              Case: 15-14716     Date Filed: 07/05/2017    Page: 1 of 7


                                                                           [PUBLISH]


                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                 No. 15-14716
                           ________________________

                      D.C. Docket No. 1:13-cv-21653-KMW


HERBERT STETTIN,
Trustee,

                                                   Plaintiff,


ROBERT C. FURR,
Trustee,
MICHAEL I. GOLDBERG,
not individually, but as Chapter 11 Trustee of the estate of the debtor,
Rothstein Rosenfeldt Alder, P.A.,
BAYON INCOME FUND, LP., et al.,

                                                   Plaintiffs - Appellants,

versus

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA,
TWIN CITY FIRE INSURANCE COMPANY,

                                                   Defendants - Appellees,

AONRISK SERVICES INC. OF MASSACHUSETTS, et al.,

                                                   Defendants.
               Case: 15-14716     Date Filed: 07/05/2017     Page: 2 of 7


                            ________________________

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

                                     (July 5, 2017)

Before JORDAN and JULIE CARNES, Circuit Judges, and SCHLESINGER, *
District Judge.

JORDAN, Circuit Judge:

      This appeal is another remnant of the Ponzi scheme orchestrated by Scott

Rothstein through his law firm, Rothstein Rosenfeldt Adler. See, e.g., S.E.C. v.

Levin, 849 F.3d 995 (11th Cir. 2017); Coquina Invs. v. TD Bank, N.A., 760 F.3d

1300 (11th Cir. 2014); In re Rothstein, Rosenfeldt, Adler, P.A., 717 F.3d 1205

(11th Cir. 2013). It arises out of litigation based on the alleged conduct of certain

executives of Gibraltar Private Bank and Trust Company, at which RRA

maintained accounts.

      Gibraltar and some of its executives were named as defendants in numerous

suits seeking to recover for losses caused by Mr. Rothstein’s scheme.               They

requested that their insurance carriers, National Union Fire Insurance Company of

Pittsburgh and Twin City Fire Insurance Company, extend coverage under




*
  Honorable Harvey E. Schlesinger, United States District Judge for the Middle District of
Florida, sitting by designation.



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Gibraltar’s executive and organization liability insurance policies towards a joint

settlement of the claims.

      When National Union and Twin City denied coverage, Gibraltar and its

executives began settlement discussions without the insurance companies. The

parties eventually reached a settlement, which included Gibraltar and the

executives assigning their policy rights to the bankruptcy trustees of RRA and of

other entities that lost money in the Ponzi scheme.

      After the assignment, the trustees again unsuccessfully demanded coverage.

The trustees then filed suit, asserting breach of contract and bad faith claims.

National Union and Twin City moved to dismiss the action, arguing that coverage

was barred by a “professional services exclusion” found in each of the policies.

The district court agreed, and granted the insurers’ motions. The trustees now

appeal.

      The National Union policy is the primary policy, while the Twin City policy

is an excess policy that follows the primary policy’s relevant provisions. The

terms of the policies are relatively straightforward.    The policies provide for

coverage for “the Loss of any Insured Person arising from a Claim made against

such Insured Person for any Wrongful Act of such Insured Person, except when

and to the extent the Organization has indemnified such an Insured Person.” D.E.




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18-1 at 7. The policies also exempt “professional services” from coverage. The

professional services exclusion reads as follows:

       The Insurer shall not be liable to make any payment for Loss in
       connection with any Claim made against any Insured alleging, arising
       out of, based upon, or attributable to the Organization’s or any
       Insured’s performance of or failure to perform professional services
       for others, or any act(s), error(s) or omission(s) relating thereto.

Id. at 37.

       The district court reasoned that the plain language of the exclusion barred

coverage because some of the insured executives at Gibraltar provided professional

banking services directly to RRA. See D.E. 80 at 18 (“A plain reading of the

Professional Services Exclusion demonstrates that it bars coverage for any Claim

made against any Insured arising out of any Insured’s performance or failure to

perform professional services for others.”).        See generally Kattoum v. New

Hampshire Indem. Co., 968 So. 2d 602, 603 (Fla. 2d DCA 2007) (“If the policy

provides joint coverage, the fraud or misconduct of one insured can be imputed to

an ‘innocent co-insured.’”) (citation omitted).

       The trustees ask that we reverse. They contend that the exclusion should be

read severally, and therefore barring coverage only as to the claims against those

insured executives who directly provided professional services to RRA. Under

their reading, the district court erred because claims against executives who were




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merely responsible for internal managerial banking functions, like complying with

federal reporting regulations, are not exempt from coverage.

      We affirm. Applying Florida law, and exercising plenary review, see Hegel

v. First Liberty Ins. Corp., 778 F.3d 1214, 1219 (11th Cir. 2015), we reach the

same conclusion as the district court.

      The district court properly observed “that the phrase any insured

unambiguously expresses a contractual intent to create joint obligations.” D.E. 80

at 18 (quoting Sales v. State Farm Fire & Cas. Co., 849 F.2d 1383, 1385 (11th Cir.

1988)) (internal quotation marks omitted).        The phrase “any insured,” as we

explained in Sales, generally makes the obligations under an insurance provision

“jointly rather than severally held” and “unambiguously expresses a contractual

intent to create joint obligations and to prohibit recovery by an innocent co-

insured.” 849 F.2d at 1385 (citing cases). Sales involved Georgia law, but Florida

law is generally in accord. See, e.g., USAA Cas. Ins. Co. v. Gordon, 707 So. 2d

1185, 1186 (Fla. 4th DCA 1998) (“We have no trouble concluding that exclusion

(h), which excludes coverage for damage caused by ‘any insured,’ unambiguously

results in joint property coverage in this case.”) (citation omitted).

      Understanding that the phrase “any insured” must be read in context, see

Kattoum, 968 So. 2d at 604–05, we believe that the district court correctly

interpreted the exclusionary language. Here the professional services exclusion



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twice uses the phrase “any insured,” once in referring to the claim made and once

in referring to the professional services rendered. And that, we think, evinces an

intent to create joint obligations. See Thoele v. Aetna Cas. & Sur., 39 F.3d 724,

725–27 (7th Cir. 1994) (holding, under Illinois law, that exclusion barring

coverage for claims arising out of “business pursuits of any insured” included

“injuries triggered by one insured in connection with the business pursuit of

another”). This is not a case like Michigan Millers Mut. Ins. Corp. v. Benfield, 140

F.3d 915, 926 (11th Cir. 1998), in which we held, under Florida law, that the

interchangeable use of the phrase “an insured” and “the insured” in a policy

created an ambiguity and did not provide joint coverage or obligations “so as to

exclude [an innocent insured] from recovering under the policy.”

      The trustees rely on Premier Ins. Co. v. Adam, 632 So. 2d 1054 (Fla. 5th

DCA 1994), but that case does not call for a different result. In Premier, the Fifth

District explained that an insurance policy’s severability clause resulted in separate

insurable interests for each insured, such that each insured must be treated as

holding separate insurance coverage. Id. at 1055–57. As a result, notwithstanding

an exclusion stating that the policy “did not apply” to “bodily injury or property

damage which is expected or intended by any insured,” coverage could only be

denied against an insured who actually committed the excluded act. Id. at 1056–57

(emphasis added). Here, however, the insurance policies issued by National Union



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and Twin City do not contain a severability clause. And that difference in policy

language is fatal to the trustees’ argument. See Taylor v. Admiral Ins. Co., 187 So.

3d 258, 260–62 (Fla. 3d DCA 2016) (citing Premier and concluding that exclusion

applying to conduct of “any insured” would bar claim but for policy’s severability

clause); Gordon, 707 So. 2d at 1186 (explaining that without a severability clause

an exclusion applying to the conduct of “any insured” creates a joint obligation).

      As to the trustees’ other arguments, we affirm on the basis of the district

court’s well-reasoned order.

      AFFIRMED.




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