F ILED U.S. COURT O F APP EALS EL EV EN TH C IRC UIT February20 , 2 008 T HOMA S K. KA HN CLERK [DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 06- 1539 8

____ ____ ____ ____ ____ ____ D. C. Dock etNo. 0 5- 60 80 5 C V-FAM CLARENDON NAT IONAL INSURANCE COMPANY, Plaintiff-C ount erDe fendant-Appellee,
ve rs us RAY MON D B . V ICKER S, ind ivi dua lly

and a s C o- T ru ste e of

the H an s J. H vid e L ivi ng T ru st, De fendant-CounterCl ai m an t- Appe llant.

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court fo r the S outhe rnD istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (F eb ru ar y 20 , 200 8) Before AN DE RSO N and BARKET T, Circuit Judges, and TR AG ER *, D istrict Judg e.

____ ____ ____ ____ *Honora

ble David G. T rag er, United States District J udg e for the Easter

n District of Ne w York, sitting by

desig nation.2

PE R CU RIA M: A ft er or al arg um en t and c ar ef

ul c onsi de ratio n, w e co nc lud e that the jud gm en t o f th e d is tri ctco ur t i s due to be rev ers ed . Und er t he rel ev an t Fl or id a la w,

“ so l ong as the [ unde rl y ing ] c om pla int c anr ea sona

bly be r ea d a s a lle gin g th at

the

. . . inj ur ie s w er e ne gli ge ntl y c au se d, e ve n if

it a lso m ay arg uably be r ea d a s a lle gin g that the inj ur ie s w er e int en tio na lly c au se d, the doubt m

ust be r es olv ed

in favor of fi ndi ng a duty to de fe nd. ” H ar

tf or d A cc ide nt & I nde m . Co
. v. Be av er , 466 F . 3d 1289 , 129 7 ( 11 Ci r. 200 6) ( ap ply ing F lor ida lawand f

ind ing aduty

to de fe nd th notw ith standi ng an e xc lus ionin the pol ic y f or int en tio na l a ct s)
. S im ilarl y , the part ie s he re a gr ee that, if

the und er ly ing c om

pla int c ont ai ns at l ea st o ne a lle ga tio n w ithr es pe ct

to w hic h th er e w oul d be c ove ra ge , the n th e ins ur an ce c om pany m ust de fe nd the e nti re sui t. W ithr es pe ct

to the P ro ba te A ct ion , w e co nc lud e that the re is at le as t on e al le gatio n w ithr es pe ct

to w hic h th er e is c ove ra ge and a duty to de fe nd. I n th e Pr obate A ct ion , in para gr ap hs 6 0, e t se q ( the de cl ar at or y j udgm en t c ount

I ), Mr s. H vid e ch al le nge s V ic ke rs ’ c ondu ct a s c o- tr ust ee in ac qui ri ng ( ind ir ec tly) 51% of the sto ck of E lle r Co rp or at ion , the pr im ar y a sse t of the tr ust . T his is al le ge d to have be enan a ct ionw ithr es pe ct to w hic h V ic ke rs ha d ac onf lic t of int er es t, and
was an act io n fo r whi ch Flo rid a la w requi redap pr ov al by the pro ba te co ur t.3

Be ca use avia ble c la im w as a lle ge d w ith out

r eg ar d to V ic ke rs ’ m en s r ea , e xc lus ion A ( disho nest and fraudulent actions ) does not apply
. Beca use this p articular al le gatio n c ha lle nge s V ic ke rs ’ c ondu ct a s c o- tr ust ee in pe rm itt ing the tr an sf er of the m aj or a sse t of the tr ust , and n ot any

a ct ion s of

V ic ke rs a s an of

fi ce r or dir ec tor of any bus ine ss e nte rp ri se , ne ith er of the tw o “busi ne ss e nte rp ri se ” ex cl usi ons apply
. Ac cordingly , the j udgm ent of the district court with respect to the insurance
co m pany ’ s duty

to de fe nd the P ro ba te A ct ionis re ve rs ed
. Si m ilarl y , w ithr es pe ct

to a re as ona

ble r ea din g of

the F ed er al A ct ionin V ic ke rs ’ f

av or , w e co nc lud e that the re is at le as t on e al le ga tio n w ithr es pe ct to
w hic h th er e w oul d be c ove ra ge and a duty to de fe nd. W e co nc lud e that, pur suant to a r ea sona ble r ea din g of

the m al pr ac tic e al le ga tio ns i n c ount I II , Mr s. H vid e al le ge d th at

V ic ke rs , a ct ing a s atto rn ey f or he r pe rs ona lly

and/ or f or the tr ust , w as lia ble to he r al te rn at ive ly

f or sim ple br ea chof

f idu ci ar y duty ( para gr ap h 58 ) an d f

or de li be rat e d ecep ti on an d wan to n a ndreck le ss in di ffer en ce (p arag rap h 5 9)
. Although the latter a llegation wouldbe encom passed in exclus ion A, the form er would not. Also, because this particular allegation challenges Vicker s’ conduct as attor ne y f or Mr s. H vid e pe rs ona lly

and/ or a s atto rn ey

f or the tr ust , ne ith er

of the two “busin ess enterprise” e xclusio ns apply
. Thus, the j udgm ent of the district
co urt w ithr es pe ct

to the ins ur an ce c om

pany ’ s duty

to de fe nd the F ed er al A ct ionisIn th is a pp e a l, a pp e lla nt c ha lle ng e s o nly

the dis tr ic t c ourt ’s ru lin gwi th r e sp e c t to 1 the Probate A ction and the F eder al Action. Ac cording ly , the district court’s r uling with re spect to the Records A ction is left undisturbed.

T h e i n s uran ce co mp an y

as s ert s two ad d i t i o n al d ef en s es – i t s p ri o r kn o wl ed ge 2 defe nse, and its ar gument that Vicker s’ indemnity claim is untimely . The district cour t did not addre ss these def

enses, a nd we de cline to addr ess them in the first instance . Acc ording ly , the c a se is r e mand e d to the dis tr ic t c ourt fo r f ur the r p ro c e e din g s. 4 re ve rs ed
. 1 A cc or din gly , the j udgm en t of the dis tr ic t c ourt i s 2 REVERSED.