Court Opinion

ID: 4581224
Source: CourtListenerOpinion
Date Created: 2020-10-28 14:00:28.600144+00
Date Added: 2024-06-11T09:28:18.217675
License: Public Domain

USCA11 Case: 19-12100    Date Filed: 10/28/2020   Page: 1 of 4

                                                          [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 19-12100
                       ________________________

                       D.C. No. 1:16-cv-20194-DPG

LYNN MCCULLOUGH, et al.,

                                                           Plaintiffs-Appellees,

                                  versus

AIG INSURANCE HONG KONG LIMITED,

                                                          Defendant-Appellant.

                       ________________________

                Appeal from the United States District Court
                    for the Southern District of Florida
                      ________________________

                            (October 28, 2020)

Before WILSON, NEWSOM and ANDERSON, Circuit Judges.
          USCA11 Case: 19-12100       Date Filed: 10/28/2020    Page: 2 of 4

PER CURIAM:

      This is an appeal challenging a district court decision that relied entirely on

our decision in Outokumpu Stainless USA, LLC v. Converteam SAS, 902 F.3d
1316 (11th Cir. 2018). Our decision involved contracts containing an identical

arbitration clause between a steel manufacturing plant and a general contractor

providing, inter alia, for the manufacture and supply of certain motors. The

contracts were each signed by those two parties. A subcontractor of the general

contractor actually manufactured and supplied the motors. The subcontractor did

not sign the contracts containing the arbitration clause. The steel plant sued the

subcontractor after the motors failed. The subcontractor sought to enforce the

arbitration agreement. The contracts containing the arbitration clause were subject

to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards

(the “New York Convention”). The Eleventh Circuit held that the non-signatory

subcontractor could not compel arbitration. We held that the New York

Convention required that the parties actually sign the agreement containing the

arbitration clause. Id. at 1326. We held that the non-signatory subcontractor could

not rely on domestic equitable estoppel doctrines to enforce the arbitration

agreement as a non-signatory because equitable estoppel doctrines conflict with the

New York Convention’s signatory requirement. Id. at 1326–27.

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          USCA11 Case: 19-12100        Date Filed: 10/28/2020    Page: 3 of 4

      The instant case, like Outokumpu, presents the issue of whether and under

what circumstances a non-signatory is bound by an agreement to arbitrate. We

write only for the parties, who are fully familiar with the relevant facts. We note

here only that Plaintiffs Lynn and William McCullough (the “McCulloughs”) are

injured third parties who sought tort damages against the “Rain Forest defendants,”

and who now claim that AIG Insurance Hong Kong Limited (“AIG”) insured one

or more of such defendants and failed in good faith to settle. The McCulloughs

settled with the Rain Forest defendants, and now sue AIG, as Florida law allows,

for breach of its duty to its insureds to exercise good faith to settle the case within

its policy limits and protect its insureds against excess judgment. AIG sought to

compel the non-signatory McCulloughs to arbitrate pursuant to the policy

provisions binding on AIG and the Rain Forest defendants.

      As noted above, the district court relied entirely on our decision in

Outokumpu in declining to grant AIG’s motion to compel arbitration. Thus, the

district court did not address AIG’s argument that applicable equitable doctrines

permitted enforcement of the arbitration agreement against the non-signatory

McCulloughs.

      However, after the district court decision in this case, and after the briefing

on appeal, the Supreme Court in GE Energy Power Conversion France SAS, Corp.

v. Outokumpu Stainless USA, LLC, reversed our decision. ___ U.S. ___, 140 S.

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             USCA11 Case: 19-12100        Date Filed: 10/28/2020      Page: 4 of 4

Ct. 1637 (June 1, 2020). Contrary to the Eleventh Circuit decision, the Supreme

Court held that nothing in the New York Convention conflicts with the application

of relevant equitable doctrines. Accordingly, the Court reversed the judgment of

the Eleventh Circuit and remanded for further proceedings with respect to such

doctrines.

       Consistent with that Supreme Court ruling, we also vacate the judgment of

the district court and remand for further proceedings not inconsistent with this

opinion or the opinion of the Supreme Court in Outokumpu. 1

       VACATED and REMANDED.

1
       We understand that the issue of coverage must also be determined on remand, as well as
possibly other issues.
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