                                                   [DO NOT PUBLISH]


             IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________              FILED
                                                   U.S. COURT OF APPEALS
                            No. 08-13303             ELEVENTH CIRCUIT
                                                         MAY 18, 2009
                      ________________________
                                                     THOMAS K. KAHN
                                                         CLERK
              D. C. Docket Nos. 07-00288-CV-ORL-28-DAB,
                            07-00595-CV-ORL

6:07-CV-288-ORL-28DAB:


ERNIE HAIRE FORD, INC.,

                                                  Plaintiff-Appellee,

CROWN AUTO DEALERSHIPS, INC.,

                                                  Consolidated Plaintiff-
                                                  Appellee-Cross-
                                                  Appellant,

                                versus

UNIVERSAL UNDERWRITERS INSURANCE COMPANY,

                                                 Defendant-Appellant-
                                                 Cross-Appellee.
__________________________________________________________________
6:07-CV-595-ORL-28DAB:

CROWN AUTO DEALERSHIPS, INC.,

                                                   Plaintiff-Appellee-
                                                   Cross-Appellant,
                                        versus

UNIVERSAL UNDERWRITERS INSURANCE COMPANY,

                                                            Defendant-Appellant-
                                                            Cross-Appellee.


                            ________________________

                    Appeals from the United States District Court
                         for the Middle District of Florida
                          _________________________

                                   (May 18, 2009)

Before BIRCH, HULL and FAY, Circuit Judges.

PER CURIAM:

      This case involves a dispute regarding the amount of liability insurance

coverage available to Ernie Haire Ford, Inc. (“Ford”) and Crown Auto Dealerships,

Inc. (“Crown”) (collectively, “Appellees”) in connection with class action suits

filed against them. The district court granted in part and denied in part Appellees’

summary judgment motion as to the scope of coverage available to them. The

court also granted summary judgment to Universal Underwriters Insurance

Company (“Universal”) regarding whether it breached its duty to defend Crown in

the class action suit. Universal appeals the district court’s grant of Appellees’

motion for summary judgment regarding the scope of coverage. Crown filed a

                                           2
cross-appeal from the district court’s grant of Universal’s motion for summary

judgment on the question of the duty to defend. Ford also moved to dismiss

Universal’s appeal as moot with respect to the district court’s grant of summary

judgment against Ford. After reviewing the record and hearing oral argument, we

DENY Ford’s motion to dismiss the appeal, AFFIRM the district court’s grant of

Appellees’ motion for summary judgment, VACATE the court’s grant of

Universal’s motion for summary judgment, and REMAND for further proceedings

in light of this opinion.

                                     I. BACKGROUND

A. Class Action Suits and Appellees’ Insurance Policies

       Ford and Crown both were sued in separate class-action law suits for multi-

year patterns or practices involving automobile sales that allegedly violated the

Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. The class period for the

suit against Ford ran from 30 August 1998 to 1 August 2003, and the class period

for the suit against Crown ran from 5 January 2000 to 5 July 2003.1 Ford and

Crown both purchased “Unicover” insurance policies from Universal. Both



       1
         The district court’s first summary judgment order mentions that the end date of the class
period for the suit against Ford possibly was being changed to 31 December 2002. See Ernie
Haire Ford, Inc. v. Universal Underwriters Ins. Co., 541 F. Supp. 2d 1295, 1296 n.1 (M.D. Fla.
2008). The parties’ briefs do not discuss whether this change occurred. However, based on the
time frames covered by the policies at issue, such a modification would not alter our analysis.

                                                3
companies purchased five successive policies during the time frame encompassed

by their respective class periods.2 All of Ford’s policies covered annual periods

between 1 April 1998 and 1 April 2003. Four of Crown’s policies also covered

annual periods — one from 1 August 1999 to 1 August 2000 and three between 1

April 2001 and 1 April 2004. Crown’s fifth policy covered the period between 1

August 2000 and 1 April 2001.

       TILA violations are covered in Coverage Part 500 of the Unicover Policy as

part of “STATUTE AND TITLE E&O” (hereinafter, “STEO”). In Coverage Part

500, Universal agreed to “pay all sums the INSURED legally must pay as

DAMAGES . . . because of STATUTE AND TITLE E&O.” R4-33, Exh. C at

UUIC-00053. The Unicover Policy defines STEO as “any claim or SUIT filed

against [the policyholder] . . . by or on behalf of . . . a customer . . . because of an

alleged violation during the Coverage Part period, of any federal, state, or local . . .

truth-in-lending or truth-in-leasing law.” Id. at UUIC-00055. It also defines

“DAMAGES” as “amounts awardable by a court of law” and “SUIT” as “a civil

action for DAMAGES.” Id. at UUIC-00054–55. The Unicover Policy specifically

provides that “[a] class action is one SUIT.” Id. at UUIC-00056. Additionally, it


       2
          For the purposes of this appeal, the relevant language of Appellees’ policies is identical.
Hereinafter we will refer to the “Unicover Policy” when addressing language common to all the
policies and will refer to “the policy” or “the policies” when discussing a particular policy or
policies.

                                                  4
contains a “non-stacking provision” as part of its “General Conditions,” which

states as follows:

             NON-STACKING OF LIMITS — If more than one
             Coverage Part or policy issued by US to YOU should
             insure a LOSS, INJURY, OCCURRENCE, claim or
             SUIT, the most WE will pay is the highest limit
             applicable. The limit under that Coverage Part or policy
             will be inclusive of the lower limit in the other Coverage
             Part(s) or policy(s), not in addition to them.

Id. at UUIC-00020. In this provision, “US” and “WE” refer to Universal and

“YOU” to the insured party.

      For those policy periods before 1 April 2002, the policies provided that

Universal would pay no more than “the annual aggregate limit shown in the

declarations for the sum of all DAMAGES and settlements involving STATUTE

and TITLE E&O.” Id. at UUIC-00059–60. All of the relevant declarations pages

for those policy periods list the “annual aggregate” and “per suit” limits as

$500,000. Unicover altered this provision for policy periods beginning 1 April

2002 by adding an endorsement stating that the most it would “pay in damages and

defense costs for any one claim or suit is the limit per suit stated in the declarations

for such coverage.” R5-33, Exh. F at UUIC-00132. For those policy periods, the

declarations pages listed the “per suit” limits as $25,000 and the “annual

aggregate” limits as $500,000.



                                            5
      In early 2004, Crown submitted to Universal the first amended complaint in

the class action suit against it. Universal appointed an attorney, Mark Kapusta, to

defend the action and notified Crown of this action in a 2 February 2004 letter. In

this letter, Universal noted that it was accepting the matter under a reservation of

rights since it was unable to determine whether the action was covered under the

Unicover Policy. It also stated that Crown had an aggregate limit of $500,000 for

all damages and settlements stemming from STEO claims and suits. Kapusta

subsequently hired an expert, who estimated potential damages from the class

action suit at between $624,105 and $974,900. Crown’s separately-hired counsel

rendered a much higher estimate — $44 million in potential damages.

      The class action parties unsuccessfully attempted to mediate the dispute in

both July 2004 and March 2005. On both occasions, Universal recommended

settlement and offered to pay $500,000, which it believed to be the policy limit

because it thought that the class action was subject to the non-stacking provision.

Universal estimated that Crown would have to contribute $100,000 or more to

effect a settlement. Crown officials testified that they were reluctant to settle, even

for an amount under $500,000, because they believed they had done nothing wrong

and did not want to set a bad precedent by settling. Crown ultimately settled the

class action in September 2007 for over $1.1 million.



                                           6
B. Procedural History

      In early 2007, Appellees filed separate suits against Universal in Florida

state court seeking declaratory judgments about the scope of coverage available to

them under the Policies with respect to the class action suits. Universal removed

both cases to the United States District Court for the Middle District of Florida.

Shortly thereafter, Universal moved to consolidate the two cases based on the

presence of common questions of law and fact, the similarity in the plaintiffs’

allegations and the defenses Universal raised, and the fact that common counsel

represented both Crown and Ford. The district court granted the motion.

      The complaints filed by Appellees were largely identical. Count One

involved a request for a declaratory judgment that they were entitled to $500,000

in liability limits under Coverage Part 500 for each of the years involved in the

class action. Count Two involved a similar request regarding a different part of the

Unicover policy, Coverage Part 550. Crown’s second amended complaint also

included a third count alleging that Universal breached its duty to defend with

respect to the underlying class action and seeking all consequential damages

stemming from that breach.

      Appellees subsequently moved for summary judgment as to Count One.

Universal filed a cross-motion for summary judgment as to Count One and moved



                                          7
for summary judgment on Count Three.3 With respect to Count One, the court

disagreed with Universal’s contention that the non-stacking provision limited

coverage. It found that provision to be inapplicable because no single policy

insured the entire class action suit. See Ernie Haire Ford, 541 F. Supp. 2d at 1301.

Instead, the court generally agreed with Appellees that the policies provided a

separate limit for each policy period, which was equivalent to the “per suit” limit in

each policy. See id. at 1303, 1306–07. The sole point of disagreement was with

respect to coverage for those policy periods after 1 April 2002. The court

concluded that the change in policy language for those periods meant that the limit

for those periods was $25,000 rather than $500,000. See id. at 1305–06. The court

therefore granted in part and denied in part Appellees’ motion on Count One and

denied Universal’s cross-motion on that count. See id. at 1307. Universal

appealed this decision.

       With respect to Count Three, Crown contended that summary judgment was

inappropriate because Universal should have settled at mediation for an amount

greater than $500,000.4 It asserted that such a refusal constituted a breach of



       3
           The district court dismissed Count Two based on a joint stipulation by the parties.
       4
          Crown also cited four other bases upon which a jury could find for it on the issue of
duty to defend. However, on appeal it specifically limited its arguments to Universal’s refusal to
settle for more than $500,000.

                                                  8
Universal’s contractual duty to defend in light of the court’s ruling that the policy

limits exceeded that figure. The court disagreed, instead finding that a mistake

regarding the correct amount of coverage would not prove that Universal had

breached a contractual duty to defend. On this basis, it granted Universal’s motion

as to Count Three. Crown filed a cross-appeal of this decision. On 24 November

2008, after the district court granted summary judgment for Appellees on Count

One, Universal wrote a check to the class action plaintiffs suing Ford for

approximately $1.8 million, an amount equivalent to the remaining policy limits.

Based on this action, Ford filed a motion to dismiss as moot Universal’s appeal of

the grant of summary judgment for Ford.

                                  II. DISCUSSION

A. Scope of Coverage

      Universal contends that the district court erred in granting summary

judgment to Appellees on Count One. It asserts that, since the Unicover Policy

treated a class action as a single suit, the non-stacking provision limits coverage for

a class action to the highest “per suit” limit contained in any of the applicable

policies, which would be $500,000. It also maintains that the district court’s

decision contravened the plain language of the Unicover Policy and violated the

parties’ freedom of contract.



                                           9
      We review de novo a district court’s grant of motion summary judgment.

See Pugliese v. Pukka Dev., Inc., 550 F.3d 1299, 1302 (11th Cir. 2008). In so

doing, we “apply[] the same legal standards that bound the district court, and

view[] all facts and reasonable inferences in the light most favorable to the

nonmoving party.” Id. (quotation marks and citation omitted). The decision to

grant summary judgment is appropriate when “there is no genuine issue as to any

material fact and . . . the moving party is entitled to a judgment as a matter of law.”

Fed. R. Civ. P. 56(c).

      In a diversity suit, such as this, we apply the substantive law of Florida, the

forum state. See generally Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817

(1938). Under Florida law, the interpretation of provisions of an insurance policy

is a question of law, which we review de novo. See James River Ins. Co. v.

Ground Down Eng’g, 540 F.3d 1270, 1274 (11th Cir. 2008). Additionally, “[i]f

the relevant policy language is susceptible to more than one reasonable

interpretation, one providing coverage and another limiting coverage, the insurance

policy is considered ambiguous.” Garcia v. Federal Ins. Co., 969 So. 2d 288, 291

(Fla. 2007) (quotation marks and citations omitted). “Ambiguities in insurance

contracts are interpreted against the insurer and in favor of the insured.” Id.

      The non-stacking provision in the Unicover Policy limits the amount of



                                          10
coverage only “[i]f more than one Coverage Part or policy . . . should insure a . . .

SUIT.” R4-33, Exh. C at UUIC-00020. We view this language as having two

potential interpretations. Read broadly, it could encompass all situations in which

multiple policies cover some portion of the underlying suit. However, it also could

be read narrowly to address only those circumstances in which multiple policies

insured the complete suit.5 Since both of these readings are reasonable, the

provision is ambiguous, and we must construe it against Universal and in favor of

Appellees. We therefore interpret it narrowly so as to limit coverage only when

multiple policies insure an entire suit.

       Under this narrow interpretation, the non-stacking provision would not limit

Appellees’ STEO coverage. Universal contends that since the Unicover policy

defines a class action as a single suit, such suits should be non-divisible for the

purpose of determining whether a policy insures a suit. However, this argument

ignores the consecutive, non-concurrent, nature of the policies and the fact that the

policies’ own terms base STEO coverage on the timing of the violations. Each

       5
         Notably, the “more than one Coverage Part or policy” language fails to resolve whether
the “Part or policy” must partially “insure” or completely “insure” the suit. The word “insure,”
in our view, is not synonymous with the term “apply.” That is, UUIC might be correct if the
policy discussed situations in which “more than one Coverage Part or policy should [apply to] a
SUIT.” But that is not what the non-stacking provision says. This lack of clarity is especially
troublesome here where each successive policy would cover only a part of a law suit. Further,
although the provision begins by saying “more than one Coverage part or policy,” it ends by
saying “should insure a SUIT” — not “a SUIT or a part of a SUIT.” At a minimum, it is unclear
whether the language refers to part or all of the suit.

                                               11
individual policy covers suits deriving from those violations that occur during its

particular policy period. Both of the underlying class action suits stemmed from

patterns and practices of violations that took place over a number of years.

Multiple policies would have been in effect during the time when the violations

took place, with no policy governing during the full class period. Each policy thus

covered a portion of the class action suits, but more than one policy did not insure

the entirety of either suit. Since no policy nor provision of a policy would insure

the whole class action, the non-stacking limitation is inapplicable. As the district

court correctly noted, Appellees’ coverage in the underlying class action suits thus

would be equal to the “per suit” limitation for each applicable policy period.

Accordingly, we affirm the district court’s grant of Appellees’ motion for summary

judgment as to Count One.6

B. Duty to Defend

       Crown contends that the district court erred in granting summary judgment

for Universal on Count Three. It asserts that since the coverage available under the

       6
         Although the district court made no explicit finding regarding whether the policy was
ambiguous, it made reference to Florida’s standards for interpreting ambiguous policy language
and applied the narrow interpretation of the non-stacking limitation. Regardless, we can affirm a
grant of summary judgment on any basis that is supported by the record. See Lucas v. W.W.
Grainger, Inc., 257 F.3d 1249, 1256 (11th Cir. 2001).

       Additionally, since we affirm the district court’s grant of summary judgment on this
count, we do not have to address Ford’s motion to dismiss Universal’s appeal. We therefore
deny that motion.

                                               12
Unicover Policy was $1.55 million, Universal breached its contractual duty to

defend by refusing to settle the class action within the actual policy limit, even if it

had a reasonable belief at the time that the policy limit was only $500,000. The

district court, in addressing this argument, noted that Crown alleged only a breach

of contract rather than the broader violation of bad faith settlement practices and

found that Universal made a reasonable mistake regarding the correct amount of

coverage. Such a mistake, it concluded, was insufficient to establish either bad

faith or a breach of the duty to defend, particularly since Crown did not contest

Universal’s coverage estimate until 2007.

      Universal’s duty to defend derives from the text of the Unicover Policy. See

Allstate Ins. Co. v. RJT Enters., Inc., 692 So. 2d 142, 144 (Fla. 1997) (noting that

an insurer’s duty to defend is based on either contract or statute). Under Coverage

Part 500, Universal has “the right and duty to defend any SUIT asking for” STEO

damages or any damages described in that coverage part. R4-33, Exh. C at UUIC-

00053. As part of this duty, Universal “may investigate and settle any claim or

SUIT [it] consider[s] appropriate.” Id. Universal’s duty to defend ceases after it

has paid the limit identified in the policy declarations. See id.

      Universal asserts that the district court correctly granted summary judgment

because Crown failed to assert that Universal acted in bad faith in refusing to settle



                                           13
for more than $500,000. However, Florida appellate courts often have permitted

plaintiffs to assert a breach of contract claim for an allegedly wrongful denial of

coverage and to seek damages resulting from that breach. See Florida Ins. Guar.

Ass’n, Inc. v. All the Way with Bill Vernay, Inc., 864 So. 2d 1126, 1129 (Fla. Dist.

Ct. App. 2003); Robinson v. State Farm Fire & Cas. Co., 583 So. 2d 1063, 1068

(Fla. Dist. Ct. App. 1991); Carrousel Concessions, Inc. v. Florida Ins. Guar. Ass’n,

483 So. 2d 513, 516 (Fla. Dist. Ct. App. 1986). This is true even in circumstances

in which the plaintiff has not or could not assert a bad faith claim. See, e.g.,

Carrousel Concessions, 483 So. 2d at 516 (noting that whether an insurer breached

its duty to defend “can be determined objectively from the insurance contract itself

without inquiry into whether the insurer acted in good faith or bad faith”). We

therefore find that, contrary to the district court’s conclusions, Crown could

establish a valid claim for breach of a contractual duty to defend based on

Universal’s refusal to settle.

      We also disagree with the district court’s finding that summary judgment

was proper because Universal’s mistake as to the correct amount of coverage was

reasonable. Florida courts have held that “[a]n insurer which denies coverage does

so at its own risk” even if it bases the denial “on a mistaken but honest belief that

coverage did not exist.” Thomas v. Western World Ins. Co., 343 So. 2d 1298,



                                           14
1304 (Fla. Dist. Ct. App. 1977) (per curiam); see also Gallagher v. Dupont, 918 So.

2d 342, 347 (Fla. Dist. Ct. App. 2005) (noting that an insurer “acts at its peril in

refusing to defend its insured and will be held responsible for the consequences”);

St. Paul Fire & Marine Ins. Co. v. Thomas, 273 So. 2d 117, 121 n.7 (Fla. Dist. Ct.

App. 1973). In this case, Crown did not contest Universal’s contentions about the

policy limits at the time of the settlement negotiations and even may have

evidenced a reluctance to settle. However, as the Florida Supreme Court has

noted, it is the insurer, not the insured, who is responsible for “mak[ing] decisions

as to when and when not to offer or accept settlement of the claim.” Doe v.

Allstate Ins. Co., 653 So. 2d 371, 374 (Fla. 1995) (per curiam). As a result, though

Crown’s actions would buttress Universal’s argument that it did not breach its duty

to defend, they do not compel that conclusion, and a jury could still reasonably

find the opposite. The duty-to-defend issue thus involves sufficient issues of

material fact to preclude summary judgment. We therefore vacate the district

court’s grant of Universal’s motion for summary judgment on Count Three and

remand for further proceedings in light of this opinion.

                                 III. CONCLUSION

      Universal appeals the district court’s grant of Ford and Crown’s motion for

summary judgment regarding the scope of coverage under the Unicover Policy for



                                           15
various class-action suits filed against them, and Crown cross-appeals the court’s

grant of Universal’s motion for summary judgment as to whether Universal

breached its duty to defend under the policy. Ford also moves to dismiss

Universal’s appeal as moot as to it. Because we find that the policy language

discussing stacking of policy limits was, at best, ambiguous, we AFFIRM the

district court’s grant of Ford and Crown’s motion for summary judgment on Count

One and DENY Ford’s motion to dismiss the appeal as moot. However, the

question of whether Universal breached its duty to defend presents sufficient issues

of material fact to preclude summary judgment. Accordingly, we VACATE the

district court’s grant of Universal’s motion for summary judgment on Count Three

and REMAND for further proceedings in light of this opinion.

      AFFIRMED IN PART, DENIED IN PART, AND VACATED AND

REMANDED IN PART.




                                         16
