Court Opinion

ID: 65880
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:04:14+00
Date Added: 2024-06-11T14:57:53.542176
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[DO NOT PUBLISH]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. 08-10872                  SEPT 17, 2008
                          Non-Argument Calendar           THOMAS K. KAHN
                       ________________________               CLERK
                    D. C. Docket No. 06-60742-CV-JIC

YALE L. GALANTER, P.A.,
YALE L. GALANTER,
individually,

                                                         Plaintiffs-Appellants,

                                  versus

CHARLES E. JOHNSON, JR.,
NATIONAL UNION FIRE INSURANCE CO., PITTSBURGH,
PENNSYLVANIA,

                                                        Defendants-Appellees,

NORTH AMERICAN SPECIALTY INSURANCE, CO., INC., et al.,

                                                                  Defendants.
                       ________________________

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

                          (September 17, 2008)

Before CARNES, MARCUS and PRYOR, Circuit Judges.

PER CURIAM:
      Yale L. Galanter and his law firm (collectively, “Galanter”) appeals from the

entry of final judgment in Galanter’s action for breach of contract, bad faith and

unjust enrichment, seeking legal fees in the amount of $769,321.65 plus interest,

against his client, Charles E. Johnson, Jr. and four insurance companies that

provided Directors and Officers (“D&O”) insurance policies to Johnson’s

employer, Purchasepro.com, Inc. On appeal, Gallanter only challenges the district

court’s entry of summary judgment in favor of National Union Fire Insurance Co.,

arguing that the district court erred in construing the contract between the parties to

condition payment upon Johnson’s consent and upon a separate, future agreement

upon which Galanter was not a party. After thorough review, we affirm.

      We conduct a de novo review of a district court’s order granting summary

judgment, “applying the same legal standards as the district court.” Chapman v. AI

Transp., 229 F.3d 1012, 1023 (11th Cir. 2000) (en banc). “Summary judgment is

appropriate if the evidence before the court shows ‘that there is no genuine issue as

to any material fact and that the moving party is entitled to a judgment as a matter

of law.’ In making this determination, the court must view all evidence and make

all reasonable inferences in favor of the party opposing summary judgment.”

Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995) (citations omitted).

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      The relevant facts are these. Johnson was insured through Purchasepro.com

under a “tower” of D&O insurance coverage, of which National Union issued the

primary policy and the final excess policy, with three layers of intermediate

coverage issued by different carriers. Specifically, (1) National Union’s primary

policy had limits of $10 million; (2) TIG Insurance’s excess policy had limits of $5

million in excess of the primary National Union policy; (3) Underwriters at

Lloyd’s, London’s excess policy had limits of $5 million in excess of the TIG

policy; (4) North American Specialty Insurance Company’s excess policy had

limits of $5 million in excess of the Lloyd’s policy; and (5) National Union’s

excess policy had limits of $10 million in excess of the North American policy.

Galanter concedes that National Union’s primary policy was exhausted in August

2005, and the next $15 million limit of excess coverage by other companies was

exhausted by October 2006, when National Union’s excess policy was triggered.

      Galanter provided legal services to Johnson in a federal criminal proceeding

from late 2004 through January of 2006, pursuant to a letter agreement dated

December 22, 2004 from National Union’s counsel to Galanter. This agreement

gave National Union’s consent for Johnson to retain Galanter under National

Union’s D&O policy (even though Galanter was not a pre-approved Panel

Attorney under the policy), subjected the agreement to certain policy exclusions

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and limitations, including the policy limits, and detailed the procedures that

Galanter must follow in order to be paid. Notably, it provided that Galanter was to

send invoices to National Union on a monthly basis, and National Union had 90

days from the receipt of such invoices to reimburse the same. The agreement was

then signed by Johnson, Galanter, and counsel for National Union. Galanter was

ultimately paid over $2 million pursuant to the agreement.

       In January of 2006, a dispute arose between Galanter, Johnson, and the

tower insurance companies, resulting in the companies’ refusal to pay Galanter’s

final bill. Galanter withdrew from the representation of Johnson in January, 2006,

and submitted a final bill of $769,321.65 for services for the period from

November 2005 through January 2006, during which time Galanter worked

hundreds of hours in the criminal trial of Johnson’s co-defendants.1 Following the

dispute, Galanter brought this lawsuit against Johnson and the tower insurers, even

though, in April 2007, Johnson re-retained Galanter to represent him.

       As an initial matter, we agree with the district court that the letter agreement,

drafted by counsel for National Union, is an independent contract between

National Union and Galanter, which created a reasonable expectation on the part of

1
       Around this same time, Johnson, along with his other co-defendants, negotiated and then
agreed to a Defense Funding Agreement, essentially capping total fees received from National
Union, in return for an agreement by National Union not to seek reimbursement of fees should a
covered defendant be found guilty or plead guilty.

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Galanter that he would be paid pursuant to the policy for representing Johnson. “It

is elementary that for an enforceable contract to exist there must be an offer, an

acceptance, consideration and sufficient specification of terms so that the

obligations involved can be ascertained.” W.R. Townsend Contracting, Inc. v.

Jensen Civil Construction, Inc., 728 So. 2d 297, 302 (Fla. Dist. Ct. App. 1999)

(quotations omitted).2       As the district court reasoned, in consideration for their

signed acceptance of the offer with certain imposed conditions, Galanter was

allowed to be paid under the policy, and Johnson was able to have Galanter

represent him.

       We also agree with Galanter that there was nothing in the agreement, or the

policy, conditioning Galanter’s payment upon Johnson’s consent to such payment,

and that Galanter -- not party to the subsequent Defense Funding Agreement -- was

not subject to any changes it may have imposed on the original policy and letter

agreement. However, our inquiry does not end here.

       As we’ve noted, Galanter is subject to the various policy exclusions and

limitations expressly stated in the letter agreement. One of those express

limitations is that all claims for payment of defense costs are subject to the

continuously depleting policy limits. There is no dispute that the initial $10 million

2
        We are assuming, as the district court did, that Florida law applies. The parties have not
raised this issue on appeal, and we therefore do not address it here.

                                                 5
dollar primary policy limit specifically described in the agreement was depleted in

August of 2005, prior to the billing of the unpaid amount sued upon in this action.

Moreover, to the extent that the district court gave Galanter the “benefit of the

doubt” that the letter agreement’s policy limit language included the excess amount

in the final $10 million National Union policy, we do not agree.                  Even if the

policies were “follow-form” and intended to be interpreted as one, Galanter was

not entitled to benefits directly from the policy. See Continental Casualty Co. v.

Marx, 480 So. 2d 177, 178-79 (Fla. Dist. Ct. App. 1985) (“No court has ever held .

. . that [a] lawyer may himself sue upon an insurance policy or any other agreement

which obliges one contracting party to pay the other’s legal fees.”).3                 Rather,

Galanter was only entitled to payment pursuant to the letter agreement, which does

not make reference to the excess policy or its limits. See Key v. Allstate Ins. Co.,

90 F.3d 1546, 1549 (11th Cir. 1996) (holding that under Florida law, if the terms

of a contract are clear and unambiguous, “a court must interpret the contract in

accordance with its plain meaning, and, unless an ambiguity exists, a court should

not resort to outside evidence or the complex rules of construction to construe the

contract.”). In short, National Union cannot be held liable for breach of contract

3
       See also Old Republic Ins. Co. v. Sidley & Austin, 702 F. Supp. 207, 211 (N.D. Ill.
1988); Simmons v. USF&G Co., 405 A.2d 675 (Conn. Sup. Ct. App. Session 1978); Kelly,
Walker & Liles v. McFarling, 509 S.W.2d 659 (Tex. Ct. App. 1974).

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under the letter agreement since its primary policy limits -- to which, as the letter

agreement provided, Galanter was subject -- were exhausted.4

       Accordingly, we affirm the district court’s entry of summary judgment in

favor of National Union. See Bircoll v. Miami-Dade County, 480 F.3d 1072, 1088

n.21 (11th Cir. 2007) (“This Court may affirm on any ground supported by the

record.”).

       AFFIRMED.

       4
        Galanter’s primary response to this holding is that National Union did not make this
argument with particularity before the district court, and thus that the district court erred in
ruling on this basis. However, Galanter was generally on notice of, and in fact espoused, the
plain language in the letter agreement. See Artistic Entm’t, Inc. v. City of Warner Robins, 331
F.3d 1196, 1201-02 (11th Cir.2003) (per curiam) (“[W]here a legal issue has been fully
developed, and the evidentiary record is complete, summary judgment is entirely appropriate
even if no formal notice has been provided.”); Scott v. NCNB Nat. Bank of Florida, 489 So. 2d
221 (Fla. Dist. Ct. App. 1986) (no error where nonmoving party had sufficient notice of basic
argument).

        On the merits, Galanter essentially says the fact that the primary policy limit was
exhausted should not control, arguing that the insurers’ subsequent course of conduct modified
the terms of the written letter agreement, since he received payments from the insurers even after
National Union’s primary policy was exhausted. But National Union cannot be liable under a
course-of-conduct theory because: (1) Galanter has not pointed to any evidence on the record to
dispute National Union’s showing that any payments Galanter received immediately after
August 2005, when National Union’s primary policy was exhausted, were paid by the other
insurers in the tower, not National Union (and thus, National Union cannot be said to have given
the consent required for such a modification, see Rhodes v. BLP Associates, Inc., 944 So. 2d
527 (Fla. Dist. Ct. App. 2006)); and (2) Galanter has not pointed to any evidence in the record to
show that the payments he received in 2007, after he was re-retained, were pursuant to the
original letter agreement. Rather, the undisputed record indicates that when he was re-retained,
he received payments pursuant to a subsequent agreement.

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