American Builders Insurance Company v. Southern-Owners Insurance Company

This is a rehearing from an opinion concerning bad faith and an insurance company’s obligation to pursue settlement. The Eleventh Circuit granted rehearing to change one thing about its opinion, and it’s very much a good thing—in theory. Just not in this case.

In the January opinion, the court rejected the claim that the trial court erred in denying summary judgment. The claim was not re-raised in a post-trial motion. The panel stated that even if the issue was a pure issue of law, any challenge to a denial of summary judgment cannot be raised on appeal after a jury trial. The United States Supreme Court, however, in Dupree v. Younger, 143 S. Ct. 1382 (2023), made it clear “that arguments denied at summary judgment are appealable after a trial on the merits if they raise ‘purely legal issues.’” The factual issues are extinguished by the jury considering the facts, but the pure issues of law do not need to be re-preserved by a post-trial motion because the issue of law was never considered by the jury and the argument about the issue of law was already rejected by the judge. Because they are issues of pure law unaffected by development of the facts at trial, there is “no benefit” to having a district court pass on the same question again in order to preserve it.

That said, the Eleventh Circuit really, really, really did not want to review the merits of this issue that Southern-Owners despite it looking enough like a “pure issue of law” back in January that they expressly stated in that opinion that even a pure issue of law from a denied summary judgment motion cannot be argued on appeal.

In the panel’s view, Southern-Owners’ argument that a policy provision excluded coverage for bodily injury was not argued as a purely legal issue, so they don’t have to apply the Supreme Court’s new case. Now the panel says that Southern-Owners relied in their summary judgment motion on facts to establish that Guthrie, the injured person, was in the scope of his employment, and summary judgment was denied based on the existence of a genuine issue of material fact, not a purely legal policy exclusion.