FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

SEPT 26, 2008

THOMAS K. KAHN

CLERK

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 05-10559

________________________

D. C. Docket No. 02-23093-CV-TK

POZZI WINDOW COMPANY, 

Plaintiff-CounterDefendant-Appellee

Cross-Appellant, 

versus 

AUTO-OWNERS INSURANCE, 

Defendant-CounterClaimant-Third 

Party-Plaintiff-Appellant 

Cross-Appellee, 

versus 

CORAL CONSTRUCTION OF SOUTH FLORIDA, INC., 

JAMES IRBY, 

Third-Party-Defendants. 
Honorable Jane A. Restani, Chief Judge, United States Court of International Trade,

*

sitting by designation.

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________________________

Appeals from the United States District Court

for the Southern District of Florida

_________________________

(September 26, 2008)

Before TJOFLAT and HULL, Circuit Judges, and RESTANI, Judge. *

PER CURIAM:

In this insurance dispute, Appellant Auto-Owners Insurance Company

(“Auto-Owners”) issued two commercial general liability policies (the “Policies”)

to Coral Construction of South Florida, Inc. (“Coral”) and Coral’s president, James

J. Irby (“Irby”). Appellee Pozzi Window Company (“Pozzi”) manufactured the

windows in a home that Coral, as a general contractor, constructed. After the

homeowner sued Pozzi for water damage due to leakage around the windows,

Pozzi cross-claimed against Coral and Irby, asserting that their subcontractor had

defectively installed the windows. Coral and Irby settled Pozzi’s claims against

them, and as part of the settlement, they assigned their rights under the Policies to

Pozzi. Auto-Owners and Pozzi dispute whether the Policies cover Coral’s and

Irby’s liability for the repair or replacement of the defectively installed windows. 

The district court concluded that the Policies provided coverage and granted
In Pozzi I, this Court also affirmed the magistrate judge’s (1) grant of judgment as a 1

matter of law to Auto-Owners on Pozzi’s claim of bad faith, and (2) decision to set aside the

jury’s grant of punitive damages to Pozzi. See Pozzi I, 446 F.3d at 1179. Further background

can be found in the prior opinion. See id. at 1179-1182. 

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partial summary judgment to Pozzi. The case then proceeded to a jury trial before

a magistrate judge on Pozzi’s claims of bad faith and breach of contract—i.e.,

breach of the Policies—and the jury found in Pozzi’s favor. Auto-Owners

appealed. 

After review and oral argument, this Court certified the coverage issue to the

Florida Supreme Court. See Pozzi Window Co. v. Auto-Owners Ins., 446 F.3d

1178, 1188 (11th Cir. 2006) (“Pozzi I”). The specific question certified to the 1

Florida Supreme Court was:

DOES A STANDARD FORM COMPREHENSIVE GENERAL

L IABIL ITY POLICY WITH PRO DUCT CO MP LE TE D

OPERATIONS HAZARD COVERAGE, SUCH AS THE POLICIES

DESCRIBED HERE, ISSUED TO A GENERAL CONTRACTOR,

COVER THE GENERAL CONTRACTOR’S LIABILITY TO A

THIRD PARTY FOR THE COSTS OF REPAIR OR

R EP L A CE M E N T O F D EFECTIVE W ORK BY IT S

SUBCONTRACTOR?

Id. 

In answering this certified question, the Florida Supreme Court opined that

there “appear[ed] to be a factual issue as to whether the windows themselves were

defective or whether the faulty installation by the Subcontractor caused damage to
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both the windows and other portions of the completed project.” Auto-Owners Ins.

Co. v. Pozzi Window Co., 984 So. 2d 1241, 1247 (Fla. 2008). The Florida

Supreme Court dubbed this purported factual issue “critical,” and thus answered

the certified question as follows:

If the windows were purchased by the Homeowner and were not

defective before being installed, coverage would exist for the cost of

repair or replacement of the windows . . . . However, a different result

would follow if the windows were defective prior to being

installed . . . . 

Id. at 1243, 1248 (emphasis added). 

The parties have litigated this case as though the only matter at issue was

whether coverage would exist under the Policies if the windows were defectively

installed—and not whether coverage would exist if the windows were defective

prior to installation. As detailed in Pozzi I, this litigation commenced when Jorge

Perez hired Coral and Irby to construct his house. Pozzi I, 446 F.3d at 1180. The

house included windows manufactured by Pozzi and installed by Coral’s and

Irby’s subcontractor, Brian Scott Builders, Inc. (“Scott”). Id. After Perez moved

into the house, he complained of water damage due to leakage around the windows

and filed suit against Pozzi, Coral, and Scott. Id. 

In Perez’s lawsuit, Pozzi cross-claimed against Coral and Irby for negligent
Pozzi settled Perez’s claims and agreed to remedy the problems with the windows. 2

Pozzi I, 446 F.3d at 1180. 

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supervision of Scott during the window installation. Id. Coral and Irby filed 2

claims with Auto-Owners for coverage under the Policies for their liability arising

from Pozzi’s claim that the windows were defectively installed, but Auto-Owners

responded that the damages sought by Pozzi were not covered. Id. Pozzi

ultimately settled its cross-claims against Coral and Irby, and as part of that

settlement, Coral and Irby assigned to Pozzi their rights under the Policies,

including their claims against Auto-Owners for denying coverage for Pozzi’s

original cross-claims that alleged defective installation of the windows. Id. 

Pozzi’s cross-claims unambiguously asserted that the damages caused to

Perez’s home were the result of Scott’s improper or defective installation of the

windows. Amended Cross-Claim ¶ 14. More importantly, in Auto-Owners’

December 2000 letter denying coverage to Coral and Irby for Pozzi’s cross-claims,

Auto-Owners advised as follows:

In accordance with Florida Law, our policy will not extend coverage

for the damages consisting of the defective construction performed by

you or by your subcontractors. The costs incurred to remedy the

defective installation of windows are not damages covered under your

policy.

Letter from Auto-Owners to Coral (Dec. 27, 2000) (emphasis added). In other

words, from the very beginning of this case, Auto-Owners denied coverage for
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Pozzi’s cross-claims based solely on the argument that defective work performed

by the subcontractor Scott was not covered under the Policies. Auto-Owners never

asserted that Pozzi’s claims were not covered due to defects in the windows that

existed prior to installation. 

Indeed, even on appeal before this Court, the statement of issues in AutoOwners’ brief identified one issue and framed the only issue as whether the

Policies covered “damages for repair and replacement due to defective

workmanship of the general contractor or its subcontract.” Appellant’s Br. at 1

(emphasis added). It is well-settled that an argument not raised or developed on

appeal is waived. See McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1263

(11th Cir. 2004) (collecting cases). Even assuming arguendo that Auto-Owners at

one time might have raised the argument that the only liability and loss in this case

arose from defective manufacture of the windows and that coverage was

unavailable under the Policies due to defects in the windows themselves, AutoOwners did not raise that issue and thus waived it. The sole issue in this particular

case has always been whether, under Florida law, the Policies covered Coral’s and

Irby’s liability for repairing and replacing Scott’s defective installation of the

windows. See Pozzi I, 446 F.3d at 1188. Because the Florida Supreme Court has

now answered that question in the affirmative, we affirm the breach-of-contract
The Florida Supreme Court’s conclusion that there “appear[ed] to be a factual issue as to 3

whether the windows themselves were defective or whether the faulty installation by the

Subcontractor caused damage to both the windows and other portions of the completed project”

seems to be based primarily on language in our original Pozzi I opinion. See Auto-Owners Ins.

Co., 984 So. 2d at 1247 (“The Eleventh Circuit characterizes the ‘defective work’ in this case in

two distinct manners.”). Our opinion in Pozzi I contained at least fourteen references to

“defective work,” but there are two stray references to “defective windows.” After reviewing the

record again and for the reasons already outlined above, we conclude there is no factual dispute

in this coverage lawsuit, and the only issue on appeal is whether the Policies covered “damages

for repair and replacement due to defective workmanship of the general contractor or its

subcontractor.” Appellant’s Br. at 1.

We note that in 2005, after a joint motion to stay by the parties, the magistrate judge 4

entered an order staying determination of attorney’s fees and costs until this appeal was resolved.

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judgment in Pozzi’s favor. We remand for consideration of whether Pozzi is 3

entitled to attorney’s fees, but express no opinion about that issue.4

AFFIRMED and REMANDED.