck Construction were largely not responsible. On
October 14, he then informed Cohen that American Builders was
prepared to pay its $1 million policy limit but that it could not ac-
cept Cohen’s new stipulation because it provided only a partial re-
lease.
During the early weeks of October, the record does not re-
flect that Southern-Owners did anything, other than request
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6 Opinion of the Court 21-13496
extensions. But on October 18 -- over a month after receiving no-
tice of Guthrie’s injury -- Southern-Owners contacted the lawyer
that American Builders had retained for Beck Construction to set
up an interview with Russell Beck, the company’s principal. South-
ern-Owners and the attorney spent the rest of October and all of
November trying to set up a time to talk.
On November 25, still struggling to set up a meeting with
Beck, Southern-Owners wrote Cohen, describing the setback and
noting that it had no written documentation on the claim. South-
ern-Owners also requested until December 20 to respond to the
September 5 demand letter. That same day, Southern-Owners told
American Builders that it would agree to a defense of Beck Con-
struction under a reservation of rights, but only after it spoke with
someone from Beck Construction and completed its investigation.
The letter noted that Southern-Owners’ policy included an em-
ployer liability exclusion, which might bar coverage. American
Builders passed along the contents of that letter to Beck Construc-
tion the same day. Also on November 25, Beck Construction’s law-
yer offered November 26 or 27 for an interview with Beck, but
Southern-Owners declined because this was not enough notice.
He then proposed a telephone conference, but Southern-Owners
demanded an in-person meeting.
Meanwhile, Cohen continued his attempts to secure pay-
ment for Guthrie. On November 18, he wrote to Evanston’s claims
manager, attaching the September 5 demand letter, the medical
records, and other relevant documents, and made a new demand:
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21-13496 Opinion of the Court 7
a $2 million payout in exchange for a complete release of both
American Builders and Evanston, with a decision due by December
18. American Builders received a copy of the November 18 de-
mand letter two days later.
On December 10, nearly three months after it received no-
tice of the claim, Southern-Owners finally met with Beck. Beck
told Southern-Owners that Ernest Guthrie, LLC employed Guth-
rie; Guthrie was performing subcontracting work for Beck Con-
struction; the other people on site were not responsible for spotting
Guthrie; Guthrie did not request fall protection; and Guthrie ad-
mitted that he “f*cked up” and “stepped off the roof.” Based on
that conversation, Southern-Owners believed it had a strong liabil-
ity defense. One week later, Southern-Owners decided it should
talk with the other two workers present. At that time, Southern-
Owners’ counsel was “in the process of reaching out” to them.
Also on December 10, Evanston told American Builders’
counsel -- who was no longer involved in the case -- that it planned
to tender its full policy to Guthrie, even though it was not the pri-
mary insurer. After reactivating his file, counsel saw the Novem-
ber 18 demand letter. With only eight days until that letter’s dead-
line, he once again worked fast, reviewed the 2,700-page file, and
concluded that American Builders should tender its policy limit to
avoid a bad-faith claim.
On December 17, after internal discussions, American Build-
ers decided to tender its limit. It then called Cohen to request a
one-day extension and discuss the Southern-Owners policy. It
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8 Opinion of the Court 21-13496
learned that Guthrie did “not wish to pursue coverage under the
[Southern-Owners] Policy and desire[d] to move forward with set-
tlement without involving [Southern-Owners], directly.” Ameri-
can Builders’ counsel’s understanding was that Cohen and Guthrie
simply wanted the payout and did not care where the money came
from.
The next day, American Builders’ counsel notified Southern-
Owners of the November 18 demand letter. Since Southern-Own-
ers was listed as the primary insurer, counsel believed that South-
ern-Owners had a primary obligation to pay, so he reached out to
give Southern-Owners a chance to step up before American Build-
ers did. Additionally, Southern-Owners’ policy required an insured
receive consent before accepting any settlement. Counsel did not
want American Builders -- standing in the shoes of Beck Construc-
tion -- to breach Southern-Owners’ contract by tendering payment
without consent. Southern-Owners confirmed that it would not
tender its coverage by the December 19 deadline. American Build-
ers’ counsel then told Southern-Owners that American Builders
would be paying its policy limit. Later that day, he wrote to South-
ern-Owners’ counsel to confirm that American Builders was forced
to pay the policy because Southern-Owners would not, and that
American Builders would seek equitable subrogation against
Southern-Owners.
American Builders paid the policy on December 19, and
Guthrie provided a release for Beck Construction, American Build-
ers, and Evanston the next day. At that point, Southern-Owners --
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21-13496 Opinion of the Court 9
having only conducted one interview with Beck -- ended its inves-
tigation.
B.
American Builders sued Southern-Owners in Florida state
court for common law bad faith under Florida’s doctrine of equita-
ble subrogation. Southern-Owners removed the case to the United
States District Court for the Southern District of Florida based on
diversity jurisdiction. Southern-Owners later moved for summary
judgment, in part because it claimed its policy did not cover Guth-
rie’s injury. The district court denied the motion.
The parties then consented to the jurisdiction of a magistrate
judge, who oversaw a three-day jury trial. After the close of Amer-
ican Builders’ evidence, Southern-Owners moved for judgment as
a matter of law under Federal Rule of Civil Procedure 50(a). South-
ern-Owners’ only argument was that American Builders intro-
duced no evidence that proved Guthrie attempted to settle with
Southern-Owners. The court denied the motion. After the close
of all evidence, the jury returned a verdict in favor of American
Builders, and the district court entered final judgment for
$1,091,240.82. Southern-Owners then filed a renewed motion for
judgment as a matter of law under Rule 50(b), or, in the alternative,
a motion for a new trial under Rule 59. This time, Southern-Own-
ers argued that it could not have settled Guthrie’s demand, and that
American Builders, standing in the insured’s shoes, breached
Southern-Owners’ contract by failing to receive its consent before
settling with Guthrie. The district court denied those motions.
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10 Opinion of the Court 21-13496
This timely appeal followed.
II.
“We review de novo the denial of a motion for judgment as
a matter of law under Federal Rule of Civil Procedure 50, viewing
the evidence in the light most favorable to the non-moving party.”
St. Louis Condo. Ass’n, Inc. v. Rockhill Ins. Co., 5 F.4th 1235, 1242
(11th Cir. 2021). “We review a ruling on a motion for a new trial
for abuse of discretion,” giving deference to the district court
“where a new trial is denied and the jury’s verdict is left undis-
turbed.” McGinnis v. Am. Home Mortg. Serv., Inc., 817 F.3d 1241,
1255 (11th Cir. 2016) (citation and quotation marks omitted). “We
review a district court’s decision on summary judgment de novo,”
viewing the evidence and drawing all inferences in the light most
favorable to the non-moving party. Smith v. Owens, 848 F.3d 975,
978 (11th Cir. 2017).
A.
The first and most significant issue in this appeal is whether
American Builders proved a bad faith claim. Taking the evidence
in the light most favorable to American Builders, a reasonable jury
could have found (as it did) both that Southern-Owners acted in
bad faith and that its bad faith caused American Builders to pay its
policy. Moreover, American Builders did not breach Southern-
Owners’ contract and relieve Southern-Owners of its good-faith
duties. The district court did not err in denying Southern-Owners’
Rule 50(b) motion.
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1.
Under controlling Florida law, “the critical inquiry in a bad
faith [action] is whether the insurer diligently, and with the same
haste and precision as if it were in the insured’s shoes, worked on
the insured’s behalf to avoid an excess judgment.” Harvey v.
GEICO Gen. Ins. Co., 259 So. 3d 1, 7 (Fla. 2018). Additionally, any
“damages claimed by an insured in a bad faith case ‘must be caused
by the insurer’s bad faith.’” Id. (citation omitted). That is, the bad
faith conduct must “directly and in natural and continuous se-
quence produce[] or contribute[] substantially to producing such
[damage], so that it can reasonably be said that, but for the bad faith
conduct, the [damage] would not have occurred.” Id. at 11 (quot-
ing Fla. Std. Jury Instr. (Civ.) 404.6(a)).
The bad faith inquiry “is determined under the ‘totality of
the circumstances’ standard,” id. at 7, and we focus “not on the ac-
tions of the claimant but rather on those of the insurer in fulfilling
its obligations to the insured,” Berges v. Infinity Ins. Co., 896 So. 2d
665, 677 (Fla. 2004). That said, a claimant’s actions -- such as a de-
cision not to offer a settlement -- remain relevant in assessing bad
faith. See Powell v. Prudential Prop. & Cas. Ins. Co., 584 So. 2d 12,
14(Fla. 3d DCA 1991); Pelaez v. Gov’t Emps. Ins. Co.,13 F.4th 1243, 1254
(11th Cir. 2021). Insurers have obligations “to advise
the insured of settlement opportunities, to advise as to the probable
outcome of the litigation, to warn of the possibility of an excess
judgment, and to advise the insured of any steps he might take to
avoid [the] same,” as well as to “investigate the facts, give fair
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12 Opinion of the Court 21-13496
consideration to a settlement offer that is not unreasonable under
the facts, and settle, if possible, where a reasonably prudent person,
faced with the prospect of paying the total recovery, would do so.”
Bos. Old Colony Ins. Co. v. Gutierrez, 386 So. 2d 783, 785 (Fla.
1980). These “obligations . . . are not a mere checklist,” however,
and, as the Florida Supreme Court has explained, “[a]n insurer is
not absolved of liability simply because it advises its insured of set-
tlement opportunities, the probable outcome of the litigation, and
the possibility of an excess judgment.” Harvey, 259 So. 3d at 7.
Moreover, insurance companies occasionally have an af-
firmative duty to offer settlements. “Bad faith may be inferred
from a delay in settlement negotiations which is willful and with-
out reasonable cause.” Powell, 584 So. 2d at 14. Thus, “[w]here
liability is clear, and injuries so serious that a judgment in excess of
the policy limits is likely,” the insurer must “initiate settlement ne-
gotiations.” Id. “In such a case, where ‘[t]he financial exposure to
[the insured] [i]s a ticking financial time bomb’ and ‘[s]uit c[an] be
filed at any time,’ any ‘delay in making an offer under the circum-
stances of this case even where there was no assurance that the
claim could be settled could be viewed by a fact finder as evidence
of bad faith.’” Harvey, 259 So. 2d at 7 (alterations in original) (cita-
tion omitted).
At the end of trial, the district court properly and thoroughly
instructed the jury on bad faith. The court charged the jury to con-
sider “all of the circumstances” in determining whether the insurer
“use[d] the same degree of care and diligence as a person of
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21-13496 Opinion of the Court 13
ordinary care and prudence should exercise in the management of
his own business,” “investigate[d] the facts, . . . and “settle[d], if
possible, where a reasonably prudent person faced with the pro-
spect of paying the total recovery would do so.” Moreover, the
district court instructed the jury on causation, observing, among
other things, that bad faith must “directly and in natural and con-
tinuous sequence produce[] or contribute[] substantially to produc-
ing” any damage, though it “need not be the only cause.”
On this record, there was enough evidence to allow the jury
to reasonably find that Southern-Owners acted in bad faith because
it delayed acting on its duty to investigate and settle Guthrie’s
claim. American Builders notified Southern-Owners of the acci-
dent on September 12, and Cohen furnished the company with all
relevant documents on September 27. Among those documents
were proof of Guthrie’s paraplegic status and medical bills already
exceeding $400,000 and correspondences between Cohen and
American Builders, laying out Cohen’s theory of Beck Construc-
tion’s liability. Right off the bat, Southern-Owners had little work
left because the pertinent information landed in its lap. Those doc-
uments painted a picture of “injuries so serious that a judgment in
excess of the policy limits [was] likely.” Powell, 584 So. 2d at 14.
All that remained was a meeting with Beck, who could have helped
inform Southern-Owners whether “liability [was] clear.” Id. In-
stead of meeting with Beck, though, Southern-Owners dawdled. It
did nothing for several weeks before finally reaching out to Beck
Construction’s lawyer. Then, when Southern-Owners finally did
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14 Opinion of the Court 21-13496
speak with counsel, it delayed reasonable offers to interview Beck
for nearly two months, turning down an in-person meeting for be-
ing last-minute and a phone interview for not being in person. Af-
ter finally meeting with Beck in early December, Southern-Owners
decided it needed to follow up with the two other workers on site
that day. But it delayed again, providing no evidence that it
reached out to them for at least another two weeks. As of Decem-
ber 18, Southern-Owners still had not contacted them -- even
though Southern-Owners had requested until December 20 to re-
spond to Cohen’s September 5 demand. With no time to spare,
Southern-Owners was in essentially the same position it was in on
September 27.
That body of evidence could lead a reasonable jury to con-
clude that Southern-Owners delayed its investigation instead of at-
tempting “to resolve the coverage dispute promptly” or using “dil-
igence and thoroughness.” Pozzi Window Co. v. Auto-Owners
Ins., 446 F.3d 1178, 1188 (11th Cir. 2006) (quoting State Farm Mut.
Auto. Ins. Co. v. Laforet, 658 So. 2d 55, 63 (Fla. 1995)). And, in that
delay, a jury could reasonably find that Southern-Owners com-
pletely neglected its “affirmative duty to initiate settlement negoti-
ations,” Powell, 584 So. 2d at 14, while Guthrie’s hospital bills
climbed due to his traumatic injury.
A reasonable jury could also find that Southern-Owners’ bad
faith caused American Builders’ damages. See Harvey, 259 So. 3d
at 7. When American Builders informed Southern-Owners of Co-
hen’s November 18 demand, Southern-Owners refused to pay
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21-13496 Opinion of the Court 15
because it was still investigating the claims. Evanston had already
tendered its $1 million policy on December 10, but the demand re-
quested $2 million, so the next million needed to come from either
Southern-Owners or American Builders. After Southern-Owners
balked, American Builders had no choice but to tender payment.
Southern-Owners’ delay in investigating and settling led to its ina-
bility to tender an offer on December 18. As a result, a reasonable
jury could find (as it did) that American Builders’ damages
stemmed directly and naturally from Southern-Owners’ bad faith.
See id. at 11.
In defense, Southern-Owners points the finger at Guthrie
and Cohen. It focuses on their two settlement demands, neither of
which named Southern-Owners, and on Cohen’s statement that he
and Guthrie had no interest in negotiating with Southern-Owners
directly. However, “[t]he lack of a formal offer to settle does not
preclude a finding of bad faith.” Powell, 584 So. 2d at 14. Instead,
under Florida law, it “is merely one factor to be considered.” Id. A
jury could find that even though Guthrie and Cohen never made
an offer to Southern-Owners, this did not wipe Southern-Owners’
hands clean. What’s more, Southern-Owners was left to explain
why its own actions were not in bad faith, rather than focusing on
just the claimant’s actions. Harvey, 259 So. 3d at 7. Of course,
“there’s a difference between focusing on a claimant’s actions,
which would be improper, and factoring a claimant’s actions into
the totality of the circumstances analysis, which is not improper.”
Pelaez, 13 F.4th at 1254 (emphasis in original). In this case, though,
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16 Opinion of the Court 21-13496
Southern-Owners flipped Florida law on its head and exclusively
focused on Guthrie and Cohen’s actions.
2.
In the alternative, Southern-Owners argues that a reasona-
ble jury should have found that it had no duty to act in good faith
because American Builders breached Southern-Owners’ contract
by not receiving consent before settling the claim. 1 As we see it,
this affirmative defense fails, for two separate reasons. For starters,
a reasonable jury could find that American Builders’ failure to re-
ceive consent did not substantially prejudice Southern-Owners.
What’s more, a reasonable jury could also find that Southern-Own-
ers did not act diligently or in good faith in attempting to obtain
consent.
1 Southern-Owners argued that a reasonable jury would have found in its fa-
vor on this affirmative defense for the first time in its Rule 50(b) motion. But
“[d]istrict courts lack authority to grant a Rule 50(b) motion on a ground not
previously raised in a Rule 50(a) motion prior to the submission of the case to
the jury.” Johnston v. Borders, 36 F.4th 1254, 1270 n.31 (11th Cir. 2022).
American Builders, however, did not raise this lack of authority in district
court and thus “fail[ed] to raise the inadequacy of [the] Rule 50(a) motion in
response to [the] Rule 50(b) motion.” Howard v. Walgreen Co., 605 F.3d
1239, 1243 (11th Cir. 2010). By not raising the argument in the trial court,
American Builders “forfeited [its] right to raise waiver on appeal.” Id. More-
over, none of the exceptions to forfeiture apply, and American Builders does
not argue otherwise. Thus, we consider this argument forfeited, and turn to
the merits of the affirmative defense.
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21-13496 Opinion of the Court 17
Southern-Owners’ contract with Beck Construction pro-
vided that “[n]o insured will, except at the insured’s own cost, vol-
untarily make a payment, assume any obligation, or incur any ex-
pense, other than for first aid, without our consent.” “[T]his lan-
guage requires the insured to obtain the insurer’s consent before
settling.” Am. Reliance Ins. Co. v. Perez, 712 So. 2d 1211, 1213 (Fla.
3d DCA 1998). That is, “while an insured is free to enter into a
reasonable settlement when its insurer has wrongfully refused to
provide it with a defense to a suit, . . . the insured is not similarly
free to independently engage in such settlements where, as here,
the insurer had not declined a defense to suit.” First Am. Title Ins.
Co. v. Nat’l Union Fire Ins. Co., 695 So. 2d 475, 477 (Fla. 3d DCA
1997); see also Am. Reliance Ins. Co., 712 So. 2d at 1212–13.
The Florida Supreme Court requires an insurer to establish
three things in order to succeed on this affirmative defense: (1) a
lack of consent; (2) substantial prejudice to the insurer; and (3) dil-
igence and good faith by the insurer in attempting to receive con-
sent. See Ramos v. Nw. Mut. Ins. Co., 336 So. 2d 71, 75 (Fla. 1976);
Mid-Continent Cas. Co. v. Am. Pride Bldg. Co., 601 F.3d 1143,
1149–50 (11th Cir. 2010). The first element has a few exceptions.
The insured may settle without obtaining consent if the insurer
“wrongfully refused to provide [the insured] with a defense to a
suit,” First Am. Tit. Ins. Co., 695 So. 2d at 477, or offers a condi-
tional defense that the parties cannot agree upon, Taylor v. Safeco
Ins. Co., 361 So. 2d 743, 746 (Fla. 1st DCA 1978). Moreover, even
if the insured was obliged to obtain consent, the failure to do so is
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18 Opinion of the Court 21-13496
not an affirmative defense unless the insurer also establishes sub-
stantial prejudice and evinces good faith in bringing about the co-
operation of the insured. Ramos, 336 So. 2d at 75. As the Florida
Supreme Court put it:
This Court . . . emphasized that to constitute the
breach of a policy, the lack of cooperation must be
material and the insurance company must show that
it was substantially prejudiced in the particular case
by failure to cooperate. Furthermore, . . . the insurer
must show that it has exercised diligence and good
faith in bringing about the cooperation of its insured
and must show that it has complied in good faith with
the terms of the policy.
Id. (citations omitted).
We start with the first element: lack of consent. Over the
objection of Southern-Owners, the district court instructed the jury
to decide “whether American Builders Insurance Company volun-
tarily made a payment without obtaining Southern-Owners Insur-
ance Company’s prior consent, or whether American Builders In-
surance Company was legally obligated to make such payment.”
Both parties agree that American Builders never received consent
before paying. Instead, they debate only whether American Build-
ers needed to obtain consent because its payment was not “volun-
tary.”
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21-13496 Opinion of the Court 19
American Builders argued to the jury that its payment was
involuntary because Southern-Owners unreasonably withheld
consent and forced American Builders to either pay without con-
sent or face a bad faith suit itself. The theory went this way: when
Southern-Owners told American Builders that it would not tender
payment, American Builders “involuntarily” paid “because of cir-
cumstances beyond [its] control,” since the “situation requir[ed]
immediate response to protect its legal interests.” See Rolyn Cos.
v. R & J Sales of Tex., Inc., 412 F. App’x 252, 255 (11th Cir. 2011)
(quotation marks and citation omitted). Southern-Owners re-
sponded that it could not have unreasonably withheld consent be-
cause American Builders had already decided to pay. The jury was
told by Southern-Owners that American Builders made its decision
voluntarily and before seeking any consent.
We need not settle whether American Builders made a vol-
untary payment under Florida law because Southern-Owners also
bore the burden to prove two additional things -- substantial prej-
udice and good faith -- in order to sustain its affirmative defense,
and the jury could reasonably have found that Southern-Owners
failed to prove either.
Turning first to prejudice, the district court instructed the
jury that Southern-Owners “must establish that [American Build-
ers’] breach of the consent provision was material and caused de-
fendant to suffer substantial prejudice.” See Ramos, 336 So. 2d at
75. Southern-Owners provided no evidence of substantial preju-
dice. In fact, its claim adjuster (John Blaser) unambiguously
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20 Opinion of the Court 21-13496
testified that he did not know how Southern-Owners was preju-
diced by American Builders’ decision to pay. When first asked
whether Southern-Owners suffered any prejudice, the claim ad-
juster responded “maybe.” And when asked if he had any facts of
prejudice, he simply replied, “Not that I’m aware of at this time.”
We are unpersuaded by Southern-Owners’ claim that it has
been prejudiced. For starters, Southern-Owners argues it was
“blindsided” by American Builders’ decision to pay on December
18 because it was not aware of Cohen’s November 18 demand.
This argument has several flaws. To begin, American Builders may
have decided to pay before it called Southern-Owners, but it did
not plan to tender payment until after learning whether Southern-
Owners decided to pay instead. The evidence was sufficient to es-
tablish that American Builders’ payment was contingent on South-
ern-Owners’ decision. Moreover, this argument overlooks that, by
the December 18 phone call with American Builders, Southern-
Owners should have been ready to decide whether it would pay
anyway because it had asked for an extension on its own investiga-
tion until December 20. Lastly, it ignores the company’s long
months of delay. An insurer must have a reasonable time to inves-
tigate the claim, see Bos. Old Colony, 386 So. 2d at 785, but the
evidence adduced at trial strongly suggested that Southern-Owners
largely sat on its thumbs.
Southern-Owners also says that the $1,091,240.92 judgment
entered by the district court turned Southern-Owners into a judg-
ment debtor in an amount greater than its policy limits, resulting
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21-13496 Opinion of the Court 21
in substantial prejudice. But Southern-Owners forfeited this argu-
ment by not raising it in district court. See Blue Martini Kendall,
LLC v. Miami Dade County, 816 F.3d 1343, 1349 (11th Cir. 2016).
Regardless, a post-trial judgment does not affect “the rights of the
insurer in defense of the cause.” Ramos, 336 So. 2d at 75. The
judgment could not have affected Southern-Owners’ defense be-
cause it came after Southern-Owners decided not to provide cov-
erage.
Finally, as we have already detailed at length, a reasonable
jury could (and did) plainly find that Southern-Owners did not
“show that it [had] exercised diligence and good faith.” Id. Amer-
ican Builders did everything when it came to investigating Guth-
rie’s claim and deciding whether the insured should make a pay-
ment, all while Southern-Owners sat back and watched. The Flor-
ida Supreme Court has been clear on this point: without good faith,
an insurer may not avail itself of an affirmative defense based on an
insured’s failure to cooperate. See id.
The long and short of it is that, on this record, the evidence
is not “so overwhelmingly in favor of [Southern-Owners] that a
reasonable jury could not” have ruled for American Builders on
bad faith and against Southern-Owners on breach of contract. Mid-
dlebrooks v. Hillcrest Foods, Inc., 256 F.3d 1241, 1246 (11th Cir.
2001). We see no error in the denial of Southern-Owners’
Rule 50(b) motion.
B.
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22 Opinion of the Court 21-13496
Next up is Southern-Owners’ claim that the district court
abused its discretion in denying the motion for a new trial. South-
ern-Owners offers four reasons: (1) it did not act in bad faith be-
cause it was not offered an opportunity to settle; (2) any bad faith
did not cause American Builders’ damages; (3) American Builders
breached its contract; and (4) generally, it did not act in bad faith.
All four of these arguments are retreads of the arguments for
judgment as a matter of law that we have already rejected. The
district court did not abuse its discretion in denying a new trial. For
a new trial, Southern-Owners must show “the verdict ‘[was]
against the clear weight of the evidence or . . . result[ed] in a mis-
carriage of justice.’” Chmielewski v. City of St. Pete Beach, 890
F.3d 942, 948 (11th Cir. 2018) (citation omitted). As we’ve already
explained in some detail, sufficient evidence existed for a rational
jury to find that: (1) Southern-Owners delayed in its investigation
and neglected to act on its affirmative duty to settle, Powell, 584
So. 2d at 14; (2) Southern-Owners’ bad faith caused American
Builders to suffer damages, Harvey, 259 So. 3d at 7, 11; and
(3) American Builders did not breach because Southern-Owners
did not establish substantial prejudice or good faith, Ramos, 336 So.
2d at 75. The limited evidence favoring Southern-Owners -- its
multiple requests for extensions of time and the details from the
Beck interview -- does not amount to “the clear weight of the evi-
dence.” Chmielewski, 890 F.3d at 948 (citation omitted).
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21-13496 Opinion of the Court 23
The jury’s verdict was not against the clear weight of the
evidence, and the district court did not abuse its discretion in deny-
ing Southern-Owners’ Rule 59 motion.
C.
The last issue raised is whether the district court erred in
denying Southern-Owners’ summary judgment motion because its
policy purportedly did not cover Guthrie’s injuries. We will not
consider this issue for two separate reasons.
First, during oral argument, Southern-Owners maintained
for the first time that a purely legal issue denied at summary judg-
ment is appealable after trial. Oral Argument at 24:00–27:45.
Southern-Owners said nothing about this in its briefing to our
Court. “We do not consider arguments raised for the first time at
oral argument.” Hernandez v. Plastipak Packaging, Inc., 15 F.4th
1321, 1330 (11th Cir. 2021).
Second, and in any event, Southern-Owners is incorrect.
Our circuit has no such legal-issue exception to the general rule
that “a party may not appeal an order denying summary judgment
after there has been a full trial on the merits.” Carrizosa v. Chiquita
Brands Int’l, Inc., 47 F.4th 1278, 1339 (11th Cir. 2022) (quotation
marks and citation omitted); see also Ortiz v. Jordan, 562 U.S. 180,
183–84 (2011) (“May a party . . . appeal an order denying summary
judgment after a full trial on the merits? Our answer is no.”). In
Ortiz, the Supreme Court left open the question whether an “issue
of a ‘purely legal nature’ . . . is preserved for appeal by an
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24 Opinion of the Court 21-13496
unsuccessful motion for summary judgment.” 562 U.S. at 190 (ci-
tation omitted). Other circuits are split on the answer to that ques-
tion.2 Both before and after Ortiz, however, we have repeatedly
and broadly held that “this Court will not review the pretrial denial
of a motion for summary judgment after a full trial and judgment
on the merits.” Lind v. United Parcel Serv., Inc., 254 F.3d 1281,
1286 (11th Cir. 2001); see also Akouri v. Fla. Dep’t of Transp., 408
F.3d 1338, 1347 (11th Cir. 2005) (“[W]e have held that, after a full
trial and judgment on the merits, we will not review the pretrial
denial of a motion for summary judgment.”); Pensacola Motor
Sales Inc. v. E. Shore Toyota, LLC, 684 F.3d 1211, 1219 (11th Cir.
2012) (same); Scott v. United States, 825 F.3d 1275, 1282 (11th Cir.
2 The Second, Third, Sixth, Seventh, Ninth, Tenth, D.C., and Federal Circuits
allow appeals of purely legal arguments denied at summary judgment. See,
e.g., Rothstein v. Carriere, 373 F.3d 275, 284 (2d Cir. 2004); Pennbarr Corp. v.
Ins. Co. of N. Am., 976 F.2d 145, 149–55 (3d Cir. 1992); McPherson v. Kelsey,
125 F.3d 989, 995(6th Cir. 1997); Chemetall GMBH v. ZR Energy, Inc.,320 F.3d 714
, 719–20 (7th Cir. 2003); Pavon v. Swift Transp. Co.,192 F.3d 902, 906
(9th Cir. 1999); Ruyle v. Cont’l Oil Co., 44 F.3d 837, 841–42 (10th Cir. 1994);
Feld v. Feld, 688 F.3d 779, 783 (D.C. Cir. 2012); United Techs. Corp. v. Chro-
malloy Gas Turbine Corp., 189 F.3d 1338, 1344 (Fed. Cir. 1999). The Eighth
Circuit allows appeals of decisions “based on [the] resolution of a preliminary
legal issue,” like statute of limitations, estoppel, or standing. Kirk v. Schaeffler
Grp. USA, Inc., 887 F.3d 376, 384 (8th Cir. 2018). The First, Fourth, and Fifth
Circuits do not allow appeals of any denials of summary judgment after a trial
on the merits, unless the issues are preserved in a Rule 50 motion. See, e.g., Ji
v. Bose Corp., 626 F.3d 116, 127–28 (1st Cir. 2010); Chesapeake Paper Prods.
Co. v. Stone & Webster Eng’g Corp., 51 F.3d 1229, 1237 (4th Cir. 1995); Feld
Motor Sports, Inc. v. Traxxas, L.P., 861 F.3d 591, 596 (5th Cir. 2017).
USCA11 Case: 21-13496 Document: 41-1 Date Filed: 01/04/2023 Page: 25 of 25
21-13496 Opinion of the Court 25
2016) (same); St. Louis Condo. Ass’n., 5 F.4th at 1242 (same); Car-
rizosa, 47 F.4th at 1339 (same).
AFFIRMED.
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