Opinion ID: 3049019
Heading Depth: 4
Heading Rank: 2

Heading: Federal Declaratory Judgment Action

Text: In 2009, the insurer Alea filed this declaratory judgment action against AHS and FastSigns, seeking to resolve several substantive issues regarding what AHS’s 3 In the certified class action, the state trial court found that AHS was responsible for sending 306,000 unsolicited faxes in violation of the TCPA. On September 15, 2010, following a bench trial, the state court awarded treble damages of $1,500 for each violation, resulting in a total award of $459 million. 6 Policy with Alea did or did not cover. Specifically, Alea sought a declaratory judgment that: (1) it did not have to indemnify AHS for damages because the Policy did not cover the claims in the state lawsuit; (2) even if the Policy covered those claims, Alea did not have to pay any damages award up to $500 per individual because that amount fell within the per-claimant deductible schedule in the Policy; and (3) any award in the state lawsuit increasing the $500 damages award based on a finding of willful or knowing violations of the TCPA by AHS was not covered due to the Policy’s exclusion of punitive or exemplary damages. FastSigns and Alea filed cross-motions for summary judgment.4 In rulings not challenged in this appeal, the district court determined: (1) that the Policy obligated Alea to defend and indemnify AHS in the state lawsuit; and (2) that AHS’s facsimile transmissions in violation of the TCPA amounted to violations of “a person’s right of privacy” for purposes of Advertising Injury Liability under the Policy.5 In rulings now challenged in this appeal, the district court concluded that: 4 Alea actually filed its Motion for Summary Judgment after the deadline, and had to seek the district court’s leave to file its motion. The district court allowed this tardy filing; that decision is not on appeal. 5 As to Advertising Injury Liability coverage, there are arguably issues whether that coverage, as defined in the Policy, exists only when the content of the material published by unsolicited faxes violates a person’s right to privacy or whether the TCPA-prohibited publication of the unsolicited advertisement is itself violative of a person’s right to privacy. See Penzer v. Transp. Ins. Co., 545 F.3d 1303, 1312 (11th Cir. 2008) (Penzer I) (certifying to Florida Supreme Court question whether advertising injury liability insurance covered liability for unsolicited faxes in violation of the TCPA); Penzer v. Transp. Ins. Co., 29 So. 3d 1000, 1002 (Fla. 2010) 7 (1) the $500 per-claimant deductible applies to AHS’s coverage for Advertising Injury Liability; (2) treble damages under the TCPA are punitive in nature and consequently are excluded by the Policy; and (3) the Policy does not cover any attorneys’ fees awarded against AHS in the state lawsuit.6 The parties do not dispute that the Policy was entered into in Georgia and that Georgia law governs construction of the Policy.7 Thus we first examine relevant Georgia law and then the specific parts of the Policy in issue.