[ DO NOT PUBLISH]



## In the



# United States Court of Appeals

For the Eleventh Circuit

____________________

No. 23

- 10137

____________________

ANNETTE DAVIS,

Plaintiff

- Appellant,

versus

GREAT NORTHERN INSURANCE COMPANY,

FEDERAL INSURANCE COMPANY,

Defendants

- Counter Claimants

- Counter Defendants

- Appellees.

____________________

Appeal from the United States District Court

for the Southern District of Florida

D.C. Docket No. 0:21

- cv

- 61958

- AHS

____________________ USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 1 of 2023

- 10137 Opinion of the Court 2

Before J ORDAN

, B RASHER , and A BUDU , Circuit Judges.

PER CURIAM:

Annette Davis appeals from the district court’s grant of

summary judgment to Great Northern Insurance Company and

Federal Insurance Company , which are indirect, wholly own ed

insurance subsidiaries of Chubb Limited. Ms. Davis sought to

enforce a so

- called Coblentz settlement agreement against Chubb,

alleging that its subsidiary insurers had breached their duty to

defend in an underlying action she had brought. See Coblentz v. Am.

Sur. Co. of N.Y. , 416 F.2d 1059 (5th Cir. 1969). The district court

ruled that the Coblentz agreement could not be enforced, reasoning

in part that the Chubb insurers had offered to defend under a

reservation of rights and thus not breached their duty. We agree

,

and therefore affirm the district court’s ruling that the Coblentz

agreement cannot be enforced against Chubb. 1

I. BACKGROUND

A. Facts 2

1. The Underlying Litigation

This case arises out of Ms. Davis’ negligence claim against

Akam

- On Site, Inc., the management company of The Tides at

Bridgeside Square Condominium, where she resided. In April of

2018, Ms. Davis sued Akam in state court for negligent property

1 As to issues not specifically discussed, we summarily affirm.

2 For ease of reference, we collectively refer to Chubb and its subsidiaries as

Chubb. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 2 of 2023

- 10137 Opinion of the Court 3

management regarding its annual maintenance on a water

- cooling

tower at The Tides. See D.E. 202

- 11 at 3; D.E. 216

- 12 at 2. Ms. Davis,

who is immunocompromised, alleged that Akam’s negligent work

on a drainage pipe caused mold in side her apartment walls and

forced her to undergo immunoglobulin treat ment sessions every

three weeks for the rest of her life. See D.E. 202

- 1 at 5

– 6.

The Tides designated Akam as a “named insured” in its two

liability policies under its property management contract. See D.E.

202

- 4 at 10. Akam’s first policy was issued by AmTrust

International Underwriters and insured The Tides under a primary

commerci al general liability policy. See D.E. 23

- 1. The AmTrust

policy contained an “Organic Pathogen Exclusion,” which

excluded bodily injury “which would not have occurred but for

. . .

exposure to

. . . any ‘[o]rganic pathogen,’” including “any type of

mold[. ]” Id. at 76‒77. Chubb issued the second policy under the

Great Northern Insurance Company, which provided excess

coverage to the primary AmTrust policy. See D.E. 202

- 35.

In a letter to The Tides on May 31, 2018, AmTrust stated that

it “ha[d] agreed t o provide [The Tides] a defense against the claims

asserted in the [underlying action] subject to certain rights reserved

in [its] letter” and had “already arranged [to provide] such [a]

defense” if necessary. See D.E. 202

- 7 at 2. The letter also referen ced

the organic pathogen exclusion in the AmTrust policy, noting that

the exclusion would apply to losses related to “bodily injury and/or

property damage” if such losses were “the result of mold.” Id. at

5. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 3 of 2023

- 10137 Opinion of the Court 4

AmTrust retained an attorney to defend Akam a nd provided

a “full, complete defense” against all of Ms. Davis’ allegations. See

D.E. 202; D.E. 255. AmTrust did not ask Chubb to participate in

this initial defense of Akam. Nor did AmTrust request payment

from Chubb to defray the costs associated with such a defense. See

D.E. 202

- 5 at 114.

2. Chubb’s Reservation of Rights Letters

In July of 2018, Akam notified Chubb of the lawsuit. See

D.E. 202

- 9. Chubb responded by issuing its first reservation of

rights letter on October 9, 2018. See D.E. 202

- 11. Chubb

acknowledged that AmTrust was fully defending Akam and

explained that its letter was “not a denial of coverage.” Id. at 22.

The le tter also informed Akam that Chubb was “monitoring th[e]

matter under a complete reservation of rights” and that “Akam

. . . acknowledge[d] and accept[ed] all of these rights pursuant to the

reservation

. . . . ” Id.

In January of 2019, during the initia l phase of the case,

Akam’s counsel (appointed by AmTrust) produced a pre

- mediation

report which estimated that Ms. Davis had only a 20

‒ 30% chance

of obtaining a favorable verdict. See D.E. 202

- 14 at 35. Based on

that estimate, the report valued the p otential settlement of the

underlying action at $150,000 to $200,000. Id.

More than a year later, in March of 2020, Akam’s counsel

produced a second report which reiterated the previous estimate

for a favorable verdict and revised the settlement value s lightly to a

new range of $150,000 to $250,000. See D.E. 202

- 36 at 58. This USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 4 of 2023

- 10137 Opinion of the Court 5

report explained that Ms. Davis would have “a difficult time

proving causation of damages if liability [was] proven” and

“recommended attempting settlement in the range of the de fense

costs.” Id.

During the initial phase of the litigation

, Ms. Davis offered

to settle the case with Akam for $3.75 million and later for $2.975

million. D.E. 202

- 15 at 58; D.E. 202

- 36 at 3. To that end, the first

report to AmTrust stated that “[t]he biggest problem[ ] to

resolution [was] [p]laintiff’s attorne y’s unrealistic evaluation of the

case.” See D.E. 202

- 15 at 58.

Ms. Davis retained experts who estimated the present value

of her economic damages

, including past and future medical

expenses and lost earnings

. Those estimates ranged from

$10,485,430 at the low end to $21,989,181 at the high end

. See D.E.

216

- 23 at 193 ; D.E. 216

- 24 at 107.

3. The Coblentz Agreement

In September of 2020, Ms. Davis and Akam participated in

another unsuccessful mediation. See D.E. 202

- 5 at 98:3‒15. That

month, Akam retained separate counsel in addition to the joint

counsel that AmTrust had originally appointed

. See D.E. 202

- 30 at

6. At one point

, the mediator introduced the possibility of a

Coblentz agreement for the first time. See D.E. 221 at 21

. Akam

declined to settle under a Coblentz agreement and, as a result, Ms.

Davis filed a second lawsuit in state court against Akam, The Tides,

and Chubb in November of 2020. See D.E. 1

- 2 at 2

. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 5 of 2023

- 10137 Opinion of the Court 6

With trial set to start in May of 2021

, Chubb sent a letter on

December 10, 2020, advising Akam that it had “decided to exercise

its right to participate in the defense” and that it had hired

additional counsel to jointly represent Akam in the underlying

litiga tion

. See D.E. 202

- 18. In its own words, Chubb wanted to

“minimize [its] exposure to [the] insured” by “supplement[ing] the

[existing] trial team with the best trial lawyers [it] could find.” D.E.

202

- 10 at 42. Six days later, Akam’s separate counsel r esponded to

the letter, asking Chubb to “promptly and clearly articulate the

terms under which Chubb [was] now offering to defend [Akam], so

that an informed decision to accept or reject the defense [could] be

made.” D.E. 202

- 19. On December 22, 2020, Ch ubb responded to

Akam that it had “been handling this matter for Akam under a

complete reservation of rights, which ha[d] been accepted,” and

that Chubb had retained a law firm “to act as co

- trial counsel for

Akam.” D.E. 202

- 20.

On February 5, 2021, Akam’ s separate counsel rejected

Chubb’s tendered defense, stating that Akam had now “had the

opportunity to consider Chubb’s offer of a qualified defense, nearly

two years after litigation incepted, and respectfully reject[ed]” the

offer. See D.E. 202

- 21. One week later, Chubb reiterated “its

request t o associate in as defense counsel [and]

. . . to assist with

Akam’s defense in the [l]awsuit.” See D.E. 202

- 22. Chubb also

pointed out that “Akam [had] accepted [its] reservation [of rights]

and to date ha[d] never voiced any objection.” See id. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 6 of 2023

- 10137 Opinion of the Court 7

Short ly thereafter, Ms. Davis entered a Coblentz agreement

with Akam and The Tides

. See D.E. 202

- 33

. This agreement

secured Ms. Davis a payment of $250,000

, with Akam contributing

$100,000 and Am T rust contributing the remainder on Akam’s

behalf. See id. at 1

. The agreement also assigned to Ms. Davis all

claims held by Akam against Chubb stemming from Chubb’s

alleged refusal to defend and denial of coverage

. See id. at 7. The

agreement included a consent judgment in favor of Ms. Davis and

against Akam for $14.5 million and specified that the “right to seek

satisfaction of [that] judgment [was] solely against [Chubb].” Id. at

8.

B. Procedural History

As noted, i n Novemb er of 2020, Ms. Davis filed a lawsuit

against Akam, The Tides, and Chubb in state court

. See D.E. 1

- 2 at

2

. One month later, Chubb removed Ms. Davis’ action to federal

court. See id

. Shortly thereafter, Ms. Davis moved to drop The

Tides and Akam as parties for “no longer hav[ing] an interest in the

outcome of this litigation

, ” leaving Chubb as the sole defendant

.

See D.E. 1

- 4 at 2.

Ms. Davis eventually sought to enforce the Coblentz

agreement against Chubb

, and b oth parties moved for summary

judgm ent. See D.E. 198, 203. In support of its motion, Chubb

argued that (1) Akam breached the cooperation provision of its

policy by entering into a Coblentz agreement; (2) the Coblentz

agreement was neither reasonable n or negotiated in good faith; USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 7 of 2023

- 10137 Opinion of the Court 8

and (3) the Coblentz agreement did not allocate between covered

and uncovered damages. See D.E. 203.

The district court granted summary judgment for Chubb.

As relevant here, the court found that, as a matter of law, Ms. Da vis

failed to meet each of the requirements needed to enforce a

Coblentz agreement and that “[n]o reasonable jury could find [that]

Chubb refused to defend Akam.” Davis v. Great N. Ins. Co. , 650 F.

Supp. 3d 1332, 1339 (S.D. Fla. 2023). The district court also

explained that the $14.5 million consent judgment under the

Coblentz agreement was 58 times the pre

- trial report range of

$150,000 to $250,000, and more than three times higher than any

demand ever made by Ms. Davis during the mediation proceedings.

See id. at 1341. Accordingly, the district court entered judgment in

favor of Chubb, finding the consent judgment unenforceable under

Florida law. Ms. Davis timely appealed.

II. STANDARD OF REVIEW

We review de novo the district court’s grant of summary

judgment, viewing all facts in the light most favorable to the non

moving party. See Morales v. Zenith Ins. Co. , 714 F.3d 1220, 1226 (11th

Cir. 2013). The district court’s interpretation of insurance policy

language is also subject to plenary review. See Cathbake Investment

Co. v. Fisk Electric Co. , 700 F.2d 654, 656 (11th Cir. 1983).

Summary judgment is appropriate only when there exists no

genuine factual dispute and the movant is entitled to judgment as

a matter o f law. Fed. R. Civ. P. 56(a). “Once the movant adequately

supports it motion, the burden shifts to the nonmoving party to USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 8 of 2023

- 10137 Opinion of the Court 9

show that specific facts exist that raise a genuine issue for trial.”

Dietz v. Smithkline Beecham Corp. , 598 F.3d 812, 815 (11th Ci r. 2010).

III. DISCUSSION

Ms. Davis raises multiple arguments on appeal in support of

her contention that the district court improperly granted summary

judgment to Chubb. As relevant here, Ms. Davis contends that,

contrary to the district court’s order, g enuine issues of material fact

exist with regard to (1) the extent of Chubb’s coverage for Akam

under its existing policies; (2) whether Chubb wrongfully denied

coverage to Akam and The Tides; and (3) whether the Coblentz

agreement between Ms. Davis, The T ides, and Akam was

negotiated in good faith and settled at a reasonable amount. See

Appellant’s Br. at 18‒38.

To determine whether a Coblentz agreement is enforceable

under Florida law, a court must typically analyze (1) whether there

was coverage under the relevant insurance policy ; (2) whether the

insurer wrong ful ly refused to defend; and (3) whether the

settlement amount was unreasonable and negotiated in bad faith.

See Chomat v. N. Ins. Co. of N.Y. , 919 So. 2d 535, 537 (Fla. 3d DCA

2006). Because w e conclude that Chubb did not wrongful ly refuse

to defend Akam and The Tides, we express no opinion on the issues

of coverage and reasonableness. For this reason, our analysis USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 9 of 2023

- 10137 Opinion of the Court 10

focuses on the extent to which an insurer is bound by its duty to

defend and wh en that duty is breached under Florida law. 3

A. An Insurer’s Duty to Defend

Under Florida law, “an insurer’s duty to defend is separate

and distinct from its duty to indemnify, and is more extensive.”

First Am

. Title Ins

. Co

. v

. Nat’l Union Fire Ins

. Co

. , 695 So. 2d 475, 476

(Fla. 3d DCA 1997) . Thus, “an insurer is obligated to defend a claim

even if it is uncertain whether coverage exists under the policy.”

Id

. Moreover, in Florida

, an insurance provider’s duty to defend an

insured party “depends solel y on the facts and legal theories alleged

3 “T he reasonableness of the settlement . . . is generally a question of fact,

taking into account the likelihood of a judgment against the insured as well as

the possible amount of liability

, ” and thus a matter best left for the jury. See 1

New Appleman Law of Liability Insurance § 1.05[2][i] (2d ed. & September

2019 u pdate). Although we do not decide th e matter of reasonableness, we

note that the district court did not consider the evidence in the record that Ms.

Davis retained experts who estimated the present value of her economic

damages, including past and future medical expenses and lost earnings, a s

ranging from $10,485,430 at the low end to $21,989,181 at the high end

. See

D.E. 216

- 23 at 193; D.E. 216

- 24 at 107

. See also D.E. 202

- 15 at 53. The district

court also did not consider that, at the time of the Coblentz agreement, the trial

court in th e original state court action had denied summary judgment to

Akam and The Tides while also granting partial summary judgment to Ms.

Davis on the issue of Akam ’s and The Tides’ unlicensed mold remediation in

her unit, in violation of Fla. Stat. § 468.84. S ee D.E. 216

- 12. Given these

developments, the earlier valuation of Ms. Davis’ claim in the two reports

provided to AmTrust did not tell the whole story. At the summary judgment

stage, the district court was required to view the evidence in the light most

favorable to Ms. Davis and we have some doubts that it did so on the issue of

reasonableness. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 10 of 2023

- 10137 Opinion of the Court 11

in the pleadings and claims against the insured.” James River Ins. Co.

v. Ground Down Eng’g, Inc. , 540 F.3d 1270, 1275 (11th Cir. 2008)

(emphasis in original) . Accordingly, an insurer’s duty to defend

“arises when the relevant pleadings allege facts that ‘fairly and

potentially bring the suit within policy coverage.’” Lawyers Title Ins.

Corp. v. JDC , 52 F.3d 1575, 1580 (11th Cir. 1995) (citation omitted)

.

An insurer’s wrongful refusal to defend forfeit s its

corresponding right to control the defense

. See Bellsouth Telecomm.,

Inc. v. Church & Tower of Fla., Inc.

, 930 So. 2d 668, 671−72 (Fla. 3d

DCA 2006). It is well

- established under Florida law that “an

insurer’s unjustified refusal to defend a suit a gainst the insured

relieves the insured of his contract[ual] obligation to leave the

management of such suit to the insurer and justifies him in

assuming the defense of the action on his own account .” Id. at 672

(citation and internal quotation marks omit ted). Under such

circumstances, “if it is later determined that the insured was

entitled to coverage, the insured will be entitled to full

reimbursement of the insured’s litigation costs.” Id. at 671.

B. Defending an Insured Under a Reservation of Rights

Because under Florida law an insurer may not lawfully

refuse to defend even when it suspects that coverage might not

exist, “ an insurer may provide a defense under a reservation of

rights.” Nat’l Union Fire Ins. Co.

, 695 So. 2d at 476−77. A

reserv ation of rights allows an insurer to “provide a defense while

still preserving the option to later litigate and ultimately deny

coverage.” 14A Couch on Ins urance § 202:39 ( 3d ed. & Nov. 2023 USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 11 of 2023

- 10137 Opinion of the Court 12

update ). In essence , a reservation of rights letter is a mechanism

that allows the insurer to avoid “breaching its duty to defend by

allowing the insurer to challenge its liability on the underlying

claim while still fulfilling its obligations under the policy.” Id.

Defend ing a claim under a reservation of rights “enables an insurer

to preserve its right to contest the duty to indemnify if the defense

is unsuccessful.” Id.

Florida courts have made clear that “[a]n insurer does not

breach its duty to defend an insured whe n it provides a defense

under a reservation of rights.” Nat’l Union Fire Ins. Co.

, 695 So. 2d

at 477. See also Giffen Roofing Co. v. DHS Devs., Inc. , 442 So. 2d 396,

396

– 97 (Fla. 5th DCA 1983); Liability Colony Ins. Co. v. G & E Tires

& Serv., Inc. , 777 So. 2d 1034, 1037

– 38 (Fla. 1st DCA 2009); Eckerd

Youth Alternatives, Inc. v. Devereux Found., Inc. , 366 So. 3d 1154 , 1158

(Fla. 2d DCA 2023). An insurer is entitled to tender such a defense

because “the law distinguishes between the insurer’s duties to

defend and to pay.” Taylor v. Safeco Ins. Co

. , 361 So. 2d 743, 745 (Fla.

1st DCA 1978). Because a defense subject to a reservation of rights

does not constitute a wrongful refusal to defend, an insurer retains

its right to control the defense. See Continental Cas. Co. v. City of

Jacksonville , 283 F. App’x 686, 690 (11th Cir. 2008) (unpublished)

. At the same time, an insured is “not obliged t o surrender control

of his personal defense to an insurer which disclaimed

responsibility for any judgment within policy limits that might

result from the litigation.” Id. Therefore, “if the insurer offers to

defend under a reservation of rights, the ins ured has the right to

reject the defense and hire its own attorneys and control the USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 12 of 2023

- 10137 Opinion of the Court 13

defense.” BellSouth

, 930 So. 2d at 671. See also Mid

- Continent Cas.

Co. v. Am

. Pride Bldg. Co., LLC , 601 F.2d 1143 , 1149 (11th Cir. 2010)

(“While an insurer must defend its insured, and may tender its

defense subject to a reservation of rights, Florida law does not

require an insured to accept such a defense

. ”).

Our unpublished decision in City of Jacksonville illustrates

these principles w ell. In that case, the insurer agreed to defend the

City of Jacksonville in a toxic tort lawsuit. The insurer proceeded

with its defense

— paying reasonable and necessary legal expenses

—

while simultaneously issuing a complete reservation of rights. See

283 F. App’x at 687. The C ity accepted the defense but argued that

it had the right to control the defense because the insurer had

tendered a defense subject to a reservation of rights. See id. The

insurer obtained a declaratory judgment which stated in relevant

part that it had fulfilled its obligations and that the City’s failure to

cooperate “was a material failure that substantially prejudiced [the

insurer].” Id. at 688. On appeal, the C ity characterized the insurer’s

defense under a reservation of rights as a refusal to defend,

“allowing [it] to retain full control of the defense and entitling it to

settle without [the insurer’s] consent.” Id.

We affirmed the district court’s grant of summary judgment

for the insurer and reiterated Florida’s lon g

- standing rule that an

insurer’s offer to defend subject to a reservation of rights does not

amount to a refusal to defend. See id. at 689. We noted that the

C ity took ten months to notify the insurer of the underlying action

.

See id. at 690. Because the insurer promptly offered to defend USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 13 of 2023

- 10137 Opinion of the Court 14

subject to a reservation of rights, we affirmed the district court’s

finding that the insurer had fulfilled its duty to defend. See id.

We reached a similar conclusion two years later in Gallina v.

Com. & Indus. In s. , 375 F. App’x 935, 936 (11th Cir. 2010)

(unpublished) . In that case, a construction worker initiated a tort

claim against his employer for an injury suffered on a work site.

The employer’s insurance company assumed a full defense of the

claim, but the employer’s personal counsel requested the insurer

“confirm or deny coverage.” Gallina v. Com. & Indus. Ins. , 2008 WL

4491543, at *3 (M.D. Fla. Sept. 30, 2008). The insured later

“reject[ed] [the] defense due to [the insurer’s] reservation of rights”

and informed the insurer that the insured “was assuming its own

defense of the . . . action.” Id. at *4. The next day, the injured

worker and the insured entered into a Coblentz agreement against

the insurer. See id

.

The district court in Gallina distinguished BellSouth

, 930 So.

2d at 670, explaining that the insurer in that case had refused to

defend its insured because of late notice. See 2008 WL 4491543, at

*7. The insured there was forced to assume its own defense against

the claim, only for the insurer to retract its position a year later and

seek to assume the insured’s defense once the insured initiated a

declaratory action against the insured. See id. Accordingly, the

court found that the insured would suffer material harm if forced

to r elinquish control of its defense to the insurer. See id. By

contrast, in Gallina the insurer had “not waive[d] its right to

defend.” See id. at *8. On the contrary, the insurer had provided a USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 14 of 2023

- 10137 Opinion of the Court 15

defense “ [f]rom the inception of [the] action.” See i d

. The district

court granted the insurer ’s motion for summary judgment

, and we

affirmed. We concluded that the insured had “breached its contract

with [the insurer] by settling its case with the injured party, witho ut

[the insurer’s] consent, and [by] rejecting [the insurer’s]

unconditional defense.” Gallina

, 375 F. App’x at 937. 4

C. An Excess Insurer’s Duty to Defend

With respect to an excess insurer’s duty to defend, t he

majority rule is that an excess insurer “is not obligated to defend its

insured until all primary insur ance is exhausted or the primary

insurer has tendered its policy limits. An excess carrier may

nevertheless voluntarily participate in the insured’s defense but has

no obligation to do so.” 14 A Couch on Insurance § 200:39 (3d ed

. & Nov. 2023 update). Based on the one case we have been able to

locate, it appears to us that Florida will follow the majority rule.

See U.S. Fire Ins. Co. v. Mikes , 576 F. Supp. 2d 1303 , 1325 (M.D. Fla.

200 7) (“Once an insurer assumes the defense of the insured

pursuant to its duty to defend, other insurers, including an excess

insurer, that provide coverage and have a duty to defend are

ordinarily no longer obligated to provide a defense to the

insured.”), aff’d , 279 F. App’x 879, 881 (11th Cir. 2008) (the duty to

defend “does not extend to an excess insurer when a primary

insurer has a duty to defend”)

. Accord 31A Fla. Jur

. 2d Insurance §

3153 (2d ed. & March 2024 update) (“An excess insurer has no duty

4 City of Jacksonville and Gallina are unpublished decisions, and therefore not

binding, but we find them persuasive. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 15 of 2023

- 10137 Opinion of the Court 16

to defend the insured as long as the primary insurer has such a

duty.”). The rationale for this rule “is that the insurer undertaking

the representation does so for all the claims and damages, whether

or not the claims are covered by its policy.” U.S. Fire Ins. Co. , 576

F. Supp. 2d at 1325.

D. Application

Chubb was an excess insurer for Akam. But we will assume

that it had some duty to defend Akam

— despite AmTrust’s

undertaking of the defense

— on the theory that at some point

Chubb might (or would) have been on the hook due to the organic

pathogen exclusion in the AmTrust policy. See D.E. 23

- 1 at 76.

Even so, the undisputed facts in this case establish that Chubb

never refused to defend Akam or The Tides at any time during the

underlying litigation.

Chubb issued its first r eservation of r ights letter to Akam on

October 9, 2018, abo ut three months after Akam provided notice

of Ms. Davis’ lawsuit. See D.E. 202

- 11. While acknowledging that

AmTrust was providing Akam a defense and suggesting that

Chubb’s primary policy was in excess to that of AmTrust, the letter

explicitly stated tha t it was “not a denial of coverage.” See id. at 22.

The letter reiterated that AmTrust was defending Akam in the

underlying action under a general liability policy issued to The

Tides, under which Akam was a named insured. See id. at 2.

On February 8, 2019, Chubb issued a second r eservation of

r ights letter, reiterating that AmTrust was fully defending Akam

under its primary policy and that because the Chubb policies were USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 16 of 2023

- 10137 Opinion of the Court 17

excess to the primary AmTrust policy, Chubb would continue to

monitor the underly ing litigation under a reservation of rights. See

id. at 2, 4, 20. Once again, Chubb concluded by stating that the

letter was “not a denial of coverage.” Id. at 26.

Between July of 2018 and December of 2020, Chubb actively

monitored the state court liti gation initiated by Ms. Davis

—

analyzing the liability and damages, evaluating the potential

exposure to Akam, and attending mediation proceedings. See D.E.

202

- 10 at 14:7

- 15:1. At no point did Akam ever reject, dispute, or

otherwise object to anything co ntained in either of the reservation

of rights letters sent by Chubb in October of 2018 and February of

2019.

In addition to monitoring the underlying action, Chubb

twice offered to associate additional trial counsel to defend Akam

between December of 2020 and February of 2021

. The first tender

of a defense stated that Chubb was “exercis[ing] its righ t to

participate in the defense” and had already “retained . . . additional

counsel [to] represent[ ] Akam in the [l]awsuit.” See D. E. 202

- 18

.

The second tender of a defense acknowledged Akam’s “attempt to

reject

. . . Chu b b’s retention of additional lawyers” and reiterated

its offer to “associate in defense counsel and to participate in the

defense of Akam” subject to a modified reservation of rights. See

D.E. 202

- 22.

With trial imminent, Akam rejected Chubb’s second offer

on April 15, 2021, stating, in part, that Chubb had “wrongful ly

refused to defend or acknowledge its indemnity obligation for two USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 17 of 2023

- 10137 Opinion of the Court 18

years after litigation incepted” and forced Akam to take “steps

necessary to protect its interests.” See D.E. 202

- 30

. The next day,

Akam entered a Coblentz agreement with Ms. Davis and The Tides.

See D.E. 202

- 30 at 345

– 51 ; D.E. 202

- 38 at 5

‒ 6; D.E. 202

- 33.

According to Ms. Davis

, Akam did not breach any duty to

cooperate with Chubb under its policy by entering a consent

judgment because Chubb had already repudiated coverage

. Specifically, Ms. Davis points to a letter from February 19, 2019, in

which Chubb stated that “at least $26,000,000 of insurance” needed

to be “exhausted before [its] policies [were] implicated” in the

underlying litigation. See D.E. 201

- 30. She argues that such an

“exhaustion” could never occur given the organic pathogen

exclusion in the AmTrust policy and that

, as a result

, Chubb’s letter

effectively constituted “ an advanced repudiation . . . of coverage.”

Appellant’s Br. at 22

– 2 3. Ms. Davis therefore concludes that by

February of 2019 Chubb had “disavowed its contractual obligations

to Akam” and relieved Akam of its “duty to cooperate and to not

make voluntary payments under the policy.” See id.

But Florida law makes clear that Chubb was “not required

to abandon its contest of a duty to pay as a condition of fulfilling an

assumed or admitted duty to defend.” Taylor

, 361 So. 2d at 745. In

other words, even if Chubb’s February 2019 letter amounted to a n

advanced repudiation of coverage, Chubb at no point breached its

duty to defend Akam under the policy. Instead, Chubb chose to

undertake the defense of Akam under a reservation of rights. “In

this manner, [Chubb] . . . avoid[ed] breaching its duty to d efend USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 18 of 2023

- 10137 Opinion of the Court 19

while maintaining its right to later challenge its liability to

indemnify for some or all of the claims” in the underlying litigation.

See Eckerd , 366 So. 3d at 1158. Indeed, that is the very reason such

a mechanism exists under Florida law. See id. (“Because the duty

to defend is so broad, [insurers] who believe they are not liable to

indemnify . . . may undertake the defense of an [insured] und er a

reservation rights.”) (citation omitted). And, as we have explained,

an excess insurer like Chubb is not generally required to provide a

defense to its insured if the primary insurer has already done so.

See U.S. Fire Ins. Co. , 576 F. Supp. 2d at 13 25; 14A Couch on

Insurance § 200:39.

Akam was, of course, free to reject Chubb’s tendered

defense at any point in the underlying litigation. But “[n]one of

these options . . . allow [Akam] to receive a defense funded by

someone else while at the same tim e retaining the freedom to

independently and without consent of the paying insurer [to] settle

the claim to the policy limits.” Cont’l Cas. Co. v. City of Jacksonville

, 2006 WL 8453022, at *6 (M.D. Fla. Apr. 11, 2006). This, in effect, is

what Akam attem pted to do by retaining both separate counsel and

joint counsel appointed by AmTrust , later rejecting Chubb’s

defense

, and finally claiming Chubb had relieved it of its duty to

cooperate by not funding a defense from the very start of the

litigation

. See Appellant’s Br. at 22

– 23.

At the end of the day , even if Ms. Davis is right about the

ultimate effect of the organic pathogen exclusion in the AmTrust

policy, she has not established a material issue of fact on whether USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 19 of 2023

- 10137 Opinion of the Court 20

Chubb breached it s duty to defend. This is fatal for her claim

because “where an injured party wishes to recover under a Coblentz

agreement, the injured party must bring an action against the

insurer . . . [and] prove coverage [and a] wrongful refusal to

defend.” Chomat

, 919 So. 2d at 537.

Accordingly, we agree with the district court that on this

record “[n]o reasonable jury could find [that] Chubb refused to

defend Akam.” Davis , 650 F. Supp. 3d at 1339. As the district court

point ed out, there is “no language cited in any correspondence

indicating a refusal to defend.” Id.

I V. CONCLUSION

We affirm the district court’s grant of summary judgment

in favor of Chubb

.

AFFIRMED. USCA11 Case: 23-10137 Document: 42-1 Date Filed: 06/03/2024 Page: 20 of 20