Court Opinion

ID: 4433283
Source: CourtListenerOpinion
Date Created: 2019-08-26 18:00:32.333354+00
Date Added: 2024-06-11T14:24:42.347387
License: Public Domain

Case: 17-14844       Date Filed: 08/26/2019       Page: 1 of 23

                                                                    [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT

                               ________________________

                                     No. 17-14844
                               ________________________

                          D.C. Docket No. 0:16-cv-62168-MGC

PHILADELPHIA INDEMNITY INSURANCE COMPANY,
a foreign Corporation,

                                             Plaintiff-Counter Defendant-Appellee,

                                             versus

SABAL INSURANCE GROUP, INC.,
a foreign Corporation,
IAN MARSHALL NORRIS,

                                             Defendants-Counter Claimants-Appellants.

                               ________________________

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

                                      (August 26, 2019)

Before MARCUS, BLACK, and WALKER, ∗ Circuit Judges.

       ∗ John M. Walker, Jr., United States Circuit Judge for the Second Circuit, sitting by
designation.
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WALKER, Circuit Judge:

      This appeal concerns a Directors & Officers liability insurance policy (the

“Policy”) that Defendants-Counterclaim Plaintiffs-Appellants Sabal Insurance

Group, Inc. (“Sabal Insurance Group”) purchased from Plaintiff-Counterclaim

Defendant-Appellee Philadelphia Indemnity Insurance Company (“PIIC”).

Following an investigation by the Miami-Dade County Office of the Inspector

General regarding the business dealings of Sabal Insurance Group and its President

and CEO Ian M. Norris (“Norris” and together with Sabal Insurance Group,

“Sabal”), Norris was arrested, and Norris and Sabal Insurance Group were charged

with grand theft. Norris and Sabal Insurance Group settled the charges with the

State of Florida pursuant to a Stipulated Settlement Agreement (“SSA”), in which

they agreed to make various payments to the alleged victim and other entities.

Thereafter, Sabal claimed indemnification for these payments from PIIC under the

Policy. PIIC denied coverage, and then filed a declaratory judgment action against

Sabal. Sabal answered and counterclaimed on the basis that PIIC breached the

Policy by refusing to indemnify Sabal. The parties then cross-moved for summary

judgment, and on September 28, 2017, the district court (Marcia G. Cooke, Judge)

granted PIIC’s motion for summary judgment and denied Sabal’s motion for

summary judgment. Sabal has appealed, arguing that the district court erred in its

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disposition of both motions for summary judgment. For the reasons set forth

below, we AFFIRM the judgment of the district court.

                               I.       BACKGROUND

      We begin by setting out the relevant provisions of the Policy, the facts

pertaining to the charges against Sabal, the facts of Sabal’s claim under the Policy,

and the procedural history of this case.

          A. Relevant Provisions of the Policy

      The Policy requires that PIIC pay “Loss from Claims” for “D&O Wrongful

Acts” while the Policy is in effect. App’x at 38. A “D&O Wrongful Act”

includes “any actual or alleged . . . act, error, omission, misstatement, misleading

statement, neglect, or breach of duty committed or attempted by” the insured.

App’x at 38. A “Claim” includes “a criminal proceeding commenced by a return

of an indictment.” App’x at 44. There is no dispute that the criminal proceeding at

issue in this case qualifies as a Claim under the Policy.

      “Loss” includes “Damages” and “Defense Costs,” but does not include,

among other things, “matters deemed uninsurable under the law to which this

Policy shall be construed” or “criminal or civil fines or penalties imposed by law.”

App’x at 46. The Policy also includes the following exclusion:

      The Underwriter shall not be liable to make any payment for Loss in
      connection with any Claim made against the Insured:

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      A. arising out of, based upon or attributable to such Insured gaining
      any profit, remuneration or advantage to which they were not legally
      entitled; however, this exclusion shall only apply if a final and non-
      appealable judgment or adjudication establishes the Insured
      committed such act or omission;

      B. arising out of, based upon or attributable to any dishonest or
      fraudulent act or omission or any criminal act or omission by such
      Insured; however, this exclusion shall only apply if a final and non-
      appealable judgment or adjudication establishes the Insured
      committed such act or omission.

App’x at 48. The parties do not dispute that the amounts at issue in this case

are either Damages or Defense Costs under the Policy but do dispute

whether one or more of these exclusions applies.

         B. The Charges Against Sabal

      Like PIIC, Sabal is an insurance agency, and it provided a workers’

compensation and general liability insurance policy to Quality Aircraft Services

(“QAS”), paid for by the Miami-Dade Aviation Department (“MDAD”). MDAD

was concerned that it was being overcharged by Sabal, and it initiated an

investigation, which was carried out by the Miami-Dade County Office of the

Inspector General over the course of thirty months. Following the investigation,

Norris was arrested, and Norris and Sabal Insurance Group were charged with

grand theft under a five-count information. Under the alleged scheme, Sabal

overcharged QAS/MDAD by creating invoices with fraudulently inflated

premiums. PIIC alleges that the investigation determined that Sabal fraudulently

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obtained over $416,000; however, the amount obtained within the statute of

limitations was $180,807.87. Sabal Insurance Group and Norris settled the charges

with the State of Florida in the SSA, which required Sabal Insurance Group and/or

Norris to make the following three payments:

            1.   Payment to Miami Dade County Aviation
            Department in the amount of $183,807.87

            2.     A Donation payable to the Denise Moon Memorial
            Fund at The Miami Foundation in the amount of
            $100,000.00. Both Sabal and IAN MARSHALL NORRIS
            stipulate that neither will claim this money as a charitable
            deduction on any income tax return.

            3.    Costs of Investigation payable to the Miami-Dade
            County Aviation Department in the amount of
            $20,000.00

App’x at 103. We refer to these payments as the “Payment to MDAD,” the

“Donation,” and the “Costs of Investigation,” respectively.

         C. The Claim

      On September 23, 2014, Sabal notified PIIC that it had received a subpoena

from the Miami-Dade State Attorney’s Office. In response, on October 15, 2014,

PIIC issued a reservation of rights letter accepting the subpoena as a Claim under

the Policy and reserving its rights under the Policy. Sabal then received and

notified PIIC of a second subpoena, and on November 3, 2014, PIIC issued a

second reservation of rights letter accepting the second subpoena as a Claim under

the policy and reserving its rights under the Policy. On January 13, 2015, PIIC
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issued an updated reservation of rights letter advising Sabal that PIIC deemed the

criminal information that had been filed to relate back to the Claim originally

commenced by the subpoenas and reserving its rights under the Policy. PIIC

funded Sabal’s defense, and throughout 2015 responded to several questions from

Sabal regarding coverage under the Policy. In November 2015, Sabal’s defense

counsel asked whether PIIC would agree to indemnify Sabal for any payment to

Florida of the money it was accused of stealing. PIIC responded that it would not

indemnify Sabal for such payments for various reasons, including that restitution is

not damages but a criminal sanction and was therefore not a covered Loss under

the Policy.

      On February 19, 2016, Sabal’s counsel sent PIIC the proposed final SSA and

asked PIIC to advise within one business day whether it had any objections to the

proposed agreement or would request any changes. PIIC responded that it was not

prepared to review the agreement and advise as to coverage in that timeframe but

agreed not to object to the settlement on the basis that PIIC failed to provide its

consent to the settlement, as required by the Policy. On March 10, 2016, PIIC

issued a “Denial of Indemnity Coverage” letter to Sabal refusing to indemnify

Sabal for the payments made pursuant to the SSA.

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         D. Procedural History

      PIIC filed a declaratory judgment action against Sabal in the district court

for the Southern District of Florida asserting that it was not obligated to indemnify

Sabal under the Policy for the payments Sabal made under the SSA. Sabal

answered with affirmative defenses of waiver and estoppel and counterclaimed that

PIIC breached the Policy by refusing to indemnify Sabal. After the parties cross-

moved for summary judgment, the district court, on September 28, 2017, granted

PIIC’s motion for summary judgment and denied Sabal’s motion for summary

judgment. This appeal followed.

                                II.   DISCUSSION

      On appeal, Sabal argues that the district court erred in: (i) granting PIIC’s

motion for summary judgment on its declaratory claim that the Policy does not

obligate it to indemnify Sabal for the payments it made under the SSA, (ii) denying

Sabal’s motion for summary judgment on its breach of contract counterclaim, and

(iii) granting PIIC’s motion for summary judgment regarding Sabal’s affirmative

defenses. For the reasons set forth below, we affirm the district court’s grant of

PIIC’s motion for summary judgment and denial of Sabal’s motion for summary

judgment.

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          A. Standard of Review

      We review de novo the district court’s decision to grant one party’s motion

for summary judgment and to deny the other party’s motion for summary

judgment. Boardman Petrol., Inc. v. Federated Mut. Ins. Co., 135 F.3d 750, 752

(11th Cir. 1998). In doing so, we “consider all facts and reasonable inferences in

favor of the nonmoving party, and apply the same legal standards used by the

district court.” Galindo v. ARI Mut. Ins. Co., 203 F.3d 771, 774 (11th Cir. 2000).

“Summary judgment properly is granted when the evidence before the district

judge shows that there is no genuine issue concerning any material fact and that the

moving party is entitled to judgment as a matter of law.” Id.

      “The interpretation of an insurance contract is also a matter of law subject to

de novo review.” LaFarge Corp. v. Travelers Indem. Co., 118 F.3d 1511, 1515

(11th Cir. 1997). In a diversity action, we apply the substantive law of the forum

state, id. (citing Erie R.R. v. Tompkins, 304 U.S. 64 (1938)), which in this case is

Florida. In this regard, we are not limited to the law as stated by Florida’s

Supreme Court. “Absent a decision by the highest state court or persuasive

indication that it would decide the issue differently, federal courts follow decisions

of intermediate appellate courts in applying state law.” Galindo, 203 F.3d at 775.

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           B. Indemnification for Amounts Paid Pursuant to the SSA

        The district court concluded that the payments made by Sabal pursuant to

the SSA are not collectively a covered Loss under the Policy because, (i) as a

matter of Florida law, insurance contracts do not insure the restitution of ill-gotten

gains, and (ii) the payments made by Sabal under the SSA are “clearly

restitutionary in nature.” Philadelphia Indem. Ins. Co. v. Sabal Ins. Grp., Inc., No.

16-62168-CIV, 2017 WL 4310700, at *4 (S.D. Fla. Sept. 28, 2017). On appeal,

Sabal challenges both conclusions. While we agree with the district court’s

reasoning regarding the Payment to MDAD and the Costs of Investigation, we

affirm the district court’s conclusion that the Donation is not a covered Loss under

the Policy based on different reasoning. We address each of these payments in

turn.

                  i. Payment to MDAD

                        1. Coverage of the Restitution of Ill-Gotten Gains

        The first issue is whether, as matter of Florida law, an insurance contract

excludes the restitution of ill-gotten gains. The district court concluded that it

does, citing to an unpublished Eleventh Circuit opinion, CNL Hotels & Resorts,

Inc. v. Twin City Fire Ins. Co., 291 F. App’x. 220 (11th Cir. 2008) (unpublished

opinion). CNL Hotels addressed whether an insurance policy covered payments

made to settle disputes between a company and its shareholders following a

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corporate merger involving the company. Id. at 222. In that case, we concluded

that “loss” under an insurance contract does not include the restitution of ill-gotten

gains and that “[t]he return of money received through a violation of law, even if

the actions of the recipient were innocent, constitutes a restitutionary payment, not

a ‘loss.’” Id. at 223. We reach the same conclusion in this case.

       “It is axiomatic in the insurance industry that one should not be able to

insure against one’s own intentional misconduct,” and Florida courts recognize

exceptions to this general rule “only in individualized cases where innocent third

parties were involved or it appeared unlikely that the wrongful act could have been

produced by the prospect of coverage.” Ranger Ins. Co. v. Bal Harbour Club, Inc.,

549 So. 2d 1005, 1007 (Fla. 1989). In this case, the payments by Sabal were made

to resolve alleged intentional misconduct, and it is likely that the prospect of

coverage under the Policy would have tended to encourage the alleged wrongful

act.

       Sabal nevertheless argues that Florida law permits insurance contracts to

cover restitution, and points to Mitchel v. Cigna Prop. & Cas. Ins. Co., 625 So. 2d
862, 863 (Fla. Dist. Ct. App. 1993). In that case, the Third District Court of

Appeal concluded that the insurance contract at issue did cover a restitution

payment imposed as part of the settlement of criminal charges. Id. 863–65.

Mitchel is factually distinguishable from the present case, however, because it dealt

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with restitution in the form of compensation for damage the insured caused to a

coral reef with his boat, not the restitution of ill-gotten gains. Id. at 863. Mitchel

also therefore does not run afoul of the axiom stated in Ranger.

      Public policy considerations also counsel against interpreting the Policy as

covering the restitution of ill-gotten gains. As described by the Florida Supreme

Court, when “determining whether a particular policy of civil liability insurance is

opposed to public policy, we look to two factors: the conduct of the insured (is it a

type that will be encouraged by insurance?), and the purpose served by the

imposition of liability for that conduct (is it to deter wrongdoers or compensate

victims?).” Ranger, 549 So. 2d at 1007. “An examination of the first factor leads

to the determination of whether the existence of insurance will directly stimulate

commission of a wrongful act, and an examination of the second factor leads to the

determination of whether deterrence or compensation should be given priority.”

Id.

      In this case, the first factor favors excluding coverage, because extending

coverage under an insurance contract to the restitution of ill-gotten gains could

encourage commission of a wrongful act. The second factor also favors excluding

coverage, because excluding coverage would deter wrongdoing, while allowing

coverage would only compensate the wrongdoer. Public policy considerations,

therefore, reinforce the axiom that “one should not be able to insure against one’s

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own intentional misconduct,” id., and together compel our conclusion that

insurance contracts are not, as a matter of Florida law, permitted to insure the

restitution of ill-gotten gains.

       Sabal next argues that even if the restitution of ill-gotten gains cannot be

insured under Florida law, under this Policy a payment is only the restitution of ill-

gotten gains if it is determined to be so by a final and non-appealable judgment or

adjudication. In other words, Sabal argues that we must read the Policy’s

exclusionary provision into the coverage provision, either because the two

provisions must be considered in pari materia or because if the exclusionary

provision is not read into the coverage provision, it would make the coverage

provision superfluous. Neither argument has merit.

       As a threshold matter, we agree with the district court’s refusal to read the

exclusionary provision into the coverage provision on the basis that “Florida law

clearly states that an exclusionary provision does not apply unless there is coverage

in the first instance.” Philadelphia Indem. Ins. Co., 2017 WL 4310700, at *5.

Without coverage there is nothing from which to exclude. “This statement of the

law is undeniable—the existence or nonexistence of an exclusionary provision in

an insurance contract is not at all relevant until it has been concluded that the

policy provides coverage for the insured’s claimed loss.” Siegle v. Progressive

Consumers Ins. Co., 819 So. 2d 732, 740 (Fla. 2002). In this case, because the

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policy does not provide coverage for the restitution of ill-gotten gains, there is no

need to look to the exclusionary provision. Sabal argues that the district court’s

reliance on Siegle was misplaced because the policy in that case did not include an

exclusion to be read in the context of the entire contract, and therefore its rule only

applies to contracts that do not have an exclusionary provision. But Siegle states a

general legal principle, not a statement of law limited to specific facts.

      Regarding Sabal’s argument that the coverage and exclusionary provisions

should be read together, Sabal is correct that “[a]lthough exclusionary clauses

cannot be relied upon to create coverage, principles governing the construction of

insurance contracts dictate that when construing an insurance policy to determine

coverage the pertinent provisions should be read in pari materia.” State Farm Fire

& Cas. Co. v. CTC Dev. Corp., 720 So. 2d 1072, 1074–75 (Fla. 1998) (citations,

internal quotation marks, and brackets omitted). However, “courts generally apply

in pari materia only when a legal text is ambiguous.” United States v. Warren,

820 F.3d 406, 408 (11th Cir. 2016). Here, the coverage provision is unambiguous,

so there is no need to turn to other sections of the Policy to interpret it. In addition,

Sabal’s reading of the coverage provision would add a condition that is not

included in the plain language of the Policy. “When an insurance contract is not

ambiguous, it must be given effect as written.” Siegle, 819 So. 2d at 735.

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      Sabal’s argument that the coverage provision would be superfluous if it is

not considered together with the exclusionary provision is equally without merit.

In making this argument, Sabal relies on a district court decision from Minnesota:

U.S. Bank Nat. Ass’n v. Indian Harbor Ins. Co., 68 F. Supp. 3d 1044 (D. Minn.

2014). That court was persuaded that if it interpreted the exclusionary provision

regarding matters uninsurable under the law as precluding coverage for a payment

based on a settlement resolving claims for restitution, “it would nullify the Ill-

Gotten Gains Provision that precludes coverage for a payment based only on a

final adjudication determining that the claims warrant restitution. So to interpret

the two provisions consistently, the Court must read the Uninsurable Provision to

bar coverage for a payment that a final adjudication in the underlying action

determined is restitution.” Id. at 1050. We are unpersuaded. Although “‘in

construing insurance policies, courts should read each policy as a whole,

endeavoring to give every provision its full meaning and operative effect,’” U.S.

Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 877 (Fla. 2007) (quoting Auto–

Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000)), these two provisions

are not duplicative because there could be circumstances in which the claim is

deemed uninsurable by law but the insured has not committed a criminal act.

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       For these reasons, we agree with the district court in this case that, as a

matter of Florida law, insurance contracts do not insure the restitution of ill-gotten

gains. Sabal’s arguments to the contrary are unavailing.

                        2. Whether the Payment to MDAD is Restitution

       The second issue we must consider is whether the $183,807.87 Payment to

MDAD is the restitution of ill-gotten gains. We conclude that it is.

       In support of its argument that the payment under the SSA is not restitution,

Sabal points to the following facts. Under the SSA, the State of Florida agreed to

“nolle prose [sic] all charges contained in the Information” as to Norris and Sabal

Insurance Group. App’x at 103. The SSA also stated that the parties “are aware of

the risks of litigation and the chances of success or failure, and desire to settle all

charges in the Information now pending and to end all charges in the Information,”

App’x at 102, and that Sabal’s payments would be made “[w]ithout there being

any admission of guilt by either Norris or Sabal [Insurance Group] and solely for

purposes of compromise and case resolution.” App’x at 103. The district court

dismissed these statements by citing our unpublished decision in CNL Hotels for

the proposition that the SSA “is not binding on any third party or this Court,”

Philadelphia Indem. Ins. Co., 2017 WL 4310700, at *4 (citing CNL Hotels, 291 F.

App’x. at 224), and concluded that the payment was “clearly restitutionary in

nature,” id. at *5.

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      “The word ‘restitution’ is generally understood as being synonymous with

‘restoration’ and ‘indemnification.’” J.O.S. v. State, 668 So. 2d 1082, 1085 (Fla.

Dist. Ct. App. 1996), approved, 689 So. 2d 1061 (Fla. 1997). “[T]he purpose of

[criminal] restitution is twofold (1) to compensate the victim and (2) to serve the

rehabilitative, deterrent, and retributive goals of the criminal justice system.”

Kirby v. State, 863 So. 2d 238, 242 (Fla. 2003). “For [criminal] restitution to be

deemed reasonable, it must bear a significant relationship to the convicted offense.

A factor in determining whether a significant relationship exists is whether there is

a causal connection between the criminal conduct and the loss claimed by the

victim.” L.H. v. State, 803 So. 2d 862, 863 (Fla. Dist. Ct. App. 2002) (internal

citations omitted).

      With these standards in mind, we agree with the district court that the

Payment to MDAD is restitution. It was made to resolve a criminal information

charging Sabal with grand theft, and the amount of the Payment to MDAD is equal

to the amount of Sabal’s alleged ill-gotten gains that accrued within the statute of

limitations. It is clear to us from the language of the SSA and the surrounding

circumstances that the purpose of the Payment to MDAD is to make MDAD whole

for losses that accrued within the statute of limitations period. The provisions of

the SSA in which Sabal did not admit guilt are irrelevant, because the admission of

guilt is not required for a payment to be the return of ill-gotten gains.

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      On appeal, Sabal argues that Eleventh Circuit case law does not support the

proposition that an unproven allegation constitutes an uninsurable claim. Sabal

first points to Int’l Ins. Co. v. Johns, 874 F.2d 1447, 1455 (11th Cir. 1989), for the

proposition that “[w]ithout a finding that the gains were in fact ill-gotten, the

insurer could not deny coverage or disclaim the loss.” Appellant’s Br. at 37. But

this statement does not appear in the opinion. And Johns did not address the

restitution of ill-gotten gains, but rather the question of whether money paid to

executives under a golden parachute was corporate waste. 874 F.2d at 1450. Sabal

next cites Limelight Prods., Inc. v. Limelight Studios, Inc., 60 F.3d 767 (11th Cir.

1995), arguing that the case stands for the proposition that “damages” under an

insurance policy includes ill-gotten profits. Limelight is also factually

distinguishable. That case considered recovery of ill-gotten profits under the

Lanham Act, which are “the presumed equivalent of plaintiff’s own lost profits”

and therefore “merely another form of damages that the statute permits to be

presumed because of the proof unavailability in these actions.” Id. at 769.

      Sabal also makes a policy argument that settlements are favored under

Florida law, implying that settlements will be discouraged if we find the payments

under the SSA to be restitution. Although the District of Minnesota was convinced

by this argument, U.S. Bank, 68 F. Supp. 3d at 1050, we agree with the Seventh

Circuit that it “can’t be right” that if a case is settled before an entry of judgment,

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“the insured is covered regardless of the nature of the claim against it.” Level 3

Commc’ns, Inc. v. Federal Ins. Co., 272 F.3d 908, 911 (7th Cir. 2001). Doing so

would create an artificial distinction between parties who have settled criminal

cases and parties who have not, and would allow wrongdoers to recoup the

proceeds of their wrongdoing simply by entering into a settlement agreement. See

id. at 911–12.

       For these reasons, we agree with the district court that the payment to

MDAD under the SSA is the restitution of ill-gotten gains and therefore not a Loss

that is covered by the Policy.

                   ii. Donation

       Without discussing the issue, the district court also considered the Donation

under the SSA to be restitution. The Donation does not restore any ill-gotten

gains, however. It was paid to a third-party charitable foundation, rather than the

victim of Sabal’s alleged crime. In addition, the amount of the Donation,

$100,000, does not have a clear connection to the $235,192.13 that Sabal allegedly

stole beyond the statute of limitations period. For these reasons, the Donation is

not restitution.

       Nevertheless, we agree that the Donation is not a covered Loss under the

Policy. Loss under the Policy also excludes “criminal or civil fines or penalties

imposed by law,” and the Donation is such a penalty. App’x at 46. Under Florida

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law, “a penalty or fine involves punishment which is not designed to effect

compensation for or restoration of the damages caused by a specific act.” Mitchel,
625 So. 2d at 864. Unlike damages, “[a] penalty need have no causal connection

with the wrong inflicted. In a penal statute the penalty is inflicted by a law for its

violation.” Hyman v. State, Dep't of Bus. Regulation, Div. of Pari-Mutuel

Wagering, 431 So. 2d 603, 605 (Fla. Dist. Ct. App. 1983) (quoting Porter v.

Montgomery, 163 F.2d 211, 215 (3d Cir. 1947) (internal quotation marks

omitted)). Therefore, “a remedial provision designed to effect restitution rather

than to punish and deter wrongdoing is not a penalty.” Id. at 605. Viewed in this

light, the Donation is plainly a penalty. Although the parties call this payment a

“Donation,” it is neither voluntary nor tax deductible.

      Sabal argues that the Donation cannot be a “fine or penalty imposed by law”

because only the judiciary can order criminal restitution and the criminal charges

in this case were not adjudicated. This distinction is immaterial. The SSA was

entered into between Sabal and the State of Florida, explicitly for the purpose of

resolving felony charges, and was “accepted and ratified” by the court. App’x at

109. Therefore, the Donation that was imposed by the SSA is a penalty imposed

by law.

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               iii. Costs of Investigation

      Unlike the Donation, we agree with the district court that the Costs of

Investigation in the amount of $20,000 is restitution. The Costs of Investigation

was paid to MDAD, the alleged victim, even though the investigation was

conducted by the Miami-Dade County Office of the Inspector General, not

MDAD. In addition, the notation on Sabal’s check for the Costs of Investigation

indicates that this amount, like the Payment to MDAD, is a “settlement.” App’x at

115. For the same reasons that the Payment to MDAD is not a covered Loss under

the Policy, the Costs of Investigation is not a covered Loss under the Policy.

          C. Sabal’s Breach of Contract Counterclaim

      The district court denied Sabal’s motion for summary judgment on its breach

of contract counterclaim because a breach of contract cause of action requires “that

there actually be coverage under the Policy.” Philadelphia Indem. Ins. Co., 2017
WL 4310700, at *6. On appeal, Sabal argues that the district court erred in

granting summary judgment to PIIC on Sabal’s breach of contract claim because

the Policy “unambiguously covers indemnification for the payments made to settle

the State’s action.” Appellant’s Br. at 47. However, because we reject Sabal’s

argument that these payments are covered under the Policy, we agree with the

district court that Sabal’s breach of contract claim fails.

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             D. Sabal’s Affirmative Defenses

      Finally, Sabal argues that the district court erred in granting summary

judgment to PIIC on Sabal’s affirmative defenses because disputed issues of

material fact remain. Specifically, Sabal argues that “there is a factual dispute as

to whether PIIC is estopped to deny coverage, waived its right to deny coverage or

otherwise ratified the terms of the Stipulated Settlement Agreement.” Appellant’s

Br. at 48.

      This alleged factual dispute revolves around an email exchange between

Sabal and PIIC regarding the SSA. On February 19, 2016, Sabal’s counsel sent

PIIC’s counsel a draft version of the SSA, requested that PIIC advise “whether

PIIC sees anything objectionable or requests any changes” and stated that “Mr.

Norris asked that I pass on to you his request that PIIC, based upon Mr. Norris’s

review of the applicable policy, fund the payments to be made by Sabal referenced

in paragraph 2(d) of the proposed agreement.” App’x at 398. PIIC’s counsel

responded on the same day as follows:

      Congratulations on the nolle prose [sic]. The settlement agreement
      arrived at 2:47 pm Friday and you are looking for a response by early
      afternoon one business day later. PIIC is not prepared to review this
      and advise as to coverage in that time frame. PIIC will agree not to
      interpose any objection to the document or to the amounts agreed to be
      paid on the basis that PIIC’s written consent to the settlement was not
      obtained. (Part 6, section III B) Otherwise we will review it as soon as
      reasonably possible and advise.

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             Case: 17-14844      Date Filed: 08/26/2019   Page: 22 of 23

      Further to our review please forward all revisions and versions of the
      agreement as referenced below. We will likely have questions
      concerning the settlement.

App’x at 406. Sabal’s counsel then responded: “My time sensitive inquiry is not

requesting a coverage opinion; only seeking objections to terms. The separate

inquiry as to coverage by Mr. Norris should be addressed with Mr. Norris and

should not hold up settlement on Tuesday. Two different issues.” App’x at 408.

      Although Sabal and PIIC cite two different sources in the record for this

email exchange, the text is the same in both. Thus, there is no disputed issue of

fact. Rather, the dispute is a legal question of whether this email exchange

constitutes an agreement by PIIC “not to object to the use of the document to

resolve the underlying case, or to object to the amounts agreed to be paid.”

Appellant’s Br. at 48. But the plain language of PIIC’s email shows that it is not

such an agreement. PIIC agreed not to “interpose any objection” only “on the

basis that PIIC’s written consent to the settlement was not obtained” and explicitly

stated that it could not “advise as to coverage.” App’x at 406. That coverage was

not implicated by PIIC’s response was confirmed by Sabal’s reply. Therefore,

there is no factual dispute regarding the waiver and estoppel defenses, and the

district court did not err in finding otherwise.

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            Case: 17-14844    Date Filed: 08/26/2019   Page: 23 of 23

         E. Conclusion

      For these reasons, we AFFIRM the district court’s grant of PIIC’s motion for

summary judgment and its denial of Sabal’s motion for summary judgment.

AFFIRMED.

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