                                                                     [DO NOT PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT                          FILED
                            ________________________                U.S. COURT OF APPEALS
                                                                      ELEVENTH CIRCUIT
                                                                          JUNE 10, 2009
                                    No. 08-14137                       THOMAS K. KAHN
                              ________________________                      CLERK

                       D. C. Docket No. 05-00108 CV-3-RV-MD

DELTA HEALTH GROUP INC.,

                                                                          Plaintiff-Appellant
                                                                             Cross-Appellee,

                                            versus

ROYAL SURPLUS LINES INSURANCE COMPANY,
a Foreign Corporation,

                                                                        Defendant-Appellee
                                                                          Cross-Appellant.

                              ________________________

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

                                     (June 10, 2009)

Before WILSON and ANDERSON, Circuit Judges, and GOLDBERG,* Judge.

PER CURIAM:

       *
         Honorable Richard W. Goldberg, United States Court of International Trade Judge,
sitting by designation.
      Appellant and Cross-Appellee Delta Health Group Inc. (“Delta”) appeals

from a jury verdict largely in favor of its insurer, Appellee and Cross-Appellant

Royal Surplus Lines Insurance Company (“Royal”), in a suit concerning the scope

of Royal’s duty to defend and indemnify Delta under various insurance agreements

between Delta and Royal. Delta and Royal also each appeal from the district

court’s order denying their respective motions for attorney’s fees following the

jury’s verdict. For the reasons described below, we affirm the district court’s

denial of attorney’s fees to both parties, and we affirm with respect to Delta’s

appeal and also with respect to Royal’s cross-appeal.

                                       FACTS

      Delta owns, operates, and manages nursing home facilities in several states.

Royal is an insurance company that issued two professional healthcare liability

insurance policies to Delta (“Royal Primary policies”). Following the expiration of

the second Royal Primary policy, Delta obtained primary policy coverage from

Lexington Insurance Company (“the Lexington policy”). The Lexington policy

required the satisfaction of a $50,000 self-insured retention before the Lexington

policy would provide coverage. Also, in the Lexington policy, defense costs

eroded the $3 million aggregate limit. Royal also issued two umbrella policies to

Delta, which afforded excess coverage above Delta’s primary policies (“Royal

                                          2
Umbrella policies”). Because the Lexington policy did not provide sufficient

primary coverage under the terms of the second Royal Umbrella policy, Royal and

Delta negotiated an amendment to the second Royal Umbrella policy under which,

in the event that the Lexington policy was exhausted, Delta was required as a self-

insured to provide coverage for the first $1,000,000 per occurrence, and to provide

its own defense costs before the Royal Umbrella policy would take effect.

      Numerous people filed suit against Delta for alleged injury at the hands of

Delta employees or agents. Many of the claims implicated the periods covered by

the Royal Primary policies and the periods covered by the Lexington policy and

Delta’s self-insurance. For those claims implicating the Royal Primary policies and

the Lexington policy, Delta and Royal agreed to share defense costs until Delta

satisfied the $50,000 self-insured retention requirement under the Lexington

policy. Royal and Lexington then shared defenses costs until the exhaustion of the

Lexington policy. After the exhaustion of the Lexington policy, Delta and Royal

again shared the costs of defending the underlying suits. Delta and Royal also

shared settlement payments for underlying claims involving injuries occurring after

the exhaustion of the second Royal Primary policy.

      Delta brought suit in 2005 against Royal, seeking declaratory judgment that

Royal owed Delta a complete defense on all of the underlying claims and

                                         3
repayment of the defense costs Delta had expended under the cost-sharing

agreements. Delta later added a claim for indemnification for the amounts that

Delta had contributed to settlement. Royal counter-claimed, alleging that the Royal

Primary policies required Delta to pay a $50,000 deductible for each claim, and that

Delta had refused to pay the deductible in many cases.

       This case went to jury trial in the Northern District of Florida. At the

beginning of trial, the district judge ruled as a matter of law that Royal owed Delta

a complete defense in all of the underlying cases. The jury found, however, that

Delta had validly agreed to share costs in the defense of all of the cases. The jury

also found that Royal should have indemnified Delta for the settlement costs of

only one of the underlying cases. Because the parties had earlier stipulated that

Delta owed Royal unpaid deductibles, the district court determined that Delta owed

Royal over $700,000 in unpaid deductibles on Royal’s counterclaim after

subtracting the indemnification amount Royal owed Delta under the jury’s verdict.

Both parties then moved for attorney’s fees. The district court declined to assign

any attorney’s fees. Delta has appealed the jury verdict and the denial of its motion

for attorney’s fees. Royal has cross-appealed the denial of its motion for its

attorneys fees, and has alleged error in the presentation of the indemnification issue

to the jury.

                                           4
                                  STANDARD OF REVIEW

       We review the district court’s decision regarding the award of attorney’s fees

for abuse of discretion, “revisiting questions of law de novo and reviewing

subsidiary findings of fact for clear error.” Atlanta Journal & Constitution v. City

of Atlanta Dep’t of Aviation, 442 F.3d 1283, 1287 (11th Cir. 2006).

       Regarding Delta’s allegations of error at trial, “[w]e apply a deferential

standard of review to a district court’s jury instructions. If the instructions

accurately reflect the law, the trial judge is given wide discretion as to the style and

wording.” Wright v. CSX Transport. Inc., 375 F.3d 1252, 1256 (11th Cir. 2004).

Furthermore, “[w]e will not disturb a jury’s verdict unless the charge, taken as a

whole, is erroneous and prejudicial.” Mosher v. Speedstar Div. of AMCA Int’l,

979 F.2d 823, 824 (11th Cir. 1992).

                                          DISCUSSION

       A. Attorney’s Fees

       After trial, Delta and Royal both moved for attorney’s fees, each claiming to

be the prevailing party in the suit. Delta moved for attorney’s fees pursuant to Fla.

Stat. § 627.428(1).1 Delta argued it received judgment for purposes of §


       1
               Fla. Stat. § 627.428(1) provides: “Upon the rendition of a judgment or decree by
any of the courts of this state against an insurer and in favor of any named or omnibus insured or
the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the

                                                  5
627.428(1) because Delta prevailed in its claim for declaratory judgment that Royal

owed Delta a duty to defend, and because Delta prevailed on indemnification for

settlement costs in one of the thirty-six underlying suits. Royal moved for

attorney’s fees pursuant to a provision in the first Royal Primary policy between

Delta and Royal, which provided for attorney’s fees if Royal was required to take

action to seek payment of deductibles owed by Delta,2 because Royal succeeded in

its counter-claim against Delta for unpaid deductibles.

       The district court held that both parties would be entitled to attorney’s fees

under their respective theories. The district court found, however, that the fees

owed to each side could not be significant. The district court also determined that

the attorney’s fees would result in a “wash,” and neither party could truly be

deemed “prevailing” for the purpose of awarding attorney’s fees. The district court

accordingly declined to grant attorney’s fees to either party. Both parties appeal

the district court’s determination and seek attorney’s fees from this Court.


event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge
or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or
compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the
recovery is had.”
       2
                The provision in the first Royal Primary policy providing for attorney’s fees
states: “If you do not promptly reimburse us for any deductible amount, then any cost incurred by
us in collection of the deductible amount will be added and applied in addition to the applicable
deductible amount without limitation. These costs include, but are not limited to, collection
agency fees, attorney’s fees and interest.”

                                                 6
             1. Public Policy Argument

      Delta argues that the district court erroneously concluded that Royal could

be entitled to attorney’s fees. Delta argues that the attorney’s fees provision of the

first Royal Primary policy violates Florida public policy reflected in Fla. Stat. §

627.428. Accordingly, Delta argues that the attorney’s fees provision in the first

Royal Primary policy should be declared invalid. If Delta were correct in this

argument, Delta would then receive attorney’s fees because there would no longer

be an entitlement to attorney’s fees by Royal to “wash” Delta’s entitlement to

attorney’s fees.

      Delta’s argument that the attorney’s fees provision of the first Royal Primary

policy violates Florida public policy is premised upon the Florida Supreme Court’s

statement that “the purpose of this provision [§ 627.428] is to level the playing

field so that the economic power of insurance companies is not so overwhelming

that injustice may be encouraged because people will not have the necessary means

to seek redress in the courts.” Ivey v. Allstate Ins. Co., 774 So. 2d 679, 684 (Fla.

2000). The statute has been declared a “one-way street,” Danis Indus. Corp. v.

Ground Improvement Techniques, Inc., 645 So. 2d 420, 421 (Fla. 1994), and

insurers may not collect attorney’s fees under § 627.428. Id. According to Delta, if

insurers are allowed to place fee provisions in insurance policies allowing for

                                           7
insurers to seek attorney’s fees, then the non-reciprocal fee statute of § 627.428

would be rendered impotent, and by implication the purpose of leveling the playing

field would be undermined.

      Delta is incorrect that the provision concerning attorney’s fees in the first

Royal Primary policy is against public policy. We need not, and do not, express an

opinion as to whether it would violate Florida public policy for an insurance policy

to provide for fees for the insurer any time that an insured sues the insurer and

loses. The instant policy provision does not allow the insurer to collect attorney’s

fees whenever the insured loses a litigated case on a claim for coverage. Instead,

the provision applies only where the insurer must sue the insured in order to collect

a deductible that the insured was obligated to pay and failed to pay. In contrast, §

627.428 addresses the concern that insurers will contest valid claims by their

insureds, and that insureds will be forced to take legal action to seek payment.

Danis Indus., 645 So. 2d at 421. We hold that this limited provision in the first

Royal Primary policy does not violate the public policy expressed in § 627.428

because the instant insurance contract provision does not pertain to the issue

contemplated by § 627.428. Therefore, it was not an abuse of discretion for the

district court to find that Royal was entitled to attorney’s fees under the terms of

the insurance contract for the amounts expended in seeking the payment of

                                           8
deductibles owed.3

               2. District Court’s Order Denying Attorney’s Fees

       Both parties challenge the district court’s determination that the attorney’s

fees incurred by either side in earning their respective victories could not have been

significant, and that the amounts owed would result in a “wash.” The district court

essentially perceived the case as involving two major issues. The first was whether

Royal owed a duty to provide a full and complete defense as a matter of insurance

policy interpretation. Delta prevailed on this issue as a matter of law. The second

major issue was whether Delta knowingly and voluntarily engaged in defense cost

sharing. Royal prevailed on this issue before the jury. The district court apparently

assumed that most of the attorney time was expended on these two issues, and thus

Delta’s entitlement to fees for winning the policy interpretation issue was

discounted by its loss on the cost-sharing issue. Florida law allows the district

court to discount Delta’s entitlement to attorney’s fees under § 627.428 based on

the fact that Delta lost on the second major issue in the case. See Danis Indus., 645

So. 2d at 421 (“[T]he trial court, in determining the fee award, may take into

account the fact that the insured or beneficiary has not prevailed on all issues . . .”).



       3
              Delta’s request that this Court certify a question to the Florida Supreme Court is
accordingly DENIED.

                                                 9
Therefore, any fees to which Delta would have been entitled would not have been

significant.

      Furthermore, the district court pointed out that the deductible issue, on which

Royal prevailed, and the only issue with respect to which Royal was entitled to

attorney’s fees, “was stipulated and not really at issue in the case.” Therefore, any

fees to which Royal would have been entitled also would not have been significant.

The district court concluded that the fees to which Delta would have been entitled

and the fees to which Royal would have been entitled would “wash” out. We

cannot conclude that the district court’s findings of fact on this issue are clearly

erroneous or that its decision is an abuse of discretion. Atlanta Journal &

Constitution, 442 F.3d at 1287. Accordingly, we affirm the district court’s decision

not to award attorney’s fees to either party. Thus, we reject Delta’s argument in its

appeal, and we reject Royal’s argument in its cross-appeal.

      B. Jury Instructions

               1. Burden of Proof

      Because the district court found, as a matter of law, that Royal had the duty

to provide a complete defense to Delta, Royal then had the burden of proving that

Delta had entered into the cost-sharing agreements knowingly and voluntarily in

order to alter Royal’s duty to defend Delta. Delta argues that the jury instructions

                                           10
erroneously shifted from Royal to Delta the burden of proof on the issue of whether

the cost-sharing agreements were knowing and voluntary. Delta challenges the

following language from the jury instructions: “It is Delta’s burden to demonstrate

that the cost-share agreements were coerced or made under duress, and not

knowingly and voluntarily entered into.” While this instruction probably was

intended to say only that Delta had the burden of proof on coercion, we entertain

the possibility that the jury may have read it to imply that Delta also had the burden

of proof with respect to whether Delta knowingly and voluntarily entered into the

cost-sharing agreement. We assume arguendo, therefore, that the instruction was

erroneous. Nevertheless, we conclude that the instruction was harmless because it

was clear from the evidence presented at trial that the cost-sharing agreements were

entered into voluntarily. Significantly, Delta made only two arguments at trial to

indicate that the agreements were not actually knowing and voluntary: first that

Delta was misled by Royal’s misrepresentations (i.e. silence in the face of a duty to

speak), and second that Delta was coerced into continuing the agreements. Delta

conceded at oral argument that it bore the burden of proof with respect to both of

those arguments. Accordingly, even if the challenged instruction erroneously

implied that Delta had the burden of proof on knowledge and voluntariness, it was

harmless error.

                                          11
             2. Consideration

      Delta also argues that the district court erred by failing to give an instruction

on whether there was adequate consideration to support the cost-sharing

agreements between Delta and Royal. Consideration is only required to rise to the

level of a peppercorn. See Ashby v. Ashby, 651 So. 2d 246, 247 (Fla. Dist. Ct.

App. 1995) (“It is axiomatic that a promise, no matter how slight, can constitute

sufficient consideration so long as a party agrees to do something that they are not

bound to do”). In this case, there was overwhelming evidence of consideration in

the fact that Royal forbore from filing a declaratory judgment action to resolve the

disputed issue of whether Royal owed a duty to provide a full and complete defense

without cost sharing. See Citibank Int’l v. Mercogliano, 574 So. 2d 1190, 1191

(Fla. Dist. Ct. App. 1991) (“It is well settled Florida law that forbearance from

pursuing a legal remedy, where the promisee has a bona fide belief that a viable

legal right exists, constitutes valid consideration for an agreement which benefits

the promisor”); Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So. 2d 810,

815 (Fla. Dist. Ct. App. 1985) (“An insurer obviously can have the court determine

its obligation to defend by filing a declaratory judgment action”). Alternatively,

there was obvious consideration for the cost-sharing agreements in that they

resolved the disputed and uncertain legal issue of whether Royal was required to

                                          12
provide Delta with a complete defense under Florida law. Therefore, any error of

the district court in not instructing the jury on consideration was harmless.4

       C. Royal’s Challenge to the Indemnification Issue

       In its cross-appeal, Royal contends that the court should not have permitted

Delta to bring its claims for indemnity to trial because indemnity was not pled and

because it was not included in the motion for summary judgment. Delta included

its claim for indemnity in the joint pretrial stipulation that was adopted by the

district court in its pretrial order. The pretrial order supersedes the pleadings.

Jackson v. Seaboard Coast Line R.R. Co., 678 F.2d 992, 1012 (11th Cir. 1982).

Therefore, the pretrial order added the issue of indemnification to the issues to be

tried, and Royal was on notice that indemnification would be tried. Accordingly,

Royal’s argument on this issue is rejected.

                                          CONCLUSION

       For the foregoing reasons, the district court’s judgment is affirmed in all

respects.

AFFIRMED




       4
                The other arguments on appeal by Delta, including its further challenges to the
jury instructions, its challenge to the district court’s supplemental instruction, and its challenge to
the introduction of evidence, are rejected without need for further discussion.

                                                  13
