Court Opinion

ID: 51894
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:09:48+00
Date Added: 2024-06-11T14:58:33.725270
License: Public Domain

[DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT                     FILED
                        ________________________          U.S. COURT OF APPEALS
                                                            ELEVENTH CIRCUIT
                                                                March 19, 2007
                               No. 06-13361                  THOMAS K. KAHN
                         ________________________                CLERK

                     D. C. Docket No. 03-00878-CV-S-N

NATIONAL UNION FIRE INSURANCE COMPANY,

                                                                 Plaintiff-Appellee,

                                    versus

BILL G. CAVINS,

                                                           Defendant-Appellant,

VIRGINIA CAVINS,
PROGRESSIVE SYSTEMS, INC.,

                                                                        Defendants,

COLORADO CASUALTY INSURANCE COMPANY,

                                                      Interested Party-Appellant.

                         ________________________

                  Appeal from the United States District Court
                      for the Middle District of Alabama
                        _________________________

                               (March 19, 2007)
Before CARNES, PRYOR and FARRIS,* Circuit Judges.

PER CURIAM:

       The main issue in this appeal is whether, under Ohio law, a party who seeks

indemnification under an express contract and fails to satisfy the three

requirements of Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790, 794 (Ohio 1944),

may recover attorney’s fees incurred in litigation that settled. National Union Fire

Insurance Company sought from Bill Cavins, Virginia Cavins, and Progressive

Systems contractual indemnification for money paid in a settlement and attorney’s

fees incurred in the underlying litigation. The magistrate judge ruled that, because

National Union failed to satisfy the requirements of Globe Indemnity, National

Union could not recover the moneys paid in settlement but the magistrate judge

awarded National Union indemnification for the attorney’s fees based on an

unpublished decision of an Ohio court of appeals. We conclude, based on an

opinion of the Supreme Court of Ohio that neither party cited to either this Court or

the magistrate judge, that National Union was not entitled to indemnification for

the attorney’s fees. We reverse the award against Bill Cavins, who was the only

judgment debtor to appeal that award.

       *
         Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by
designation.

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                               I. BACKGROUND

      In 1988, Bill Cavins entered a Distributor Agreement with The Kirby

Company. The agreement included the following indemnification provision:

      Distributor shall indemnify the Company, its employees, agents and
      servants and hold the Company and its said employees, agents and
      servants harmless from any and all liability, damage, or expense
      incurred by it in connection with any claim, demand or suit based on
      Distributor’s acts or omissions, including alleged negligence;
      provided, however, that the Company shall (1) give Distributor
      prompt written notice of any such claim, demand or suit, and (2)
      provide the Distributor with every reasonable assistance which the
      Distributor may request in resisting such claim, demand or suit. The
      foregoing indemnification shall not apply if the Company is found
      guilty of any negligence, misconduct or wrongdoing in connection
      with any such claim, demand or suit.

The agreement also specified that it “shall be construed under and governed by the

law of the State of Ohio.” In 1996, Bill Cavins assigned the agreement to

Progressive, a corporation owned by Bill Cavins and his wife, Virginia Cavins.

The Cavinses and Progressive sold vacuum products manufactured by The Kirby

Company.

      Between 1998 and 2001, nearly 100 lawsuits were filed in Alabama state

courts against the Cavinses, Progressive, and The Kirby Company. National Union

defended The Kirby Company in these lawsuits. Eventually, the lawsuits settled

based on an agreement in which the Cavinses and Progressive paid more than $1

million through their insurer Colorado Casualty Insurance Company. The Kirby

                                         3
Company paid $830,550 through National Union.

      The Kirby Company assigned its rights to indemnity under the agreement to

National Union, which filed a complaint in federal district court based on diversity

jurisdiction against the Cavinses and Progressive. National Union sought

indemnification of the $830,550 paid in settlement and $748,462.75 of attorney’s

fees. The parties consented to the jurisdiction of a magistrate judge.

      National Union moved for summary judgment, and the magistrate judge

denied the motion. The magistrate judge reasoned that, under Ohio law, a party

who seeks indemnification for money paid in settlement must meet the three

requirements established by the Supreme Court of Ohio in Globe Indemnity, 53

N.E.2d at 794. The magistrate judge concluded that National Union failed to meet

the requirements.

      National Union then moved to alter or amend the order of the magistrate

judge. National Union argued that, “even if the court correctly applied Globe

[Indemnity] to the . . . funds paid in settlement, under the Ohio [court of appeals]

opinion of Ozko, Inc. v. Isaacson Construction, Inc., [No. 17078, 1995 WL 678548

(Ohio Ct. App. Nov. 15, 1995),] National Union is entitled to recover attorney’s

fee[s].” National Union argued that, under Ozko, the requirements of Globe

Indemnity do not apply to indemnification for attorney’s fees incurred in litigation

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that settled. The magistrate judge denied the motion, but then certified the

question to the Supreme Court of Ohio. The Supreme Court of Ohio declined to

answer the certified question.

       The magistrate judge relied on Ozko and awarded National Union

indemnification for the attorney’s fees incurred. On May 25, 2006, the magistrate

judge entered a judgment against the Cavinses and Progressive and awarded

National Union $748,462.75. Bill Cavins and Colorado Casualty then filed a

notice of appeal.

                           II. STANDARD OF REVIEW

       We review de novo both a grant of summary judgment, Stephens v. Tolbert,

471 F.3d 1173, 1175 (11th Cir. 2006), and the determination of state law, Price v.

Time, Inc., 416 F.3d 1327, 1334 (11th Cir. 2005).

                                 III. DISCUSSION

       To decide this appeal, we must resolve two matters: first, whether we have

jurisdiction over all the purported appellants named in the initial brief; and second,

whether National Union is entitled to indemnification from any appellant for the

attorney’s fees incurred in the state court litigation that settled. We address each

issue in turn.

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           A. We Have Jurisdiction Over the Appeal of Only Bill Cavins.

      In the initial brief, Bill Cavins, Virginia Cavins, and Colorado Casualty

purport to be appellants, but the notice of appeal named only Bill Cavins and

Colorado Casualty. It is “abundantly clear that a timely and properly filed notice

of appeal is a mandatory prerequisite to appellate jurisdiction.” Holloman v. Mail-

Well Corp., 443 F.3d 832, 844 (11th Cir. 2006). We asked the parties for

simultaneous letter briefs addressing whether Virginia Cavins, who was not named

in the notice of appeal, and Colorado Casualty, which was not a defendant before

the magistrate judge, are properly appellants.

      The parties agree that Colorado Casualty is not a party, but disagree about

Virginia Cavins. National Union contends that neither Virginia Cavins nor

Colorado Casualty are properly appellants. The Cavinses concede that Colorado

Casualty is not properly an appellant, but they assert that Virginia Cavins was

“inadvertently left off of the Notice of Appeal” and should be considered a proper

appellant. In their supplemental letter brief, the Cavinses contend without

explanation or citation to supporting authority that “[t]he proper appellants are Bill

G. Cavins, Virginia Cavins[,] and Progressive Systems, Inc.”

      Because neither Virginia Cavins nor Progressive were named in the notice of

appeal, we must determine whether an “intent [by them] to appeal is ‘objectively

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clear’ from all of the circumstances.” Id. Although Federal Rule of Appellate

Procedure 3(c)(1)(A) requires that the notice of appeal “specify the party or parties

taking the appeal by naming each one,” Rule 3 was amended in 1993 to instruct

that “[a]n appeal . . . not be dismissed . . . for failure to name a party whose intent

to appeal is otherwise clear from the notice,” Fed. R. App. P. 3(c)(4). The

Advisory Committee explained that “[t]he test established by the [amended] rule

. . . is whether it is objectively clear that a party intended to appeal.” Fed. R. App.

P. 3 advisory committee’s note.

      Nothing in the notice of appeal makes it “objectively clear” that Virginia

Cavins and Progressive intended to appeal. Although the caption of the notice of

appeal reads “Bill G. Cavins, et al.,” the notice states twice in the body of the filing

that the appellants are Bill Cavins and Colorado Casualty. The notice may be

ambiguous as to the intent of Virginia Cavins and Progressive to appeal, but it is

far from objectively clear. The assertion that Virginia Cavins was “inadvertently

left off” of the notice of appeal is not relevant to what the notice objectively

conveys. Virginia Cavins and Progressive also “did not file any [other] document

or series of documents that indicated [they] sought to appeal.” Holloman, 443 F.3d

at 844. Neither the initial brief filed in this appeal, which purports to be on behalf

of Virginia Cavins, nor the supplemental letter brief, which asserts that Virginia

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Cavins and Progressive are proper appellants, “serve[s] as effective notice of [an]

intent to appeal [by Virginia Cavins and Progressive], because [those documents

were] not filed until after the deadline for filing [a] notice of appeal.” Id. at 844-

45.

      We have jurisdiction over the appeal of only Bill Cavins. The parties

concede that the appeal of Colorado Casualty must be dismissed for lack of

jurisdiction. See Wolff v. Cash 4 Titles, 351 F.3d 1348, 1354 (11th Cir. 2003)

(“Generally, one not a party lacks standing to appeal an order in that action.”

(internal quotation marks omitted)). Because Virginia Cavins and Progressive

never filed a notice of appeal, they have no appeal to dismiss.

  B. National Union Was Not Entitled to Indemnification from Bill Cavins for the
        Attorney’s Fees Incurred in the State Court Litigation That Settled.

      Bill Cavins contends that the magistrate judge erred when he relied on the

unpublished decision of an Ohio court of appeals in Ozko and awarded National

Union the attorney’s fees incurred in the state court litigation that settled. Cavins

asserts that the magistrate judge should have followed a different unpublished

decision of an Ohio court of appeals, Blair v. Mann, No. 98CA35, 1999 WL

228265 (Ohio Ct. App. Apr. 8, 1999). Cavins argues that, under Blair, the

requirements of Globe Indemnity barred National Union from recovering the

attorney’s fees incurred. We agree with the result advocated by Cavins, but do not

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rely upon the case law he cites.

      As a preliminary matter, neither Blair nor Ozko are controlling authority in

this circumstance. Until several years ago, an unpublished decision of an Ohio

court of appeals was controlling authority only as to the parties to the decision and

persuasive authority only in the district in which the decision was rendered. Ohio

Sup. Ct. R. for Reporting of Ops. 4 commentary. Effective May 1, 2002,

“designations of, and distinctions between, ‘controlling’ and ‘persuasive’ opinions

of the courts of appeals based merely upon whether they have been published in

the Ohio Official Reports [we]re abolished.” Ohio Sup. Ct. R. for Reporting of

Ops. 4. Both Blair and Ozko were decided before the amendment of the rule.

      Our goal in “deciding a state law issue is to resolve it the same way the

state’s highest court would.” Price, 416 F.3d at 1334. “Where the state’s highest

court has not spoken to an issue, a federal court ‘must adhere to the decisions of

the state’s intermediate appellate courts absent some persuasive indication that the

state’s highest court would decide the issue otherwise.’” Ernie Haire Ford, Inc. v.

Ford Motor Co., 260 F.3d 1285, 1290 (11th Cir. 2001) (quoting Ins. Co. of N. Am.

v. Lexow, 937 F.2d 569, 571 (11th Cir. 1991)). We are “bound by this rule

whether or not [we] agree[] with the reasoning on which the state court’s decision

is based or the outcome which the decision dictates.” Silverberg v. Paine, Webber,

                                          9
Jackson & Curtis, Inc., 710 F.2d 678, 690 (11th Cir. 1983).

      In Globe Indemnity, the plaintiff sought indemnification in common law tort

for money paid in settlement. The Supreme Court of Ohio held that “the one

seeking indemnity, after making voluntary settlement, must prove that he has given

proper and timely notice to the one from whom it is sought, that he was legally

liable to respond and that the settlement effected was fair and reasonable.” Globe

Indemnity, 53 N.E.2d at 794. National Union concedes that it cannot satisfy two of

the three requirements of Globe Indemnity.

      The circumstances here differ from those of Globe Indemnity in two

important respects. First, National Union sought indemnification under an express

contract, not implied indemnity arising from a common law tort. Second, National

Union was awarded indemnification for the attorney’s fees incurred in litigation

that settled, not the money paid in settlement. We must then consider whether the

requirements of Globe Indemnity apply to an action for indemnification brought

under a contract and whether the requirements apply to indemnification for

attorney’s fees incurred in litigation that settled. The magistrate judge

commendably sought guidance by certifying a question to the Supreme Court of

Ohio, but that certification was unfortunately not accepted.

      A decision of the Supreme Court of Ohio, which the parties failed to cite to

                                          10
this Court or the magistrate judge, squarely resolves the question whether the

requirements of Globe Indemnity apply to indemnification for attorney’s fees

incurred in tort litigation that settled. In New York Central Railroad Co. v.

Linamen, 167 N.E.2d 778 (Ohio 1960), the Supreme Court of Ohio applied the

requirements of Globe Indemnity to indemnification for attorney’s fees incurred in

litigation that settled. The plaintiff in Linamen sought indemnification in common

law tort for the “loss suffered . . . in payment of [a] settlement . . . plus expenses

and attorney fees,” and the supreme court refused to award indemnification for

either the moneys paid in settlement or the related fees because the plaintiff had

failed to satisfy two of the three requirements of Globe Indemnity. Id. at 779

(emphasis omitted).

      The question that remains is whether the requirements of both Globe

Indemnity and Linamen apply to an action for indemnification brought under an

express contract. Although the Supreme Court of Ohio has not spoken to the issue,

the question is answered by an unpublished decision of an Ohio court of appeals

that was decided after May 1, 2002, and that decision is controlling authority. In

Lubrizol Corp. v. Michael Lichtenberg & Sons Construction, Inc., No. 2004-L-

179, 2005 WL 3610468 (Ohio Ct. App. Dec. 29, 2005), the court of appeals

applied the requirements of Globe Indemnity to an action for indemnification

                                            11
brought under a contract.

      In the light of Linamen and Lubrizol, National Union was not entitled to

indemnification for the attorney’s fees incurred in the state court litigation that

settled. The magistrate judge erred in awarding attorney’s fees to National Union.

We reverse with respect to Bill Cavins, the only judgment debtor who has

appealed.

                                 IV. CONCLUSION

      The appeal of Colorado Casualty is DISMISSED for lack of jurisdiction,

and the summary judgment against Bill Cavins is REVERSED.

                                           12
FARRIS, Circuit Judge, concurring and dissenting in part:

      I am pleased to join my brothers in this matter. Except that in my view we

have jurisdiction over Virginia Cavins’ appeal. Federal Rule of Appellate

Procedure 3(c)(4) states that “failure to name a party whose intent to appeal is

otherwise clear from the notice [of appeal]” does not require dismissing the appeal.

Bill and Virginia Cavins were in identical positions, represented by the same

attorney, and victory on appeal for only one of them would be of significantly less

value. These factors indicate that Virginia Cavins’ intent to appeal was “otherwise

clear.”

      Rule 3(c)(1)(A) states that “an attorney representing more than one party

may describe those parties with such terms as . . . ‘the plaintiffs A, B, et al.’” in the

notice of appeal’s “caption or body.” Bill and Virginia Cavins shared an attorney,

who captioned the notice “National Union Fire Insurance Company, Plaintiff, v.

Bill G. Cavins, et al., Defendants.” It might have been more prudent if he had

remembered that wise counsel always “dots all i’s and crosses all t’s.”      He could

have listed the appellants by name. He didn’t. For whatever it is worth, a third of

the panel does not conclude that his failure to do so was fatal to Virginia Cavins’

appeal.

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