           Case: 19-10326   Date Filed: 06/13/2019   Page: 1 of 5


                                                       [DO NOT PUBLISH]



            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 19-10326
                        Non-Argument Calendar
                      ________________________

                D.C. Docket No. 8:18-cv-01237-WFJ-JSS



COLORADO BOXED BEEF CO., INC.,

                                                          Plaintiff - Appellant,

BRYAN SATERBO, et. al.,

                                                                     Plaintiffs,

                                  versus

EVANSTON INSURANCE COMPANY,

                                                        Defendant - Appellee.

                      ________________________

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

                             (June 13, 2019)
                 Case: 19-10326        Date Filed: 06/13/2019       Page: 2 of 5


Before WILLIAM PRYOR, MARTIN, and NEWSOM, Circuit Judges.

PER CURIAM:

       This case concerns whether Evanston Insurance Company is obligated to

indemnify and defend several directors and officers of Colorado Boxed Beef

(collectively, “CBB”) in a separate proceeding in Florida state court.1 The district

court concluded that it is not, as the underlying state-court case concerns the sale of

equity securities and thus qualifies for a policy exclusion in CBB’s Directors and

Officers liability insurance policy. On appeal, CBB contends that the district court

erred in so holding because the allegations in the underlying case “fairly and

potentially bring the suit within coverage and the allegations are not cast solely

within the policy exclusion.” For the following reasons, we disagree.

       We review de novo the district court’s interpretation of an insurance

contract, and in doing so, construe its terms “according to their plain meaning.”

James River Ins. Co. v. Ground Down Eng’g, Inc., 540 F.3d 1270, 1274 (11th Cir.

2008) (citations and quotations omitted). Under Florida law, “[i]t is well settled

that an insurer’s duty to defend its insured against a legal action arises when the

complaint alleges facts that fairly and potentially bring the suit within policy


1
  The plaintiffs in state court are former shareholders and officers of CBB. They assert seven
claims against CBB based on the sale of their shares pursuant to a Stock Purchase Agreement,
including (1) fraud in the inducement, (2) negligent misrepresentation, (3) violation of Fla. Stat.
§ 517.301 “for making false statements,” (4) breach of fiduciary duty, (5) unjust enrichment, (6)
conspiracy to defraud, and (7) rescission.

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coverage.” Hartford Acc. & Indem. Co. v. Beaver, 466 F.3d 1289, 1292 (11th Cir.

2006) (quotations and citations omitted). If we conclude that the complaint in the

underlying case “alleges facts showing two or more grounds for liability, one being

within the insurance coverage and the other not,” the insurer is bound “to defend

the entire suit.” Lime Tree Vill. Cmty. Club Ass’n, Inc. v. State Farm Gen. Ins.

Co., 980 F.2d 1402, 1405 (11th Cir. 1993) (quotations and citations omitted).

“[A]ny doubt about the duty to defend,” we have said, “must be resolved in favor

of the insured.” State Farm Fire & Cas. Co. v. Steinberg, 393 F.3d 1226, 1230

(11th Cir. 2004) (citations omitted).

      Evanston’s D&O policy provides, in pertinent part, that it “shall pay on

behalf of the Insured Persons all Loss . . . which the Insured Persons become

legally obligated to pay on account of any Claim . . . for a Wrongful Act taking

place before or during the Policy Period.” “Wrongful Act[s]” include “[a]ny actual

or alleged error, misstatement, misleading statement, act, omission, neglect, or

breach of duty.” Despite this broad language, the D&O policy includes several

coverage exceptions. The district court’s decision turned on Exclusion K, which

provides that Evanston will not be responsible for claims “[b]ased upon, arising out

of or in any way involving (i) the actual, alleged or attempted purchase or sale, or

offer or solicitation of an offer to purchase or sell, any debt or equity securities; or




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(ii) the actual or alleged violation of any federal, state, . . . or common . . . law

relating to . . . debt or equity securities.”

       We agree with the district court that the underlying claims all fall within the

scope of Exclusion K. CBB emphasizes that the district court concluded that the

“allegations of self-dealing or corporate theft” in the complaint “could stand alone

as ‘claims’ for ‘wrongful acts’ under the policy.” CBB reads these references in

the complaint out of context, however. As the district court correctly recognized,

the alleged instances of “self-dealing or corporate theft” are “part and parcel of the

fraudulent inducement and purchase of the (suing) Sellers’ shares in the company.”

Indeed, the complaint states that the state-court plaintiffs sought damages or

rescission of the Stock Purchase Agreement “arising from [CBB’s]

misrepresentations and omissions of material facts in connection with [CBB’s]

purchase of shares” from the plaintiffs, and each count is tailored toward that end.

To the extent that the complaint references “improper management and self-

dealing,” it does so not in support of stand-alone claims, but rather as part of the

overall scheme to allow CBB to induce the state-court plaintiffs to sell their shares

at an artificially low price.

       We think that any references to self-dealing in the state-court complaint, at a

minimum, “aris[e] out of” the sale of securities. See Taurus Holdings, Inc. v. U.S.

Fid. & Guar. Co., 913 So. 2d 528, 539 (Fla. 2005) (explaining that “arising out of”


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“should be interpreted broadly” and that the phrase merely “requires some casual

connection[] or relationship”) (citations omitted). Therefore, the district court

correctly held that Evanston can rely on Exclusion K to deny coverage.

AFFIRMED




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