Elite Integrated Medical, LLC v. Hiscox, Inc.

USCA11 Case: 21-13151 Date Filed: 05/31/2022 Page: 1 of 9

[DO NOT PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 21-13151

Non-Argument Calendar

____________________

ELITE INTEGRATED MEDICAL, LLC,

JUSTIN C. PAULK,

individually,

Plaintiffs - Appellants,

versus

HISCOX, INC.,

CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING

TO POLICY NUMBER MEO1505941.19,

Defendants - Appellees,

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2 Opinion of the Court 21-13151

HISCOX DEDICATED CORPORATE MEMBER LIMITED,

as Representative Member of Syndicate 3624 at Lloyd's,

Defendant.

____________________

Appeal from the United States District Court

for the Northern District of Georgia

D.C. Docket No. 1:20-cv-03948-AT

____________________

Before WILSON, ANDERSON, and EDMONDSON, Circuit

Judges.

PER CURIAM:

In this declaratory judgment action, Plaintiffs Elite Inte-

grated Medical, LLC (“Elite”) and Elite’s President, Justin Paulk,

appeal the district court’s order dismissing Plaintiffs’ complaint

against Hiscox, Inc. and Certain Underwriters at Lloyd’s Subscrib-

ing to Policy MEO1505941.19 (“Hiscox”). The district court deter-

mined that Hiscox owed no duty to defend Plaintiffs in an underly-

ing civil action brought against Plaintiffs by the Attorney General

for the State of Georgia (“the State”). No reversible error has been

shown; we affirm.

Elite operated formerly a medical practice that provided re-

generative medicine products and services to patients suffering

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21-13151 Opinion of the Court 3

from pain in the joints of their spines and extremities. In March

2020, the State served Plaintiffs with a “Notice of Contemplated

Legal Action,” in which the State alleged that Elite had engaged in

“unfair and deceptive business practices,” in violation of Georgia’s

Fair Business Practices Act, O.C.G.A. § 10-1-390.

In September 2020, the State filed a civil action against Elite

and Paulk. The State asserted against Plaintiffs four claims for vio-

lations of Georgia’s Fair Business Practices Act, including three

claims for engaging in unfair and deceptive acts (in violation of

O.C.G.A. § 10-1-393(a)) and one claim for using a computer or

computer network to engage in deceptive acts (in violation of

O.C.G.A. § 10-1-393.5(b)).

Briefly stated, the State alleged that Plaintiffs, through Elite’s

advertising materials (including Elite’s websites, social media posts,

emails, written marketing materials, and live seminars) made false

and misleading representations to consumers about Elite’s regen-

erative medicine products and services. According to the State,

Plaintiffs represented falsely that the regenerative medicine prod-

ucts offered by Elite (1) treat, cure, or mitigate diseases and health

conditions, (2) are comparable to or superior to conventional med-

ical treatments, and (3) are unregulated by and require no approval

from the Food and Drug Administration.

At the time the State filed the underlying suit, Elite was the

named insured on a professional liability insurance policy adminis-

tered by Hiscox (“Policy”). Plaintiffs notified Hiscox of the im-

pending suit and requested that Hiscox defend Plaintiffs. Hiscox

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4 Opinion of the Court 21-13151

responded that the State’s claims against Plaintiffs fell outside the

scope of the Policy’s coverage and, thus, Hiscox owed no duty to

defend Plaintiffs.

Plaintiffs then filed this declaratory action in federal district

court, seeking a ruling that Hiscox owed a duty to defend Plaintiffs

in the underlying suit. The district court granted Hiscox’s motion

to dismiss.

We review de novo the district court’s dismissal under Fed-

eral Rule of Civil Procedure 12(b)(6), “accepting the allegations in

the complaint as true and construing them in the light most favor-

able to the plaintiff.” See Hill v. White, 321 F.3d 1334, 1335 (11th

Cir. 2003).

We are bound by the substantive law of Georgia in deciding

this diversity case. See Mesa v. Clarendon Nat’l Ins. Co., 799 F.3d

1353, 1358 (11th Cir. 2015). Under Georgia law, “[a]n insurer’s duty

to defend turns on the language of the insurance contract and the

allegations of the complaint asserted against the insured.” Garland,

Samuel & Loeb, P.C. v. Am. Safety Cas. Ins. Co., 651 S.E.2d 177,

179 (Ga. Ct. App. 2007). “[W]here the complaint filed against the

insured does not assert any claims upon which there would be in-

surance coverage, the insurer is justified in refusing to defend the

insured’s lawsuit.” Id.

The interpretation of a provision in an insurance contract is

a question of law subject to de novo review. Hegel v. First Liberty

Ins. Corp., 778 F.3d 1214, 1219 (11th Cir. 2015); Am. Empire

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21-13151 Opinion of the Court 5

Surplus Lines Ins. Co. v. Hathaway Dev. Co., Inc., 707 S.E.2d 369,

371 (Ga. 2011). The first step in construing a contract is to deter-

mine whether the contract language is “clear and unambiguous.”

Atlanta Dev. Auth. v. Clark Atlanta Univ., Inc., 784 S.E.2d 353, 357

(Ga. 2016). If it is, the court enforces the contract “according to its

clear terms.” Id. If the contract language is ambiguous, however,

the court may resolve the ambiguity by applying the rules of con-

tract construction. Id.

We begin by examining the language of the Policy. Under

the Policy, Hiscox agreed to pay for damages and claim expenses

for claims made against the insured “alleging a negligent act, error,

or omission in your professional services performed on or after the

retroactive date. . . .” The Policy defines “professional services” as

“only those services identified as Covered Professional Services un-

der” the Declarations section. “Covered Professional Services” are

defined as conduct “[s]olely in the performance of services as a

physical medicine clinic including chiropractic, hormone therapy,

neuropathy, medical and non-medical weight loss, allergy testing,

durable medical equipment and/or instruction, PRP, and amniotic

human tissue injections and naltrexone implants.”

The Policy also identifies several exclusions: for categories

of claims that are not covered. Pertinent to this appeal, the Policy’s

“Antitrust/Deceptive Trade Practices” exclusion provides that

Hiscox owes “no obligation to pay any sums under this Coverage

Part, including any damages or claim expenses, for any claim . . .

based upon or arising out of any actual or alleged: (a) false,

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6 Opinion of the Court 21-13151

deceptive, or unfair trade practices; . . . or (d) deceptive or mislead-

ing advertising.” The Policy’s “Intentional Acts” exclusion bars

coverage for claims “based upon or arising out of any actual or al-

leged fraud, dishonesty, criminal conduct, or any knowingly

wrongful, malicious, or intentional act or omissions, except that . .

. [Hiscox] will pay claim expenses until there is a final adjudication

establishing such conduct . . . .”

The unambiguous language in the Policy makes clear that

the State’s claims fall outside the scope of the Policy’s coverage.

First, none of the State’s claims involve “Covered Professional Ser-

vices,” as defined by the Policy. The State’s claims against Plaintiffs

are for engaging in unfair and deceptive business practices and for

using a computer to do so, in violation of Georgia’s Fair Business

Practices Act. None of the State’s claims involve an alleged “negli-

gent act, error, or omission” in Plaintiffs’ performance of profes-

sional medical services. The State’s claims focus, instead, solely on

Elite’s conduct related to marketing and advertising: conduct that

required no medical training. See Garland, Samuel & Loeb, P.C.,

651 S.E.2d at 179-80 (stating that, to qualify as “professional ser-

vices” under a professional liability policy, an insured’s act or ser-

vice must “necessarily entail[] an application of special learning

unique to the insured’s profession”).

Plaintiffs contend that Hiscox owes them a duty to defend

because the “true facts” show that any potential violation of the

Fair Business Practices Act was unintentional. That Plaintiffs deny

the State’s allegations of wrongdoing, however, does not alter the

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21-13151 Opinion of the Court 7

nature of the State’s claims against Plaintiffs or bring those claims

within the Policy’s coverage. See Bituminous Cas. Corp. v. N. Ins.

Co. of N.Y., 548 S.E.2d 495, 496-97 (Ga. Ct. App. 2001) (stressing

that, in determining whether an insurer owes a duty to defend, “the

issue is not whether the insured is actually liable to the plaintiffs in

the underlying action; the issue is whether a claim has been as-

serted which falls within the policy coverage” (emphasis in origi-

nal)).

We also reject Plaintiffs’ argument that Elite’s live seminars

constituted “instruction” within the meaning of “Covered Profes-

sional Services.” Contrary to Plaintiffs’ suggestion, “instruction”

by itself is no “Covered Professional Service.” Instead, the defini-

tion of “Covered Professional Services” includes the word “instruc-

tion” only within the phrase “durable medical equipment and/or

instruction.” Read in context, the term “instruction” is limited to

instruction about durable medical equipment: not instruction

about regenerative medicine.

Moreover -- even if the State’s claims could be construed as

involving Covered Professional Services (which they do not) -- the

State’s claims against Plaintiffs would fall clearly within the Policy’s

“Antitrust/Deceptive Trade Practices” exclusion. The language of

the “Antitrust/Deceptive Practices” exclusion provides unambigu-

ously that no coverage exists for claims involving “false, deceptive,

or unfair trade practices” or “deceptive and misleading advertis-

ing”: the precise category of claims asserted against Plaintiffs in the

underlying civil action.

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8 Opinion of the Court 21-13151

On appeal, Plaintiffs do not dispute that the Policy’s “Anti-

trust/Deceptive Trade Practices” exclusion encompasses the

State’s asserted claims. Plaintiffs argue, instead, this exclusion is

rendered ambiguous in the light of the Policy’s exclusion for “In-

tentional Acts.” Given this purported ambiguity, Plaintiffs say that

the Policy should be construed in Plaintiffs’ favor and that Plaintiffs

should be entitled to recover partial claim expenses as provided un-

der the “Intentional Acts” exclusion. We disagree.

An ambiguity exists “when a provision in a policy is suscep-

tible to more than one meaning.” Blue Cross & Blue Shield of Ga.,

Inc. v. Shirley, 699 S.E.2d 616, 619 (Ga. Ct. App. 2010). In constru-

ing a contract, we consider the policy as a whole, giving each pro-

vision effect and interpreting each provision so as to harmonize

with the others. See Cincinnati Ins. Co. v. Magnolia Ests., Inc., 648

S.E.2d 498, 500 (Ga. Ct. App. 2007). Generally speaking, courts

must “avoid any construction that renders portions of the contract

language meaningless.” Id.

No inherent conflict exists between the Policy’s exclusion

for “Antitrust/Deceptive Trade Practices” and the Policy’s exclu-

sion for “Intentional Acts.” That the unfair-and-deceptive-trade-

practices claims asserted against Plaintiffs might also involve inten-

tional conduct (and thus might also fall within the Policy’s “Inten-

tional Acts” exclusion) does not render the unequivocal language

in the “Antitrust/Deceptive Trade Practices” exclusion susceptible

to more than one reasonable interpretation. Enforcing the “Anti-

trust/Deceptive Trade Practices” exclusion “according to its clear

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21-13151 Opinion of the Court 9

terms,” no coverage exists for claims alleging unfair and deceptive

trade practices.

The plain and unambiguous Policy language makes clear

that the claims asserted against Plaintiffs in the underlying civil ac-

tion fall outside the scope of Policy’s coverage. Hiscox, thus, owed

no duty to defend Plaintiffs in the underlying suit. The district

court concluded properly that Plaintiff’s declaratory action was

subject to dismissal.

AFFIRMED.