[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

________________________ No. 10

- 12613

________________________ D.C. Docket No. 3:09

- cv - 00894

- HES

- JRK

INTERVEST CONSTRUCTION OF JAX , INC. , et. al. Plaintiff s - Appell ants ,

versus
GENERAL FIDELITY INSURANCE COMPANY ,
Defendant

- Appell ee .

________________________ Appeal from the United States District Court for the Middle District of Florida

_____________ ___________ (March 28, 2014) Before CARNES , Chief Judge, TJOFLAT , Circuit Judge, and MICKLE , ∗ District Judge

.

∗ The Honorable Stephan P. Mic k le, United States District Judge for the Northern District of Florida, sitting by designation. Judge Mickle did not participate in the decision; it is rendered by quorum. See 28 U.S.C. § 46(d) (2012 ).

Case: 10-12613 Date Filed: 03/28/2014 Page: 1 of 62 PER CURIAM : I. The controversy in this case is between an insur er, General Fidelity
Insurance C ompany , and its insureds , Intervest Construction of Jax, Inc. and ICI Homes, Inc. (collectively “ICI”) , regarding whether General Fidelity breached its obligations under a general liability insurance policy held by ICI. The coverage dispute at issue arose from a personal injury suit broug ht against ICI by Katherine Ferrin, who purchased and lived in a home built by ICI. During the construction of Ferrin’s residence, ICI hired Custom Cutting s , Inc. to install the attic stairway . Pursuan t to its subcontract with ICI , Custom Cutting s agreed to indemnify ICI from any damages or claims brought against IC I as a result of Custom Cuttings ’s negligen ce. In April 2007, Ferrin received serious injuries from a fall while using the attic stai rs installed by Custom Cutting s. She brought suit s olely against ICI. In turn, ICI sought indemnification from Custom Cuttings pursuant to the terms of their subcontract. At the time of Ferrin’s accident, ICI held a general liability insurance policy with General Fidelity (the “General Fidelity Policy ”) and Custom Cuttings held a general liability insurance policy with North Pointe Insurance Company.

Case: 10-12613 Date Filed: 03/28/2014 Page: 2 of 63 T he terms of the General Fidelity Policy included a Self

- Insured Retention endorsement (“the SIR endorsement”), requiring ICI to pay $1 million towards its

own losses before General Fidelity ha d a duty to defend or indemnify ICI for any
occurrence or event. 1 The General Fidelity P olicy also contained a transfer

- of

rights provision giving General Fidelity subrogation rights over certain ICI claims

. 2 On July 7, 2009 a mediation was held involving Ferrin, ICI, Custom Cutting s , General Fidelity, and North Pointe. As a result of this mediati on, a settlement agreement was reached w herein ICI and General Fidelity agreed to pay Ferrin $1.6 million as full and final settlement of her claims against ICI, Custom Cuttings, General Fidelity, and North Pointe

. As indemnity, Custom Cuttings and North Pointe agreed to pay $1 million (the “Custom Cuttings Payment”) to ICI and General Fidelity in exchange f or a release from any liability arising under the Ferrin lawsuit. A dispute arose between ICI and General Fidelity regarding to whom the Custom Cuttings Settlem ent Payment should be payable and whether ICI could use

1 The full text of the SIR endorsement can be found at Intervest Const r . of Jax , Inc. v. Gen

. Fid

. Ins. Co. , 662 F.3d 1328, 1333

– 35 (11th Cir. 2011).

2 The transfer

- of

- rights provision found in the General Fidelity Policy reads as follows: If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our re quest, the insured will bring “s uit” or transfer thos e rights to us and help us enforce them. Case: 10-12613 Date Filed: 03/28/2014 Page: 3 of 64 the Custom Cuttings Payment to satisfy the SIR endorsement. In order to resolve Ferrin’s claim, ICI and General Fidelity tabled their dispute and agreed to release the Custom Cuttings Payment

–– which was being held in trust

–– to Ferrin and to each fund $300,000 towards the $1.6 million settleme nt agreement. B oth ICI and General Fidelity reserved all claims and defenses against one another with respect to the coverage provided by the General Fidelity Policy.
II. After th e full $1 .6 million settlement payment was delivered to Ferrin, ICI filed suit in the Circuit Court of the Fourth Judicial Circuit of Florida against General Fideli ty for breach of contract , requesting a declaratory judgment that its claim to the Custom Cuttings payment is superior to General Fidelity’s and that it is entitled t o apply the Custom Cuttings payment towards the SIR endorsement in the General Fidelity Policy. General Fidelity removed the case to the United States District Court fo r the Middle District of Florida. After hearing arguments, the District Court found in favor of General
F idelity, concluding that ICI had not satisfied the SIR obligation because the payment had originated from another party

. Intervest Constr. of Jax , Inc., v. Gen. Fid. Ins. Co. , No. 3:09

- cv - 00894

- HES

- JRK , Order at 8 (M.D. Fla. Apr. 22, 2010). On appeal, we determined that the resolution of this dispute depends on unanswered questions of Florida law. Intervest Constr. of Jax, Inc., v. Gen. Fid.

Case: 10-12613 Date Filed: 03/28/2014 Page: 4 of 65 Ins. Co. , 66 2 F.3d 1328, 1332 (11th Cir. 20 11)

. In light of the absence of controlling precedent from the Supreme Court of Florida, we certified two questions for resolution: 3 “ 1) Does the General Fidelity Policy allow the insured to apply indemnification payments received from a third

- party towar ds satisfaction of its $1 million Self

- Insured Retention? [ and ] 2) Assuming that funds received through an indemnification clause can be used to offset the Self

- Insured Retention, does the transfer of rights provision found in the General Fidelity Policy g rant superior rights to be made whole to the insured or to the insurer? ” Id. On February 6, 2014 the Supreme Court of Florida issued a decision answering both of these questions. Intervest Constr. of Jax, Inc., v. Gen. Fid. Ins.
Co. , No. SC11

- 2320 (Fla. 2014). In its decision, the Supreme Court of Florida concluded that (1) “the General Fidelity policy allows the insured to apply indemnification payments received from a third party towards satisfaction of its $1
million self

- insured retention, ” i d. at *1 9, and (2) “the transfer of rights provision in the policy does not abrogate the made whole doctrine, thereby preserving ICI’s right of priority,” i d. at *25. In light of the Supreme Court’s answers , the final judgment of the District Court is

3 The Florida Constitution allows the Florida Supreme Court to consider a certified question if it “is determinative of the cause and for which there is no controlling precedent of the supreme court of Florida.” Fla. Const. art. V, § 3(b)(6); see also Stevens v. Batt e l l e Mem ’ l Inst. , 488 F.3d 896, 904 (11th Cir. 2007)

.

Case: 10-12613 Date Filed: 03/28/2014 Page: 5 of 66 REVERSED

. Case: 10-12613 Date Filed: 03/28/2014 Page: 6 of 6