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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-11181
________________________
D.C. Docket No. 6:15-cv-00718-CEM-DCI
HEALTH FIRST, INC.,
HOLMES REGIONAL MEDICAL CENTER, INC.,
CAPE CANAVERAL HOSPITAL, INC.,
HEALTH FIRST PHYSICIANS, INC.,
HEALTH FIRST HEALTH PLANS, INC.,
HEALTH FIRST INSURANCE, INC.,
Plaintiffs - Appellants,
versus
CAPITOL SPECIALTY INSURANCE CORP.,
DARWIN NATIONAL ASSURANCE COMPANY,
DARWIN SELECT INSURANCE COMPANY,
EXECUTIVE RISK INDEMNITY, INC.,
EXECUTIVE RISK SPECIALTY INSURANCE CO.,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(August 22, 2018)
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Before MARTIN, JULIE CARNES, and GILMAN, * Circuit Judges.
MARTIN, Circuit Judge:
Health First, Inc. appeals the District Court’s grant of summary judgment to
its insurers in this insurance-coverage case. Health First brought suit seeking
indemnification for costs it incurred defending and settling several lawsuits relating
to its allegedly anticompetitive behavior. All of Health First’s relevant insurance
policies have “related claims” provisions, deeming all claims “related logically,
causally or in any other way” to arise whenever the first related claim was made.
Health First submitted the first two lawsuits for coverage under its insurance
policies, and its insurer paid, exhausting Health First’s coverage for those years.
Now, its insurers say that all the later lawsuits are related to those first claims, and
as a result, they are not covered by Health First’s more recent insurance policies.
The District Court agreed. After careful review, and with the benefit of oral
argument, we affirm.
I. BACKGROUND
A. THE FACTS
Health First is a healthcare company based in Florida. It was formed in 1995
upon the merger of Holmes Regional Medical Center and Cape Canaveral Hospital,
*
Honorable Ronald Lee Gilman, United States Circuit Judge for the Sixth Circuit, sitting
by designation.
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both located in Brevard County, Florida. Today, Health First includes four
hospitals, a physician group, and a network of managed health plans.
1. The Insurance Policies
At all relevant times, Health First had insurance policies that indemnified
against loss from wrongful acts. The insurers at issue here are Executive Risk
Indemnity, Inc. and Executive Risk Specialty Insurance Co. (the Executive Risk
Defendants), as well as Capitol Specialty Insurance Corp., Darwin National
Assurance Co., and Darwin Select Insurance Co. (the Allied World Defendants).
Each of the relevant policies in this case is a “claims-made” policy, meaning
coverage is triggered at the time a claim is made rather than at the time the
challenged activity occurred. Each policy also has a “related claims” provision. In
general, these provisions state that “All Related Claims, whenever made, shall be
deemed to be a single Claim and shall be deemed to have been first made”
whenever the earliest related claim was made. “Related Claims” is further defined
as
all Claims for Wrongful Acts based on, arising out of, directly or indirectly
resulting from, in consequence of, or in any way involving the same or
related facts, circumstances, situations, transactions or events or the same or
related series of facts, circumstances, situations, transactions or events,
whether related logically, causally or in any other way.
2. The Lawsuits
Since 1998, Health First has been the defendant in a number of lawsuits
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alleging it engaged in various forms of anticompetitive behavior. In February 1998,
Wuesthoff Health Systems sued Health First in federal court in Florida, alleging
that Health First was engaging in anticompetitive behavior (“Wuesthoff I”).
Wuesthoff claimed Health First was using its regional market dominance to coerce
health insurers and physicians to stop working with Wuesthoff. Health First
allegedly forced physicians to refer patients to Health First facilities in order to
retain their staff privileges. If physicians did not comply, Health First “would
arrange for new physician practice groups to open competing practices and
undercut the fees charged” in order to drive uncooperative physician groups out of
business.
In 1999, Wuesthoff voluntarily dismissed its claims and refiled similar claims
in state court (“Wuesthoff II”). In this state-court action, Wuesthoff said Health
First was a monopolist, controlling the vast majority of the market for acute-care
hospital inpatient services in South Brevard County. This forced all health-
management plans and physician groups operating in South Brevard County to
work with Health First. But some competition still existed in Central Brevard
County, where Wuesthoff was located. Wuesthoff said Health First forced
managed-care plans that wanted access to its hospitals in South Brevard County to
also cover care offered at its hospital in Central Brevard County, where Wuesthoff
was located—behavior Wuesthoff alleged to be “unlawful tying.” Wuesthoff also
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said Health First made managed-care plans exclude coverage at Wuesthoff facilities
in order to qualify for discounts. The parties settled this action in December 2000.
In September 2005, Wuesthoff filed another lawsuit, again alleging that
Health First had engaged in anticompetitive behavior (“Wuesthoff III”). Wuesthoff
claimed Health First’s managed-care plans referred patients exclusively to Health
First facilities, and that independent plans were placed at a competitive
disadvantage. New to this complaint, Wuesthoff said Health First had initiated an
unsuccessful regulatory challenge to Wuesthoff’s expansion into South Brevard
County, and then attempted to expand its own operations into Central Brevard
County, where Wuesthoff was based, in an attempt to directly target Wuesthoff. In
addition, Wuesthoff claimed Health First had purchased many physician-practice
groups in Central Brevard County that agreed to admit patients exclusively to
Health First facilities. In May 2007, Wuesthoff voluntarily dismissed its federal
case and refiled in state court (“Wuesthoff IV”). The parties settled this action in
November 2012.
Also in May 2007, Dr. Richard Hynes and his employer, the B.A.C.K.
Center, filed a class-action suit against Health First, likewise alleging
anticompetitive behavior (“Hynes”). Hynes alleged that Health First rewarded
providers who referred patients exclusively to Health First facilities and punished
providers who did not. Specifically, Hynes said that he and the B.A.C.K. Center
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had been excluded from coverage under the Health First plan, that the Health First
plan refused to collect bills previously owed to B.A.C.K., and that the Health First
plan refused to sell health coverage to B.A.C.K. employees because B.A.C.K. was
also using Wuesthoff facilities. Notably, Hynes and Wuesthoff IV were
consolidated for all pretrial purposes. While Wuesthoff IV had settled, some of the
claims in Hynes were still pending when Health First filed this action.
In September 2013, OMNI Healthcare, the Interventional Spine Institute of
Florida, and individual medical providers sued Health First for anticompetitive
behavior (“OMNI”). OMNI is a multi-specialty group practice located in South
Brevard County that admitted patients to both Health First and Wuesthoff facilities.
OMNI said it was denied referrals from Health First affiliates and lost hospital
privileges at Health First hospitals for failing to admit patients exclusively to Health
First hospitals. The OMNI suit was still pending when Health First filed this action.
Health First submitted Wuesthoff I and II for coverage under its 1997 and
1998 insurance policies with Executive Risk. Executive Risk accepted coverage
and paid out those claims, leaving no outstanding requests for coverage relating to
Wuesthoff I and II. Health First later submitted Wuesthoff III, IV, Hynes, and
OMNI to its insurers for indemnification. The Executive Risk Defendants accepted
coverage for Wuesthoff III, IV, and Hynes. But because Executive Risk concluded
the later suits were related to Wuesthoff I and II, it offered coverage only under
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Health First’s 1997 and 1998 policies. Executive Risk paid out the limits on those
policies to Health First, but refused to pay under any later policies. The Allied
World Defendants denied coverage for all the lawsuits, saying they were all related
to Wuesthoff I and II, and therefore predated Health First’s coverage with Allied
World.
B. PROCEDURAL HISTORY
In March 2015, Health First filed suit against its insurers in Florida state
court. Health First sought declaratory relief and damages for its insurers’ failure to
provide indemnification for the Wuesthoff III, IV, Hynes, and OMNI cases under
its later insurance policies. 1 The insurers removed to federal court.
The Executive Risk Defendants and the Allied World Defendants moved for
summary judgment, arguing that all the claims were related to Wuesthoff I and II.
As a result, they said the more recent lawsuits were not covered by their more
recent policies. Both defendants later filed alternative motions for summary
judgment. In these motions, the defendants argued that at the very least Wuesthoff
III, IV, Hynes, and OMNI were all related to each other, meaning they all related
back to the time Wuesthoff III was filed.
Health First opposed the motions for summary judgment, arguing in part that
1
Health First had policies with the Executive Risk Defendants when the Wuesthoff I, II,
III, IV, and Hynes lawsuits were filed. Health First had policies with the Allied World
Defendants when Wuesthoff III, IV, Hynes, and OMNI were filed.
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a related-claims determination must be based on the facts underlying previous
lawsuits, not just on the complaints. Health First contended summary judgment
was improper because the insurers had “not presented the Court with any evidence
of the actual facts involved in those actions.”
The District Court granted the insurers’ original motions for summary
judgment. The court rejected Health First’s argument that the court could not
consider the similarity of the allegations in the various complaints, writing that
“[c]ourts do not require a showing of the actual facts to determine whether multiple
claims are related. Rather courts often focus on and compare the underlying
allegations to determine if multiple claims are related under an insurance policy’s
related claims provision.” The court looked to the text of the related-claims
provisions, the factual allegations in each complaint, and statements Health First
had made in the Wuesthoff III litigation that that case merely repeated the
allegations of Wuesthoff I and II. The court determined that all the lawsuits
described conduct from a “common scheme” that Health First had undertaken “with
the overarching goal of furthering their own success, dominating the South and
Central Brevard County healthcare markets, eliminating competition, and
establishing a monopoly in the healthcare service industry.” Because all the
lawsuits related back to Wuesthoff I and II, the court found they were not covered
by the later policies at issue.
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This appeal followed.
II. DISCUSSION
We review de novo the District Court’s ruling on summary judgment. Lee
v. Ferraro,
284 F.3d 1188, 1190 (11th Cir. 2002).
On appeal, Health First makes two primary arguments. First, that the
District Court erred as a matter of law in granting summary judgment for the
insurers based only on allegations in the underlying complaints. And second, that
even considering only the complaints, the District Court erred in granting summary
judgment for the insurers and finding that all claims were related.
Summary judgment may be granted only if “there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “Once the movant, here, the defendant, satisfies its initial
burden under Rule 56(c) of demonstrating the absence of a genuine issue of
material fact, the burden shifts to the nonmovant to come forward with specific
facts showing that there is a genuine issue for trial.” Allen v. Tyson Foods, Inc.,
121 F.3d 642, 646 (11th Cir. 1997) (quotation marks omitted). In other words,
once the insurers put forward evidence that Health First could not prove it was
entitled to coverage under the later policies, it was Health First’s burden to show
that some dispute of material fact remained that prevented the court from ruling in
the insurers’ favor.
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A. WHETHER THE DISTRICT COURT ERRED IN RELYING SOLELY ON
THE COMPLAINTS AS EVIDENCE OF RELATEDNESS
Now, Health First argues that the District Court erred because it “improperly
relied exclusively on the allegations of the Underlying Complaints in making a
determination of the Insurers’ duty to indemnify Health First.” Instead, Health First
says “[t]he district court was obligated to rule based on the actual facts underlying
the legal claims made in the Underlying Lawsuits and was precluded, as a matter of
Florida law, from looking solely to the allegations made in the pleadings to
determine whether the multiple insurance claims at issue are related.”
Health First seeks coverage in this case based on its insurers’ duty to
indemnify. “Unlike the duty to defend, which generally is triggered by the
allegations in the underlying complaint, an insurance company’s duty to indemnify
an insured party is narrower and is determined by the underlying facts adduced at
trial or developed through discovery during the litigation.” Stephens v. Mid-
Continent Cas. Co.,
749 F.3d 1318, 1324 (11th Cir. 2014) (quotation marks
omitted). In other words, because the duty to defend arises as soon as a relevant
claim is made, that duty “depends solely on the facts and legal theories alleged in
the pleadings.”
Id. at 1323 (quotation marks omitted). The duty to indemnify, on
the other hand, is based on “the actual facts, not only those that were alleged in the
state court complaint.”
Id. at 1324. These principles are blackletter law.
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The duty to defend is a broader duty for an insurer than is the duty to
indemnify. See
id. (describing the duty to indemnify as “narrower” than the duty
to defend); Jones v. Fla. Ins. Guar. Ass’n,
908 So. 2d 435, 443 (Fla. 2005) (“The
duty to defend is of greater breadth than the insurer’s duty to indemnify, and the
insurer must defend even if the allegations in the complaint are factually incorrect
or meritless.”); U.S. Fire Ins. Co. v. Hayden Bonded Storage Co.,
930 So. 2d 686,
691 (Fla. 4th DCA 2006) (“It is clear that an insurer’s duty to defend is broader
than its duty to indemnify. . . . Because the duty to defend is so broad and so
important to an insured, its existence is determined early on based on only the
allegations of the complaint.”). This typically means that, at the summary-
judgment stage, showing an absence of the duty to defend is tougher for an insurer,
not easier, than showing an absence of the duty to indemnify.
Because the duty to defend is broader than the duty to indemnify, the Florida
courts have recognized that a duty to indemnify cannot exist if there is no duty to
defend. See, e.g., WellCare of Fla., Inc. v. Am. Int’l Specialty Lines Ins. Co.,
16
So. 3d 904, 906 (Fla. 2d DCA 2009) (“We first address whether [the insurer] had a
duty to defend because the duty to indemnify is narrower than the duty to defend
and thus cannot exist if there is no duty to defend.”); accord Wilshire Ins. Co. v.
Poinciana Grocer, Inc.,
151 So. 3d 55, 57 (Fla. 5th DCA 2014) (Orfinger, J.,
concurring) (“As the duty to defend is broader than the duty to indemnify, if a
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court determines that there is no duty to defend, as a matter of law, there cannot be
a duty to indemnify.”). This makes sense because an insurer has a duty to defend
against a claim only if there is at least a possibility that the claim is covered by the
insurance policy. If it is clear from the outset there is no coverage under the
policy, then the insurer has neither a duty to defend nor a duty to indemnify.
The Florida courts have therefore dismissed claims for indemnification upon
finding no duty to defend. See, e.g., Mid-Continent Cas. Co. v. Royal Crain, LLC,
169 So. 3d 174, 184 (Fla. 4th DCA 2015) (“The eight corners of the complaint and
the policy do not provide a basis for the Insurer’s duty to defend. Because the
accident arose from a claim excluded from coverage under the policy, the Insurer
has no duty of indemnification.”); Essex Ins. Co. v. Big Top of Tampa, Inc.,
53
So. 3d 1220, 1224 (Fla. 2d DCA 2011) (“Because Essex has no duty to defend Big
Top . . . , Essex has no corresponding duty to indemnify.”); Acosta, Inc. v. Nat’l
Union Fire Ins. Co.,
39 So. 3d 565, 574–76, 578 (Fla. 1st DCA 2010) (affirming a
determination at summary judgment that the insurer owed no duty to indemnify
based on the complaints alone, and stating that “whether extrinsic evidence should
be considered” in assessing the duty to indemnify “is a matter to be decided on a
case-by-case basis”);
WellCare, 16 So. 3d at 907 (“Having concluded that AISLIC
had no duty to defend, we likewise conclude that it had no duty to indemnify
WellCare for the sums [that WellCare] paid to settle the [underlying] action.”). So
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although the duty to indemnify depends on the underlying facts of the case, the
duty-to-defend test can be used to assess whether the underlying facts could
possibly give rise to a duty to indemnify. A determination that there is no duty to
defend, in other words, is also a determination that there is no duty to indemnify.
In short, even though the duty to indemnify depends on the actual facts of
the case, there is no rule against relying solely on the complaint to determine
whether there is any set of facts that could possibly give rise to coverage. Because
the complaints in Wuesthoff III, Wuesthoff IV, Hynes, and OMNI revealed no set
of facts under which coverage would be available—that is, no set of facts that
could both support the claims in those complaints and be unrelated to the claims in
Wuesthoff I and Wuesthoff II—the district court did not err in applying the duty-
to-defend test in order to determine whether there was a duty to indemnify.
Critical to our decision is that Health First has not pointed, either in the
District Court or on appeal, to any extrinsic evidence showing that the allegations
made in the complaints were actually unrelated. At no point in the District Court or
before this Court has Health First presented any affidavits or other evidence hinting
at a genuine dispute of material fact. And as pointed out at oral argument, Health
First was the defendant in all the relevant actions, many of which had already
settled. As a result, Health First was better positioned than any of the insurers to
present evidence from those underlying cases to strengthen its position, but it chose
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not to do so. The defendant insurers put forward their own evidence that all the
claims were related, including the underlying complaints and statements made by
Health First in the underlying actions that spoke to their relatedness. Health First
was welcome to “come forward with specific facts showing that there [was] a
genuine issue for trial,” but it did not do so. See
Allen, 121 F.3d at 646 (quotation
marks omitted). Accordingly, the District Court did not err in resolving the
insurers’ motions for summary judgment based on the only evidence of relatedness
that was put before it.
B. WHETHER THE COMPLAINTS SHOW A GENUINE DISPUTE OF
MATERIAL FACT TO PRECLUDE SUMMARY JUDGMENT
Next, Health First argues that even considering only the underlying
complaints, the underlying claims were not related. We look first to the text of the
insurance policies. “Florida courts have said again and again
that ‘insurance contracts must be construed in accordance with the plain language
of the policy.’” Sphinx Int’l, Inc. v. Nat’l Union Fire Ins. Co.,
412 F.3d 1224, 1227
(11th Cir. 2005) (quoting Swire Pac. Holdings, Inc. v. Zurich Ins. Co.,
845 So. 2d
161, 165 (Fla. 2003)). The related-claims provisions at issue in this case are
extremely broad. Health First’s policies group claims “in any way involving the
same or related facts,” and “whether related logically, causally or in any other
way.” The inclusion of “in any way” in both of these phrases suggest they could
reach conduct with a somewhat attenuated connection. See Vozzcom, Inc. v. Great
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Am. Ins. Co. of N.Y.,
666 F. Supp. 2d 1332, 1340 (S.D. Fla. 2009) (reading similar
language to “require[] only a tenuous connection” between claims).
In the end, Health First is stuck with the policies it paid for. These policies
have extremely broad related-claims provisions. In this case, all of the underlying
complaints describe a continuing pattern of anticompetitive behavior on the part of
Health First. To name just one similarity, all the complaints allege that Health First
used its monopolistic power to coerce doctors to admit patients exclusively to
Health First facilities. This Court and the Florida courts have applied related-
claims provisions with much narrower language to bar claims relating to a pattern
or practice of behavior. See, e.g., Cont’l Cas. Co. v. Wendt,
205 F.3d 1258 (11th
Cir. 2000) (per curiam) (finding “different types of acts . . . aimed at a single
particular goal . . . [that] resulted in a number of different harms to different
persons” to be related claims); Gidney v. Axis Surplus Ins. Co.,
140 So. 3d 609,
614–15 (3d Fla. DCA 2014) (finding separate actions relating to negligent
brokering and servicing of mortgages “based on the same course of conduct by the
insured” to be related claims). Health First’s half-hearted attempts to distinguish
the underlying lawsuits based on the identity of the plaintiffs or time at which they
were filed do not change the fact that all the lawsuits describe a continuing pattern
of the same or similar bad behavior. The District Court therefore did not err in
finding that all the underlying claims were related under the extremely broad
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related-claims clauses in Health First’s insurance policies.
AFFIRMED.
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