Court Opinion

ID: 2761878
Source: CourtListenerOpinion
Date Created: 2014-12-17 18:00:59.365161+00
Date Added: 2024-06-11T10:41:54.563572
License: Public Domain

Case: 13-14228        Date Filed: 12/17/2014      Page: 1 of 18

                                                                                   [PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                     No. 13-14228
                               ________________________

                          D. C. Docket No. 2:12-cv-00225-RWS

ST. PAUL MERCURY INSURANCE COMPANY,
                                                                           Plaintiff-Appellee,

                                            versus

FEDERAL DEPOSIT INSURANCE
CORPORATION, as receiver for Community
Bank & Trust of Cornelia, Georgia,
CHARLES M. MILLER; TRENT D. FRICKS,
                                                                     Defendants-Appellants.

                               ________________________

                      Appeals from the United States District Court
                          for the Northern District of Georgia
                            _________________________

                                     (December 17, 2014)

Before WILSON and ROSENBAUM, Circuit Judges, and SCHLESINGER,*
District Judge.

       *
          Honorable Harvey E. Schlesinger, United States District Judge for the Middle District
of Florida, sitting by designation.
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SCHLESINGER, District Judge:

      This appeal arises from a declaratory judgment action initiated by St. Paul

Mercury Insurance Company, a subsidiary of The Travelers Companies, Inc. (“St.

Paul”). St. Paul filed this action in response to a separate federal lawsuit brought

by the Federal Deposit Insurance Corporation (“FDIC”), as receiver (“FDIC-R”)

for Community Bank & Trust (“Bank”), against Charles M. Miller and Trent D.

Fricks, former Bank officers (“Officer defendants”). In that separate action, the

FDIC-R sought recovery from the Officer defendants’ for alleged gross negligence

and breaches of fiduciary duty related to the Bank’s Home Funding Loan Program

(“FDIC-R action”). St. Paul disputes coverage for the separate FDIC-R action, and

brought this lawsuit seeking a determination of coverage and its duty to advance

defense costs to the Officer defendants in the separate FDIC-R action.

                                         I.

      On January 29, 2010, the Georgia Department of Banking and Finance

closed the Bank and appointed the FDIC as receiver. Upon appointment, the

FDIC-R assumed the obligation to determine and pay creditors’ claims from

receivership assets.   The FDIC in its corporate capacity became one of the

receivership’s primary creditors—after paying insured deposits from its Deposit

Insurance Fund, the FDIC acquires a subrogated claim for those deposits. As part

of its effort to secure assets to pay creditors, including the FDIC’s Deposit
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Insurance Fund, the FDIC-R brought its action against the Officer defendants. In

that action, the FDIC-R alleged that the Officer defendants’ tortious conduct

caused over $15 million in damages by, in the case of Fricks, approving loans in

violation of the Bank’s loan policy and prudent lending practices, and, in the case

of Miller, failing to adequately supervise Fricks and implement corrective

measures.

      The Policy, drafted by St. Paul, provided liability coverage to Directors and

Officers of the Bank for:

      Loss for which the Insured Persons are not indemnified by the
      Company and which the Insured Persons become legally obligated to
      pay on account of any Claim first made against them, individually or
      otherwise . . . for a Management Practices Act.

      The Policy contains five separate insuring agreements applicable to: (1)

management liability; (2) employment practices liability; (3) fiduciary liability; (4)

trust liability; and (5) bankers professional liability, including lender liability and

professional services liability.

      FDIC-R seeks coverage under the management liability insuring agreement,

particularly the “Directors and Officers Individual Coverage” (“Officer

Coverage”). The Officer Coverage provides, in relevant part: “The Insurer shall

pay on behalf of the Insured Persons Loss for which the Insured Persons . . .

become legally obligated to pay on account of any Claim first made against them .

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. . for a Management Practices Act . . . .”

      The Policy’s definition of a “Claim” includes a “civil proceeding against any

Insured.”    A “Claim” also includes a “formal administrative or regulatory

proceeding . . . commenced by . . . a notice of filed charges, a formal investigative

order or a similar legal document.”

      The Policy defines “Insured” to include “Insured Persons,” which

encompasses “Directors or Officers.” A “Director or Officer” is defined as “any

natural person who was, now is or shall be a duly elected or appointed director,

officer, member of the board of managers, or management committee member of

any Company . . . .” “Company” is defined to include Community Bankshares,

Inc., and its subsidiaries, including CB&T.

      The Policy also contains an “insured-versus-insured” exclusion, applicable

to all insuring agreements, including the Officer Coverage.          This exclusion

provides:

      The Insurer shall not be liable for Loss [including Defense Costs] on
      account of any Claim made against any Insured:

                                         ***

      4.     brought or maintained by or on behalf of any Insured or
             Company [including CB&T] in any capacity, except:

             (a)    a Claim that is a derivative action brought or maintained
                    on behalf of the Company by one or more persons who
                    are not Directors or Officers and who bring and maintain
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            such Claim without the solicitation, assistance or active
            participation of any Director or Officer;

      (b)   a Claim brought or maintained by a natural person who
            was a Director or Officer, but who has not served as a
            Director or Officer for at least six-years preceding the
            date the Claim is first made, and who brings and
            maintains the Claim without the solicitation, assistance or
            active participation of any Director or Officer who is
            serving as a Director or Officer or was serving as a
            Director or Officer within such six-year period;

      (c)   a Claim brought or maintained by or on behalf of any
            Insured Person for an Employment Practices Act;

      (d)   a Claim brought or maintained by any Insured Person for
            contribution or indemnity, if the Claim results from
            another Claim covered under this Policy;

      (e)   only with respect to any Fiduciary Liability Insuring
            Agreement made part of this Policy, a Claim brought or
            maintained by or on behalf of any Employee of the
            Company for any Fiduciary Act;

      (f)   a Claim brought by an Insured Person solely in his or her
            capacity as a customer of the Company for a Trust Act or
            a Professional Services Act, provided that such Claim is
            instigated totally independent of, and totally without the
            solicitation, assistance, active participation, or
            intervention of, any other Insured; or

      (g)   a Claim brought or maintained in a jurisdiction outside of
            the United States of America, Canada or Australia by an
            Insured Person of a Company incorporated or chartered
            in a jurisdiction outside of the United States of America,
            Canada or Australia.

Finally, the Policy’s Officer coverage extends only to a “Loss” as defined in

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the Policy. The Policy defines “Loss” in pertinent part as: “[T]he amount which

the Insureds become legally obligated to pay on account of each Claim . . . for

Wrongful Acts for which coverage applies, including Damages, judgments,

settlements and Defense Costs . . . .”

      The Policy then carves out certain items from the definition of covered Loss.

Of importance here, this includes the unrepaid loan carve-out in subsection (c) of

the definition of Loss, which provides that an “amount” that constitutes “any

unrepaid, unrecoverable or outstanding loan, lease or extension of credit to any

Affiliated Person or Borrower” is not included as a covered Loss.

      The definition of “Affiliated Person” used in the unrepaid loan carve-out

expressly includes any “Director, Officer or Employee” of the Bank. On the other

hand, the term “Borrower” used in the carve-out is defined to mean “any individual

or entity that is not an Affiliated Person and to which the Company extends, agrees

to extend, or refuses to extend, a loan, lease or extension of credit.”

                                           II.

      On September 21, 2012, St. Paul filed suit in the United States District Court

for the Northern District of Georgia seeking a declaration that the Policy bars

coverage for the FDIC-R action.          On December 26, 2012, St. Paul requested

summary judgment.       Following additional briefing on whether the applicable

Policy provisions were ambiguous, the district court determined: that the unrepaid
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loan carve-out provision was ambiguous in this context; that the insured v. insured

exclusion was “not ambiguous, that any ambiguity in the policy c[ould] be

resolved without resort to parol evidence;” that no further discovery was necessary;

and that St. Paul “ha[d] no duty under the policy to pay to defend or to indemnify”

the Officer defendants.

                                        III.

      This Court reviews de novo the district court’s decision to grant summary

judgment. Beach Cmty. Bank v. St. Paul Mercury Ins. Co., 635 F.3d 1190, 1194

(11th Cir. 2011). A court may grant a motion for summary judgment only where

the moving party has demonstrated the absence of any genuine issue of material

fact and entitlement to judgment as a matter of law. Fed. R. Civ. P. 56(a); Beach

Cmty. Bank, 635 F.3d at 1194.

                                        IV.

      This case presents us with the following issues.       First, whether claims

brought by the FDIC-R as receiver for a closed bank against former directors and

officers of the bank are covered under the Policy that excludes from coverage

actions brought “by or on behalf of” any “Insured” or the “Company.” Second,

whether the district court erred in concluding that the Policy unambiguously

precluded coverage and refusing to consider extrinsic evidence or allow further

discovery.   Third, and finally, whether the unrepaid loan carve-out provision
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precludes coverage for damages that are unrepaid loans.

                                         A.

      The FDIC-R maintains that the plain language of the insured v. insured

exclusion precludes coverage only for actions brought “by or on behalf of any

Insured or Company in any capacity.” Neither the exclusion nor the defined terms

make any reference to the FDIC, regulators, or any liquidating entity; therefore, the

FDIC-R insists the district court erred in concluding the insured v. insured

exclusion applied. Not surprisingly, St. Paul disagrees and insists the district court

correctly interpreted the insured v. insured exclusion.

      The disagreement between the parties has its genesis in O’Melveny & Myers

v. FDIC, 512 U.S. 79 (1994). In O’Melveny, the Supreme Court considered a suit

where the FDIC brought an action against a law firm for “professional negligence

and breach of fiduciary duty.” Id. at 82. The FDIC argued that despite the cause

of action originating under California law, federal law governed the rights of the

FDIC because it was an appointed receiver of a failed financial institution under a

federal statute. Id. at 83. The Supreme Court granted certiorari to examine two

issues: (1) whether federal common law, not state law, “determines whether the

knowledge of corporate officers acting against the corporation’s interest will be

imputed to the corporation;” and (2) even if state law answers the first question,

whether “federal common law determines the more narrow question whether
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knowledge by officers so acting will be imputed to the FDIC when it sues as

receiver of the corporation.” Id.

      The O’Melveny Court disposed with the first issue by explaining that

“‘[t]here is not federal general common law,’” id. (quoting Erie R. Co. v.

Tompkins, 304 U.S. 64, 78 (1938)), and that state law, not federal, “govern[ed] the

imputation of knowledge to corporate victims of alleged negligence . . . .” Id. at

84–85. For the second, more complex issue the FDIC maintained that even though

the claim arose under state law, federal law governs the FDIC’s rights because it

was appointed as a receiver of the failed savings and loan pursuant to a federal

statute—the Financial Institutions Reform, Recovery, and Enforcement Act of

1989 (“FIRREA”), Pub. L. No. 101–73, 103 Stat. 183 (codified in scattered

sections of 12 U.S.C.). Id. at 85. The Court was not persuaded by this argument

and instead explained that where Congress promulgated a “comprehensive and

detailed” statute, the court must presume that matters unaddressed in the federal

statute are “left subject to the disposition provided by state law.” Id.

      In reaching this conclusion, the O’Melveny Court stated,

      Section 1821(d)(2)(A)(i), which is part of a title captioned “Powers
      and duties of [the FDIC] as . . . receiver,” states that “the [FDIC] shall,
      . . . by operation of law, succeed to—all rights, titles, powers, and
      privileges of the insured depository institution . . . . ” 12 U.S.C. §
      1821(d)(2)(A)(i) (1988 ed., Supp. IV). This language appears to
      indicate that the FDIC as receiver “steps into the shoes” of the failed
      S & L, obtaining the rights “of the insured depository institution” that
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      existed prior to receivership. Thereafter, in litigation by the FDIC
      asserting the claims of the S & L—in this case California tort claims
      potentially defeasible by a showing that the S & L’s officers had
      knowledge—any defense good against the original party is good
      against the receiver.

Id. at 86 (emphasis added) (internal quotation marks and citations removed).

      The parties disagree on the import of the stepping into the shoes language.

According to the FDIC-R, O’Melveny does not stand for the proposition that the

FDIC-R’s role as successor to the failed Bank renders it equivalent to the Bank for

all purposes. It is FDIC-R’s position that although the Supreme Court determined

that state law applied, because the FDIC “steps into the shoes” of a failed bank, the

legal significance of this statement is limited because as the Bank’s receiver,

FDIC-R steps into a number of pairs of different shoes—as it were the wingtips of

the Bank, the pumps of any stockholder, the loafers of any accountholder, and the

tennis shoes of any Bank depositor—because the FDIC sues to recoup not only its

own losses, but also the losses of depositors and other creditors. In light of this

unique role, FDIC-R asserts a majority of courts have concluded that it is not the

equivalent of the insured bank for purposes of insured v. insured exclusions. See,

e.g., Am. Cas. Co. v. Sentry Fed. Sav. Bank, 867 F. Supp. 50, 59 (D. Mass. 1994);

Am. Cas. Co. v. FDIC, 791 F. Supp. 276, 277–78 (W.D. Okla. 1992); FDIC v. Am.

Cas. Co. of Reading, Pa., 814 F. Supp. 1021, 1026–27 (D. Wyo. 1991).

      By contrast, St. Paul interprets the O’Melveny language to mean that when
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the FDIC, as receiver, asserts state law claims that originally belonged to a failed

bank, the FDIC “steps into the shoes” of the bank and is subject to all defenses that

could have been asserted against the bank. That construction, according to St.

Paul, captures precisely the circumstances of this case. St. Paul, in support, points

to courts that have recognized that, in asserting the failed bank’s claims, the FDIC,

or other government entity, stands in the shoes of the bank and therefore the claims

were, in effect, brought “by” the insured bank. See, e.g., Gary v. Am. Cas. Co. of

Reading, Pa., 753 F. Supp. 1547, 1554–56 (W.D. Okla. 1990); Mt. Hawley Ins. Co.

v. Fed. Sav. & Loan Corp., 695 F. Supp. 469, 481–82 (C.D. Cal. 1987).

      We need not resolve the disagreement between the parties concerning

whether O’Melveny’s “steps into the shoes” language may be construed to render

the insured v. insured exclusion applicable here if the Policy was ambiguous,

regardless of its intended meaning.

                                         B.

      The FDIC-R urges that under Georgia law an insurance policy provision is

ambiguous when it is susceptible to two or more reasonable interpretations. In

such circumstances, the FDIC-R argues that the Georgia rules of contract

construction provide that the court must adopt the interpretation that favors

coverage—regardless of whether that may be the logical choice. The FDIC-R’s

position, in other words, is that the language of the insured v. insured exclusion is,
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at the very least, reasonably susceptible to an interpretation that would provide

coverage for the FDIC-R action. St. Paul, on the other hand, maintains the district

court correctly determined that no ambiguity existed and that coverage was

excluded.

      The district court addressed this argument and concluded that not applying

the insured v. insured exclusion would have the effect of reading the phrase, “on

behalf of,” out of the Policy in contravention of the rule that requires this Court to

construe a contract “in whole and in every part.” O.C.G.A. § 13-2-2(4). It was the

district court’s opinion that, aside from a derivative action, the only party that

could bring an action on           a federally insured bank’s behalf is the

FDIC—demonstrating that the exclusion speaks specifically to this circumstance.

      Because the parties do not dispute that Georgia law governs the construction

of the Policy, it is necessary to allow Georgia law to guide our inquiry. Previously,

we succinctly outlined Georgia’s rules of construction for insurance policies:

      Georgia law directs courts interpreting insurance policies to ascertain
      the intention of the parties by examining the contract as a whole. A
      court must first consider the ordinary and legal meaning of the words
      employed in the insurance contract. An insurance policy should be
      read as a layman would read it. Parties to the contract of insurance are
      bound by its plain and unambiguous terms. If the terms of the
      contract are plain and unambiguous, the contract must be enforced as
      written.

      An ambiguity exists, however, when the plain words of a contract are
      fairly susceptible of more than one meaning. Georgia law teaches that
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      an ambiguity is duplicity, indistinctness, an uncertainty of meaning or
      expression. When a term in a contract is ambiguous, Georgia courts
      apply the rules of contract construction to resolve the ambiguity.

      Pursuant to Georgia’s rules of contract construction, the construction
      which will uphold a contract in whole and in every part is to be
      preferred, and the whole contract should be looked to in arriving at the
      construction of any part. Further, ambiguities are construed against
      the drafter of the contract (i.e., the insurer), and in favor of the insured
      . . . . If the ambiguity remains after the court applies the rules of
      construction, the issue of what the ambiguous language means and
      what the parties intended must be resolved by the finder of fact.

Duckworth v. Allianz Life Ins. Co. of N. Am., 706 F.3d 1338, 1342 (11th Cir. 2013)

(citing Alea London Ltd. v. Am. Home Servs., Inc., 638 F.3d 768, 773–74 (11th Cir.

2011) (internal citations, alterations, and quotation marks omitted)).

      “[E]xceptions, limitations, and exclusions to insurance agreements require a

narrow construction on the theory that the insurer, having affirmatively expressed

coverage through broad premises assumes a duty to define any limitations on that

coverage in clear and explicit terms.” U.S. Fid. & Guar. Co. v. Park’N Go of Ga.,

Inc., 66 F.3d 273, 278 (11th Cir.1995) (internal quotation marks omitted). “Any

exclusion sought to be invoked by the insurer is to be liberally construed against

the insurer unless it is clear and unequivocal.” Id.

      Further, a court must not interpret a policy to allow an insurer to provide

largely illusory coverage.     In other words, “Georgia public policy disfavors

insurance provisions that permit the insurer, at the expense of the insured, to avoid

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the risk for which the insurer has been paid and for which the insured reasonably

expects it is covered.” Barrett v. Nat’l Union Fire Ins. Co. of Pittsburgh, 696

S.E.2d 326, 330 (Ga. Ct. App. 2010) (internal alterations and quotation marks

omitted).

      There is a low threshold for establishing ambiguity in an insurance policy.

“Ambiguity in an insurance contract is duplicity, indistinctiveness, uncertainty of

meaning of expression, and words or phrases which cause uncertainty of meaning

and may be fairly construed in more than one way.” Ga. Farm Bureau Mut. Ins.

Co. v. Meyers, 548 S.E.2d 67, 69 (Ga. Ct. App. 2001). As recognized by Georgia

courts, “if a provision of an insurance contract is susceptible of two or more

constructions, even when the multiple constructions are all logical and reasonable,

it is ambiguous . . . .” Hurst v. Grange Mut. Cas. Co., 470 S.E.2d 659, 663 (Ga.

1996) (citing Lakeshore Marine, Inc. v. Hartford Acc. & Indem. Co., 296 S.E.2d

418 (Ga. Ct. App. 1982)).

      What is more, “Georgia courts have long acknowledged that insurance

policies are prepared and proposed by insurers. Thus, if an insurance contract is

capable of being construed two ways, it will be construed against the insurance

company and in favor of the insured.” Bituminous Cas. Corp. v. Advanced

Adhesive Tech., Inc., 73 F.3d 335, 337 (11th Cir. 1996) (quoting Claussen v. Aetna

Cas. & Sur. Co., 380 S.E.2d 686, 687–88 (Ga. 1989)). In other words, “[t]he
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number of reasonable and logical interpretations makes the clause ambiguous, and

the statutory rules of construction require that we construe the ambiguous clause

against the insurer.” Hurst, 470 S.E.2d at 663 (internal citation omitted). Finally,

an important indication of ambiguity in a policy is whether nearly identical or

similar language has been construed differently by other courts. Boston Ins. Co. v.

Gable, 352 F.2d 368, 370 (5th Cir. 1965) (applying Georgia law).1

       The FDIC-R asserts a number of arguments in support of its contention that

the insured v. insured exclusion is unambiguous and should not apply. However, it

seems to us that the most compelling argument is that courts who have addressed

similarly worded insured v. insured exclusions have reached different results.2

       One such case illustrates the point, Progressive Casualty Ins. Co. v. FDIC,

926 F. Supp. 2d 1337 (N.D. Ga. 2013)—a strikingly similar case. Progressive

       1
           In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), this Court
adopted as binding precedent all of the decisions of the former Fifth Circuit handed down prior
to the close of business on September 30, 1981.
       2
          St. Paul cites other cases that conclude the insured v. insured exclusion applies, and
maintains that these are the “better-reasoned” opinions. See, e.g., Gary v. Am. Cas. Co. of
Reading, Pa., 753 F. Supp. 1547, 1554–56 (W.D. Okla. 1990); Mt. Hawley Ins. Co. v. Fed. Sav.
& Loan Corp., 695 F. Supp. 469, 481–82 (C.D. Cal. 1987). Nevertheless, the fact remains that
there are two schools of thought on how to interpret insured v. insured exclusions, and that
seems to make FDIC-R’s point. Compare St. Paul Mercury Ins. Co. v. Hahn, No. SACV
13-0424 AG RNBX, 2014 WL 5369400, at *3 (C.D. Cal. Oct. 8, 2014) (holding insured versus
insured exclusion is ambiguous as to the FDIC); W. Holding Co., Inc. v. Chartis Ins. Co.-Puerto
Rico, 904 F. Supp. 2d 169, 182–84 (D.P.R. 2012) (same); Am. Cas. Co. v. Baker, 758 F. Supp.
1340 (C.D. Cal. 1991) (same); and Fid. & Deposit Co. of Md. v. Zandstra, 756 F. Supp. 429,
433–34 (N.D. Cal. 1990) (same), with St. Paul Mercury Ins. Co. v. Miller, 968 F. Supp. 2d 1236,
1243–44 (N.D. Ga. 2013) (holding exclusion applies); and Fid. & Deposit Co. of Md. v. Conner,
973 F.2d 1236, 1244–45 (5th Cir. 1992) (same).
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Casualty Insurance Company initiated a declaratory judgment action “seeking a

declaration that the directors and officers/company liability policy” it had issued

did not “afford coverage” to former directors and officers of the bank in a lawsuit

filed by the FDIC as a receiver. Id. at 1338. Progressive eventually moved for

summary judgment claiming, among other things, that coverage was “barred by the

‘insured verses insured exclusion’ in the policy.” Id. at 1339. The insured versus

insured exclusion specifically provided, “The Insurer shall not be liable to make

any payment for Loss in connection with any Claim by, on behalf of, or at the

behest of the Company, any affiliate of the Company or any Insured Person in any

capacity . . . .” Id. at 1339.

       Progressive insisted because the policy language excluded any claim “by” or

“on behalf of,” that this applied to the FDIC-R and barred coverage since the

FDIC-R stepped into the shoes of the bank. Id. at 1339–40. Interestingly, the

Progressive Court found ambiguity and concluded,

       However, it is unclear whether the FDIC-R’s claims are “by” or “on
       behalf of” the failed bank. Furthermore, it is unclear what exactly is
       encompassed by the phrase “steps into the shoes.” These ambiguities
       arise, in part, because the FDIC-R differs from other receivers or
       conservators that might step into the shoes of a failed or insolvent
       bank. The FDIC-R is tasked, under the Financial Institutions Reform,
       Recovery, and Enforcement Act of 1989, with bringing claims to
       recover losses suffered by the federal Deposit Insurance Fund and a
       bank’s depositors, creditors, and shareholders. The FDIC-R has
       multiple roles.     Therefore, the FDIC-R has shown that some
       ambiguity exists in the insured versus insured exclusion.
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Id. at 1340 (internal citations omitted).

      The fact that the district court in this case and the Progressive Court reached

opposite conclusions about the effect of a nearly identically worded insured v.

insured exclusion appears to us to plainly support a finding of ambiguity under

Georgia law. In Georgia, “‘[i]f the courts cannot with any degree of assurance, or

unanimity, interpret exclusion provisions of this kind, that fact alone weighs

heavily against the insurer because the fine print of the policy, where ambiguous, is

construed in favor of the assured.’” First Ga. Ins. Co. v. Goodrum, 370 S.E.2d 162,

164 (Ga. Ct. App. 1988) (quoting Travelers Ins. Co. v. State Farm Mut. Auto. Ins.

Co., 175 F. Supp. 673, 676 (E.D. La. 1959)). Consequently, we conclude that the

insured v. insured exclusion is ambiguous.

      Since we conclude that the insured v. insured exclusion is ambiguous, it may

be necessary to consider extrinsic evidence to determine the parties’ intent. See

Duckworth, 706 F.3d at 1342 (explaining that if ambiguity remains after the

application of the rules of construction, the language of the insurance policy

remains ambiguous and the intention of the parties must be consulted to determine

what the parties intended).

                                            C.

      Alternatively, St. Paul contends that the unrepaid loan carve-out precludes

coverage for damages that are unrepaid loans. The district court concluded that the
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definition of loss which carved out unrepaid loans was ambiguous, and we see no

reason to disturb that finding.

                                           V.

      Based on the foregoing and our review of the record and the parties’ briefs,

we conclude the insured v. insured exclusion is ambiguous, and that extrinsic

evidence may be necessary to determine the parties’ intent. Accordingly, this case

is remanded to the district court for further consideration in accordance with this

opinion.

      REVERSED.

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