                                                                       [DO NOT PUBLISH]

                      IN THE UNITED STATES COURT OF APPEALS

                                   FOR THE ELEVENTH CIRCUIT           FILED
                                    ________________________ U.S. COURT OF APPEALS
                                                                       ELEVENTH CIRCUIT
                                            No. 11-10814                OCTOBER 13, 2011
                                        Non-Argument Calendar              JOHN LEY
                                      ________________________              CLERK


                               D.C. Docket No. 9:09-cv-80554-KAM

OFFICE DEPOT, INC.,

llllllllllllllllllllllllllllllllllllllll                  Plaintiff - Appellant,

                                                versus

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA,

llllllllllllllllllllllllllllllllllllllll                   Defendant - Appellee,

AMERICAN CASUALTY COMPANY OF READING, PA,

llllllllllllllllllllllllllllllllllllllll                   Intervenor Defendant - Appellee.

                                     ________________________

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

                                           (October 13, 2011)

Before WILSON, MARTIN and ANDERSON, Circuit Judges.

PER CURIAM:
       Office Depot, Inc. (“Office Depot”) appeals the district court’s grant of

summary judgment in favor of National Union Fire Insurance Company (“National

Union”) and American Casualty Company (“American”) (collectively, “carriers”).

Office Depot filed for declaratory judgment, seeking coverage under its insurance

policy for more than $20 million in legal fees that it incurred while responding to

Securities and Exchange Commission (“SEC” or “the Commission”) inquiries.

The National Union policy—providing “organization insurance,” inter

alia—carried $25 million worth of insurance for covered claims, subject to a $2.5

million retention1 and a 20% co-insurance provision. The American insurance

policy used identical policy language and provided coverage for losses above $25

million.2 The district court determined that most of the legal fees were not

covered by the policy and granted summary judgment in the carriers’ favor. After

extensive review of the parties’ briefs, the insurance policy, and the record, we

affirm.

                                                 I.

       The following dates and occurrences are relevant to the disposition of this


       1
          The retention clause of the contract makes clear that the carriers are responsible only for
losses in excess of the first $2.5 million.
       2
          Because the policies issued by National Union and American are identical in all
relevant parts, we will refer to a singular “policy” throughout this opinion.

                                                 2
appeal:

      June 2007—An article on the Dow Jones Newswire reported that Office
      Depot may have violated federal securities laws by selectively disclosing
      nonpublic information.

      July 11, 2007—Office Depot forwarded a copy of the article to the carriers
      as “notice of circumstances” that a claim might be filed against it in the
      future.

      July 2007—Office Depot received an internal letter alleging problems with
      various accounting practices. That prompted an independent review, which
      included the use of outside legal counsel and forensic accountants.

      July 17, 2007—The SEC sent Office Depot a letter advising it that the
      Commission would begin conducting an inquiry into Office Depot to
      determine whether Office Depot had violated securities laws.3

      August 6, 2007—The SEC asked Office Depot to produce any internal
      letters regarding accounting irregularities so that it could determine whether
      securities laws had been violated.

      October 29, 2007—Office Depot announced the findings of its internal
      review, concluding that certain financial statements would have to be
      revised and others delayed. It self-reported each problem to the SEC.

      November 2007—Two shareholder derivative lawsuits and two securities
      lawsuits were filed against Office Depot and various officers and directors
      in the federal district court for the Southern District of Florida.

      January 10, 2008—The SEC issued a formal order of investigation. It
      indicated that the Commission had information suggesting that Office Depot
      had broken securities laws. In the two years following the order of
      investigation, the SEC issued subpoenas to various officers and directors,



      3
          Shortly after receipt, Office Depot forwarded the letter to the carriers.

                                                  3
       and “Wells Notices”4 recommending civil action against three officers.

       December 2009—The SEC filed a formal complaint, and Office Depot
       announced that it had reached a settlement agreement with the SEC staff.

                                                II.

       The standards we use for summary judgment and Florida insurance policy

interpretation are well settled.

                      We review a district court’s grant of summary
               judgment de novo, applying the same legal standards used
               by the district court. Thus, summary judgment is
               appropriate where the pleadings, depositions, answers to
               interrogatories, and admissions on file, together with the
               affidavits, if any, show 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. . . .
                      Further, we are required to apply Florida law to
               determine the meaning of the insurance policy. Thus, we
               look at the policy as a whole and give every provision its
               full meaning and operative effect. We start with the plain
               language of the policy, as bargained for by the parties. If
               that language is unambiguous, it governs. Under Florida
               law, however, if the relevant policy language is susceptible
               to more than one reasonable interpretation, one providing
               coverage and the other limiting coverage, the insurance
               policy is considered ambiguous, and must be interpreted
               liberally in favor of the insured and strictly against the



       4
          “‘A Wells Notice notifies the recipient that the SEC’s Enforcement Division is close to
recommending to the full Commission an action against the recipient and provides the recipient
the opportunity to set forth his version of the law or facts.’” SEC v. Internet Solutions for Bus.,
Inc., 509 F.3d 1161, 1163 n.1 (9th Cir. 2007) (quoting Carlson v. Xerox Corp., 392 F. Supp. 2d
267, 279 (D. Conn. 2005)).

                                                 4
               drafter who prepared the policy.5

Hyman v. Nationwide Mut. Fire Ins. Co., 304 F.3d 1179, 1185–86 (11th Cir. 2002)

(alteration omitted) (citations omitted) (internal quotation marks omitted). We

keep these principles in mind when evaluating the instant insurance policy.

                                               III.

       Office Depot presents four arguments for review. We address each below.6

                                                A.

       Office Depot contends that the first insuring provision under the

“Organization Insurance” section, which provides coverage for Losses7 “arising

from” Securities Claims, covers all of the Defense Costs incurred after Office

Depot received its first SEC letter on July 17, 2007.8 It contends that the


       5
          The record reflects that the parties disputed whether Florida or New York contract law
applied in proceedings before the district court, but that opinion indicates that the parties
stipulated to the district court’s application of Florida law, agreeing that there was no material
difference between the two. Neither party meaningfully briefed this issue on appeal.
Accordingly, we will assume Florida law applies and deem any challenge on this point
abandoned. Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008) (per curiam).
       6
          We do not address Office Depot’s arguments in the order that they are briefed. Rather,
we address them in the order that the language at issue appears in the policy. This allows for a
better understanding of the structure of the instant policy.
       7
          Certain terms within the insurance policy are defined within it. Accordingly, we will
capitalize these terms to denote that they have a specific meaning in this appeal. We define some
of these terms throughout the opinion.
       8
          The carriers concede that the policy covers the costs incurred in responding to the
securities lawsuits filed by November 2007.

                                                 5
definition of Securities Claim in the policy does not explicitly exclude costs

associated with SEC investigations, and, even if it does, the “carve-back”

language that completes the definition restores coverage.

       Two policy provision are relevant to the disposition of this issue. First, the

insuring agreement language provides:

               COVERAGE B: ORGANIZATION INSURANCE
               (i) Organization Liability. This policy shall pay the
                   Loss9 of any Organization arising from a Securities
                   Claim made against such Organization for any
                   Wrongful Act of such Organization. . . .

The policy defines a Securities Claim as:

               a Claim, other than an administrative or regulatory
               proceeding against, or investigation of an Organization,
               made against any Insured:

               (1)    alleging a violation of any federal, state, local or
                      foreign regulation, rule or statute regulating
                      securities . . . ; or

               (2)    brought derivatively on the behalf of an
                      Organization by a security holder of such
                      Organization.

               Notwithstanding the foregoing, the term “Securities Claim”
               shall include an administrative or regulatory proceeding
               against an Organization, but only if and only during the


       9
          “Loss” encompasses “Defense Costs,” which includes reasonable and necessary legal
fees and costs “resulting solely from the investigation, adjustment, defense and/or appeal of a
Claim against an Insured . . . .”

                                                6
               time such proceeding is also commenced and continuously
               maintained against an Insured Person.10

(emphasis added).

        Office Depot argues that “[t]he Policy does not contain any definition of

what is or is not an ‘administrative or regulatory proceeding.’ It certainly does not

contain clear and unmistakable language excluding coverage for SEC

investigations.” Therefore, Office Depot argues that the policy should be read

liberally and coverage should begin with the issuance of the SEC letter in July

2007.

        While it is true that the policy fails to define “administrative or regulatory

proceedings,” it does not follow that Office Depot is entitled to coverage for all

expenses incurred after receiving the SEC letter. The initial portion of the

Securities Claim definition creates a clear disjunctive through the use of “or.”

Specifically, it eliminates coverage for two types of potential Securities Claims:

(1) Claims in the form of administrative or regulatory proceedings against Office

Depot and (2) Claims in the form of an administrative or regulatory investigation

of Office Depot. The carve-back provision restores coverage for the former under

certain circumstances. But it does not restore for the latter. Since we give


        10
          The district court referred to this final sentence of the Securities Claim definition as the
“carve-back” clause. For convenience, we use the same terminology.

                                                  7
meaning to each phrase within a policy, see Hyman, 304 F.3d at 1186, that

omission is dispositive for our interpretation of the policy’s language on this point.

Because the SEC’s requests for voluntary cooperation in furtherance of its pre-suit

discovery constituted an “investigation” rather than an “administrative or

regulatory proceeding,” Office Depot’s expenses incurred after the receipt of the

SEC letters are excluded from coverage. Accordingly, the district court did not err

on this ground.

                                            B.

       Office Depot next contends, briefly, that the insuring agreement’s

indemnification of Insured Persons covers the losses it incurred as a result of the

SEC’s investigation.11

       The relevant policy language states:

              COVERAGE B: ORGANIZATION INSURANCE
              ...
              (ii) Indemnification of an Insured Person. This policy
                   shall pay the Loss of an Organization arising from a
                   Claim made against an Insured Person (including an
                   Outside Entity Executive) for any Wrongful Act of
                   such Insured Person, but only to the extent that such
                   Organization has indemnified such Insured Person.

       A Claim is defined, in relevant part, as:


       11
         The carriers acknowledge that the SEC’s issuance of subpoenas, between September
2008 and February 2009, constituted covered Claims.

                                             8
             (2)   a civil, criminal, administrative, regulatory or
                   arbitration proceeding for monetary, non-monetary
                   or injunctive relief which is commenced by: (i)
                   service of a complaint or similar pleading; (ii) return
                   of an indictment, information or similar document
                   (in the case of a criminal proceeding); or (iii) receipt
                   or filing of a notice of charges; or
             (3)   a civil, criminal, administrative or regulatory
                   investigation of an Insured Person:
                   (i)     once such Insured Person is identified in
                           writing by such investigating authority as a
                           person against whom a proceeding described
                           in Definition (b)(2) may be commenced; or
                   (ii) in the case of an investigation by the SEC or
                           a similar state or foreign government
                           authority, after the service of a subpoena upon
                           such Insured Person.

       Office Depot seems to contend that the SEC letters it received starting in

2007 were sufficient to trigger a Claim as defined by the policy. Generally, in

these letters, the SEC asked Office Depot to preserve certain documents and

requested that several individuals provide testimony. Office Depot argues that

those letters are sufficient to constitute notice that Insured Persons could have

proceedings commenced against them.

      The letters, however, only broadly request information to assist the SEC in

determining whether Office Depot committed securities violations. They do not

allege that violations have occurred or identify specific individuals that could be



                                          9
charged in future proceedings. In contrast, the Wells Notices, which the carriers

concede trigger a Claim, state that the SEC staff “intends to recommend that the

Commission bring a civil injunction against [named individual], alleging” that he

or she violated specific securities laws. The Wells Notices create a Claim because

an “Insured Person is identified in writing by [the SEC] as a person against whom”

“a civil . . . proceeding for . . . injunctive relief” may be commenced by “service of

a complaint or similar pleading” or by the “filing of a notice of charges.” After

review of the policy and the correspondence at issue, we conclude that

correspondence to which Office Depot referred does not trigger a Claim under the

relevant policy definition.

                                          C.

      Office Depot next posits that the district court erred in concluding that the

policy covered only Defense Costs incurred after a Claim is made against the

Insured. Specifically, it contends that there is no “temporal limitation in this

definition barring coverage for costs of investigating an anticipated claim or actual

claim.” Office Depot’s argument is based mostly on the practical realities of

securities litigation. Regarding the text, however, it argues that “[t]here is no ‘but

only after the Claim is actually made’ exclusion or other temporal limitation in

[the definition of Defense Costs] barring coverage” for pre-Claim expenses.

                                          10
       The policy defines Defense Costs as “reasonable and necessary fees, costs,

and expenses consented to by the Insurer . . . resulting solely from the

investigation, adjustment, defense and/or appeal of a Claim against an

Insured . . . .”

       We conclude that the text unambiguously limits Defense Costs to those

costs incurred after a Claim has been made. Investigation of a Claim necessitates

that a Claim exists to investigate. While we agree with Office Depot that the

policy does not explicitly exclude the investigation costs for potential claims, we

also realize that such a step is not necessary. The plain language demonstrates that

the costs must “result[] solely from” a Claim. As the operative facts at issue in

this argument do not create a Claim, the costs preceding the Claim cannot “result

from” the Claim. Accordingly, the district court correctly concluded that expenses

constituted only Defense Costs within the meaning of this policy if they were

incurred after a Claim was made against Office Depot.

                                          D.

       We now address Office Depot’s final, and most detailed, argument. It

revolves around policy Section 7, entitled “Notice/Claim Reporting Provisions.”

It declares that the Insured must give the carrier notice of possible claims that

might arise. It provides, in relevant part:

                                          11
(a)   An Organization or an Insured shall, as a condition
      precedent to the obligations of the Insurer under this
      policy, give written notice to the Insurer of a Claim
      made against an Insured . . . as soon as practicable:
      (i) after the Named Entity’s Risk Manager or
      General Counsel . . . first becomes aware of the
      Claim; or (ii) the Crisis commences, but in all events
      no later than either:
      (1) the end of the Policy Period . . . ; or
      (2) within 30 days after the end of the Policy
             Period . . . as long as such Claim was first
             made against an Insured within the final 30
             days of the Policy Period . . . .
(b)   If written notice of a Claim has been given to the
      Insurer pursuant to Clause 7(a) above, then a Claim
      which is subsequently made against an Insured and
      reported to the Insurer alleging, arising out of, based
      on or attributable to the facts alleged in the Claim
      for which such notice has been given, . . . shall be
      considered related to the first Claim and made at the
      time such notice was given.
(c)   If during the Policy Period . . . an Organization or
      an Insured shall become aware of any
      circumstances which may reasonably be expected to
      give rise to a Claim being made against an Insured
      and shall give written notice to the Insurer of the
      circumstances, the Wrongful Act allegations
      anticipated and the reasons for anticipating such a
      Claim, with full particulars as to dates, persons and
      entities involved, then a Claim which is
      subsequently made against such Insured and
      reported to the Insurer alleging, arising out of, based
      upon or attributable to such circumstances or
      alleging any Wrongful Act which is the same as or
      related to any Wrongful Act alleged or contained in
      such circumstances, shall be considered made at the

                            12
                    time such notice of such circumstances was given.

(emphasis added).

      The crux of Office Depot’s argument is that Section 7 allows the Claim to

“relate back” to the date the insured filed the original notice of circumstances such

that any costs incurred between the notice of circumstances and the date a Claim

was made so long as they are both based on the same facts. Office Depot contends

that the district court erred in ruling that Section 7 does not allow it to recover

Defense Costs incurred in connection with the investigation following Office

Depot’s submission of the notice of circumstances, which it filed immediately

after the Dow Jones article was published.

      The carriers, however, contend that “there is no coverage for any

investigatory Defense Costs incurred before the subsequent Claim is ‘actually

made.’” Office Depot disagrees, pointing out that the policy “does not contain any

such language barring or limiting coverage for investigatory costs incurred after

the date the first notice is submitted. The date of notice is the date on which all

related Claims are ‘considered made’ for purposes of coverage.” Without that

express limitation, Office Depot believes its reading of the policy is, at the very

least, a reasonable interpretation of the language, and thus the policy should be

construed in favor of coverage.

                                           13
      We disagree. After analyzing the policy as a whole, it is clear that Section 7

does not cover the costs incurred between the filing of the initial notice of

circumstances and the time a Claim is made against an Insured. Nothing in the

language of Section 7 indicates that it extends coverage to Defense Costs incurred

after a notice is filed but before a Claim actually exists. Instead, it creates a

notification process for Claims filed both inside and outside of the Policy Period.

Importantly, Section 5 of the policy, entitled “Limit of Liability (For All Loss-

Including Defense Costs),” illuminates the role of Section 7. It states that “a

Claim which is made subsequent to the Policy Period . . . which pursuant to

Clause 7(b) or 7(c) is considered made during the Policy Period . . . shall also be

subject to the one aggregate Limit of Liability . . . .” (emphasis added). Since we

read the entire policy to determine its meaning, Section 5 provides a clear

indication that Section 7’s provisions determine the Policy Period that Claims are

“considered made,” rather than expand coverage to the costs incurred before a

Claim is actually made. Therefore, the policy does not cover the Defense Costs

associated with the SEC investigation—which did not constitute a Claim against

Office Depot until events such as the issuance of subpoenas and Wells Notices

occurred.

                                          IV.

                                           14
       Based on the foregoing, we affirm the decision of the district court.12

       AFFIRMED.




       12
         Because we have concurred in the district court’s result, we necessarily decline to grant
Office Depot’s request for partial summary judgment.

                                               15
