### FILED U.S. COURT OF APPEALS ELEVENTH CIRCUI T October 28,

2003 THOMAS K. KAHN

CLERK

* Honorable Adalberto J. Jordan, United States District Judge for the Southern District of Florida, sitting by designation. [PUBL ISH]

IN THE UNITED STATES COURT OF APPEALS FOR TH E ELEV ENTH C IRCUIT

________________________ No. 02-16511

________________________ D. C. Docket No. 01-01058-CV-ORL-28 CAS T ST EEL PRO DUC TS, IN C.,

Plaintiff- Appe llant,

versus ADM IRAL INSU RAN CE C OM PAN Y, Defen dant-A ppellee.

________________________ Appeal from the United States District Court for the Middle Dist

rict of Flor

ida

_________________________ (October 28, 2003)

Bef oreBLACK a

nd FAY,Circui

t Ju dge s, a nd J ORDAN * , District Judge. FAY, Circuit Judge:2

Cast Steel Products, Inc. (“ Cast Steel”) appeals an adverse s ummary judgmen t granted to A dmiral Insur ance Com pany (“Ad miral”) on C ast Steel’s action for a declarat

ion that either (or bot

h) of its 1999 and 2000 “claims-made” professional liability policies with Admiral covered a defective product cla im that accrued at t

he conclusion of

the 1999 policy

period but was not r

eported until the start of the 2000 policy period. The district court found that neither policy provided coverage for the claim because the c laim had not both accrued and been reported to Admiral during the same policy period. Cast Steel argues on appeal that the 1999 Professional Liability Policy (“99 Policy ”) is ambiguous with respect to coverage of the 1999 claim u pon renewal of the 99 Policy in 2000. Specifically, Cast St eel c ontends that

becaus e the 9 9 Polic

y automatic ally

extends the

clai ms reporting per

iod upon cancellat

ion or non-renewal

of the po licy, but is sile nt as to whether renewal

of the policy would provide the same reporting extension, an unresolved ambigui

ty exists in the policy that pre cluded the di strict court from granting summ ary judg ment. We agree that the 99 Po licy is ambiguous. We further find that, because under Florida law an ambiguity i n an insurance pol

icy must be cons

trued in favor of the insured so as not to deny coverage, summary judgment should have been granted to Cast S teel. Swire Pacifi c Holdings, Inc. v. Zurich Ins. , Co. , 845 So. 2d1 Cast Steel actually purchased the 99 Policy throug h Ayers/Sierra, a local insurance broker. Because Ayers/Sierra was not in the business of se lling surplus lines insurance, it sought out Markel, a surplus lines agent for Admiral’s products in Florida.

2 Cast Steel also purc

hased a commerc

ial general lia

bility policy

from Admiral in ea

rly 1999 (the “CGL Policy”), and it sought declara tory relief under that policy as we ll. The district court ultimately determined that the CGL Policy , by its plain language, did not cover the claim at issue. Cast Steel does not challenge that finding on appeal. Thus, in order to avoid confusion, we focus only on the professional liability policies (which we refer to as the “99 Policy” and “00 Policy”) in this opinion. 3 161, 165 (Fla. 2003). Accordingly, we REVERS E the district court ’s order granting summary judgment in Admiral’s favor, and REMAND to the district court with instruc

tion to ent

er summary judgment i

n Cast Steel’ s favor as to t he 99 Policy. I. Cast Steel i s a Florida cor poration in t

he business of s

upplying cast

ings and components to the mining and waste energy industries. In early 1999, it purchased professional liability insurance fr om Admiral, a surplus lines insurer headquarte red in Delaware, t

hrough Admiral’s des ignated surpl us lines broke

r in the st

ate of Florida , Gary M arkel. 1 The 99 Policy had a re troacti ve effecti

ve date of Janua

ry 6, 1999 and an expiration date of January 6, 2000, at 12:01 a. m. Cast Steel subseq uently ren ewed th e 99 Po licy, and th e renew al policy h ad an eff ective date of January 6, 2000, and expiration date of January 6, 2001 (“00 Policy”). 2 Both policies, by thei

r terms, were “claims-made” policies, which meant that each policy3 Admiral sent the reservation of rights letter only as to the CGL Policy, and Cast Steel argues that, as a result, Admiral never reserved its right to deny coverage under the 99 or 00 Policies. We find this

argument unava

iling, however,

because Cast Stee

l only made a

claim under the CGL Policy, and Admiral took it upon itself to determine whether any of Cast Steel’s three policies provided coverage. 4 purported to cove

r only those c laims which had bot h accrued and

were re ported to Adm iral durin g the po licy period indicated on the fa ce of the p olicy. Sometime in earl

y 1999, Cast Stee l was awarded a contr act to provi de 130 pallet c ars to Hibbing Taconi te (“Hibbing”), an iron ore mine locate d in Hibbing, Minn esota, for the purc hase pric e of $5.5 million. C ast Steel d elivered th e cars in June 1999. Soon therea fter, i n August 1999, Hibbing report ed signifi cant problems with the wheels of the cars, which, aft er some investigation, Cast Steel determined t

o be caused by defe ctive desi gn of the beari

ngs. On October 21, 1999, Hibbin g prepa red an in cident rep ort and f ormally r eported its claim to C ast Steel. Cast Steel immediately a dvised Ayers/Sierra of the Hibbing claim and asked that the proper claim paperwork be prepared. In an unfortunate twist of f ate, Ayers/Sierra

failed t o submit the Hibbi

ng claim to Admiral

until Janua

ry 6, 2000 – just hours af

ter the 99 Policy had expired. On February 10, 2000, Admiral sent Cast Steel a reservation of rights letter and bega n inves tiga ting t he Hibbi ng cla im. 3 After four months of i nvestigat ion by an independent c laims adjus ter, Admiral

sent Cast Ste el a let

ter denying c overage4 Section II(B)(2)(a) of the 00 Policy indicates claims arising prior to the effective date of the policy are covered only if the insured had no knowledge of the claim as of the date of signing the app lic ati on f

or t he p oli cy. 5 under a ll policies. This suit fol

lowed on July 25, 2001. Cast Steel or iginall y brought the ac

tion in Florid a state cou rt, seeking , inter alia , a declar ation that at least one of the various policies obligated Admiral to cover the Hibbing claim. Admiral removed the acti on to the Middle Dist rict of Flor

ida on diversi

ty grounds and, i

n July 2002, Cas t St eel move d fo r su

mmar y ju dgment on th e 99 Pol icy . Admira l’ s own summary judgment motion followed. On October 24, 2002, the district court entertaine d oral arg ument a nd in N ovemb er grante d summ ary judg ment to Adm iral, findin g that no ne of the policies p rovided coverag e to Cast S teel. Specific ally, the distr ict court d etermine d that Ca st Steel faile d to com ply with the 99 Po licy’s notice requirem ent wh en it failed to report th e Hibb ing claim during the 99 Policy period. As t o the 00 Policy,

the court hel

d that becaus e the Hibbing claim ac crued during 1999, a nd Cast Steel was undi sputedly aware of the claim when it renewed the policy, the plain language of the 00 Policy precluded coverage. 4 With re spect to C ast Steel’s a rgume nt that A dmiral w as on no tice of its claim because Admiral (or Admiral’s surplus li nes broker Markel) cloaked Ayers/Sierra

with apparent a

uthority t o receive claims on Admiral’s behalf, t he6

district cou rt found that Cast S teel failed to show that Ad miral eve r represe nted to Cast Steel that Ayers/Sier ra was its agent in this

regard and, moreover, the record showed that Ayers/Sierra itself adamantly denied being Admiral’s agent or ever making a represe ntation to Cast Ste el that it wa s Adm iral’s agen t. Cast Steel asserts on appeal that the district court erred in granti ng summary judgment to Admiral because issues of fact re mained as to whether Ayers/Sierra was cloaked with app arent authority to receive claims on behalf of Ad miral. Cast Steel als o argues that

an unresolved ambiguity as t o whether renewal of t

he 99 Policy extended the period in which it could report claims precluded summary judgment on Admiral’s behalf. II. We review a district court’ s granting of a motion for summary j udgment de

novo , applying the same legal stand ards use d by the d istrict cour t. Hilburn v. Murata Elecs. N. Am., Inc. , 181 F.3d 1220, 1225 (11th Ci r. 1999). We “vie

w the evidence and al

l factual inferences

therefrom in t

he light most

favorable t

o the party opposing the motion.” Burton v. City of Belle Glade , 178 F.3d 1175, 1187 (11th Cir. 1999) (quoting Clemo ns v. Do ugherty Coun ty , 684 F.2d 1365, 1368 (11th Cir. 1982)) . Denial of summary judgment is al so reviewed de novo

. Weeks v. Harden Mfg. Corp. , 291 F .3d 130 7, 1311 (11th C ir. 2002 ).7 III. The district court’ s decision presents a somewhat alarming scenar io. Faced with two consecuti

ve insurance pol

icies t hat creat ed apparentl

y seamless c overage over tw o policy p eriods, th e court n everthele ss foun d that a claim accruing within the two periods was s omehow not covered by eit her policy. On the face of the 99 and 00 Policies, there appears t o be no gap in coverage. Indeed, the 99 Policy was effective u ntil 12:01 a.m. on J anuary 6 , 2000, a nd the 0 0 Policy was retr oactively effective beginning on January 6, 2000 (presumably at 12:01 a.m.). At a glance, one would be hard presse d to imagine how a cl aim accruing i n the middle of t

he two policy periods would not be covered by one of the policies. But because a claims-made policy is desi gned to cover only claims both accruing and reported during the specified polic y period, the district court held that a cl aim which accrued lat

e in the fi

rst polic y period but was not

reported unti

l early i n the second

was co vered b y neither p olicy. Cast Steel challenges the district court’s conclusion, and argues that because the 99 Policy automaticall y extends (by thirty days ) the period in which to report 1999 claims if

the insured e lects t

o cancel or non-r

enew the policy , there re mains an amb iguity as to wheth er renew al provid es a similar reportin g extens ion. Subsection B of the

“Extended Discover

y Period” provis ion (Section I V) of the 998

Policy provides as follows:

If the policy is ca

ncelled or not renewed by the Named Insured an automat

ic thirt y (30) day Clai

ms Extension Period shall

apply to claims, provide d such claims a re not covered under any s

ubsequent insur

ance purchased by the Named Insured, or

that would be cover

ed but for the exhaustion of the amount of insurance applicable to such claims. 99 Policy, Sect . IV (B). Cast Ste el chose nei ther of the t

wo options above, but rather rene

wed the 99 Policy i

n the following y

ear. Neithe

r this sec tion, nor any section of t

he 99 Policy, however, discusse s whether a similar report ing extensi on accompanies re

newal of the policy. Accordingl y, Admiral count

ers that t he policy’s silence c an only mean that the same report

ing extensi on does not accomp any rene wal. The distric

t court, s iding with Admiral , did not fi nd any ambiguity

in the 99 Policy. Grant

ing summary judgment i n Admiral’s favor, the dist rict court relied on the Southern Dist

rict of Flor

ida’s 2001 Pantro pic decision in finding that renewal of the 99 Policy d id not ex tend the tim e in wh ich Cast S teel could report its c laim. Pantropic Power Prods., Inc. v. Fir emen’s Fund Ins. Co. , 141 F. Supp. 2d 1366 (S.D. Fla. 2001). In Pantro pic , which was affirmed by this Court in an unpublished per curiam opinion, the plainti ff offered, and the district court rejecte d, the ident

ical argument

to Cast Steel ’s here. The c ourt in Pantro pic , in5 This p artic ular s cenar io has only be en add resse d by a few other dist rict c ourts . In

Ehrgood , the court reached the same conclusion as the Southern District in Pantropic

. Ehrgood v. Coregis Ins. Co. , 59 F. Supp. 2d 438 (M.D. Pa. 1998). However, in Ehrgood , as in Pantropic , the Year 1 policy provided the insured a 60-day grace period in which to report claims accruing during the first policy period, and insured reported its claim outside this window. Id . at 447. The insurer prevailed in Checkrite as well, but the court noted that even if it were to give the insured the benefit of the additional 60- or 90-day grace period contemplated by New York insurance law, the insured reported its claim far outside this time frame. Checkrite Ltd., Inc. v. Illinois Nat’l Ins. Co. , 95 F. Supp. 2d 180, 1 91–194 & n.9 (S.D. N.Y. 2000); see also Westp ort Ins. Corp. v. Mirsky , No. CIV A. 00-4367, 2002 WL 31018554, at *11 (E.D. Pa. Sept. 10, 2002) (district court reached the same conclusion but was not faced with the extended reporting provision present in this matter). 9 granting insurer’s motion for summary judgment, explai ned that because an insurer undertakes a more limited risk i n a claims-made policy, i t typicall y charges a lower premiu m. Id . at 1369. In e xchange, the i

nsured is only

permitted t

o make and report a cl aim during a narr ow window of time. Signifi cantly,in the poli cy at iss ue in Pantro pic , that time incl uded the expressed policy period plus a 60-day grace period

. Id

at 1370. Because the Pantro pic plaintiff submitted its claim 16 days after the 6 0-day g race perio d expire d, it was n ot entitled to coverag e even th ough it had ren ewed its policy fo r consec utive year s with in surer. Id . at 1369–70. 5 This Court was able to identify only one case i n which a court, when faced with a nearly-identic al factua l scenari o, found in favor of the insured. In Helberg , the Sixth District of Ohio determined t hat a claim accruing during Year 1 of a claims-made pol

icy, but not

reported unti

l the Year 2 policy period (which, like here, was a renewal of Year 1), was covered by the Year 1 policy pursua nt to the10

(albeit ambiguous) report

ing extensi on clause cont ained there in. Helberg v. Nat’l Union Fire Ins. Co. , 657 N.E.2d 832, 833–35 (Ohio Ct. App . 1995). Plaintif f in Helberg , an attorney, i nitiated li

tigation against

his malpractice insurer (“National”),when National refused to indemnify him in a malpractic e action br ought b y a form er client. Id . at 833. Pla intiff was undi sputedly aware of the claim a gainst him on Oc tober 21 , 1991, b ut failed to report th e claim to National unti

l January 21,1992. His 1991 clai ms-made policy pr

ovided coverage from D ecembe r 11, 19 90, to D ecembe r 11, 19 91 – thu s he did n ot repor t his claim to Natio nal until six weeks after the co nclusion of the 19 99 cov erage pe riod. However, plaintiff purchased a r enewal of his 1999 policy, which had a retroact ive effecti ve date of December 11, 1991, and theref

ore believe d that he was cover ed by malprac tice insura nce at all tim es with N ational. Id . National denied coverage, asserti ng that the 1991 c laim was not cover ed because it

was not reported dur

ing the 199 1 policy p eriod. Id

. The court, rec ognizing that a claims-made

policy requi

res that not

ice of action against the i

nsured must be presented to the insurer withi n the designated time period of

the policy , nonethele ss found that plaintiff ’s clai m was covered by the 199 1 policy. F inding s uppor t in the po licy’s exten ded rep orting en dorsem ent, the court explained:6 Note that in Helberg the insured was entitled to purchase a reporting extension pursuant to the extended rep

orting clause. H

ere, the extension

was automatic

upon non-renewal or cancellation. 11

In the present

case, the re was no cancellation of coverag e, nor did the insur ed chan ge insur ance carr iers. The ins ured m erely rene wed h is claims-m ade polic y. Such a n event sh ould no t precipita te a trap w herein claims spanning the renewal are denied

. Id . at 834 (emphasi s added). The policy at iss ue in Helber g, like the pol icy in our case, did not provide the insured with a gra ce-period after expirat

ion of the policy to report claims. Cf. Pan tropic , 141 F. Supp. 2d at 1369. But – and again similar to the 99 Policy here – the Helberg policy’s ex tended r eporting clause set o ut only two circ umstan ces wh en purc hase of a reportin g extens ion wa s necessa ry to maintain coverag e – upo n cancella tion or n on-ren ewal. 6 Helberg , 657 N.E.2d at 835. The Ohio court cont inued: Applying the ti

me-honored maxim of const ruction, expressio uni

us est excl

usio alter

ius , the incl

usion of specific things implies the excl

usion of those not mentioned, t

his court ca

n only conclude t

hat the inc lusion of “non-renewal” of the p olicy as one of those circumstances demanding the purchase of an extended reporting endorsement exclud es a “renewal” as a circumstance which demands such a purchase. Since appellant ’s position here was a renewal r ather than a “non-renewal” or “cancellat ion,” this court concl

udes that the language of the cont ract does not

deny coverage in this con text. Id . at 835.7 It is also worth noting that Admiral, unlike the insurer in Pantropic , concedes that the 00

Policy was a renewal of the 99 Policy. Thus, the Pantropic court’s reason f

or rejecting th

e logic of Helberg

– that is, because the policy at issue in Helberg specifically contemplated continuous renewal – is not availing here. Admiral does not contend, as the insurer in Pantropic did, that the 00 Policy was a separate and distinct policy r ather than a renewal of the 99 Policy. I ndeed, Admiral refers

to the 00 Policy

as a “renewal p

olicy” thro

ughout its briefs

. 12 We concur with the reasoning set for th in Helberg . Though we are sympathetic to the rat

ionale of Pantro pic , and would generally agree that t he lower premium charged for a claims-made policy should entit le an insured to lesser coverag e than a b roader, a nd mo re expen sive, occu rrence p olicy, we find it bo th illogical an d inequ itable to de ny cove rage to th e insured who c hooses to renew its claims-made pol

icy for succ essive yea

rs with the sa

me insurer – part

icularl y in the scenario we are faced with here. Cast Steel ’s claim was reported to Admiral mere hours after t

he expiration of the 99 Policy , and during a t ime period in whic

h the 00 Policy had become effective. As the Helberg court noted, if choosing to cancel

or non -renew provid ed the ins ured w ith an exte nded re porting period, e lecting to continue to do business with the same insurer by re newing the claims-made policy certainly “s

hould not precipitate a t rap wherein claims spanning the renewal are denied.” Helberg , 657 N.E.2d at 834. 7 It seems to us that the most r easonable interpretat

ion of the extended reporting clause is tha

t it aut omaticall y extends the

reporting per

iod through8 Counsel for Admiral has been unable to explain what the reporting period would be for

claims accruing on the last day, or within a very short period, of the conclusion of the policy period. Again, unlike the policy in Pantropic , the policy in question provides for no grace period following

its expiration for r

eporting claims

. 9 In view of our holding it is not necessary for us to discuss the issue of whether or not there existed genuine issues of material fact on the question of agency . However, for the sake of completeness we state that a review of the record convinces us that such do exist. Based upon the evidence in this record a jury could conclude that Admiral cloaked A yers/Sierra with the apparent authority to receive claims on its behalf. 13 renew al. The cla use is clear ly ambig uous o n this po int. 8 Accordi ngl y, b eca usewe find a clea

r mandate in Flor

ida law to const

ruct a contr

act of insur

ance in favor of the insured a

nd strict ly against

the drafte

r, we hold that

the ambiguit

y in the 99 Policy must be resolved so as not to deny coverage. Swire Pacifi c Holdings , 845 So. 2d at 165. We find that Cast Steel’s renewal of t he 99 Policy in 2000 extended the time in which to repor t the Hib bing claim . As Ca st Steel rep orted the claim immed iately after th e expiratio n of the 9 9 Policy , the district c ourt erre d whe n it denied coverage. 9 III. Finally, Cast Steel

challenges the dist

rict court’s fai

lure to require Admiral to refun d Cast S teel a $25 00 ded uctible w hich A dmiral co llected un der the p olicy. Althou gh the d istrict cour t determin ed the de ductible w as impro perly billed , it did not award Cast Stee l damages in t his amount. However, be cause we find tha t the 99 Policy covers the Hibbing claim, a logi cal outcropping of our decision is t hat14

Cast Steel would ha

ve been require d to pay Admiral t he deductibl e under the policy. Accordingly, Cast Stee l is not entit led to a refund of the deductible. IV. For the above r easons, w e reverse the district c ourt’s de cision an d reman d to the distr ict court with instruc

tion to ent

er summary judgment i

n Cast Steel’ s favor on the 99 Policy. REVE RSED and REM AND ED with instructions.