National Union Fire Ins. Co. v. Bill G. Cavins

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
March 19, 2007
No. 06-13361 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 03-00878-CV-S-N
NATIONAL UNION FIRE INSURANCE COMPANY,
Plaintiff-Appellee,
versus
BILL G. CAVINS,
Defendant-Appellant,
VIRGINIA CAVINS,
PROGRESSIVE SYSTEMS, INC.,
Defendants,
COLORADO CASUALTY INSURANCE COMPANY,
Interested Party-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
_________________________
(March 19, 2007)
Before CARNES, PRYOR and FARRIS,* Circuit Judges.
PER CURIAM:
The main issue in this appeal is whether, under Ohio law, a party who seeks
indemnification under an express contract and fails to satisfy the three
requirements of Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790, 794 (Ohio 1944),
may recover attorney’s fees incurred in litigation that settled. National Union Fire
Insurance Company sought from Bill Cavins, Virginia Cavins, and Progressive
Systems contractual indemnification for money paid in a settlement and attorney’s
fees incurred in the underlying litigation. The magistrate judge ruled that, because
National Union failed to satisfy the requirements of Globe Indemnity, National
Union could not recover the moneys paid in settlement but the magistrate judge
awarded National Union indemnification for the attorney’s fees based on an
unpublished decision of an Ohio court of appeals. We conclude, based on an
opinion of the Supreme Court of Ohio that neither party cited to either this Court or
the magistrate judge, that National Union was not entitled to indemnification for
the attorney’s fees. We reverse the award against Bill Cavins, who was the only
judgment debtor to appeal that award.
*
Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by
designation.
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I. BACKGROUND
In 1988, Bill Cavins entered a Distributor Agreement with The Kirby
Company. The agreement included the following indemnification provision:
Distributor shall indemnify the Company, its employees, agents and
servants and hold the Company and its said employees, agents and
servants harmless from any and all liability, damage, or expense
incurred by it in connection with any claim, demand or suit based on
Distributor’s acts or omissions, including alleged negligence;
provided, however, that the Company shall (1) give Distributor
prompt written notice of any such claim, demand or suit, and (2)
provide the Distributor with every reasonable assistance which the
Distributor may request in resisting such claim, demand or suit. The
foregoing indemnification shall not apply if the Company is found
guilty of any negligence, misconduct or wrongdoing in connection
with any such claim, demand or suit.
The agreement also specified that it “shall be construed under and governed by the
law of the State of Ohio.” In 1996, Bill Cavins assigned the agreement to
Progressive, a corporation owned by Bill Cavins and his wife, Virginia Cavins.
The Cavinses and Progressive sold vacuum products manufactured by The Kirby
Company.
Between 1998 and 2001, nearly 100 lawsuits were filed in Alabama state
courts against the Cavinses, Progressive, and The Kirby Company. National Union
defended The Kirby Company in these lawsuits. Eventually, the lawsuits settled
based on an agreement in which the Cavinses and Progressive paid more than $1
million through their insurer Colorado Casualty Insurance Company. The Kirby
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Company paid $830,550 through National Union.
The Kirby Company assigned its rights to indemnity under the agreement to
National Union, which filed a complaint in federal district court based on diversity
jurisdiction against the Cavinses and Progressive. National Union sought
indemnification of the $830,550 paid in settlement and $748,462.75 of attorney’s
fees. The parties consented to the jurisdiction of a magistrate judge.
National Union moved for summary judgment, and the magistrate judge
denied the motion. The magistrate judge reasoned that, under Ohio law, a party
who seeks indemnification for money paid in settlement must meet the three
requirements established by the Supreme Court of Ohio in Globe Indemnity, 53
N.E.2d at 794. The magistrate judge concluded that National Union failed to meet
the requirements.
National Union then moved to alter or amend the order of the magistrate
judge. National Union argued that, “even if the court correctly applied Globe
[Indemnity] to the . . . funds paid in settlement, under the Ohio [court of appeals]
opinion of Ozko, Inc. v. Isaacson Construction, Inc., [No. 17078, 1995 WL 678548(Ohio Ct. App. Nov. 15, 1995),] National Union is entitled to recover attorney’s
fee[s].” National Union argued that, under Ozko, the requirements of Globe
Indemnity do not apply to indemnification for attorney’s fees incurred in litigation
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that settled. The magistrate judge denied the motion, but then certified the
question to the Supreme Court of Ohio. The Supreme Court of Ohio declined to
answer the certified question.
The magistrate judge relied on Ozko and awarded National Union
indemnification for the attorney’s fees incurred. On May 25, 2006, the magistrate
judge entered a judgment against the Cavinses and Progressive and awarded
National Union $748,462.75. Bill Cavins and Colorado Casualty then filed a
notice of appeal.
II. STANDARD OF REVIEW
We review de novo both a grant of summary judgment, Stephens v. Tolbert,
471 F.3d 1173, 1175 (11th Cir. 2006), and the determination of state law, Price v.
Time, Inc., 416 F.3d 1327, 1334 (11th Cir. 2005).
III. DISCUSSION
To decide this appeal, we must resolve two matters: first, whether we have
jurisdiction over all the purported appellants named in the initial brief; and second,
whether National Union is entitled to indemnification from any appellant for the
attorney’s fees incurred in the state court litigation that settled. We address each
issue in turn.
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A. We Have Jurisdiction Over the Appeal of Only Bill Cavins.
In the initial brief, Bill Cavins, Virginia Cavins, and Colorado Casualty
purport to be appellants, but the notice of appeal named only Bill Cavins and
Colorado Casualty. It is “abundantly clear that a timely and properly filed notice
of appeal is a mandatory prerequisite to appellate jurisdiction.” Holloman v. Mail-
Well Corp., 443 F.3d 832, 844 (11th Cir. 2006). We asked the parties for
simultaneous letter briefs addressing whether Virginia Cavins, who was not named
in the notice of appeal, and Colorado Casualty, which was not a defendant before
the magistrate judge, are properly appellants.
The parties agree that Colorado Casualty is not a party, but disagree about
Virginia Cavins. National Union contends that neither Virginia Cavins nor
Colorado Casualty are properly appellants. The Cavinses concede that Colorado
Casualty is not properly an appellant, but they assert that Virginia Cavins was
“inadvertently left off of the Notice of Appeal” and should be considered a proper
appellant. In their supplemental letter brief, the Cavinses contend without
explanation or citation to supporting authority that “[t]he proper appellants are Bill
G. Cavins, Virginia Cavins[,] and Progressive Systems, Inc.”
Because neither Virginia Cavins nor Progressive were named in the notice of
appeal, we must determine whether an “intent [by them] to appeal is ‘objectively
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clear’ from all of the circumstances.” Id. Although Federal Rule of Appellate
Procedure 3(c)(1)(A) requires that the notice of appeal “specify the party or parties
taking the appeal by naming each one,” Rule 3 was amended in 1993 to instruct
that “[a]n appeal . . . not be dismissed . . . for failure to name a party whose intent
to appeal is otherwise clear from the notice,” Fed. R. App. P. 3(c)(4). The
Advisory Committee explained that “[t]he test established by the [amended] rule
. . . is whether it is objectively clear that a party intended to appeal.” Fed. R. App.
P. 3 advisory committee’s note.
Nothing in the notice of appeal makes it “objectively clear” that Virginia
Cavins and Progressive intended to appeal. Although the caption of the notice of
appeal reads “Bill G. Cavins, et al.,” the notice states twice in the body of the filing
that the appellants are Bill Cavins and Colorado Casualty. The notice may be
ambiguous as to the intent of Virginia Cavins and Progressive to appeal, but it is
far from objectively clear. The assertion that Virginia Cavins was “inadvertently
left off” of the notice of appeal is not relevant to what the notice objectively
conveys. Virginia Cavins and Progressive also “did not file any [other] document
or series of documents that indicated [they] sought to appeal.” Holloman, 443 F.3d
at 844. Neither the initial brief filed in this appeal, which purports to be on behalf
of Virginia Cavins, nor the supplemental letter brief, which asserts that Virginia
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Cavins and Progressive are proper appellants, “serve[s] as effective notice of [an]
intent to appeal [by Virginia Cavins and Progressive], because [those documents
were] not filed until after the deadline for filing [a] notice of appeal.” Id. at 844-
45.
We have jurisdiction over the appeal of only Bill Cavins. The parties
concede that the appeal of Colorado Casualty must be dismissed for lack of
jurisdiction. See Wolff v. Cash 4 Titles, 351 F.3d 1348, 1354 (11th Cir. 2003)
(“Generally, one not a party lacks standing to appeal an order in that action.”
(internal quotation marks omitted)). Because Virginia Cavins and Progressive
never filed a notice of appeal, they have no appeal to dismiss.
B. National Union Was Not Entitled to Indemnification from Bill Cavins for the
Attorney’s Fees Incurred in the State Court Litigation That Settled.
Bill Cavins contends that the magistrate judge erred when he relied on the
unpublished decision of an Ohio court of appeals in Ozko and awarded National
Union the attorney’s fees incurred in the state court litigation that settled. Cavins
asserts that the magistrate judge should have followed a different unpublished
decision of an Ohio court of appeals, Blair v. Mann, No. 98CA35, 1999 WL
228265 (Ohio Ct. App. Apr. 8, 1999). Cavins argues that, under Blair, the
requirements of Globe Indemnity barred National Union from recovering the
attorney’s fees incurred. We agree with the result advocated by Cavins, but do not
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rely upon the case law he cites.
As a preliminary matter, neither Blair nor Ozko are controlling authority in
this circumstance. Until several years ago, an unpublished decision of an Ohio
court of appeals was controlling authority only as to the parties to the decision and
persuasive authority only in the district in which the decision was rendered. Ohio
Sup. Ct. R. for Reporting of Ops. 4 commentary. Effective May 1, 2002,
“designations of, and distinctions between, ‘controlling’ and ‘persuasive’ opinions
of the courts of appeals based merely upon whether they have been published in
the Ohio Official Reports [we]re abolished.” Ohio Sup. Ct. R. for Reporting of
Ops. 4. Both Blair and Ozko were decided before the amendment of the rule.
Our goal in “deciding a state law issue is to resolve it the same way the
state’s highest court would.” Price, 416 F.3d at 1334. “Where the state’s highest
court has not spoken to an issue, a federal court ‘must adhere to the decisions of
the state’s intermediate appellate courts absent some persuasive indication that the
state’s highest court would decide the issue otherwise.’” Ernie Haire Ford, Inc. v.
Ford Motor Co., 260 F.3d 1285, 1290 (11th Cir. 2001) (quoting Ins. Co. of N. Am.
v. Lexow, 937 F.2d 569, 571 (11th Cir. 1991)). We are “bound by this rule
whether or not [we] agree[] with the reasoning on which the state court’s decision
is based or the outcome which the decision dictates.” Silverberg v. Paine, Webber,
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Jackson & Curtis, Inc., 710 F.2d 678, 690 (11th Cir. 1983).
In Globe Indemnity, the plaintiff sought indemnification in common law tort
for money paid in settlement. The Supreme Court of Ohio held that “the one
seeking indemnity, after making voluntary settlement, must prove that he has given
proper and timely notice to the one from whom it is sought, that he was legally
liable to respond and that the settlement effected was fair and reasonable.” Globe
Indemnity, 53 N.E.2d at 794. National Union concedes that it cannot satisfy two of
the three requirements of Globe Indemnity.
The circumstances here differ from those of Globe Indemnity in two
important respects. First, National Union sought indemnification under an express
contract, not implied indemnity arising from a common law tort. Second, National
Union was awarded indemnification for the attorney’s fees incurred in litigation
that settled, not the money paid in settlement. We must then consider whether the
requirements of Globe Indemnity apply to an action for indemnification brought
under a contract and whether the requirements apply to indemnification for
attorney’s fees incurred in litigation that settled. The magistrate judge
commendably sought guidance by certifying a question to the Supreme Court of
Ohio, but that certification was unfortunately not accepted.
A decision of the Supreme Court of Ohio, which the parties failed to cite to
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this Court or the magistrate judge, squarely resolves the question whether the
requirements of Globe Indemnity apply to indemnification for attorney’s fees
incurred in tort litigation that settled. In New York Central Railroad Co. v.
Linamen, 167 N.E.2d 778 (Ohio 1960), the Supreme Court of Ohio applied the
requirements of Globe Indemnity to indemnification for attorney’s fees incurred in
litigation that settled. The plaintiff in Linamen sought indemnification in common
law tort for the “loss suffered . . . in payment of [a] settlement . . . plus expenses
and attorney fees,” and the supreme court refused to award indemnification for
either the moneys paid in settlement or the related fees because the plaintiff had
failed to satisfy two of the three requirements of Globe Indemnity. Id. at 779
(emphasis omitted).
The question that remains is whether the requirements of both Globe
Indemnity and Linamen apply to an action for indemnification brought under an
express contract. Although the Supreme Court of Ohio has not spoken to the issue,
the question is answered by an unpublished decision of an Ohio court of appeals
that was decided after May 1, 2002, and that decision is controlling authority. In
Lubrizol Corp. v. Michael Lichtenberg & Sons Construction, Inc., No. 2004-L-
179, 2005 WL 3610468 (Ohio Ct. App. Dec. 29, 2005), the court of appeals
applied the requirements of Globe Indemnity to an action for indemnification
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brought under a contract.
In the light of Linamen and Lubrizol, National Union was not entitled to
indemnification for the attorney’s fees incurred in the state court litigation that
settled. The magistrate judge erred in awarding attorney’s fees to National Union.
We reverse with respect to Bill Cavins, the only judgment debtor who has
appealed.
IV. CONCLUSION
The appeal of Colorado Casualty is DISMISSED for lack of jurisdiction,
and the summary judgment against Bill Cavins is REVERSED.
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FARRIS, Circuit Judge, concurring and dissenting in part:
I am pleased to join my brothers in this matter. Except that in my view we
have jurisdiction over Virginia Cavins’ appeal. Federal Rule of Appellate
Procedure 3(c)(4) states that “failure to name a party whose intent to appeal is
otherwise clear from the notice [of appeal]” does not require dismissing the appeal.
Bill and Virginia Cavins were in identical positions, represented by the same
attorney, and victory on appeal for only one of them would be of significantly less
value. These factors indicate that Virginia Cavins’ intent to appeal was “otherwise
clear.”
Rule 3(c)(1)(A) states that “an attorney representing more than one party
may describe those parties with such terms as . . . ‘the plaintiffs A, B, et al.’” in the
notice of appeal’s “caption or body.” Bill and Virginia Cavins shared an attorney,
who captioned the notice “National Union Fire Insurance Company, Plaintiff, v.
Bill G. Cavins, et al., Defendants.” It might have been more prudent if he had
remembered that wise counsel always “dots all i’s and crosses all t’s.” He could
have listed the appellants by name. He didn’t. For whatever it is worth, a third of
the panel does not conclude that his failure to do so was fatal to Virginia Cavins’
appeal.
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