Opinion ID: 797106
Heading Depth: 3
Heading Rank: 3

Heading: Applicability of Res Judicata on Dadeland's Action

Text: 26 The district court further concluded that Dadeland's claim against St. Paul was barred by the doctrine of res judicata. The court suggested that Dadeland's claim against St. Paul was more properly construed as a breach of contract claim for its refusal to perform under the terms of the bond. Finding that Dadeland could have and should have brought that claim in its earlier arbitration proceeding, the court stated that res judicata would bar Dadeland from bringing its current action against St. Paul. 4 27 Dadeland appeals that decision, arguing that its present action is a separate count against St. Paul for its bad-faith refusal-to-settle—not a standard breach of contract claim—and that Dadeland could not have possibly asserted that count against St. Paul in the arbitration proceeding, because at the time of the arbitration it had not yet established the validity of its underlying claim. Because we were unclear as to the effect of the earlier arbitration on Dadeland's action, we certified the following question to the Florida Supreme Court: 28 IS [THE] ARBITRATOR'S DECISION RES JUDICATA, THUS BARRING DADELAND'S LATER CLAIM AGAINST THE SURETIES FOR BAD-FAITH REFUSAL TO SETTLE? 29 Dadeland, 383 F.3d at 1278. 30 The Florida Supreme Court answered that question in the negative. It agreed with Dadeland that its current claim was separate and independent from any breach of contract claim that Dadeland might have asserted in the arbitration proceeding. In addition, the court agreed that Dadeland's § 624.155(1)(b)(1) action had not yet accrued at the time of the arbitration proceeding, as Dadeland had not yet established a breach on the part of Walbridge or an entitlement to payment under the performance bond. Because Dadeland's § 624.155(1)(b)(1) action had not yet accrued at the time of the arbitration, the court concluded that res judicata would not bar Dadeland from bringing its § 624.155(1)(b)(1) claim in the present action. 31 In light of the Florida Supreme Court's response, it is clear that res judicata does not bar Dadeland from pursuing the current § 624.155(1)(b)(1) action against St. Paul. The district court erred in concluding otherwise, and in granting summary judgment to St. Paul on that basis. 32 4. Requirement of a General Business Practice to Pursue an Unfair Trade Claim in connection with a § 624.155 Action 33 The district court also concluded that Dadeland did not present evidence to establish that St. Paul's alleged conduct constituted a general business practice. The court stated that in order for a plaintiff to bring a § 626.9541(1)(i) action against an insurer—through the conduit of § 624.155—a plaintiff was required to provide evidence that the unfair settlement practice complained of was a general business practice. R3-137 at 27. Because Dadeland had failed to allege a general business practice on the part of St. Paul, the court construed Dadeland's § 626.9541(1)(i) claim as being waived. 5 34 Because the Florida Supreme Court had not addressed whether § 624.155 eliminated the need for proof of a general business practice, we certified the following question to the Florida Supreme Court: 35 DOES THE LANGUAGE IN § 624.155(1)(b)(3) ELIMINATE § 626.9541's REQUIREMENT OF PROOF OF A GENERAL BUSINESS PRACTICE WHEN THE PLAINTIFF IS PURSUING [AN UNFAIR TRADE] CLAIM THROUGH THE RIGHT OF ACTION PROVIDED IN § 624.155? 36 Dadeland, 383 F.3d at 1277 (emphasis omitted). The Florida Supreme Court answered that question in the affirmative, holding that the plain language of § 624.155(1)(b)(3) made clear that a plaintiff suing under § 624.155 does not need to allege a general business practice. The court construed the exceptional language of § 624.155(1)(b)(3) as applying to § 624.155 in its entirety, and, accordingly, concluded that the need for a general business practice was eliminated when an unfair trade count was sought pursuant to § 624.155. 37 In light of the answer of the Florida Supreme Court, is clear that Dadeland was not obligated to allege a general business practice in order to assert a § 626.9541 claim through the cause of action provided in § 624.155. The district court erred in concluding otherwise, and in treating Dadeland's § 626.9541 claim as being waived. The response of the Florida Supreme Court makes clear that it was improper to grant summary judgment for St. Paul on that basis. 5. Genuine Issues of Fact 38 Despite the fact that the district court committed the foregoing errors of Florida law in granting summary judgment for St. Paul, we might nevertheless affirm the district court's grant of summary judgment for St. Paul if we found there were no genuine issues of material fact remaining in the dispute between St. Paul and Dadeland. Rule 56 makes clear that [w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e). A dispute about a material fact is `genuine' if the `evidence is such that a reasonable jury could return a verdict for the non-moving party.' Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 594 (11th Cir. 1995) ( per curiam ) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). The inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Id. (quoting Anderson, 477 U.S. at 251-52, 106 S.Ct. at 2512). 39 The $26.5 million performance bond that was issued in connection with Dadeland's construction project set forth St. Paul's obligations as surety on the bond. Its relevant provisions state that St. Paul's obligations shall arise after Dadeland has declared a Contractor Default and [has] formally terminated the Contractor's right to complete the contract . . . . R2-71, Exh. A at 2. When that condition is met, the bond states that St. Paul shall promptly and at [St. Paul]'s expense take one of the following actions: 40 4.1 Arrange for the Contractor, with the consent of [Dadeland], to perform and complete the Construction Contract; or 41