Court Opinion

ID: 61816
Source: CourtListenerOpinion
Date Created: 2010-04-26 04:15:53+00
Date Added: 2024-06-11T09:39:11.120141
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[DO NOT PUBLISH]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
                              No. 07-14678              May 28, 2008
                      ________________________        THOMAS K. KAHN
                  D. C. Docket No. 04-02523-CV-CAP-1      CLERK

EXECUTIVE RISK INDEMNITY INC.,

                                                             Plaintiff-Counter
                                                         Defendant-Appellant,

                                  versus

AFC ENTERPRISES INC.,
FRANK J. BELATTI,
GERALD J. WILKINS,
DICK R. HOLBROOK,

                                                          Defendants-Counter
                                                         Claimants-Appellees,
SAMUEL N. FRANKEL,
MARK J. DORAN,
PAUL FARRAR,
MATT L. FIGEL,
PETER STARRETT, et al.,

                                                        Defendants-Appellees.

                       ________________________

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

                              (May 28, 2008)
Before CARNES and MARCUS, Circuit Judges, and BUCKLEW,* District Judge.

PER CURIAM:

        In this insurance case, Executive Risk Indemnity Inc. (“Executive Risk”)

appeals from a final judgment entered by the United States District Court for the

Northern District of Georgia, after a bench trial, awarding AFC Enterprises Inc.

$24,295,890.40 in damages for breach of contract.

        Executive Risk makes four basic claims on appeal. First, it says the district

court erred in finding that AFC made no material misrepresentations in connection

with the renewal of an insurance policy. Second, it claims that the trial court

abused its discretion in denying its motion to compel discovery from AFC’s

accountant, KPMG. Third, it contends that the court abused its discretion in

denying its motion to amend the complaint. Finally, it argues that the district court

erred in concluding that Executive Risk was not entitled to an allocation of the

losses incurred by AFC in settling a number of securities and derivative lawsuits in

2003 (‘the underlying actions”). After review, we affirm the judgment of the

district court based on its thorough and well-reasoned opinion of September 21,

2007.

        As to the question of allocation, however, we add this observation. Pursuant

*
  Honorable Susan C. Bucklew, United States District Judge for the Middle District of Florida,
sitting by designation.

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to the terms of the insurance policy, Executive Risk can seek an allocation only

where both “Loss covered by this Policy and Loss not covered by this Policy are

incurred,” that is, either (1) where “a Claim made against the Insureds includes

both covered and uncovered matters,” or (2) where “a Claim is made against both

Insureds and others not included within the definition of ‘Insured.’”1 Neither

circumstance is presented in this case. There is no dispute that the “claims” raised

in the underlying actions involved only covered “matters.” Moreover, it is

undisputed that all of the underlying actions were raised against “Insured” persons

or entities. On this policy, Executive Risk is not entitled to an allocation of the

settlement losses.

          Accordingly, we affirm.

          AFFIRMED

1
    In pertinent part, the policy states:

          If both Loss covered by this Policy and Loss not covered by this Policy are
          incurred, either because a Claim made against the Insureds includes both covered
          and uncovered matters, or because a Claim is made against both Insureds and
          others not included within the definition of “Insured” . . . , [the Insureds] agree to
          use their best efforts to determine a fair and proper allocation of all such amounts.
          . . . In the event that an allocation cannot be agreed to, then [Executive Risk] shall
          be obligated to make an interim payment of the amount of Loss, Including
          Defense Expenses, which the parties agree is not in dispute until a final amount is
          agreed upon or determined pursuant to the provisions of this Policy and
          applicable law.

The Policy § V, ¶ (B)(5) (emphasis added).

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