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FMG convinces Eleventh Circuit to find for client on competing “other insurance” clauses

12/27/24

By: James G. Bozza and Jessica C. Samford

In a published opinion, the Court of Appeals for the Eleventh Circuit has held that purely excess language in one “Other Insurance” clause makes that policy excess over another policy that allows for apportionment in its “Other Insurance” clause. In this ruling, the appellate court overturned the United States District Court for the Middle District of Florida’s ruling that the two clauses conflicted, thereby requiring pro rata shares toward the settlement of the underlying claim. The appellate court further held that prejudgment interest is proper under Florida law for prevailing parties.  

This declaratory judgment action appeal stems from an underlying wrongful death lawsuit alleging that a man was struck and killed by a tractor-trailer operated by an FSR Trucking, Inc. (“FSR”) employee. FSR held two insurance policies on the date of loss – a $3 million policy from Gemini Insurance Company (“Gemini”) and a $1 million policy from Zurich American Insurance Company (“Zurich”). The underlying case settled for $3 million, of which Gemini contributed $2 million, and an insurer that was not a party to the present action contributed $1 million. Notably, both Gemini and Zurich agreed that each owed some uncertain percentage of the settlement. As a result, the current dispute concerned how much both Zurich and Gemini must contribute to the $2 million payout to the decedent.  

Lead counsel Philip Savrin successfully argued that Gemini’s policy was in excess of Zurich’s. To reach this conclusion, the appellate ruling boiled down to the Court’s interpretation of the two policies’ “other insurance” clauses. Often, “other insurance” clauses are either pro rata, which limits contribution to a proportion of the loss within the policy’s limit, or excess, which provides coverage only after limits are tendered from another policy.  

Gemini’s policy stated that it was “excess over and shall not contribute with any of the other insurance . . .”, while Zurich’s policy stated only that it was “excess” but also that it would share in “proportion” to the limit of the other policies held at the same level. The Court reasoned that, although the language of both policies conflicted with one another, the proportional language in Zurich’s policy rendered Gemini’s policy as excess to Zurich’s. The Court focused on the plain meaning of the policy language and reiterated that Gemini’s “we shall not contribute” phrase deemed the policy as excess compared to Zurich’s “we will pay the proportion” phrase.   

This logical reading of the policy provisions required the Court to consider Florida case law which construed similar policy language. In doing so, the Court noted important factual differences between this and other cases interpreting “other insurance” clauses. Most notably, both insurers here offered primary coverage to FSR, which helped the Court reach its straightforward conclusion.  

Finally, the Court held that prejudgment interest, which is generally allowed in Florida unless equitable considerations mandate otherwise, was proper here. This case is now being remanded with instructions to amend the judgment to reflect $1 million in damages to Gemini plus prejudgment interest to be determined by the trial court on remand.  

This case underscores the importance of plainly outlining coverage delineation within insurance policies by using clear language even in “other insurance” clauses.  

Gemini Ins. Co. v. Zurich Am. Ins. Co., 119 F.4th 1296 (11th Cir. 2024) 

For more information, please contact James G. Bozza at james.bozza@fmglaw.com, Jessica C. Samford at jessica.samford@fmglaw.com, or your local FMG attorney.