Court Opinion

ID: 6341023
Source: CourtListenerOpinion
Date Created: 2022-05-16 16:00:41.194254+00
Date Added: 2024-06-11T08:43:13.399040
License: Public Domain

USCA11 Case: 19-14664    Date Filed: 05/16/2022   Page: 1 of 23

                                                   [PUBLISH]
                          In the
         United States Court of Appeals
               For the Eleventh Circuit

                 ____________________

                        No. 19-14664
                 ____________________

ENDURANCE AMERICAN SPECIALTY
INSURANCE COMPANY,
a foreign corporation, individually
as Subrogee of Comegys Insurance
Agency, Inc.,
                                             Plaintiff-Appellee,
versus
LIBERTY MUTUAL INSURANCE COMPANY,

                                                    Defendant,
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2                      Opinion of the Court                19-14664

SAFECO INSURANCE COMPANY OF ILLINOIS,
SAFECO INSURANCE COMPANY OF AMERICA,

                                            Defendants-Appellants.

                     ____________________

           Appeal from the United States District Court
                for the Middle District of Florida
            D.C. Docket No. 8:17-cv-02832-VMC-CPT
                    ____________________

Before JORDAN, NEWSOM, and TJOFLAT, Circuit Judges.
TJOFLAT, Circuit Judge:
        We are faced with the question of how far the indemnifica-
tion provision in this case stretches. And our answer is, not as far
as Endurance, the errors and omissions insurer for Comegys,
would like. Comegys, an independent insurance agency, had an
independent contractor relationship with Safeco, a liability in-
surer—in short, Comegys marketed Safeco insurance policies to
the public. Comegys was allegedly negligent in procuring automo-
bile insurance for one of its clients, Robert Smith. Comegys had
provided Smith with an automobile insurance policy from Safeco,
which Smith eventually needed to rely on when he caused a car
accident that ended in a motorcyclist’s death. Comegys offered to
settle (and did settle through the errors and omissions policy it had
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19-14664                   Opinion of the Court                               3

with Endurance) the potential negligence claim Smith had against
it. Now, relying on the indemnification provision between Safeco
and Comegys, Endurance is suing Safeco. Endurance wants to be
indemnified by Safeco because the attorney Safeco provided to
Smith after the car accident pointed out the potential negligence
claim Smith had against Comegys. 1 Comegys has no right to in-
demnification in this circumstance, so Endurance has no viable
claim.
        At trial, the jury found that, because Safeco had refused to
indemnify Comegys, Safeco had both breached its contract with
Comegys and violated the implied covenant of good faith and fair
dealing. The jury awarded Endurance, the errors and omissions
insurer for Comegys, about $1.6 million in damages plus a $25,000
deductible and $30,000 in attorneys’ fees paid by Comegys during
litigation. This is an appeal from the District Court’s denial of
Safeco’s motion after trial under Fed. R. Civ. P. 50(b). We hold
that Safeco did not breach its contract with Comegys, nor did it
breach the implied covenant of good faith and fair dealing. Endur-
ance was not entitled to any recovery under the indemnification
provision between Safeco and Comegys. We reverse the judgment
below and remand for entry of judgment.

1 In essence, Endurance is trying to treat Safeco like a second errors and omis-
sions insurer.
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4                         Opinion of the Court                    19-14664

                                     I.
                                     A.
       Safeco is a liability insurer. Comegys is an independent in-
surance agency. At one point, these two entities had a business
relationship. Their relationship went something like this. A cus-
tomer would go into Comegys’ office. The customer would say
she needed automobile insurance. A Comegys agent would show
her a host of available policies and probably recommend the one
he thought was best for her. Let’s say that the best policy for the
customer was a Safeco policy, and the customer agreed to that pol-
icy. Comegys would sign her up for Safeco insurance, and then
Safeco would insure her.
       Comegys and Safeco operated under a contract, the Limited
Agreement, that allowed Comegys to act as an independent con-
tractor for Safeco “for the limited purpose of placing Safeco insur-
ance products.”2 The Limited Agreement placed parameters
around Comegys’ scope of authority to act on Safeco’s behalf. For
instance, Comegys could “solicit and submit applications for insur-
ance, and [] bind insurance on [Safeco’s] behalf, but only with re-
spect to such lines of business . . . as [Safeco] [] authorized.” And

2 We note that the version of the Limited Agreement entered into evidence
was signed after the car accident in this case but before settlement. Neither
party disputes the validity of the Limited Agreement.
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19-14664               Opinion of the Court                        5

Comegys could not “adjust or settle claims unless [Comegys] ob-
tain[ed] prior written approval from [Safeco].”
       The Limited Agreement contained a set of indemnification
clauses between Comegys and Safeco. They read as follows:
      A. [Comegys] shall defend, indemnify, protect, and
      hold [Safeco] harmless from and against any and all
      liability for claims, suits, regulatory or administrative
      proceedings and investigations, losses, damages,
      costs, penalties and expenses, including court costs
      and reasonable attorneys’ fees related thereto, arising
      out of or incurred by reason of the breach of this Lim-
      ited Agreement by, or any actual or alleged negligent
      or intentional act, error or omission on the part of,
      [Comegys], its directors, officers, owners, employees,
      Sub-producers or others acting on [Comegys’] behalf
      in placing business pursuant to or carrying out the
      terms of this Limited Agreement, except to the extent
      such act, error or omission was expressly and know-
      ingly authorized, concurred in, or ratified by [Safeco].
      [Comegys’] indemnification obligation includes all
      costs, expenses and attorneys’ fees incurred by
      [Safeco] to enforce this indemnity obligation.
      [Comegys’] obligations under this Section are condi-
      tioned upon [Safeco] providing prompt notice to
      [Comegys] of any claim made or legal or regulatory
      action brought against [Safeco].

      B. [Safeco] shall defend, indemnify, protect, and hold
      [Comegys] harmless from and against any and all
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6                      Opinion of the Court                 19-14664

      liability for claims, suits, regulatory or administrative
      proceedings and investigations, losses, damages,
      costs, penalties and expenses, including court costs
      and reasonable attorneys’ fees related thereto, arising
      out of or incurred by reason of the breach of this Lim-
      ited Agreement by, or any actual or alleged negligent
      or intentional act, error or omission on the part of,
      [Safeco], its directors, officers, employees or others
      acting on [Safeco’s] behalf in the placement of busi-
      ness pursuant to or carrying out the terms and condi-
      tions of this Limited Agreement, except to the extent
      such act, error or omission was expressly and know-
      ingly authorized, concurred in, or ratified by
      [Comegys]. [Safeco’s] indemnification obligation in-
      cludes all costs, expenses and attorneys’ fees incurred
      by [Comegys] to enforce this indemnity obligation.
      [Safeco’s] obligations under this Section are condi-
      tioned upon [Comegys] providing prompt notice to
      [Safeco] of any claim made or legal or regulatory ac-
      tion brought against [Comegys].

       We can glean two principles from the indemnification pro-
visions: 1) Safeco agreed to take responsibility when it messed up
and its mess-up affected Comegys (and Comegys agreed to do like-
wise), and 2) whether Safeco (or Comegys) messed up was defined
by the terms of the Limited Agreement. In short, liability between
Safeco and Comegys rose and fell with the Limited Agreement.
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19-14664               Opinion of the Court                        7

                                 B.
       Let us return to the hypothetical above, with a customer
walking into the Comegys office to procure insurance, except now,
we are going to substitute in the characters of this case. In January
2012, Comegys procured automobile insurance for its customer,
Robert Smith. Comegys provided him with a Safeco policy—
$250,000 per person, $500,000 per incident limit with an umbrella
policy of $ 1 million. In December 2013, Smith emailed a Comegys
agent to inquire about raising his umbrella limit to $2 million or $3
million. The Comegys agent responded that Safeco would only
raise the umbrella limit to $2 million without also increasing the
automobile coverage to a $500,000 combined single limit, instead
of the $250,000 per person, $500,000 per incident limit. If Smith
chose to raise his umbrella policy with Safeco to $2 million, the
agent explained, it would cost Smith about an extra $200 annually.
The Comegys agent never discussed other policies with Smith be-
sides Safeco’s. Smith never responded to the Comegys agent about
the potential increase in policy limits with Safeco. He then re-
newed his existing Safeco policy. Smith, a man of substantial
means, later stated that he would have purchased $5 to $10 million
in umbrella insurance if it had been recommended to him and that
he would have considered other insurance companies besides
Safeco in adjusting his insurance limits.
      Smith’s Safeco automobile insurance policy became im-
portant when his car caused an accident with a motorcyclist in June
2015. About two weeks after the incident, the motorcyclist died in
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8                        Opinion of the Court                    19-14664

the hospital of his injuries. Twelve days after the motorcyclist’s
death, Safeco tendered Smith’s $1.25 million policy limit to the mo-
torcyclist’s estate by mail. The estate rejected the tender because
the estate believed its claim was more than the policy limit. In
compliance with the insurance policy, Safeco then provided Smith
with a defense attorney, whose job it was to represent Smith in any
case the estate brought against him. 3 Safeco explained to Smith’s
attorney that Smith’s policy limits would probably not be sufficient
to settle the case, so Smith’s personal assets would be at risk in any
case the estate brought against him.
        Smith’s attorney and the estate’s attorney then began dis-
cussing how to settle the accident. In reviewing the history of the
case, Smith’s attorney realized that Comegys might have been neg-
ligent in procuring automobile insurance for Smith. The basic idea
of the claim was that, based on Smith’s substantial assets, Comegys
did not adequately respond when Smith asked about raising the
umbrella coverage in December 2013. Smith’s attorney men-
tioned this possible negligent procurement claim to the estate’s at-
torney during negotiations over the accident settlement and ar-
ranged for the estate’s attorney to meet an insurance attorney who
specialized in negligent procurement suits.
      After the estate officially filed a wrongful death action
against Smith in state court in December 2015, Smith’s attorney

3 Based on the record, Smith never hired any other attorney. His only legal
representation during these proceedings was what Safeco provided.
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19-14664               Opinion of the Court                       9

reached out to Comegys, asking Comegys to indemnify and defend
Smith on the basis that Comegys had negligently procured insur-
ance for Smith prior to the accident. After some correspondence
between Smith’s attorney and Comegys, Endurance, Comegys’ er-
rors and omissions insurer, responded on Comegys’ behalf, saying
that it would not take over Smith’s defense.
        In June 2016, Smith and the estate entered non-binding arbi-
tration. The arbitrator found Smith 95% liable and the motorcy-
clist 5% liable, awarding the estate a little over $7 million. After
this non-binding arbitration, Smith and the estate entered into a
joint stipulation and agreement. The terms of the joint stipulation
were that the parties would agree to a mutual release of all claims,
in exchange for Safeco’s $1.25 million policy limit on Smith and
Smith’s assignment to the estate of his negligent procurement
claim against Comegys. In other words, the estate accepted the
negligent procurement claim as covering the difference between
the $1.25 million policy limit and the roughly $7 million award the
arbitrator in the non-binding arbitration thought was appropriate.
The state court approved the joint stipulation in September 2016,
and it served as a final judgment on the matter.
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10                          Opinion of the Court                        19-14664

                                        C.
       The estate then sent Comegys a demand for $2 million based
on Smith’s negligent procurement claim.4 Comegys’s errors and
omissions insurance with Endurance had a policy limit of $2 mil-
lion. In a strange turn of events, Endurance, Comegys’ errors and
omissions insurer, then sent a letter to Safeco, requesting indemni-
fication for the suit the estate brought against Comegys. Safeco
never responded. Next, Comegys and the estate settled for about
$1.5 million in exchange for Comegys’ release from all liability.
The settlement explained that Comegys was not at all admitting
fault or wrongdoing in procuring insurance for Smith.5 As
Comegys’ errors and omissions insurer, Endurance paid out this
sum to the estate.
      Even though Comegys voluntarily settled with the estate, in
October 2017, Endurance, on Comegys’ behalf, filed suit against
Safeco for, among a host of other things,6 breach of the indemnifi-
cation agreement between Comegys and Safeco in the Limited

4 So, in essence, the estate was willing to settle its claim against Smith for $3.25
million, the $1.25 million it already got in its settlement with Smith as Safeco’s
policy limit on Smith, plus the $2 million it then sought from Comegys.
5 In addition to the $1.5 million Endurance paid out to the estate, Comegys
itself spent $25,000 as a deductible toward settlement and paid $30,000 to
Comegys’ personal attorneys.
6 Endurance’s other claims were for fraud on the court, civil conspiracy, and
negligent misrepresentation.
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19-14664                  Opinion of the Court                              11

Agreement and breach of the implied covenant of good faith and
fair dealing. 7 The case went to trial. At the end of testimony,
Safeco filed a motion for judgment as a matter of law under Fed.
R. Civ. P. 50(a), which the District Court denied. 8 In what must
have been the jury attributing the actions of Smith’s attorney to
Safeco itself, the jury then agreed with Endurance that Safeco had
breached the indemnification provision and the implied covenant

7 Safeco’s logical response to Comegys’ claims should have been that
Comegys was a volunteer in settling with the estate when the indemnification
provision required that Comegys be liable for something or that Safeco actu-
ally caused loss by reason of Safeco’s breach of an independent provision of
the Limited Agreement.
8 The District Court order denying Safeco’s motion for judgment as a matter
of law reads as follows:
       Viewing the evidence in the light most favorable to Plaintiff,
       the Court finds that there was sufficient evidence for a reason-
       able jury to find that Defendants coordinated with the various
       actors involved in this case to shift liability from Defendants to
       Comegys in violation of the indemnification provision in the
       agency agreement, and that they were therefore liable for
       breach of contract and breach of the covenant of good faith
       and fair dealing. Plaintiff also offered sufficient evidence from
       which a reasonable jury could find that Plaintiff suffered dam-
       ages in the form of costs and expenses related to defending,
       and ultimately settling, the broker liability claim. To the extent
       that Defendants' motions seek judgment as a matter of law on
       Plaintiff's remaining claims, they are moot in light of the jury
       verdict.
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12                       Opinion of the Court                    19-14664

of good faith and fair dealing.9 The jury awarded Endurance about
$1.6 million in damages plus a $25,000 deductible and $30,000 in
attorneys’ fees paid by Comegys during litigation. Safeco filed a
renewed motion for judgment as a matter of law under Fed. R. Civ.
P. 50(b). The District Court again denied this motion. Safeco
timely appealed.
                                    II.
        This Court reviews a district court’s denial of a motion for
judgment as a matter of law de novo. Howard v. Walgreen Co.,
605 F.3d 1239, 1242 (11th Cir. 2010). We view the evidence in the
light most favorable to the non-moving party. Id. A motion for a
judgment as a matter of law should only be granted “when the
plaintiff presents no legally sufficient evidentiary basis for a reason-
able jury to find for him on a material element of his cause of ac-
tion.” Id. (internal citations omitted). We review questions of con-
tract interpretation de novo. Hegel v. First Liberty Ins. Corp., 778
F.3d 1214, 1219 (11th Cir. 2015). And this is a diversity jurisdiction
case, so Florida law applies. See Erie R. Co. v. Thompkins, 304 U.S.
64, 78, 58 S. Ct. 817, 822 (1938) (requiring federal courts whose ju-
risdiction arises from diversity alone to apply the relevant state
law). 10

9 The jury did not buy Endurance’s arguments that Safeco had committed
fraud on the court, civil conspiracy, and negligent misrepresentation.
10 From the outset, we address Endurance’s claims that Safeco waived two of
its arguments about whether it breached the indemnification agreement. We
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19-14664                   Opinion of the Court                               13

                                      III.
       Under Florida law, “[i]ndemnity contracts are subject to the
general rules of contractual construction . . . [and] must be con-
strued on the [express] intentions of the parties.” Dade County
Sch. Bd. v. Radio Station WQBA, 731 So.2d 638, 643 (Fla. 1999).
Looking at this breach-of-contract case, there is one problem.
There is no breach. So, there is no “legally sufficient evidentiary
basis” for Endurance to win this case. Howard, 605 F.3d at 1242.
Endurance never carried its burden at trial of explaining how
Safeco breached the indemnification provision of the Limited
Agreement. And that is because it cannot do so. Instead, Endur-
ance apparently distracted the jury with facts that are totally irrele-
vant to this appeal. 11 The distraction method may have worked
with the jury in this case, but it does not with us.

find that view unpersuasive. The issue of breach is clearly before the Court,
and parties may raise new arguments in support of already-raised legal issues
on appeal. See In re Home Depot Inc., 931 F.3d 1065, 1086 (11th Cir. 2019)
(explaining that when an issue is “properly presented, a party can make any
argument in support of that [issue]; parties are not limited to the precise argu-
ments they made below”) (alteration adopted) (citing Yee v. City of Escon-
dido, 503 U.S. 519, 534, 112 S. Ct. 1522, 1532 (1992))). As to Endurance’s argu-
ment that Safeco is raising for the first time on appeal that the jury award for
the deductible and Comegys’ attorneys was improper, that claim is now moot
because we are reversing the jury’s verdict.
11 Endurance’s trial testimony (and briefing) is full of accusations about
Safeco’s corrupt motives and collusive behavior, presumably derived from the
fact that Smith’s attorney worked with the estate to settle the claim arising out
of the accident. We do not recount all the irrelevant facts here because it
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14                        Opinion of the Court                      19-14664

       Endurance’s argument on appeal is that “[t]he [Limited]
Agreement requires that Safeco indemnify Comegys for any loss or
claim arising out of or incurred by any negligent or intentional acts
by Safeco.” If you take that claim on its face, Endurance is literally
saying, “Safeco has to indemnify Comegys for any loss Comegys
experiences when Safeco intentionally acts—at all.” 12 Let us com-
pare that claim with the actual language of the indemnification pro-
vision of the Limited Agreement:
       [Safeco] shall defend, indemnify, protect, and hold
[Comegys] harmless from and against any and all liability for
claims, suits, regulatory or administrative proceedings and
investigations, losses, damages, costs, penalties and ex-
penses, including court costs and reasonable attorneys’ fees
related thereto, arising out of or incurred by reason of the
breach of this Limited Agreement by, or any actual or al-
leged negligent or intentional act, error or omission on the

would be a waste of our time and yours. Suffice it to say that Endurance trying
to point to Safeco’s bad motives cannot create a breach of contract where none
exists.
12 Critically, Endurance omits that, according to the terms of the indemnifi-
cation provision, any loss caused by Safeco must be caused by a breach of the
Limited Agreement or pursuant to Safeco carrying out the Limited Agree-
ment. So, even if Comegys experienced loss, that loss must be tied to Safeco
acting against an independent term of the Limited Agreement, outside the in-
demnification provision. Even assuming Endurance proved that Comegys
had experienced loss, Endurance never proved that Safeco breached or acted
against any of the independent provisions of the Limited Agreement or that
any alleged breach caused the loss Comegys experienced.
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19-14664               Opinion of the Court                       15

part of, [Safeco], its directors, officers, employees or others
acting on [Safeco’s] behalf in the placement of business pur-
suant to or carrying out the terms and conditions of this
Limited Agreement, except to the extent such act, error or
omission was expressly and knowingly authorized, con-
curred in, or ratified by [Comegys]. Safeco’s indemnification
obligation includes all costs, expenses and attorneys’ fees in-
curred by [Comegys] to enforce this indemnity obligation.
[Safeco’s] obligations under this Section are conditioned
upon [Comegys] providing prompt notice to [Safeco] of any
claim made or legal or regulatory action brought against
[Comegys].

       What Endurance leaves off is that for Safeco’s actions to fall
under the indemnification provision, the actions must fall into one
of three buckets: 1) Safeco has breached the Limited Agreement; 2)
Safeco has negligently or intentionally committed an act, error, or
omission in the placement of business pursuant to the Limited
Agreement; or 3) Safeco has negligently committed an act, error,
or omission in the carrying out the terms of the Limited Agree-
ment. In short, to win a breach-of-contract case based on the in-
demnification provision of the Limited Agreement, Endurance
needed to prove at trial that its claim fell into one of these three
buckets. We will address these possibilities in turn.
      The first possibility is that Safeco breached the Limited
Agreement. Endurance quickly loses on this ground. Again, the
Limited Agreement that existed between Comegys and Safeco ex-
plained that when Comegys acted within its authority in selling
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16                     Opinion of the Court                19-14664

insurance Safeco would cover Comegys’ customers with the ap-
propriate insurance policies. And that is exactly what happened
here. Comegys was within the scope of its authority when it pro-
cured a Safeco insurance policy for Smith. Safeco then covered
Smith. And, in due course, when Smith had an accident and
needed his insurance coverage to kick in, Safeco tendered the pol-
icy limit within twelve days of the motorcyclist’s death. Safeco pro-
vided Smith with an attorney to negotiate the claim. And Safeco
ultimately paid the policy limit pursuant to the settlement between
Smith and the estate. In other words, Safeco covered Smith, just
like it told Comegys it would in the Limited Agreement. So, En-
durance cannot win based on an argument in the first bucket be-
cause it has not proven that Safeco breached a single provision of
the Limited Agreement.
       Next, in the second or third buckets, Endurance could have
argued that Safeco negligently or intentionally committed an act,
error, or omission in the placement of business pursuant to the
Limited Agreement or that Safeco negligently committed an act,
error, or omission in the carrying out the terms of the Limited
Agreement. At bottom, Endurance’s case is based on two facts:
Smith’s attorney (provided by Safeco) 1) brought up the possible
negligent procurement claim to the estate during negotiations and
2) recommended an insurance lawyer to the estate, if the estate
wanted to assume the negligent procurement claim against
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19-14664                   Opinion of the Court                              17

Comegys in Smith’s place. 13 In a very generous reading of Endur-
ance’s arguments at trial, it is basically saying that Safeco acted
through the attorney it provided to Smith, ultimately prompting
Comegys to (voluntarily) settle with the estate (without Comegys
admitting any fault). And, Endurance argues, because Comegys
settled with the estate (as a volunteer), Safeco now must indemnify
Comegys (even though Comegys never admitted any liability).
       The first (and biggest problem) with Endurance’s position is
that Endurance equates the actions of Smith’s attorney with the
actions of Safeco. And the two are not the same. For sure, Safeco
provided Smith with an attorney. And that was pursuant to the
insurance policy between Smith and Safeco. But that does not give
Endurance license to attribute every action of Smith’s attorney to
Safeco itself. Safeco was bound by the terms of the Limited Agree-
ment. Smith’s attorney, on the other hand, was not bound to pro-
tect Comegys in any way. Smith’s attorney had a duty of zealous
representation, which is exactly what he provided to Smith in set-
tling with the estate. See de Vaux v. Westwood Baptist Church,
953 So.2d 677, 684 (Fla. 1st Dist. Ct. App. 2007) (citing the Florida

13 Endurance points out a whole army of other facts: Smith’s attorney kept
Safeco apprised of the entire case, and Safeco gave input on the final terms of
the settlement (which makes sense because Safeco was going to be paying out
$1.25 million in a policy limit); Smith’s attorney did not conduct discovery be-
fore the non-binding arbitration; Safeco waited twelve days after the motor-
cyclist’s death before tendering the policy limits; and the cross-examination of
the motorcyclist’s widow by Smith’s attorney at the non-binding arbitration
was not strong enough. As we will explain infra, these facts are irrelevant.
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18                         Opinion of the Court                      19-14664

rules of professional responsibility and explaining that “lawyers are
expected to be zealous advocates for the interests of their clients”).
Smith’s attorney was acting on behalf of Smith, not on behalf of
Safeco. See Pozo v. Roadhouse Grill, Inc., 790 So.2d 1255, 1260
(Fla. 5th Dist. Ct. App. 2001) (explaining that “an attorney retained
by an insurer to represent an insured does so as an independent
contractor, not as an agent of the insurer”). So, Endurance cannot
win on a breach-of-contract claim when Safeco wasn’t even the one
acting and the Limited Agreement requires that Safeco act for in-
demnification to be triggered. 14 See id. (“Generally, the obligation
of contracts is limited to the parties making them.” (internal cita-
tion and quotation marks omitted); cf. Siegle v. Progressive Con-
sumers Ins. Co., 819 So.2d 732, 739 (Fla. 2002) (“In contract inter-
pretation cases, the issue to be addressed is not what this Court or
the petitioner would prefer that the policy cover, but what losses
the mutually agreed-upon contractual language covers.”).
      The next problem with Endurance’s argument is that by
looking at the plain (and clear) language of the Limited Agreement
between Comegys and Safeco, we do not read it as covering in any

14 In saying so, we do not suggest that an attorney, provided by an insurance
company to an insured, may never act on behalf of the insurance company
and in so doing violate an insurance company’s contract with an insurance
agency. But that is not the presumption under Florida law. And, what we
have here is a garden variety case of an attorney representing a client, and, in
that case, zealous representation is the mandate. Comment, rule 4–1.3, Rules
Regulating The Florida Bar.
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19-14664                 Opinion of the Court                          19

way, shape, or form how Safeco ultimately insures its policyhold-
ers. See MDS (Canada) Inc. v. Rad Source Tech., Inc., 143 So.3d
881, 891 (Fla. 2014) (“Contract interpretation begins with a review
of the plain language of the agreement because the contract lan-
guage is the best evidence of the parties’ intent at the time of the
execution of the contract.” (internal citation omitted)); see also
Crawford v. Barker, 64 So.3d 1246, 1255 (Fla. 2011) (“Where the
terms of a contract are clear and unambiguous, the parties’ intent
must be gleaned from the four corners of the document.”). The
Limited Agreement simply delineates Comegys’ authority to bind
Safeco when it sells Safeco’s insurance. Nowhere in the Limited
Agreement does it even mention any restraint on how Safeco pro-
vides attorneys to its insured or how it settles insurance claims.
The only obligations that exist by the terms of the Limited Agree-
ment are the ones between Comegys and Safeco. Because any in-
tentional act or omission of Safeco must be related to the place-
ment of business pursuant to or the carrying out the terms of the
Limited Agreement, Endurance’s argument falls outside the scope
of the four corners of the clear Limited Agreement. So, Endurance
cannot prevail on a breach-of-contract claim on this ground.
        Finally, the fatal blow to Endurance’s breach-of-contract
claim hinges on the fact that the indemnification provision protects
Comegys from all liability or loss arising out of Safeco’s breach.
The problem for Comegys is that in its settlement agreement with
the estate it specifically disclaimed all liability, and it has not proven
that it lost anything because of Safeco’s actions. The settlement
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20                         Opinion of the Court                        19-14664

agreement between Comegys and the estate explained that it was
not “to be construed as admissions of fault, wrongdoing or liability
on the part of the Claimant or Comegys, which liability is expressly
denied.” Because the indemnification provision between Safeco
and Comegys hinges on Comegys having some sort of liability or
demonstrating that Safeco’s actions caused loss, we are not free to
hold Safeco liable where Comegys is a volunteer in settlement.15
See Siegle, 819 So.2d at 739 (explaining that the court “cannot cre-
ate coverage ‘out of whole cloth’” where it otherwise would not
exist (internal citation omitted)).
        On a final note about the breach-of-contract claim, it is
worth pointing out that what Endurance, as subrogee of Comegys,
is really trying to do is make Safeco a secondary errors and omis-
sions insurer. In essence, Endurance is saying, “Smith’s attorney

15 Endurance cannot recover without proving that Comegys was actually lia-
ble to the estate—i.e., that there was an actual litigation where the estate
proved liability in court. Otherwise, Safeco would be liable in this kind of case,
even if, after Smith’s attorney (provided by Safeco) had pointed out a possible
claim, Comegys had called Smith up and explained that it had negligently pro-
cured insurance for him and wanted to make it right by paying him what it
thought was appropriate. We decline to read the indemnification provision as
extending that far. Cf. Westinghouse Elec. Corp. v. Prudential Ins. Co. of
America, 547 So.2d 721, 721–722 (Fla. 1st Dist. Ct. App. 1989) (per curiam)
(refusing to require indemnification where indemnitee had not admitted lia-
bility); Nat’l R.R. Passenger Corp. v. Rountree Transp. & Rigging, Inc., 286
F.3d 1233, 1262 (11th Cir. 2002) (declining to apply an indemnification provi-
sion when the indemnitor was not first found liable under the plain terms of
the agreement).
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19-14664                  Opinion of the Court                             21

identified that Comegys may have messed up in procuring insur-
ance for Smith. We, Endurance, on behalf of Comegys, settled that
claim with the estate without admitting fault. Now we want you,
Safeco, to pay us for doing that.” We will not penalize Safeco for
Comegys’ volunteer payment to the estate. And, even if Comegys
had been negligent and that fact had been proven in court by the
estate, we would still refuse to hold Safeco liable for Comegys’ own
alleged negligence because Florida requires those kinds of arrange-
ments to be clearly stated by contract.16 See Cox Cable Corp. v.
Gulf Power Co., 591 So. 2d 627, 629 (Fla. 1992); Charles Poe Ma-
sonry, Inc. v. Spring Lock Scaffolding Rental Equip. Co., 374 So. 2d
487, 489 (Fla. 1979). Safeco and Comegys did not express a clear
intent in the Limited Agreement that Safeco would indemnify
Comegys for Comegys’ own negligence. So, Comegys is stuck
with the one errors and omissions insurer it already has—Endur-
ance.

16 Looking at common-law indemnity principles, absent a clear contractual
arrangement, the principal has no duty to indemnify when the loss results
from the agent’s negligence or fault. See Restatement (Second) of Agency §
440(a) (1958); 19 Williston on Contracts § 54:34 (4th ed. Nov. 2021 update);
Britton D. Weiner et al., Law of Commercial Agents and Brokers § 4:3 (June
2021 update). Florida, significantly, follows this general rule. See GAB Bus.
Servs., Inc. v. Syndicate 627, 809 F.2d 755, 758–59 (11th Cir. 1987) (applying
Florida law).
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22                         Opinion of the Court                      19-14664

                                      IV.
         Regarding Endurance’s claim for breach of the implied cov-
enant of good faith and fair dealing, we have stated that generally,
under Florida law, “[t]he duty of good faith must ‘relate to the per-
formance of an express term of the contract and is not an abstract
and independent term of a contract which may be asserted as a
source of breach when all other terms have been performed pursu-
ant to the contract requirements.’” Resnick v. Avmed, Inc., 693
F.3d 1317, 1329 (11th Cir. 2012) (alteration adopted) (quoting Ins.
Concepts & Design, Inc. v. Healthplan Servs., Inc., 785 So. 2d 1232,
1235 (Fla. 4th Dist. Ct. App. 2001) (per curiam) (emphasis omit-
ted)). 17 Endurance does not argue that there is any express term of
the Limited Agreement (besides the indemnification provision,

17 We have also stated that “a cause of action for breach of the implied cove-
nant cannot be maintained . . . in the absence of breach of an express term of
the underlying contract.” Burger King Corp. v. Weaver, 169 F.3d 1310, 1318
(11th Cir. 1999). Insofar as there is any possibility that a contract could be
performed in bad faith without a breach of an express term, it would be when
a contract “appears by word or silence to invest one party with a [substantial]
degree of discretion in performance,” there is “an implied obligation of good
faith to observe reasonable limits in exercising that discretion.” Cox v. CSX
Intermodal, Inc., 732 So. 2d 1092, 1097 (Fla. 1st Dist. Ct. App. 1999) (quoting
Centronics v. Genicom Corp., 562 A.2d 187, 193 (N.H. 1989) (Souter, J.); see
Speedway SuperAmerica, LLC v. Tropic Enterprises, Inc., 966 So.2d 1, 3 (Fla.
2d Dist. Ct. App. 2007); Ins. Concepts, 785 So.2d at 1235–36 (stating that in
CSX no breach of the express terms was found but there was an express term
that was allegedly not performed in good faith). No such possibility is relevant
to this case because Endurance’s claims do not concern the exercise of discre-
tion under incompletely specified contractual terms.
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19-14664               Opinion of the Court                       23

which requires breach of an independent contract provision) that
has been violated. We accordingly find that Endurance’s claim for
breach of the implied covenant also fails.
                                 V.
       For the foregoing reasons, Safeco was entitled to judgment
as a matter of law. The judgment of the District Court on Endur-
ance’s claims for breach of contract and breach of the implied cov-
enant of good faith and fair dealing is reversed, and the case is re-
manded for entry of judgment in favor of Safeco.
       Endurance filed a separate but interrelated appeal for attor-
neys’ fees in Case No. 20-14763. However, this appeal is now moot
because we hold that Safeco did not breach the indemnification
agreement or the implied covenant of good faith and fair dealing.
Thus, Endurance loses on all claims and is not entitled to attorneys’
fees.
      REVERSED AND REMANDED.