IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF FLORIDA 

_______________ DIVISION 

HANOVER INSURANCE COMPANY) Civil Action No.: 

 ) 

 ) 

Plaintiff, ) 

v. ) 

 ) 

FLORIDA COALITION AGAINST) 

DOMESTIC VIOLENCE, INC., a) 

Florida not-for-profit corporation;) 

FLORIDA COALITION AGAINST) 

DOMESTIC VIOLENCE) 

FOUNDATION, INC., a Florida ) 

not-for-profit corporation; TIFFANY) 

CARR; SANDRA BARNETT;) 

PATRICIA DUARTE; MELODY) 

KEETH; LAUREL LYNCH;) 

ANGELA DIAZ-VIDAILLET;) 

SHANDRA RIFFEY; DONNA) 

FAGAN; THERESA BEACHY;) 

SHERYL SCHWAB; LORNA) 

TAYLOR; and PENNY MORRILL, ) 

Defendants. 

________________________________/ 

COMPLAINT FOR DECLARATORY JUDGMENT 

Plaintiff Hanover Insurance Company (“Hanover”), files its Complaint for Declaratory 

Judgment against Defendants Florida Coalition Against Domestic Violence, Inc. (“FCADV”), 

Florida Coalition Against Domestic Violence Foundation, Inc. (“FCADVF”), Tiffany Carr, 

Sandra Barnett, Patricia Duarte, Melody Keeth, Laurel Lynch, Angela Diaz-Vidaillet, Shandra 

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Riffey, Donna Fagan, Theresa Beachy, Sheryl Schwab, Lorna Taylor, and Penny Morrill 

(collectively, the “INSUREDS”), and alleges as follows: 

I. INTRODUCTION 

1. This is an insurance coverage dispute between Hanover and the INSUREDS, 

based on several Hanover Policy exclusions, as well as the INSUREDS’ misrepresentations in 

the Policy Application. The Hanover Policy at issue in this Coverage Lawsuit – a Nonprofit 

D&O Policy, has an inception date of December 19, 2019, and was the first policy Hanover 

ever issued to FCADV. 

2. FCADV is a Florida not-for-profit corporation and pursuant to two Grant 

Contracts, FCADV received tens of millions of dollars in federal and state grant monies to 

help victims of domestic violence. However, from July 1, 2016 through October 2019, the 

Florida Attorney General alleges FCADV, its CEO (Tiffany Carr), and other officers 

“engaged in a pattern of serious misconduct and abuse,” which included “the diversion of 

significant funding to enrich its officers to a shocking degree – including $7.5 million to its 

CEO, Defendants Tiffany Carr, over a three-year period.” (See, AG Lawsuit; Florida 

Attorney General’s Emergency Motion to Appoint a Receiver.) This alleged misappropriation 

of at least $7.5 million has resulted in two lawsuits by Florida state agencies against the 

INSUREDS – the first filed by the Florida Department of Children and Families (“DCF”) (the 

“DCF Lawsuit”), and the second filed by Florida Attorney General (the “AG Lawsuit”) 

(collectively, the “State Litigation”). The INSUREDS seek coverage under the Hanover 

Policy for the State Litigation, and Hanover presently seeks a declaratory judgment that it has 

no obligation to defend or indemnify the INSUREDS for the State Litigation. 

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3. Specifically, on July 26, 2018, the Miami Herald published a news article 

headlined, “Nonprofit? She gets paid $761,560 to run this domestic violence group,” and 

the article stated FCADV’s CEO Carr “is paid $761,560 annually, a salary that is approved by 

its board.” A month after this story, on August 27, 2018, the DCF began “investigat[ing] 

FCADV’s administrative costs and executive compensation”; however, over the course of the 

next two years, “FCADV...stonewall[ed] that investigation” (the “DCF Investigation”). 

4. In particular, during the DCF Investigation of FCADV, from August 27, 2018 

until February 11, 2020, the DCF made no less than six written demands for documents and 

information related to FCADV’s executive’s compensation, but instead of FCADV 

responding truthfully, the DCF alleges it “was provided false and incomplete documents, data, 

information and spreadsheets that obscured the true amounts of executive compensation 

received by” FCADV executives. 

5. Hanover has numerous coverage defenses that bar coverage for the entirety of the 

State Litigation. First, as noted above, on August 27, 2018, the DCF Investigation 

commenced its examination of executive compensation at FCADV – this investigation began 

more than two years before the inception date of Hanover’s first Policy (i.e., December 19, 

2019). To prevent providing coverage for a “burning building” (e.g., like here, the DCF 

Investigation), Hanover’s Policy contains a Prior & Pending Litigation/Demand Exclusion 

which expressly states, “[t]his insurance does not apply to Loss for any Claim [i.e., the State 

Litigation]:...[b]ased upon, arising out of or in any way related to 

any...litigation...or...written demand pending against any Insured...prior to [December 19, 

2019].” (Emphasis added.) 

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6. Here, based on the provisions of two DCF-FCADV Contracts (i.e., Contract 

LN967 and Contract LJ990),1 DCF made no less than five written demands to FCADV for it 

to produce documents and provide information on executive compensation at FCADV. 

Specifically, under Section 25.c. of Contract LN967, and Section 5.1.1 of Contract LJ990, 

these Contractual Provisions state “[u]pon demand,” FCADV was obligated to produce 

records or documents to DCF. Based on these two Contracts, the DCF Lawsuit alleges that 

DCF “made repeated and multiple demands for production of documents reflecting the income 

and expenditure of funds provided by DCF.” (DCF Lawsuit, ¶48.f.) Indeed, before the Hanover 

exclusion’s December 19, 2019 date, DCF made no less than five “written demands” to FCADV 

for it to produce documents and information related to FCADV executive’s compensation. 

Accordingly, because the State Litigation is “based upon, arising out of or in any way related 

to” DCF’s five written demands before December 19, 2019, the Prior & Pending Litigation/ 

Demand Exclusion bars coverage for the State Litigation. 

7. Second, on February 12, 2020, the INSUREDS executed and submitted a Policy 

Application for insurance with Hanover (the first insurance policy with Hanover) in which the 

INSUREDS were expressly asked if they were “aware of any fact, circumstance, or situation 

that might reasonably be expected to result in a Claim,” and incredibly, despite the five prior 

written demands for documents related to the DCF Investigation, and INSUREDS answered 

“No” to this question. Immediately following this question, the Policy Application states: 

IMPORTANT: Without prejudice to any other rights and remedies of the 

Insurer, the Applicant understands and agrees that if any such fact, circumstance 

or situation exists, whether or not disclosed in response to the question above, 

1 See, DCF Lawsuit, ¶47 (“DCF and FCADV had, and continue to have, a valid and enforceable contract.”) 

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any claim or action arising from such fact, circumstance or situation is excluded 

from coverage under the proposed policy, if issued by the Insurer. [Hereinafter, 

the “Policy Application Claim Exclusion”] (Emphasis added.) 

Given the INSUREDS were most certainly aware of “any such fact, circumstance or situation” 

– i.e., the DCF Investigation and the five demand letters directed to FCADV seeking 

documents and information related to the improperly used grants monies, the Policy 

Application Claim Exclusion bars coverage for the State Litigation. 

8. Third, in addition to the Policy Application exclusion, the Policy itself bars 

coverage for any misrepresentation in the Policy Application for any Insured “who knew of 

such misrepresentations (whether or not such individual knew such Application contained 

such misrepresentations)” (the “Policy Claim Exclusion”). Given the DCF Investigation and 

the five demand letters directed to FCADV, the Policy Application Claim Exclusion bars 

coverage for the State Litigation. 

9. Fourth, Hanover’s Policy contains other terms, conditions, and exclusions that 

bar coverage for all or some of the State Litigation, including: the Fraud Exclusion, the Profit 

Exclusion, the Contract Exclusion, and the provision excluding amounts deemed uninsurable 

by law, which applies because restitution and/or return of ill-gotten gains is not insurable 

under Florida law. In addition, under the Known Loss Doctrine, Hanover has no obligation 

to defend or indemnify the INSUREDS for the State Litigation. 

10. Presently, Hanover has agreed to defend the INSUREDS subject to: (i) an 

express reservation of rights that Hanover would be filing a Coverage Lawsuit and seeking a 

declaratory judgment that it has no obligation to defend and/or to indemnify under the Policy; 

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and (ii) if so determined, pursuant to Florida law, Hanover will seek reimbursement of all fees, 

costs, and expenses paid on behalf of each of the INSUREDS. 

11. An actual controversy exists between the INSUREDS and Hanover regarding 

Hanover’s purported obligation to provide the INSUREDS with insurance coverage for the 

State Litigation, and this controversy cannot be resolved without a declaration of the rights 

and responsibilities of the parties by this Court. 

II. PARTIES 

12. Plaintiff Hanover is a company incorporated under the laws of New Hampshire 

with its principal place of business at 440 Lincoln Street, Worcester, Massachusetts. 

13. Defendant FCADV is a Florida not-for-profit corporation, organized under 

Florida law, with its principal place of business at 425 Office Plaza Drive, Tallahassee, 

Florida. 

14. Defendant FCADVF is a Florida not-for-profit corporation, organized under 

Florida law, with its principal place of business at 425 Office Plaza Drive, Tallahassee, Florida. 

15. Defendant Tiffany Carr is a citizen of Florida. 

16. Defendant Sandra Barnett is a citizen of Florida. 

17. Defendant Patricia Duarte is a citizen of Florida. 

18. Defendant Melody Keeth is a citizen of Florida. 

19. Defendant Laurel Lynch is a citizen of Florida. 

20. Defendant Angela Diaz-Vidaillet is a citizen of Florida. 

21. Defendant Shandra Riffey is a citizen of Florida. 

22. Defendant Donna Fagan is a citizen of Florida. 

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23. Defendant Theresa Beachy is a citizen of Florida. 

24. Defendant Sheryl Schwab is a citizen of Florida. 

25. Defendant Lorna Taylor is a citizen of Florida. 

III. JURISDICTION AND VENUE 

26. This court has jurisdiction over this action pursuant to 28 U.S.C. § 1332 

respecting diversity jurisdiction insofar as it involves citizens of different states and the 

amount in controversy exceeds $75,000, exclusive of interest and costs, as the INSUREDS are 

alleged to owe in excess of $7.5 million in improper compensation to federal and state 

agencies. The INSUREDS are seeking at least this amount for indemnity from Hanover. 

27. Venue is appropriate under 28 U.S.C. § 1391 because a substantial part of the 

relevant events occurred in this District, including the issuance of the Policy to FCADV, and 

FCADV does business and has a principal office within this District, and the State Litigation 

are both filed within this District (in the Circuit Court of the Second Judicial Circuit, Leon 

County, Florida). 

IV. BACKGROUND FACTS 

A. The Hanover Policy 

1. The Hanover Application 

28. On February 11, 2020, the INSUREDS executed and submitted a Policy 

Application to Hanover. 

29. Section XI of the Policy Application (“PRIOR KNOWLEDGE AND 

APPLICANT REPRESENTATION”) provides: 

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Is any Insured proposed for coverage aware of any fact, circumstance, or 

situation that might reasonably be expected to result in a Claim that would fall 

within the scope of the proposed Liability Coverage Parts? 

Yes  No 

If “Yes” please attach a full description of the details. 

This representation applies only to those coverage types for which no coverage is 

currently maintained and any larger limits of liability requested. 

IMPORTANT: Without prejudice to any other rights and remedies of the 

Insurer, the Applicant understand and agrees that if any such fact, circumstance 

or situation exists, whether or not disclosed in response to the question above, 

any claim or action arising from such fact, circumstance or situation is excluded 

from coverage under the proposed policy, if issued by the Insurer. [Hereinafter, 

the “Application Claim Exclusion”] 

30. The INSUREDS answered “No” to the questions in Section XI. 

31. At the time of this representation, the INSUREDS had no coverage maintained 

with Hanover and were seeking $3 million in coverage from Hanover. 

2. The Terms and Conditions of the Hanover Policy 

32. Hanover issued to FCADV a Nonprofit Entity Advantage Policy, policy number 

LHJ-H138435-00, with a Policy Period from December 19, 2019 to December 19, 2020 (“the 

Policy”). 

33. A true and correct copy of the Policy (which includes as part of the Policy, the 

Policy Application (referenced above)) is attached as Exhibit 1. 

34. The Insuring Agreements of the Directors & Officers and Entity Liability 

Coverage Part (“D&O Coverage”) are at Section I of the Policy, and provide: 

I. Insuring Agreements 

A. Individual Non-Indemnified Liability 

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The Insurer will pay on behalf of each Insured Individual, Loss which the 

Insured Individual is legally obligated to pay due to a Claim first made against 

the Insured Individual during the Policy Period, or the Extended Reporting 

Period if applicable, except for Loss which the Insured Entity pays to or on 

behalf of the Insured Individual as indemnification. 

B. Individual Indemnified Liability 

The Insurer will pay on behalf of the Insured Entity, Loss which the Insured 

Individual is legally obligated to pay due to a Claim first made against the 

Insured Individual during the Policy Period, or the Extended Reporting Period 

if applicable, but only to the extent the Insured Entity indemnifies the Insured 

Individual for such Loss. 

C. Entity Liability 

The Insurer will pay on behalf of an Insured Entity, Loss which the Insured 

Entity is legally obligated to pay due to a Claim first made against the Insured 

Entity during the Policy Period, or the Extended Reporting Period if applicable.

35. Section III of the D&O Coverage of the Policy contains the following definitions 

of “Claim”: “[w]ritten demand received by an Insured for monetary or non-monetary relief 

including injunctive relief,” or “[c]ivil proceeding commenced by the service of a complaint 

or similar pleading”. 

36. Section III of the D&O Coverage of the Policy contains the following definition 

of “Loss”: 

Loss means Defense Expenses and the amount the Insured is legally obligated 

to pay as a result of a Claim including: 

A. Monetary judgments, awards or settlements, pre-judgment and post-judgment 

interest and compensatory damages; 

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37. Section III of the D&O Coverage of the Policy provides in part that Loss does 

not include any amount deemed uninsurable by law. 

38. Section III of the Common Policy Terms and Conditions (“Terms & 

Conditions”) of the Policy contains following definition of “Related Claims”: 

Related Claims means all Claims based upon, arising from or in any way 

related to the same facts, circumstances, situations, transactions, results, damages 

or events or the same series of facts, circumstances, situations, transactions, 

results, damages, or events. 

39. Section IV of the Terms and Conditions of the Policy provides: 

RELATED CLAIMS 

With respect to the Liability Coverage Parts all Related Claims will be 

considered as a single Claim made in the Policy Period or Extended Reporting 

Period in which the earliest of such Related Claims was first made or first 

deemed to have been made pursuant to the applicable Coverage Part. All Related 

Claims are subject to the Limits of Liability, Retention and other terms and 

conditions applicable to the earliest Related Claim. 

40. Section IV of the D&O Coverage of the Policy contains the following Exclusion, 

which provides in part: 

A. Exclusions Applicable to All Insuring Agreements 

This insurance does not apply to Loss for any Claim:...2. Based upon, arising 

out of or in any way related to any litigation, administrative or arbitration 

proceeding, written demand pending against any Insured, or any order, decree or 

judgment entered prior to or on the Prior & Pending Proceedings Date set forth in 

Item 5. of the D&O Declarations. 

41. Section IV of the D&O Coverage of the Policy contains the following 

Exclusions, which states in part: 

A. Exclusions Applicable to All Insuring Agreements 

This insurance does not apply to Loss for any Claim:...3. Based upon, arising 

out of or in any way related to: 

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a. Any deliberate, dishonest, fraudulent act or omission, or willful violation 

of any statute or regulation by an Insured; or 

b. An Insured gaining any profit, remuneration or advantage to which such 

Insured was not legally entitled; 

However, this exclusion shall not apply to Defense Expenses unless and until a 

final, non-appealable judgment or adjudication in any underlying proceeding or 

action establishes that an Insured committed such an act or omission, violation 

of statute or regulation or gained such profit, remuneration or advantage to which 

the Insured was not legally entitled. 

42. Section IV of the D&O Coverage of the Policy contains the following Exclusion: 

B. Exclusions Applicable to Insuring Agreement C. Corporate Entity Liability, 

Only 

This insurance does not apply to Loss for any Claim: 

1. Based upon, arising out of or in any way related to liability assumed through, 

or on account of, any oral or written contract or agreement to which an Insured 

is a party, however this exclusion shall not apply to liability that would have 

attached in the absence of such contract or agreement. 

43. Section IV of the D&O Coverage of the Policy contains the following Exclusion: 

If the Application contains any misrepresentations made with the intent to 

deceive or contains misrepresentations which materially affect the acceptance of 

the risk or the hazard assumed by the Insurer under this Policy, then no 

coverage shall be afforded for any Claim based upon, arising from, or in 

consequence of, any such misrepresentation with respect to: 

1. Any Insured Individual who knew of such misrepresentations (whether or 

not such individual knew such Application contained such misrepresentations) 

or any Insured Entity to the extent it indemnifies any such Insured Individual; 

or 

2. Any Insured Entity if any past or present chief executive officer, chief 

financial officer or chief information officer (or any equivalent position) of the 

Insured Entity knew of such misrepresentation (whether or not such individual 

knew such Application contained such misrepresentations). 

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B. The State Litigation 

1. The DCF Lawsuit 

44. On or about March 4, 2020, DCF filed the DCF Lawsuit against the INSUREDS. 

45. A true and correct copy of the DCF Lawsuit is attached as Exhibit 2. 

46. A true and correct copy of Exhibit A to the DCF Lawsuit is attached as Exhibit 3. 

47. A true and correct copy of Exhibit B to the DCF Lawsuit is attached as Exhibit 4. 

48. On July 26, 2018, the Tampa Bay Times ran a news article headlined, 

“Nonprofit? She gets paid $761,560 to run this domestic violence group,” which stated 

FCADV’s CEO Carr “is paid $761,560 annually, a salary that is approved by its board.” 

49. A true and correct copy of the Miami Herald article is attached as Exhibit 5. 

50. Less than a month after the Miami Herald article, DCF commenced an 

investigation into executive compensation at FCADV, including Carr and other executive’s 

egregious salaries at FCADV. 

51. At paragraph 24, the DCF Lawsuit alleges that on August 27, 2018, DCF sent a 

letter to FCADV “notifying FCADV that DCF Office of the Inspector General (OIG) was 

initiating an investigation of FCADV’s administrative costs and executive compensation.” 

52. At paragraph 24, the DCF Lawsuit alleges that the “letter included a request for 

documentation for fiscal years 2016-2017 and 2017-2018, with a production deadline of 

September 5, 2018.” 

53. The August 27, 2018 DCF letter states: “Section 20.055(6)(c), Florida Statutes, 

the Inspector General and his staff shall have access to any records, data, and other 

information deemed necessary to complete this project.” 

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54. The DCF Lawsuit alleges that DCF requested the documents to assist DCF to:

● Determine the proportion of Department funding expended by FCADV on

administrative costs and executive compensation; and 

● Determine whether funding expended on executive compensation agrees with

information provided to the Department. 

55. A true and correct copy of DCF’s August 27, 2018 letter to Tiffany Carr at 

FCADV is attached as Exhibit 6. 

56. By email dated August 31, 2018, DCF confirmed its August 27 requests with 

FCADV’s counsel and reiterating it demand production of “all the Public Records” by the 

close of business on “Wednesday, September 5.” 

57. A true and correct copy of DCF’s email, dated August 31, 2018 and directed to 

FCADV’s counsel, is attached as Exhibit 7. 

58. At paragraph 25, the DCF Lawsuit alleges the FCADV’s response to DCF’s 

August 27, 2018 document requests “satisf[ied] a small portion of DCF’s request for 

production of documents.” 

59. On January 31, 2019, DCF sent another letter to FCADV and advising that it 

“had failed to produce all documents specified in the August 2018 letter.”

60. At paragraph 26, The DCF Lawsuit alleges that on January 31, 2019 DCF letter 

“requested compliance with the subject request for production of documents by February 14, 

2019.” 

61. The January 31, 2019 DCF letter states, “many of the documents and records 

requested in the August 27, 2018 letter were not provided, nor have they subsequently been 

provided.” 

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62. The January 31, 2019 DCF letter states, “we have attached a list of documents 

and records that were not provided to the OIG and we request that FCADV provide them to us 

no later than February 14, 2019.” (Emphasis in original.)

63. A true and correct copy of DCF’s January 31, 2019 letter to Tiffany Carr at 

FCADV is attached as Exhibit 8. 

64. At paragraph 27, the DCF Lawsuit alleges in FCADV’s response to DCF’s 

January 31, 2019, FCADV “asserted that executive compensation was not pertinent to 

FCADV’s contract with the Department, and that FCADV refused to produce any documents 

relative to same.” 

65. At paragraph 28, the DCF Lawsuit alleges on September 11, 2019, DCF sent 

another letter to FCADV “advising that the documents requested in the August 2018 letter had 

still not been produced, and documents provided by FCADV were not responsive to the 

request for specific documentation. FCADV was again asked to provide the remaining 

documents, this time by September 27, 2019.” 

66. The September 11, 2019 DCF letter states, “many of the documents and records 

requested in the August 27, 2018 letter were not provided and we sent Ms. Carr a follow-up 

request, dated January 31, 2019.” 

67. The September 11, 2019 DCF Letter states the FCADV “did not provide the total 

compensation amounts, including supporting documentation and sources of funding for 

FCADV officers, including Ms. Carr.” 

68. The September 11, 2019 DCF letter states: 

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According to Section 20.055(6)(c), Florida Statutes, the Inspector General and 

his staff shall have access to any records, data, and other information deemed 

necessary to complete this project. 

Under Section 25.g. of Department contract no. LN967, FCADV shall comply 

and cooperate immediately with any inspections, reviews, investigations or 

audits deemed necessary by the OIG. Section 25.h. of contract no. LN967, as 

revised in section D.18. of Attachment I, adds that no record may be withheld 

based on any claim that any record is exempt from public inspection or is 

confidential. 

To date, FCADV has not provided any additional documents and records. 

Therefore, we have attached Schedule "A," which details the documents and 

records that were not provided to the OIG and we request that the FCADV 

Board of Directors provide them to us by September 27, 2019. (Bold in 

original.) 

69. A true and correct copy of DCF’s September 11, 2019 letter to the FCADV 

board of directors is attached as Exhibit 9. 

70. At paragraph 29, the DCF Lawsuit alleges in FCADV’s response to DCF’s 

September 11, 2019 letter, FCADV claimed “that FCADV is only required to provide 

documents pertinent to the Contracts, and funding provided under the Contracts,” and then the 

letter addressed Carr’s salary and bonuses with certain document disclosures, but “[n]ot only 

were those disclosures false, but, notably, FCADV misleadingly referenced Ms. Carr’s ‘base 

salary,’ while omitting any information regarding Ms. Carr’s paid time off (‘PTO’), for which 

she repeatedly received millions of dollars in cash payouts.” 

71. At paragraph 29, the DCF Lawsuit alleges on November 7, 2019, DCF’s Office 

of the General Counsel (“OGC”) issued a letter to FCADV, again seeking “to obtain the 

required documents.” 

72. The November 7, 2019 letter states, in part that: 

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After careful consideration and deliberation, the Department remains concerned 

with FCADV’s lack of cooperation and transparency regarding the use of state 

and federal funds for executive level salaries. Simply, based on FCADV's 

inadequate responses, many questions remain unanswered. 

73. The November 7, 2019 letter states, in part that: 

A. FCADV Contractual Duties 

...Section 5.1.5 of the Contract requires FCADV to comply and cooperate 

immediately with any inspections, reviews, investigations, or audits deemed 

necessary by the OIG. 

Section 5.1.6 of the Contract states that no record may be withheld nor may 

FCADV limit the scope of the foregoing inspections based on any claim that any 

record is exempt from public inspection or is confidential, proprietary, or trade 

secret in nature. 

74. The November 7, 2019 letter states, in part that: 

The Department has grave concerns regarding the failure of FCADV to 

sufficiently comply with the Inspector General’s repeated requests for 

satisfactory documentation and information regarding executive level salaries 

and funding sources. 

C. FCADV Needs to Provide Transparency on Their Use of State and 

Federal Funds 

FCADV did not provide sufficient information and documentation in response 

to the OIG letters dated August 27, 2018, January 31, 2019, and September 11, 

2019. The Department hereby requires that FCADV respond to the numbered 

items below no later than November 22, 2019. 

1. If $137,562 of the President/CEO/Executive Director’s compensation was 

from Family Violence Prevention and Services Act (FVPSA) funding, indicate 

how much of the $623,998 balance (see table) is from state-appropriated funds. 

Compensation Sources All Sources

FCADV 

Only

FCADV

$ 

761,560

$ 

761,560

FCADV and related organizations 40,050 0

SubTotal

$ 

801,610

$ 

761,560

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Less: FVPSA Portion (137,562) (137,562)

Total

$ 

664,048

$ 

623,998

75. The November 7, 2019 letter states, in part that 

The Department demands accountability and transparency of all providers, 

particularly those dealing with life and death matters. The Department expects 

and anticipates enhanced cooperation in its duty to achieve accountability and 

transparency from FCADV. The Department looks forward to FCADV's 

comprehensive response. 

76. A true and correct copy of the DCF’s November 7, 2019 letter to Karen Walker, 

who was at that time an attorney for FCADV, is attached as Exhibit 10. 

77. At paragraph 29, the DCF Lawsuit alleges a “meeting occurred as a result of 

OGC’s November 7, 2019, demand to finally review records intentionally withheld by 

FCADV, despite nearly 2 years of requests for production pursuant to the contract.” 

78. By email dated January 31, 2020, DCF requested FCADV provide documents 

and information that had been as previously requested by its Office on August 27, 201, 

January 31, 2019, September 11, 2019 and November 7, 2019. 

79. A true and correct copy of the DCF’s January 31, 2020 email to FCADV’s 

counsel Karen Walker is attached as Exhibit 11. 

80. Through its investigation, DCF determined that Carr had received millions of 

dollars in salary, bonuses and PTO. 

81. A month after DCF’s email dated January 31, 2020, DCF filed the DCF Lawsuit. 

82. At paragraph 35, the DCF Lawsuit alleges that INSUREDS “engaged in a 

scheme and conspiracy to provide false and misleading information and documents to DCF 

and OIG regarding Ms. Carr’s total compensation, and FCADV’s use of public funds.”

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83. At paragraph 36, the DCF Lawsuit alleges on information and belief, “each had 

respective personal stakes in the aforementioned scheme and conspiracy, separate and apart 

from those of FCADV, as they each received a number of personal benefits, including, but not 

limited to, increased salaries, compensation, bonuses, and PTO.”

2. The AG Lawsuit 

84. On or about March 4, 2020, the Florida Attorney General filed the AG Lawsuit 

against two of the INSUREDS, FCADV and Carr. 

85. A true and correct copy of the AG Lawsuit is attached as Exhibit 12. 

86. Like the prior written demands and the DCF Lawsuit, the AG Lawsuit directly 

relates to the alleged excessive compensation (i.e., salary, bonuses and PTO) received by Carr 

as CEO of FCADV. 

87. At paragraphs 25 and 26, the AG Lawsuit alleges “during the 40-month period 

from July 1, 2016 through October 2019, Ms. Carr received compensation – including wages, 

bonuses, paid time off (‘PTO’) liquidations, and car allowances – totaling $7,514,748.48. Of 

that, PTO payouts totaled $3,707,866.21. Inclusion of retirement and insurance benefits for 

her brings the total value of her compensation package for that same period to 

$7,762,573.27,” and that “FCADV and Ms. Carr used PTO as a means of surreptitiously 

awarding what in substance amounted to bonuses for Ms. Carr, as CEO.” 

88. At paragraph 33, the AG Lawsuit alleges: “DCF has made efforts from 2018 

forward to obtain all pertinent records of FCADV from it, but FCADV has engaged in a 

campaign of stonewalling by which it has resisted producing requested records. While FCADV 

has slowly been turning over its records to DCF, many of its records have contained redactions. 

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To date, upon information and belief, FCADV still has not fully complied with DCF’s requests 

for records.” 

D. Application of the Policy Terms and Exclusions 

1. The Prior & Pending Litigation/Demand Exclusion 

89. The Prior & Pending Litigation/Demand Exclusion states in part that, “[t]his 

insurance does not apply to Loss for any Claim [i.e., the State Litigation]:...[b]ased upon, 

arising out of or in any way related to any...litigation...written demand pending against any 

Insured...prior to [December 18, 2019].” 

90. At paragraph 54, the DCF Lawsuit alleges, “On June 20, 2013, DCF and 

FCADV entered into a valid and enforceable contract. See Exhibit ‘B.’ On July 31, 2019, the 

parties thereto entered into a subsequent valid and enforceable contract. See Exhibit ‘A.’” 

91. At paragraph 18, the DCF Lawsuit alleges “Contract LJ990” is a contract 

between DCF and FCADV. 

92. As used in “Contract LJ990,” the term “Department” means the Florida 

Department of Children and Families, and the term “Provider” means the Florida Coalition 

Against Domestic Violence, Inc. 

93. At paragraph 18, the DCF Lawsuit alleges “Contract LN967” is a contract 

between DCF and FCADV. 

94. As used in “Contract LN967,” the term “Department” means the Florida 

Department of Children and Families, and the term “Provider” means the Florida Coalition 

Against Domestic Violence, Inc. 

95. Section 25.a. of Contract LN967 provides: 

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The Provider shall establish and maintain book, records and documents 

(including electronic storage media) sufficient to reflect all income and 

expenditures of funds by the Department under this Contract. 

96. Section 25.c. of Contract LN967 provides: 

Upon demand, at no additional cost to the Department, the Provider will facilitate 

the duplication and transfer of any records or documents during the term of this 

Contract and the required retention period in Section 25.b. 

97. Section 5.1.1 of Contract LJ990 provides: 

The Provider shall establish and maintain book, records and documents 

(including electronic storage media) sufficient to reflect all income and 

expenditures of funds by the Department under this Contract. Upon demand, at 

no additional cost to the Department, the Provider will facilitate the duplication 

and transfer of any records or documents during the term of this Contract and the 

required retention period in Section 5.1.2. These records shall be made available 

at all reasonable times for inspection, review, copying, or audit by Federal, State, 

or other personnel duly authorized by the Department. 

98. DCF, or its representatives, sent correspondence to FCADV dated August 27, 

2018, August 31, 2018, January 31, 2019, September 11, 2019, November 7, 2019, and 

January 31, 2020. 

99. At paragraph 22, the DCF Lawsuit alleges, “[d]espite its contractual obligations, 

FCADV repeatedly and continuously failed and refused to comply with, and breached, 

Contracts LN967 and LJ990, including, but not limited to, by: 

a. Violating State and Federal statutes, rules, regulations and policies; 

b. Failing to advise of legal actions taken against FCADV; 

c. Failing to maintain and provide adequate financial records; 

d. Failing to comply with inspections, reviews, investigations or audits 

deemed necessary by the DCF Office of the Inspector General (OIG); 

e. Using State and Federal funds for a prohibited purpose — Lobbying; 

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f. Violating the Federal Funding Accountability and Transparency Act; and 

g. Violating of applicable public records and Sunshine laws. 

100. At paragraph 48, the DCF Lawsuit alleges, “DCF, through both its OIG and 

OGC, made repeated and multiple demands for production of documents reflecting the income 

and expenditure of funds provided by DCF.” 

101. The State Litigation is “based upon, arising out of or in any way related to” the 

DCF Investigation, and its five written demands for documents and/or information to FCADV 

prior to December 19, 2019, and therefore, the Prior & Pending Litigation/Demand Exclusion 

bars coverage for the State Litigation.

2. The Policy Application Claim Exclusion 

102. Section IX of the Hanover Policy Application asked, “[i]s the Insured proposed 

for coverage aware of any fact, circumstance, or situation that might reasonably be expected 

to result in a Claim that would fall within the scope of the proposed Liability Coverage 

Parts?” 

103. FCADV answered “no” to this question. 

104. Prior to execution of the Policy Application, the INSUREDS were aware of the 

DCF Investigation, including the written demands to FCADV seeking information and 

documents related to Carr’s and other executives’ compensation. 

105. The answer “no” to the question posed in Section IX was not a truthful answer. 

106. Given the Policy Application Claim Exclusion provides that: “the Applicant 

understands and agrees that if any such fact, circumstance or situation exists, whether or not 

disclosed in response to the question above, any claim or action arising from such fact, 

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circumstance or situation is excluded from coverage under the proposed policy, if issued by 

the Insurer,” there is no coverage under the Policy for the State Litigation. 

3. The Policy Claim Exclusion 

107. In Section XIV, the Policy Claim Exclusion provides if the Application contains 

any misrepresentations made with the intent to deceive or contains misrepresentations which 

materially affect the acceptance of the risk or the hazard assumed by the Insurer under this 

Policy, then “no coverage shall be afforded for any Claim based upon, arising from, or in 

consequence of, any such misrepresentation with respect to” any Insured “who knew of such 

misrepresentations (whether or not such individual knew such Application contained such 

misrepresentations).” 

108. Prior to execution of the Policy Application, the INSUREDS were aware of the 

DCF Investigation, including written demands to FCADV seeking information and documents 

related to Carr’s and other executives’ compensation, and its answer “no” to Section IX was 

not a truthful answer. 

109. This misrepresentation, known by the INSUREDS, was made with the intent to 

deceive or contains misrepresentations which materially affect the acceptance of the risk or 

the hazard assumed by the Insurer under this Policy, such that the Policy Claim Exclusion 

applies to any Insured “who knew of such misrepresentations (whether or not such individual 

knew such Application contained such misrepresentations).” 

4. The Fraud Exclusion 

110. The Fraud Exclusion in the Policy states in part that, “[t]his insurance does not 

apply to Loss for any Claim:...Based upon, arising out of or in any way related to: ...Any 

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deliberate, dishonest, fraudulent act or omission, or willful violation of any statute or 

regulation by an Insured.” 

111. The State Litigation contains alleges of fraud. 

112. For example, the DCF Lawsuit alleges causes of action for “Fraudulent 

Concealment,” “Fraudulent Misrepresentation,” and “Civil Conspiracy” (based on “an 

agreement to engage in fraudulent concealment and fraudulent misrepresentation of material 

facts,” as well as direct allegations of “deliberate, dishonest, fraudulent act or omission,” 

and/or “willful violation of any statute or regulation by an Insured,” such that the Fraud 

Exclusion is applicable. 

5. The Profit Exclusion 

113. The Profit Exclusion in the Policy expressly states that, “[t]his insurance does not 

apply to Loss for any Claim:...[b]ased upon, arising out of or in any way related to:...[a]n 

Insured gaining any profit, remuneration or advantage to which such Insured was not legally 

entitled.” (Hanover Policy; Ex.1, D&O Coverage, Section IV.A.3.b.) 

114. The State Litigation contains allegations of improper profiteering. 

115. Count III of the AG Lawsuit (Ex. 12) is for “Disgorgement of Profits,” and 

alleges “[t]his is an action by the Florida Department of Legal Affairs, pursuant to Section 

617.2003, Florida Statutes, to recover on behalf of FCADV profits improperly received by 

Defendant Tiffany Carr due to her breach of fiduciary duty”, and that “the OAG respectfully 

requests that judgment be entered against Tiffany Carr requiring that she disgorge all profits of 

FCADV received by her over at least the past five years, whether in the form of salary or bonus 

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or PTO or otherwise, that were not properly earned by her and not properly authorized to be paid 

to her by FCADV’s Board of Directors”. 

116. The DCF Lawsuit (Ex. 2) alleges, “[t]his funding was provided for the public 

purpose of coordinating and administering statewide activities related to the prevention of 

domestic violence, not for the FCADV board to award exorbitant salaries, bonuses, and PTO, to 

Ms. Carr, in exchange for personal gain,” and that “Ms. Carr, Ms. Barnett, Ms. Duarte, Ms. 

Keeth, Ms. Lynch, Ms. Diaz, Ms. Riffey, Ms. Fagan, Ms. Beachy, Ms. Schwab, Ms. Taylor, 

and/or Ms. Morrill engaged in a scheme and conspiracy to provide false and misleading 

information and documents to DCF and OIG regarding Ms. Carr’s total compensation, and 

FCADV’s use of public funds. Upon information and belief, Ms. Carr, Ms. Barnett, Ms. 

Duarte, Ms. Keeth, Ms. Lynch, Ms. Diaz, Ms. Riffey, Ms. Fagan, Ms. Beachy, Ms. Schwab, 

Ms. Taylor, and/or Ms. Morrill each had respective personal stakes in the aforementioned 

scheme and conspiracy, separate and apart from those of FCADV, as they each received a 

number of personal benefits, including, but not limited to, increased salaries, compensation, 

bonuses, and PTO.” 

117. The State Litigation is “[b]ased upon, arising out of or in any way related 

to:...[a]n Insured gaining any profit, remuneration or advantage to which such Insured was 

not legally entitled,” such that the Profit Exclusion is applicable. 

6. The Contract Exclusion 

118. The Contract Exclusion in the Policy states in part that, with respect to coverage 

for FCADV, “[t]his insurance does not apply to Loss for any Claim:...[b]ased upon, arising 

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out of or in any way related to liability...on account of, any oral or written contract or 

agreement to which an Insured is a party.” 

119. The DCF Lawsuit contains causes of action against FCADV for “Breach of 

Contract” ( “Breach of the Implied Duty of Good Faith and Fair Dealing” and “Breach of 

Fiduciary Duty” and avers that “FCADV owes fiduciary duty to DCF, as it was statutorily and 

contractually placed in a position of extreme trust,” and, therefore, the State Litigation is 

based upon, arising out of or in any way related to liability on account of, any oral or written 

contract or agreement to which an Insured is a party. 

7. Uninsurable As A Matter of Law 

120. The Policy provides that “Loss” does not include any amount deemed 

uninsurable by law. 

121. The State Litigation seeks recovery solely of amounts that are restitution, 

disgorgement and/or the return of ill-gotten gains of improperly paid wages, bonuses and 

PTO. Under Florida law, restitution, disgorgement, and the return of ill-gotten gains is not 

“Loss” (including Defense Expenses) and is uninsurable as a matter of law. 

8. The Known Loss Doctrine 

122. Under Florida law and the Known Loss Doctrine, there is no coverage under the 

Policy because the INSUREDS knew at the time it applied for coverage with Hanover that a 

claim or injury already occurred prior to seeking coverage. 

123. When FCADV submitted its Policy Application seeking coverage, the 

INSUREDS knew or should have reasonably known that: (i) Carr and other executives at 

FCADV had misappropriated of millions of dollars in grant monies for their own personal 

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benefit; and/or (ii) that DCF had made no less than five written demands for documents 

pursuant to the DCF Investigation – and that a claim or injury had already occurred. 

COUNT I – Declaratory Judgment Regarding Hanover’s Duty to Defend 

124. Hanover incorporates and restates each and every foregoing allegation as if fully 

set forth herein. 

125. Based upon any or all of the terms and exclusions of the Policy identified herein, 

and/or based on Florida law, Hanover has no duty to defend the INSUREDS for the 

allegations contained in the State Litigation. 

WHEREFORE, Hanover respectfully requests that this Court enter judgment in 

Hanover’s favor and against the INSUREDS, declaring that Policy provisions preclude 

coverage for the State Litigation, and that Hanover has no duty to defend the INSUREDS from 

the allegations made in the State Litigation, and that Hanover can recover all of its Defense 

Costs it has paid to the INSUREDS, and that this Court to grant Hanover such other and 

further relief as this Court deems just and equitable under the circumstances. 

COUNT II – Declaratory Judgment: Hanover Can Recoup “Defense Costs” Paid 

126. Hanover incorporates and restates each and every foregoing allegation as if fully 

set forth herein. 

127. Based on Count II, if this Court determines that Hanover had no obligation to 

defend the INSUREDS in either one of the lawsuits that comprise the State Litigation, then 

under Florida law, Hanover is entitled to recoup severally from the INSUREDS the amount of 

Defense Costs Hanover has paid related to the State Litigation. 

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WHEREFORE, Hanover respectfully requests that this Court enter judgment in 

Hanover’s favor and against the INSUREDS, declaring that Policy provisions preclude 

coverage for the State Litigation, and that Hanover has no duty to defend the INSUREDS 

from the allegations made in the State Litigation, and that Hanover can recover all of its 

Defense Costs it has paid to the INSUREDS, and that this Court to grant Hanover such other 

and further relief as this Court deems just and equitable under the circumstances. 

COUNT III – Declaratory Judgment Regarding Hanover’s Duty to Indemnify 

128. Hanover incorporates and restates each and every foregoing allegation as if fully 

set forth herein. 

129. Based upon any or all of the terms, conditions and exclusions of the Policy 

identified herein, Hanover has no duty to indemnify the INSUREDS from any Loss (e.g., 

damages, judgments or settlements) related to the State Litigation. 

WHEREFORE, Hanover respectfully requests that this Court enter judgment in 

Hanover’s favor and against the INSUREDS, declaring that Policy provisions preclude 

coverage for the State Litigation, that Hanover has no duty to indemnify the INSUREDS for 

any “Loss” related to the State Litigation, and that this Court to grant Hanover such other and 

further relief as this Court deems just and equitable under the circumstances. 

March 20, 2020 

Respectfully submitted, 

By: /s/ Sean M. McDonough 

SEAN M. McDONOUGH, ESQUIRE 

Florida Bar No. 896446 

sean.mcdonough@wilsonelser.com 

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Wilson Elser Moskowitz Edelman & Dicker LLP 

111 North Orange Avenue Suite 1200 

Orlando, Florida 32801 

407-203-7599 - Phone 

407-648-1376 - Facsimile 

Attorneys for Plaintiff, Hanover Insurance Company 

SMM:ajc 

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