[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 15-10987

________________________

D.C. Docket No. 1:14-cv-20893-UU

CLIFFORD A. ZUCKER, 

not individually, but as Plan Administrator for 

BankUnited Financial Corporation, and as 

assignee of Humberto L. Lopez and Ramiro A. Ortiz, 

 Plaintiff-Appellant,

versus

U.S. SPECIALTY INSURANCE COMPANY, 

 Defendant-Appellee.

________________________

Appeal from the United States District Court

for the Southern District of Florida

________________________

(May 16, 2017)

Before ED CARNES, Chief Judge, FAY and PARKER,

* Circuit Judges.

 * Honorable Barrington D. Parker, Jr., United States Circuit Judge for the Second Circuit, 

sitting by designation.

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ED CARNES, Chief Judge: 

For want of good corporate officers, BankUnited Financial Corporation

engaged in risky lending practices before November 2008. For want of good 

lending practices, BankUnited became insolvent. For want of solvency, 

BankUnited’s transfers of money to its subsidiary were fraudulent. 

Wanting their money back, BankUnited’s creditors sued its officers for 

authorizing those transfers. Wanting protection from the resulting liability, the 

officers asked their insurer — U.S. Specialty — to indemnify them. Not wanting 

to do that, U.S. Specialty refused based in part on a policy exclusion that barred 

coverage for claims “arising out of” conduct that occurred before November 2008. 

The question is whether the fraudulent transfers “arose out of” the officers’ preNovember 2008 misconduct.

I. FACTS & PROCEDURAL HISTORY

BankUnited (the Parent Bank) was a holding company headquartered in 

Florida. Its wholly-owned subsidiary, BankUnited FSB (the Subsidiary Bank), 

was a federally-chartered savings bank. By November 2008 both of them were in 

serious financial trouble.1 

A. The Banks’ Fiscal Difficulties

 

1 “We relate the facts — as we must at this stage of the litigation — in the light most 

favorable to” the plaintiff. Goodman v. Kimbrough, 718 F.3d 1325, 1329 (11th Cir. 2013).

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The Treasury Department’s Office of Thrift Supervision (OTS) began 

investigating the Subsidiary Bank in January 2008. By August, news reports were 

circulating that the Subsidiary Bank had engaged in risky lending practices during 

the housing boom that preceded the 2008 recession. The Parent Bank reported in a 

regulatory filing that, unless the Subsidiary Bank raised $400 million, OTS would 

downgrade its capitalization rating. The Parent Bank also announced that it was 

contributing $80 million in fresh capital to the Subsidiary Bank. This left the 

Parent Bank itself with only $40 million dollars to service $125 million in debt, not 

a good situation for any financial institution to be in. 

In September 2008 the Parent Bank’s investors filed a class action against

several corporate officers of the Parent Bank and the Subsidiary Bank, alleging that 

those officers had violated federal securities laws by knowingly or recklessly 

making “false and misleading statements about [the Parent Bank].” The investor 

plaintiffs based their allegations on, among other things, the Parent Bank’s

regulatory filings from 2006, which touted its “conservative underwriting 

standards that include evaluation of a borrower’s debt service ability” and internal 

underwriting process. They also pointed to a 2007 filing by the Parent Bank that

boldly asserted: “We expect that our historically conservative credit standards and 

relatively low loan to values will keep our loss experience well below industry 

averages.” Even more boldly, the Parent Bank issued an April 2007 press release 

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that included this statement by the company’s CEO, Alfred Camner: “[O]ur levels 

came in better than we projected last quarter. This is because of our conservative 

underwriting. We do not engage in subprime lending and, as a portfolio lender, we 

treat each loan as if it is our own.” And so on. 

As it turned out (we are beyond mere allegations now), the Subsidiary Bank 

did engage in risky lending practices. Around the same time that the Parent Bank

was being sued by its shareholders, the banks entered into agreements with OTS 

stipulating in September 2008 that they had “engaged in unsafe and unsound 

practices that . . . resulted in [the Subsidiary Bank] being in an unsatisfactory 

condition.” This was “primarily due to the rising delinquencies and defaults in its 

payment option [Adjustable Rate Mortgage] loan portfolio.” 

B. The Parent Bank’s Search for a New Insurer

By September 2008 St. Paul Mercury Insurance Company (Travelers) had 

declined to renew the Parent Bank’s directors and officers (D&O) insurance 

policy, which is not surprising given the banks’ fiscal difficulties. The Parent 

Bank began searching for a new insurer.

It found one in U.S. Specialty.2

 At the time, U.S. Specialty was aware that 

 2 The Parent Bank actually obtained the insurance through a broker’s negotiations with 

HCC Global Financial Products. Both U.S. Specialty and HCC Global are subsidiaries of HCC 

Insurance Holdings. HCC Global underwrites policies for a number of insurance companies that 

are subsidiaries of HCC Insurance, including U.S. Specialty. For simplicity’s sake, and because 

this corporate structure has no bearing on the outcome of this case, we will refer to all of these 

entities collectively as “U.S. Specialty.”

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“[b]ad loans were affecting [the banks’] financial performance,” and that they were 

in a “distressed financial condition.” It was also aware that OTS was threatening 

to downgrade the Subsidiary Bank’s capitalization rating unless the Parent Bank 

raised $400 million. All of which made issuing a D&O policy covering the Parent 

Bank’s officers a risky proposition. 

Margaret Kingsley, an underwriter and U.S. Specialty’s designee under Rule 

30(b)(6) of the Federal Rules of Civil Procedure, testified at her deposition that 

around the time the policy was issued, she thought it was unlikely that the Parent 

Bank would survive. She noted in the underwriting file that U.S. Specialty might 

be able to make an “opportunistic play” if it agreed to provide D&O coverage to 

the Parent Bank. Kingsley later testified that note in the file meant that insuring 

the Parent Bank was “an opportunity for [U.S. Specialty] to write a very restrictive 

policy and get some premium for it.” In considering whether to issue a D&O 

policy to the Parent Bank, U.S. Specialty also considered that regulators would be 

watching the banks closely, which would “keep[ ] them honest.” 

U.S. Specialty offered the Parent Bank a choice between two policies: one 

with a Prior Acts Exclusion (barring coverage for losses attributable to conduct of 

the officers before November 10, 2008) and one without that exclusion. The 

policy with the exclusion would cost $350,000; the policy without it would cost 

$650,000. The policy without the Prior Acts Exclusion would provide coverage 

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only after the Parent Bank’s other insurance policies had been exhausted. 

The Parent Bank decided to purchase the policy with the Prior Acts 

Exclusion, but asked U.S. Specialty to increase the coverage limit from $10 million 

to $20 million. The purchased policy included in addition to the Prior Acts 

Exclusion a Prior Notice Exclusion, which excluded coverage as to any losses 

reported to any insurers under earlier insurance policies. With those two 

exclusions, the one-year policy cost the Parent Bank $700,000. And, at U.S. 

Specialty’s request, the Parent Bank purchased an extension of the discovery 

period on the pre-existing Traveler’s policy, increasing the amount of time it had to 

report claims to Traveler’s. The first day of coverage under the U.S. Specialty 

policy was November 10, 2008. 

C. The Transfer of Two Tax Refunds to the Subsidiary Bank

While the Parent Bank and the Subsidiary Bank were struggling to come to 

terms with the 2008 financial crisis, the Parent Bank’s officers approved two

transfers of money to the Subsidiary Bank that are the subject of this lawsuit. In 

January 2009 the Parent Bank received a tax refund check from the U.S. Treasury 

for approximately $20 million. It transferred all of that refund to the Subsidiary

Bank. In March 2009 an officer of the Parent Bank directed that a second tax 

refund check from the Treasury for approximately $26 million that was supposed 

to be issued to the Parent Bank be wired directly to the Subsidiary Bank. Those 

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$46 million in transfers occurred after November 10, 2008 (the inception date for 

the U.S. Specialty policy). 

D. The Bankruptcy Litigation

The Parent Bank’s and the Subsidiary Bank’s financial conditions did not 

improve. And in May 2009 OTS closed the Subsidiary Bank and appointed the 

FDIC as its receiver. One day later, the Parent Bank filed for bankruptcy under 

Chapter 11 of the Bankruptcy Code. And a few days after that, an official 

committee of unsecured creditors (the Committee) was appointed in the 

bankruptcy action and began investigating whether claims might exist against, 

among others, the Parent Bank’s corporate officers — the idea being that those 

claims could be pursued for the benefit of the bankruptcy estate. 

The Committee filed a derivative standing motion, seeking “an order 

granting the Committee standing to investigate, assert and prosecute any and all 

claims that [the Parent Bank might have] against [its] current and former officers 

and directors . . . .” 3

 The motion asserted that:

Based on [the Parent Bank’s] financial collapse, the issues raised in 

the [September 2008] Securities Litigation, and information obtained 

by its professionals, the Committee believes that Claims on behalf of 

[the Parent Bank’s bankruptcy estate] may exist against certain of [its] 

current and former officers and directors . . . including without 

limitation Claims arising from breaches of duties owed by [those 

insiders] to [the Parent Bank] or [its] constituents, misrepresentations, 

 3 Besides the Parent Bank, there were two other debtors in the bankruptcy action, but that 

fact is not relevant to our decision. 

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failures to disclose and other wrongful acts . . . .

The bankruptcy court granted the Committee’s derivative standing motion. 

In November 2009, the Committee sent demand letters to three former 

Parent Bank executives — Alfred Camner, Ramiro Ortiz, and Humberto Lopez —

stating that it believed the Parent Bank’s estate had claims against the three of 

them, “including without limitation claims arising from the breach of [their] 

fiduciary duties of care and loyalty . . . and [their] failure to perform [their] duties

. . . in good faith” and from their violations of federal securities laws. U.S. 

Specialty was notified of those claims and issued a letter denying coverage based 

on the Prior Acts Exclusion, because the “Committee Demand Letters allege 

numerous Wrongful Acts occurring prior to November 10, 2008.” 

In December 2011, the Committee filed an adversary proceeding against

Camner and Lopez in the bankruptcy court. It later sought to amend the complaint

by substituting Ortiz for Camner as a defendant as to one count. Meanwhile, in 

June 2012, the bankruptcy court substituted Clifford Zucker, who had been 

appointed as the bankruptcy Plan Administrator, for the Committee as the plaintiff 

in the bankruptcy action. After the district court granted Zucker leave to do so, he

filed an amended complaint against Camner, Lopez, and Ortiz. 

The amended complaint had four counts. Count I sought to recover from 

Lopez and Camner for breaching their fiduciary duties by “fail[ing] to implement 

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and maintain effective risk management procedures and internal controls,” which 

caused the Subsidiary Bank to be placed into receivership and the Parent Bank to 

declare bankruptcy. Count II sought to recover from Lopez and Camner for 

breaching their fiduciary duties by providing inaccurate and incomplete 

information to the Parent Bank’s board of directors “concerning the lack of internal 

controls and unreasonably risky lending practices,” which Zucker alleged caused 

the board to authorize expenditures and the issuance of debt and artificially 

prolonged the existence of the company, causing more losses. Count III sought to 

recover from Camner alone for causing the Parent Bank’s board to approve the 

infusion of $80 million into the Subsidiary Bank without “investigating whether, or 

disclosing to [the Parent Bank’s] board that, among other things, the capital 

infusion would not forestall regulatory seizure of the [Subsidiary Bank].” And 

Count IV sought to recover from Ortiz and Lopez based on the contention that 

approving the two tax refund transfers to the Subsidiary Bank in 2009 was a breach 

of their fiduciary duties because the transfers violated Florida’s Uniform 

Fraudulent Transfers Act. The fraudulent transfer claims (Count IV) based on the

2009 tax refund transfers are the primary focus of this lawsuit.

In November 2012, Bankruptcy Plan Administrator Zucker sent a written 

settlement demand to Lopez and Oritz concerning the fraudulent transfer claims 

(Count IV). That demand was forwarded to U.S. Specialty, which again denied 

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coverage. 

Eventually, the fraudulent transfer claims settled for $15 million to be paid 

either by U.S. Specialty or by Lopez and Ortiz individually. The settlement 

agreement assigned Lopez’s and Ortiz’s rights under the U.S. Specialty policy to 

Zucker. The other claims were settled separately. 

E. The Lawsuit against U.S. Specialty

After Zucker settled his fraudulent transfer claims against the banks’ 

corporate officers in the bankruptcy action, he filed this lawsuit in the district court 

against U.S. Specialty based on its denial of coverage as to those claims. In the

complaint, he asserted claims for breach of contract, statutory bad faith, and 

common law bad faith. The district court bifurcated the proceedings so that it 

could decide whether denying coverage of the fraudulent transfer claims amounted 

to a breach of contract before considering whether U.S. Specialty acted in bad 

faith. The parties filed cross-motions for summary judgment, disagreeing 

primarily over whether the fraudulent transfer claims were covered by the U.S. 

Specialty policy. 

The district court concluded that the Prior Acts Exclusion did bar coverage 

for the fraudulent transfer claims, and as a result, U.S. Specialty did not breach the 

insurance contract. On that basis it granted summary judgment in favor of U.S. 

Specialty. Because that decision also foreclosed Zucker’s bad faith claims, the 

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district court entered a final judgment against Zucker. This is his appeal.

II. ANALYSIS

We review de novo the district court’s interpretation of the insurance policy 

and its grant of summary judgment in favor of U.S. Specialty. See 

EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am., 845 F.3d 1099, 1105 

(11th Cir. 2017). In so doing, “we view all of the evidence in a light most 

favorable to the nonmoving party and draw all reasonable inferences in that party’s 

favor.” Procaps S.A. v. Patheon, Inc., 845 F.3d 1072, 1079 (11th Cir. 2016) 

(quotation marks omitted).

The parties agree that Florida law applies to this case. “Under Florida law, 

insurance contracts are construed according to their plain meaning.” Taurus 

Holdings, Inc. v. U.S. Fidelity & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005). 

“Ambiguities are construed against the insurer and in favor of coverage[,] . . . .

[but] to allow for such a construction the provision must actually be ambiguous.” 4 

Id. While “insurance policies may be confusing to persons not trained or 

experienced in the form and language of insurance policies[,] . . . . that fact does 

not make such policies or language legally ambiguous.” Fla. Ins. Guar. Ass’n v. 

Sechler, 478 So. 2d 365, 367 (Fla. 5th DCA 1985). “[C]ourts may not rewrite 

 4 U.S. Specialty contends that this rule of construction should not apply here because this 

was an insurance agreement between sophisticated parties. Because we conclude that the policy 

here was not ambiguous, we need not address that contention.

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contracts, add meaning that is not present, or otherwise reach results contrary to the 

intentions of the parties.” Taurus Holdings, Inc., 913 So. 2d at 532 (quotation 

marks omitted). 

Zucker contends that the district court erred when it concluded that the 

fraudulent transfer claims in the bankruptcy complaint fell within the Prior Acts 

Exclusion in the U.S. Specialty policy. We disagree with him and agree with the 

district court.

A. Zucker’s Claims Fall within the Prior Acts Exclusion

Zucker’s claims against Lopez and Ortiz alleged that approving the 2009 tax 

refund transfers was a breach of their fiduciary duties because those transfers were

fraudulent ones under Florida law.5

 He alleged that they were fraudulent transfers 

because they “were made to the [Subsidiary Bank], an insider, for antecedent debt, 

. . . at a time when [the Parent Bank] was insolvent . . . . [and] the persons in 

control of [the Subsidiary Bank] had reasonable cause to believe [the Parent Bank] 

was insolvent.” 

 5 Zucker has an alternative theory that, even if the district court were correct that his 

claim that transferring the entire $46 million in tax refunds arose out of pre-2008 conduct and 

was covered by the Prior Acts Exclusion, the transfer of $17.9 million of the amount did not and 

was not. We will not consider that alternative theory of coverage because Zucker did not 

adequately raise it in the district court. See Reider v. Philip Morris USA, Inc., 793 F.3d 1254, 

1258 (11th Cir. 2015) (“[I]ssues raised for the first time on appeal are generally forfeited because 

the district court did not have the opportunity to consider them.”) (quotation marks omitted); 

Juris v. Inamed Corp., 685 F.3d 1294, 1325 (11th Cir. 2012) (“[I]f a party hopes to preserve a 

claim, argument, theory, or defense on appeal, she must first clearly present it to the district 

court, that is, in such a way as to afford the district court an opportunity to recognize and rule on 

it.”) (quotation marks omitted). 

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As the district court explained: “This allegation parrots the language of 

Florida’s Uniform Fraudulent Transfer Act . . . .” See Fla. Stat. § 726.106(2). To

sustain a fraudulent transfer claim under that statutory provision, a creditor must 

demonstrate that, among other things, the debtor was insolvent at the time of the 

transfer. Id.

The U.S. Specialty policy’s Prior Acts Exclusion reads:

In consideration of the premium charged, it is agreed that the Insurer 

will not be liable to make any payment of Loss in connection with a 

Claim arising out of, based upon or attributable to any Wrongful Act

committed or allegedly committed, in whole or in part, prior to 

[November 10, 2008].

And the policy defines a “wrongful act” as any: 

(1) actual or alleged act, error, misstatement, misleading statement, 

omission or breach of duty:

(a) by an Insured Person in his or her capacity as such, 

including in an Outside Capacity, or

(b)with respect only to Securities Claims, by the Company; or

(2)matter claimed against an Insured Person solely by reason of his or 

her service in such capacity or in an Outside Capacity. 

Zucker argues that because the tax refund transfers that form the basis of the 

fraudulent transfer claims occurred in 2009 and insolvency itself is not a wrongful 

act, those claims should not fall within the Prior Acts Exclusion of the policy.

6

 6 Zucker also makes much of the fact that the U.S. Specialty underwriter changed the title 

of the Prior Acts Exclusion on the quotes she sent to the Parent Bank from “Prior Acts Exclusion 

(Broad Form)” to “Prior Acts Exclusion (Policy Inception),” although the exclusion in the final 

policy still contained the “broad form” language. Zucker does not explain in his briefs to us how 

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U.S. Specialty responds that the claims do fall within the exclusion because what 

made the transfers wrongful was the Parent Bank’s insolvency, which resulted 

from its officers’ pre-November 2008 misdeeds, not their post-November 2008 

conduct. 

“When we address issues of state law, like the ones in this case, we are 

bound by the decisions of the state supreme court.” World Harvest Church, Inc. v. 

Guideone Mut. Ins. Co., 586 F.3d 950, 957 (11th Cir. 2009). The Supreme Court 

of Florida has concluded that the phrase “arising out of” is not ambiguous and has 

a broad meaning, even when used in a policy exclusion. Taurus Holdings, Inc., 

913 So. 2d at 539. It “means ‘originating from,’ ‘having its origin in,’ ‘growing 

out of,’ ‘flowing from,’ ‘incident to’ or ‘having a connection with.’” Id. While 

that standard “requires more than a mere coincidence between the conduct . . . and 

the injury[,] . . . . it does not require proximate caus[ation].” Id. at 539–40.

Decisions of the Florida Supreme Court, the Florida Courts of Appeal, and 

this Court show that the “arising out of” standard is not difficult to meet. For 

instance, in Hernandez v. Protective Casualty Insurance Co., 473 So. 2d 1241, 

1242–43 (Fla. 1985), the court concluded that a driver’s injuries did “aris[e] out of 

the ownership, maintenance or use of a motor vehicle” where he was injured by the 

 

that change in the title could modify or clarify the meaning of the exclusion or mislead an 

insured. We are not persuaded that it could or did. 

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police as they arrested him for a traffic violation. The Florida Supreme Court

explained:

It was the manner of petitioner’s use of his vehicle which prompted 

the actions causing his injury. While the force exercised by the police 

may have been the direct cause of injury, under the circumstances of 

this case it was not such an intervening event so as to break the link 

between petitioner’s use of the vehicle and his resultant injury.

Id. at 1243.7

 

Likewise, in Acosta, Inc. v. National Union Fire Insurance Co., 39 So. 3d 

565, 576–77 (Fla. 1st DCA 2010), the Florida First District Court of Appeal

concluded that a lawsuit “arose out of” an earlier lawsuit and thus fell within a 

prior litigation exclusion.8

 The court explained that the later lawsuit “ha[d] a 

connection with” the earlier one because “all of the counts asserted against” the 

defendant in both the earlier and later lawsuits “center[ed] on its efforts to obtain 

contracts with [the plaintiffs’] clients.” Id. Although the two lawsuits focused on 

different conduct, they shared a connection because the defendant’s conduct giving 

rise to each lawsuit was part of the same “overall scheme.” Id. And we have 

applied the Florida Supreme Court’s definition of “arising out of” from Taurus 

 7 Though Hernandez predates the Florida Supreme Court’s effort in Taurus Holdings to 

define “arising out of,” its decision in that case cited Hernandez — as well as several other older 

cases discussing the meaning of “arising out of” — approvingly. Taurus Holdings, Inc., 913 So.

2d at 533–34.

8 “Federal courts sitting in diversity are bound to adhere to decisions of [Florida’s] 

intermediate appellate courts, absent some persuasive indication that the state’s highest court 

would decide the issue otherwise.” Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008, 

1025 (11th Cir. 2014) (quotation marks omitted) (alteration in original). 

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Holdings in a similar fashion. James River Ins. Co. v. Ground Down Eng’g, Inc., 

540 F.3d 1270, 1276–77 (11th Cir. 2008) (holding that a claim “arose out of” 

pollution, and therefore was covered by a pollution exclusion, where a negligent 

environmental site assessment that failed to detect the presence of pollution on the 

property led to lost profits, lost property value, and the need for environmental 

remediation).9

In light of the Florida courts’ broad interpretation of the “arising out of” 

standard, we conclude that the Parent Bank’s insolvency “arose out of” wrongful 

acts that occurred before November 10, 2008. After all, Zucker’s complaint in the 

bankruptcy case alleged that the Parent Bank’s corporate officers committed 

wrongful acts, some of which occurred before November 2008, that harmed the 

company financially. So Zucker has admitted that the wrongful conduct of the 

corporate officers contributed to the insolvency that made the 2009 tax refund 

transfers fraudulent under Florida law. And while Zucker is right to say that 

insolvency itself is not an inherently wrongful act, what matters here is that an 

essential element of his claim — the Parent Bank’s insolvency — has a 

connection to some prior wrongful acts of the Parent Bank’s officers and directors 

 9 Our prior panel precedent rule requires us to follow a prior panel’s binding 

interpretation of state law unless and until the state supreme court or a state intermediate 

appellate court issues a decision suggesting that our interpretation of state law was incorrect. 

EmbroidMe.com, Inc., 845 F.3d at 1105; Roboserve, Ltd. v. Tom’s Foods, Inc., 940 F.2d 1441, 

1450–51 (11th Cir. 1991). That has not happened in this instance.

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that occurred before the policy’s effective date. Given that, Zucker’s fraudulent 

transfer claims do share “a connection with” wrongful acts covered by the Prior 

Acts Exclusion. Taurus Holdings, Inc., 913 So. 2d at 539.

Zucker attempts to get around that connection by emphasizing that he didn’t 

incorporate the paragraphs describing the officers’ misconduct into Count IV (the 

fraudulent transfer count) of his complaint. True, but irrelevant. The Parent 

Bank’s insolvency is an element of his claim and that insolvency has a connection 

to misdeeds and misdealing of the Parent Bank’s officers before November 2008. 

Zucker also points out that he would not have had to prove that the officers 

engaged in misconduct in order to prevail on his fraudulent transfer claim. That 

does not, however, mean there was no causal connection between the officers’ 

deeds and the demise of the Parent Bank. “[C]overage — and the accompanying 

duty to indemnify — is not determined by reference to the claimant’s complaint, 

but rather by reference to the actual facts and circumstances of the injury.” MidContinent Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 181 (Fla. 4th DCA 2015)

(quotation marks omitted). Zucker cannot plead himself around reality.

This is not a case where the causal connection between the prior wrongful 

acts and the loss was merely coincidental. See, e.g., Race v. Nationwide Mut. Fire 

Ins. Co., 542 So. 2d 347, 351 (Fla. 1989) (holding that a motorist’s injuries did not 

arise out of the use of an automobile where he was attacked primarily because a 

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fellow motorist, with whom he had collided, thought he was pulling a gun and the 

accident created, at most, “an atmosphere of hostility”); Martinez v. Citizens Prop. 

Ins. Corp., 982 So. 2d 57, 59 (Fla. 3d DCA 2008) (holding that an injury did not 

arise out of the “maintenance, use, loading or unloading of motor vehicles” where 

the insured was hurt when a driveway collapsed while he was changing the oil on 

his car because “it was pure chance that the object upon the driveway at the time of 

its collapse happened to be a car”); Almayor v. State Farm Fire & Cas. Co., 613 

So. 2d 526, 527 (Fla. 3d DCA 1993) (holding that an injury did not arise out of the 

“ownership, maintenance or use of [a] motor vehicle” where plaintiff was injured 

in an explosion caused when a cigarette ignited gasoline fumes from gas that had 

been siphoned from a car, because the car “was merely the coincidental and legally 

remote source of a component, the gasoline, which was itself harmless until acted 

upon by the insured’s negligence”).

It is no coincidence that insolvency and misconduct converged on the Parent 

Bank. Instead, the misconduct was a significant contributing cause of the Parent 

Bank’s vulnerability to the 2008 financial crisis. For that reason, it is plain that 

Zucker’s fraudulent conveyance claims “arose from” wrongful acts that predate 

November 10, 2008 and therefore fell within the scope of the Prior Acts 

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Exclusion.10

B. The Policy’s Terms are Unambiguous and Its Coverage is Not Illusory

Zucker’s final effort to get around the Prior Acts Exclusion is his argument 

that if we adopt U.S. Specialty’s construction of the Prior Acts Exclusion, the

policy’s coverage is illusory. We don’t think so.

Zucker relies primarily on Purrelli v. State Farm Fire & Casualty Co., 698 

So. 2d 618, 620 (Fla. 2d DCA 1997), which held that when an exclusion or 

limitation to an insurance policy “swallow[s] up the insuring provision” it 

“creat[es] the grossest form of ambiguity.” As we mentioned earlier, when 

insurance policies are ambiguous, Florida courts construe them in favor of 

coverage. Taurus Holdings, Inc., 913 So. 2d at 532. So when a policy exclusion 

does swallow up an insuring provision, the Florida Courts conclude that the policy 

is ambiguous, Purrelli, 698 So. 2d at 620, and resolve that ambiguity by ignoring 

the exclusion, see Tire Kingdom, Inc. v. First S. Ins. Co., 573 So. 2d 885, 887 (Fla. 

3d DCA 1990). To quote Tire Kingdom, “[a]n insurance policy cannot grant [a] 

 10 At one point in his brief, Zucker suggests that “arising out of” does not mean in this 

policy what the Florida Supreme Court has said it means in other policies. He points to other 

exclusions in the policy that use the “arising out of” language and emphasizes that they also 

include relatedness terminology. But Zucker makes this argument only in passing, provides no 

authority for it, and does not adequately explain why the use of relatedness terminology in other 

exclusions matters in this case. As a result, he has not properly presented this argument and we 

do not consider it. Sapuppo v. Allsatate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014) 

(“We have long held that an appellant abandons a claim when he either makes only passing 

references to it or raises it in a perfunctory manner without supporting arguments and 

authority.”).

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right[ ] in one paragraph and then retract the very same right in another paragraph 

called an ‘exclusion.’” Id. 

Zucker argues that Purelli is on all fours with this case, but it is not. The 

insurance policy in Purrelli had a provision explicitly providing coverage for 

invasion of privacy (an intentional tort), but also had an exclusion precluding 

coverage for “intended” injuries. 698 So. 2d at 619–20. In that way the policy’s 

exclusion expressly contradicted its coverage provisions, leaving the insured to 

wonder which provision correctly explained the scope of his coverage. Here, by 

contrast, the U.S. Specialty policy’s Prior Acts Exclusion does not “grant [a] 

right[ ] in one paragraph and then retract the very same right” in a later one. See

Tire Kingdom, Inc., 573 So. 2d at 887. Instead, it simply excludes coverage for a 

subset of claims that would ordinarily fall within the policy’s insuring provisions. 

For the same reason, Tire Kingdom doesn’t support Zucker’s position. In that 

case, the policy “attempt[ed] to provide coverage for certain advertising activities 

and then exclude those same activities.” Id. The U.S. Specialty policy doesn’t do 

that.

This also is not a case that falls within the common law “illusory coverage” 

doctrine that other jurisdictions have recognized and that we have indicated is part 

of Florida’s insurance law. See Interline Brands, Inc. v. Chartis Specialty Ins. Co., 

749 F.3d 962, 966–67 (11th Cir. 2014) (applying Florida law). In order for an 

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exclusion to render a policy’s coverage illusory it must eliminate all — or at least 

virtually all — coverage in a policy. See id. (“According to Interline, the 

Exclusion’s broad scope reduces the coverage Chartis sold to Interline to a ‘façade’ 

. . . . Interline overstates the extent to which the Exclusion limits coverage. Even 

with the broad Exclusion, the policy still contains extensive coverage.”) (quotation 

marks omitted); cf. Great Am. E & S Ins. Co. v. End Zone Pub & Grill of 

Narragansett, Inc., 45 A.3d 571, 576 (R.I. 2012) (“We will deem an exclusion to an 

insurance policy illusory only when it would preclude coverage in almost any 

circumstance.”) (quotation marks omitted); McGregor v. Allamerica Ins. Co., 868 

N.E.2d 1225, 1228 (Mass. 2007) (“As long as an insurance policy provides 

coverage for some acts, it is not illusory simply because it contains a broad 

exclusion.”); Point of Rocks Ranch, LLC v. Sun Valley Title Ins. Co., 146 P.3d 

677, 680 (Idaho 2006) (“An insurance policy’s coverage is illusory if it appears 

that if any actual coverage does exist it is extremely minimal and affords no 

realistic protection to any group or class of injured persons.”) (quotation marks 

omitted).

U.S. Specialty overstates the case when it says that the policy “still provides 

coverage for a wide variety of Claims.” We need not agree with that statement. It 

is enough that the policy provided coverage for claims that arose exclusively from 

conduct that happened after the effective date of the policy. The Prior Acts 

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Exclusion excludes a lot of coverage, but not all coverage. And regardless of what 

the result might have been had this exclusion been included in an adhesion policy 

issued to a layperson, it was not. The Parent Bank entered into this insurance

contract with its eyes wide open and with its wallet on its mind. U.S. Specialty 

offered the Parent Bank a policy without a Prior Acts Exclusion. After weighing 

that offer the bank decided to reject it, having calculated that its best interests 

would be served by using the money it would save by accepting the exclusion to 

buy an increased total coverage limit. In hindsight, that decision did not work out 

well, but it was the decision of a sophisticated, fully informed party.

Zucker believes the Parent Bank did not get a good deal and wishes that it

had paid a higher premium for a policy without a Prior Acts Exclusion. But after 

the fact wishes are not enough to change before the fact choices. Prior acts 

exclusions serve valid purposes when agreed to by consenting parties. Cf. Interline 

Brands, Inc., 749 F.3d at 967 (“[E]xclusions are not necessarily harmful. 

Exclusions . . . allow creation of a policy that provides the insured the coverage it 

needs at a price it can afford. Without such exclusions, coverage would 

undoubtedly be more expensive.”). The Parent Bank chose to rely on its old 

policies to cover claims against its officers connected to wrongful acts that 

occurred before November 2008. It chose to buy the policy that it bought. It

cannot change that choice now, nor can its former corporate officers, nor can 

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Zucker.

11

AFFIRMED.

 11 U.S. Specialty also contends alternatively that the fraudulent conveyance claims are 

barred by the policy’s Prior Notice Exclusion. The district court rejected that contention. 

Because we conclude that the fraudulent conveyance claims do fall within the Prior Acts 

Exclusion and that the exclusion does not render the policy’s coverage illusory, we need not 

address whether we would reach the same result based on the Prior Notice Exclusion.

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