General Star National Insurance Company v. MDLV LLC

USCA11 Case: 23-11064 Document: 45-1 Date Filed: 02/21/2024 Page: 1 of 23

[DO NOT PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 23-11064

____________________

GENERAL STAR NATIONAL INSURANCE COMPANY,

Plaintiff-Appellant,

versus

MDLV LLC,

d.b.a. One Sotheby's International Realty,

HELIAC, INC.,

GLEB KLIONER,

Defendants-Appellees.

____________________

Appeal from the United States District Court

for the Southern District of Florida

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2 Opinion of the Court 23-11064

D.C. Docket No. 1:21-cv-24284-FAM

____________________

Before ROSENBAUM, NEWSOM, and LUCK, Circuit Judges.

PER CURIAM:

This duty-to-defend action arises from an underlying lawsuit

involving a real-estate transaction. Heliac, Inc., a real-estate hold-

ing company, owned a condominium property in South Florida. It

enlisted MDLV, LLC, d/b/a One Sotheby’s International Realty

(“One Sotheby’s”) and its agent Gleb Klioner to help it sell the prop-

erty. Heliac sued One Sotheby’s and Klioner. It alleged that

Klioner made misrepresentations to induce Heliac to sell its prop-

erty so Klioner could earn a commission and that he later con-

verted the sale proceeds for his own use.

One Sotheby’s, insured by General Star National Insurance

Company, sought coverage for its defense against the Heliac law-

suit. In the action before us, General Star sought a declaratory

judgment that various exceptions in One Sotheby’s insurance pol-

icy preclude coverage. Two of those exceptions are at issue on ap-

peal: the conversion exclusion (which precludes coverage for

claims arising out of any disputes involving conversion) and the fu-

ture-value exclusion (which precludes coverage for claims arising

out of any guarantee or promise of future status, performance, or

valuation).

Florida law requires General Star to defend One Sotheby’s

in the Heliac action if any of Heliac’s claims, as alleged, fall partially

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23-11064 Opinion of the Court 3

or potentially within the scope of the policy’s coverage and outside

an exception. The district court concluded that at least two counts

in the Heliac lawsuit come within One Sotheby’s policy’s coverage

and lie outside the two exceptions at issue on appeal. We agree.

Therefore, we affirm the district court’s decision.

I.

General Star issued a Real Estate Errors and Omissions Lia-

bility Insurance Policy to One Sotheby’s, effective from November

30, 2020, through November 30, 2021 (the “Policy”). The Policy

provides professional liability coverage for the real-estate broker-

age as follows:

The Company will pay on behalf of the Insured all

sums which the Insured shall become legally obli-

gated to pay as Damages for Claims first made against

the Insured during the Policy Period and first re-

ported to the Company in writing during the Policy

Period or applicable Extended Reporting Period, aris-

ing out of any act, error, omission or Personal Injury

in the rendering of or failure to render Professional

Services by an Insured[.]

But the Policy also contains several exclusions, including, as

relevant here, one for damages arising out of disputes involving

conversion and one for damages arising from guarantees or prom-

ises of future performance or valuation:

The Company has no obligation under this Policy to

pay Damages or Claims Expenses or to provide a de-

fense, in connection with any Claim(s):

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4 Opinion of the Court 23-11064

A. Under any part of this Policy if based on or arising

out of the following: . . .

2. Any disputes involving any Insured’s fees,

commissions or charges, the failure to pay or

collect premium, escrow or tax money, or the

conversion, misappropriation, commingling or

embezzlement of funds or other property.

However, in the event a Claim is made against

an Insured seeking both the return of escrow

money and alleging an act, error, omission or

Personal Injury in the performance of Profes-

sional Services covered under this Policy, the

Company will defend such Claim without any

obligation to reimburse the Insured for the

payment of monies held as escrow: . . .

16. Any guarantee or promise of future status,

performance or valuation in the course of per-

forming Professional Services by the Insured.

Heliac filed a lawsuit against One Sotheby’s and Klioner for

actions they allegedly undertook or omitted while the Policy was

in effect. In its relevant pleading, Heliac alleged that the following

actions took place. Heliac was a real-estate holding company

whose only principals were two Russian citizens who reside in Rus-

sia. Heliac bought a condominium at 9701 Collins Avenue, Unit

502S, Bal Harbour, Florida, in the St. Regis building. To manage

their property, Heliac retained Gleb Klioner, a real-estate agent

well-known in South Florida’s Russian-speaking community. To

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facilitate his management of the condominium, Heliac gave

Klioner access to Heliac’s operating account.

Later, One Sotheby’s hired Klioner. Once Klioner worked

for One Sotheby’s, Heliac entered into a listing agreement with

One Sotheby’s. Under that agreement, One Sotheby’s listed the

condominium for almost six-million dollars. Nothing relevant to

this case happened for some time after that.

But according to Heliac’s allegations, several years later, be-

tween December 2020 and February 2021, Klioner “continuously

advised” Heliac to sell the condominium “immediately” because of

what Klioner described the relevant market conditions to be. More

specifically, Klioner made these statements to Heliac:

• The real estate market in Miami Beach, Florida, was on the

verge of crashing;

• The drop in the condominium’s value by as much as 60 to 70%

was imminent;

• It would be nearly impossible to sell the condominium beyond

mid-March 2021;

• The U.S. economy was on the verge of crashing at any moment;

• The U.S. stock market was on the verge of crashing at any mo-

ment;

• Heliac had to sell the condominium urgently, or it would lose

money because it would become unable to sell the property.

Heliac alleges that Klioner made these statements “while having

superior knowledge of the real estate market,” and knowing that

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6 Opinion of the Court 23-11064

Heliac’s principals were generally underinformed about the real-

estate market in this country.

In December 2020, Klioner presented Heliac with a $3.8 mil-

lion offer on the condominium. But that offer fell “significantly”

below the unit’s list price and, as Heliac alleged, below market price

as well. So despite pressure from Klioner, Heliac refused to sell for

$3.8 million.

Heliac asserts that after it declined to sell, on January 27,

2021, Klioner converted $20,000 from Heliac’s operating account

to his personal account. This was the first time Klioner allegedly

converted Heliac’s funds.

The next month, in February 2021, Klioner presented an-

other offer for the condominium to Heliac, this time for $4.2 mil-

lion. This offer still fell below the price Heliac wanted to accept for

the unit. But after enduring what it characterized as “merciless[]”

pressure from Klioner for over two months, Heliac’s principals ac-

quiesced to the sale on February 8, 2021.

From that date, Heliac instructed Klioner to deposit the pro-

ceeds into its bank account in Switzerland. But Klioner said that he

could only deposit the proceeds into Heliac’s operating account in

Florida, which only Klioner could access in person. Klioner also

advised that the sale could be completed in a timely matter only if

Heliac executed a corporate resolution granting him full authority

to sign all closing documents on Heliac’s behalf. Klioner never in-

formed Heliac that the closing documents could be executed

through an online notary.

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Heliac went through with the sale on March 10, 2021. In

reliance on Klioner’s disbursement instructions, Heliac arranged

for $3,885,023.02 to be wired from the closing agent’s escrow ac-

count into Heliac’s operating account. A week later, on March 17,

2021, Heliac alleged, Klioner secretly wired nearly all the pro-

ceeds—$3,734,277.21—from Heliac’s operating account to his per-

sonal account without Heliac’s knowledge or permission. This was

the second time Klioner allegedly converted Heliac’s funds.

About nine days after that, on March 26, 2021, Heliac pro-

vided Klioner with wire-transfer instructions to send the condo-

minium sale proceeds to Heliac’s principals’ account at the Swiss

bank. Klioner did not do so. Instead, for the next two-and-a-half

months—until June 7, 2021, Klioner gave Heliac’s principals vari-

ous false reasons for the bank’s inability or refusal to approve the

transfer of the sale proceeds. Eventually, though, Klioner admitted

to Heliac that he had converted the sale proceeds for his own use.

Klioner still has not returned the converted proceeds.

Heliac’s First Amended Complaint asserted five counts

against One Sotheby’s, two of which are relevant on appeal: negli-

gent misrepresentation (Count I) and negligent employee training

(Count III). In Count I, Heliac alleged that Klioner apparently be-

lieved the alleged misrepresentations of material fact he made to

Heliac about the then-current state of the real-estate market were

true, even though he and One Sotheby’s “should have known” they

were false. According to the complaint, One Sotheby’s and Klioner

“intended and expected Heliac to rely on Klioner’s

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8 Opinion of the Court 23-11064

misrepresentations to induce Heliac to sell the St. Regis Condo and,

consequently, collect a commission from the sale of the St. Regis

Condo as soon as possible.” Count I sought to recover the con-

verted sale proceeds and the difference between the market price

of the condominium and its actual sale price (“market-value dam-

ages”). This Count did not seek any damages related to the first

alleged conversion.

Count III alleged that One Sotheby’s owed Heliac a duty to

adequately train its associates and that it breached this duty. In He-

liac’s view, this duty included ensuring that associates like Klioner

properly advised clients of market value and market conditions, re-

frained from pressuring clients, informed clients of applicable clos-

ing procedures, followed client instructions, and did not “overstep”

by taking unauthorized action in real-estate transactions. Heliac

asserted that Klioner’s handling of the condominium sale made it

“evident” that One Sotheby’s had failed to adequately train him in

these alleged obligations. As a direct result of One Sotheby’s failure

to train Klioner, Heliac said, it suffered market-value damages “and

the loss of the St. Regis Condo sale proceeds.” Like Count I, Count

III did not seek recovery of the first set of funds converted.

General Star initially denied coverage for the Heliac lawsuit.

But later, it agreed to defend One Sotheby’s under a reservation of

rights. After that agreement, General Star filed this coverage action

seeking a declaration that it owed no duty to defend or indemnify

One Sotheby’s in the Heliac litigation.

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23-11064 Opinion of the Court 9

In response, One Sotheby’s filed a motion for judgment on

the pleadings in this action. The district court adopted the magis-

trate judge’s report and recommendation agreeing with One So-

theby’s that Counts I and III of the Heliac complaint fell within the

Policy’s scope of coverage and outside the exclusions. Gen. Star

Nat’l Ins. Co. v. MDLV, LLC, No. 21-24284-CIV, 2023 WL 2436148, at

*1 (S.D. Fla. Jan. 5, 2023), R&R adopted, No. 21-24284-CIV, 2023 WL

2388518 (S.D. Fla. Feb. 3, 2023). As to the conversion exclusion, the

court concluded that the complaint could be fairly read to allege

that Klioner did not decide to convert the sale proceeds until after

the sale had already occurred. Id. at *5. So, the court reasoned,

“the preceding actions—and the damages caused by the market dif-

ferences—could not have arisen from the conversion[,]” and the

counts did not fall under the conversion exception to coverage. Id.

at *5. As to the future-value exclusion, the court construed the

plain meanings of “guarantee” and “promise” narrowly and rea-

soned that the allegations in the complaint did not come “solely

and entirely within the policy exclusion.” Id. at *6.

For its part, General Star filed a motion for partial summary

judgment on issues identical to those in One Sotheby’s motion for

judgment on the pleadings. Again adopting the magistrate judge’s

separate report and recommendation, the district court denied

General Star’s motion. Gen. Star Nat’l Ins. Co. v. MDLV, LLC, No. 21-

24284-CIV, 2023 WL 449385, at *1 (S.D. Fla. Jan. 10, 2023), R&R

adopted, No. 21-24284-CIV, 2023 WL 418873 (S.D. Fla. Jan. 26, 2023).

It explained that it had already decided the issues General Star

raised in One Sotheby’s motion for judgment on the pleadings,

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10 Opinion of the Court 23-11064

applying a standard of review that was more favorable to General

Star than the one applicable under General Star’s motion for partial

summary judgment. Id.

The district court later entered final judgment, declaring

that General Star had a duty to defend One Sotheby’s in the Heliac

lawsuit for claims against One Sotheby’s.1

II.

We review de novo an order granting judgment on the plead-

ings. Perez v. Wells Fargo Nat’l Ass’n, 774 F.3d 1329, 1335 (11th Cir.

2014). Judgment on the pleadings should be granted when no ma-

terial facts are in dispute “and the moving party is entitled to judg-

ment as a matter of law.” Cannon v. City of W. Palm Beach, 250 F.3d

1299, 1301 (11th Cir. 2001). In assessing a motion for judgment on

the pleadings, we accept as true all material facts that the non-mov-

ing party’s pleading alleges, and we view those facts in the light

most favorable to the non-moving party. Perez, 774 F.3d at 1335.

We review de novo the interpretation of an insurance con-

tract. Chalfonte Condo. Apartment Ass’n Inc. v. QBE Ins. Corp., 561 F.3d

1267, 1274 (11th Cir. 2009). Because this action arises under our

diversity jurisdiction and the Policy was delivered to One Sotheby’s

in Florida, substantive Florida law governs our interpretation of the

insurance contract. Fioretti v. Massachusetts Gen. Life Ins. Co., 53 F.3d

1 As for Heliac’s claims against Klioner, the district court entered default judg-

ment for General Star against Klioner for failure to answer or otherwise plead

to the summons and complaint that General Star served on him.

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1228, 1235 (11th Cir. 1995) (explaining that Florida follows the doc-

trine of lex loci contractus, which, in the absence of a choice-of-law

provision in the contract, directs the court to follow the law of the

state in which the contract was made).

Florida has several rules we must apply in determining

whether the Policy provides any coverage for Sotheby’s One. We

set them forth below.

Under Florida law, “the duty to defend is broader than the

issue of coverage.” Mid-Continent Cas. Co. v. Royal Crane, LLC, 169

So. 3d 174, 180 (Fla. Dist. Ct. App. 2015). Florida applies the “eight

corners” rule, looking only to the underlying complaint for which

coverage is sought and the policy when deciding whether a duty to

defend exists. Travelers Indem. Co. of Conn. v. Richard Mckenzie &

Sons, Inc., 10 F.4th 1255, 1261 (11th Cir. 2021). When a complaint,

fairly read, “alleges facts that are partially within and partially out-

side the coverage of an insured’s policy,” the insurer must defend

that entire suit. Sunshine Birds & Supplies, Inc. v. U.S. Fid. & Guar.

Co., 696 So. 2d 907, 910 (Fla. Dist. Ct. App. 1997). And “[i]f the

allegations of the complaint leave any doubt as to the duty to de-

fend,” we must resolve that doubt in the insured’s favor. Mid-Con-

tinent Cas. Co., 169 So. 3d at 181 (citing Lime Tree Vill. Cmty. Club

Ass’n v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir.1993)).

When, as here, an insurer relies on an exclusion to deny cov-

erage, the insurer bears the burden to show that the complaint’s

allegations fall “solely and entirely within the policy exclusion and

are subject to no other reasonable interpretation.” Deshazior v.

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12 Opinion of the Court 23-11064

Safepoint Ins. Co., 305 So. 3d 752, 755 (Fla. Dist. Ct. App. 2020). If a

policy’s text is “plain and unambiguous,” we must give that lan-

guage “the meaning it clearly expresses.” N. Pointe Cas. Ins. Co. v. M

& S Tractor Servs., Inc., 62 So. 3d 1281, 1282 (Fla. Dist. Ct. App. 2011)

(citation omitted). But if an exclusionary provision is “ambiguous

or otherwise susceptible to more than one meaning,” we construe

that provision in the insured’s favor because, generally, the insurer

drafts the policy. Mid-Continent Cas. Co., 169 So. 3d at 182.

A.

With these standards and rules of construction in mind, we

turn to the Policy. We begin by noting that the parties do not dis-

pute that, without consideration of the Policy’s exceptions, He-

liac’s allegations are subject to coverage under the Policy. That is,

Heliac’s allegations involve “Damages for Claims first made against

the Insured during the Policy Period . . . arising out of any

act . . . in the rendering of or failure to render Professional Services

by an Insured[,]” subject to the parties’ disputes about applicable

exceptions.

We therefore consider whether the conversion exclusion re-

moves Heliac’s allegations from coverage. The relevant provision

states that General Star has no obligation “to pay Damages or

Claims Expenses or to provide a defense in connection with any

Claim(s)[] [u]nder any part of this Policy if based on or arising out

of . . . [a]ny disputes involving any Insured’s . . . conversion . . . of

funds[.]” (Emphasis omitted from original). Although the district

court described this language as “written broadly,” it concluded

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23-11064 Opinion of the Court 13

that the Heliac lawsuit could be fairly read to allege that Klioner did

not decide to convert the funds until after the sale of the condo-

minium. Gen. Star Nat’l Ins. Co., 2023 WL 2436148, at *4–5. Under

that interpretation, the court said, Klioner’s actions through the

time of sale “could not have arisen from the conversion.” General

Star argues that in reaching this conclusion, the district court ig-

nored the word “involving” in the conversion exclusion’s text; be-

cause part of the lawsuit “involve[es]” conversion, Heliac’s claims

are excluded from policy coverage.

We disagree. As we’ve mentioned, under Florida law, we

construe insurance contracts in accordance with their “plain mean-

ing.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528,

532 (Fla. 2005). And to be sure, Florida courts have broadly inter-

preted language like “arising out of,” “based on,” and “involving.”

Id. at 539–40 (interpreting “arising out of ” as “originating from,”

“having its origin in,” growing out of,” “flowing from,” incident

to,” or “having connection with”); Houston Specialty Ins. Co. v. Fen-

stersheib, 632 F. Supp. 3d 1318, 1332 (S.D. Fla. 2022) (finding that

“based on” “fit[s] snugly” with the definition of “arising out of ”);

State v. Elder, 975 So. 2d 481, 483 (Fla. Dist. Ct. App. 2007) (defining

“involve” as “to draw in as a participant,” to “implicate,” “to relate

closely,” to “connect,” “to have an effect on,” to “concern directly,”

to “affect”).

But even when we read the term “involving” broadly, it must

be read in tandem with the phrase “arising from.” As a result, we

cannot say that the claims in Counts I and III necessarily

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14 Opinion of the Court 23-11064

“originat[ed] from,” “gr[e]w out of,” or “flow[ed] from” a dispute

“connect[ed]” to conversion. The complaint can be fairly read to

allege that Klioner negligently made the misrepresentations at the

root of each claim for the purpose of inducing a sale and earning a

commission, not as part and parcel of a conversion scheme. So a

jury could find One Sotheby’s liable for market-value damages re-

lated to Klioner’s negligent misrepresentations and One Sotheby’s

negligent training of Klioner, without also necessarily also finding

it liable for conversion and the lost sale-proceeds damages.

And that is the whole ballgame. Because a jury could hold

One Sotheby’s liable without also finding conversion, the claims at

issue in this case do not necessarily “aris[e] from” a dispute “involv-

ing” conversion, and General Star has a duty to defend.

To hold otherwise would unravel Florida’s jurisprudence re-

quiring coverage for the insured when a complaint even partially

falls under coverage and outside of exclusions. Sunshine Birds &

Supplies, Inc., 696 So. 2d at 910. Florida law commands that we

parse a single lawsuit for different bases of liability, so “[i]f the facts

alleged show any basis for imposing liability upon the insured that

falls within policy coverage, the insurer has a duty to defend.” Lime

Tree Vill. Cmty. Club Ass’n, Inc., 980 F.2d at 1405–06 (emphasis added)

(finding a duty to defend where the complaint “set forth grounds,”

other than intentional acts excluded from policy coverage, “upon

which Lime Tree could be held liable”).

And when a complaint alleges multiple causes of action and

multiple types of damages, with some based on acts that the policy

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23-11064 Opinion of the Court 15

does not exclude, we must parse each basis of liability separately.

Id. at 1405 (distinguishing “a single cause of action based wholly on

acts expressly excluded by the policy” from a complaint setting

forth multiple grounds for liability). Therefore, we consider

whether each basis of liability, rather than the lawsuit as a whole,

is “based on or arising out of . . . [a]ny disputes involving . . . con-

version.” And if a basis exists for establishing liability that does not

involve conversion at all, General Star has a duty to defend.

Before we delve into the allegations of the Heliac complaint

to show why it alleges a dispute that does not “involv[e]” conver-

sion, we pause briefly to discuss the meaning of “dispute” in the

Policy. The Policy does not expressly define the term. Still, though,

its terms otherwise inform the meaning of the word.

We start with the ordinary meaning of the term “dispute.”

Deutsch v. Geico Gen. Ins. Co., 284 So. 3d 1074, 1076 (Fla. Dist. Ct.

App. 2019) (“When a term in an insurance policy is undefined, it

should be given its plain and ordinary meaning, and courts may

look to legal and non-legal dictionary definitions to determine such

a meaning.”). Black’s Law Dictionary defines “dispute” to mean “[a]

conflict or controversy, esp. one that has given rise to a particular

lawsuit.” (11th ed. 2019). Here, as we’ve noted, the conversion ex-

clusion relieves General Star of the “obligation under this Policy to

pay Damages or Claims Expenses or to provide a defense, in con-

nection with any Claim(s) . . . [u]nder any part of this Policy if

based on or arising out of . . . [a]ny disputes

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16 Opinion of the Court 23-11064

involving . . . conversion . . . .” (Emphasis added). That is, the Pol-

icy employs the plural of “dispute”—“disputes.”

We think that has significance. First, a lawsuit is not neces-

sarily a single “dispute.” Rather, it can involve multiple “disputes,”

meaning multiple “conflict[s] or controvers[ies].” Because that is

so, that one particular “dispute” within a lawsuit “involv[es]” con-

version does not necessarily mean that all “disputes” within the

case necessarily “involv[e]” conversion. And that is precisely the

case here.

Counts I and III allege facts and seek damages that do not

necessarily arise from any dispute involving conversion. Count I

expressly avers that One Sotheby’s and Klioner, “as its sales associ-

ate, intended and expected Heliac to rely on Klioner’s misrepresen-

tations to induce Heliac to sell the St. Regis Condo and, conse-

quently, collect a commission from the sale of the St. Regis Condo as soon

as possible.” (Emphasis added). One fair reading of the complaint

alleges that Klioner made the misrepresentations to secure a com-

mission, not to further a conversion scheme. True, Count I also

asserts at a different point that without the sale, “Heliac’s funds

could not have been converted.” But these allegations can be fairly

read to suggest that the dispute involving the conversion of the sale

proceeds “ar[ose] out of ” Klioner’s misrepresentations made in an

effort to procure a commission, not the other way around.

Count III turns to the misrepresentations as evidence of a

failure to train Klioner, but it similarly flows from a theory of neg-

ligence and Klioner’s desire to earn a commission, not for the

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23-11064 Opinion of the Court 17

purpose of furthering a conversion scheme. See Mactown, Inc. v.

Cont’l Ins. Co., 716 So. 2d 289, 291 (Fla. Dist. Ct. App. 1998) (finding

that a negligent retention claim did not fall under a coverage exclu-

sion for battery where the plaintiffs in the underlying suit brought

claims for respondeat superior liability for battery and negligent re-

tention).

Heliac, the master of its complaint, could have alleged that

Klioner made the misrepresentations with the goal of persuading

Heliac to sell so that he could eventually convert the funds, but it

did not. Hill v. BellSouth Telecomms., Inc., 364 F.3d 1308, 1314 (11th

Cir. 2004). Rather, Heliac set out distinct grounds for liability in its

complaint: negligence (negligent misrepresentations and negligent

employee training) and intentional acts (conversion). Lime Tree Vill.

Cmty. Club Ass’n, Inc., 980 F.2d at 1405. And negligent misrepresen-

tations made for the purpose of securing a quick commission and

the resulting market-value damages are not merely incidental to a

conversion that happened post-sale. Guideone Elite Ins. Co. v. Old

Cutler Presbyterian Church, Inc., 420 F.3d 1317, 1328 (11th Cir. 2005)

(finding it “difficult to categorize a multi-crime episode, which in-

cluded a kidnapping, an assault and battery, and a robbery, as simply

incident to a rape,” which was excluded from coverage). Nor can

we say that the negligent acts would not have occurred “but for”

the conversion, because the negligent misrepresentations were mo-

tivated by the desire to secure a commission, not enable conver-

sion. Id.

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Whether One Sotheby’s is eventually found liable under a

negligence or conversion scheme theory does not matter to

whether General Star as a duty to defend under the Policy: “[T]he

duty to defend arises even where ‘there has been a suggestion made

that the purported negligent allegations are really allegations of in-

tentional acts in disguise.’” Hartford Acc. & Indem. Co. v. Beaver, 466

F.3d 1289, 1297 (11th Cir. 2006). “[S]o long as the complaint can

reasonably be read as alleging that the [plaintiffs’] injuries were neg-

ligently caused, even if it also may arguably be read as alleging that

the injuries were intentionally caused, the doubt must be resolved

in favor of finding a duty to defend.” Id. Here, as we’ve explained,

should Heliac’s complaint proceed to trial, a jury could find One

Sotheby’s liable for negligent misrepresentation and negligent

training, and not conversion. As a result, the negligent-misrepre-

sentation and negligent-training claims do not necessarily arise

from a dispute involving conversion.

The damages alleged are also distinct: the market-value

damages and the lost-sale proceeds. General Star argues that the

market-value damages are necessarily connected to conversion.

Again, we disagree. Counts I and III allege that as a result of

Klioner’s misrepresentations and One Sotheby’s failure to ade-

quately train Klioner, Heliac was damaged to the extent of “the dif-

ference between the market price of the St. Regis Condo and its sale price,

and the loss of the St. Regis Condo sale proceeds.” (Emphasis

added). As we’ve noted, though, the complaint ties the market-

value damages to Klioner’s alleged misrepresentations that Heliac

said induced it to sell its condominium for significantly less than it

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23-11064 Opinion of the Court 19

was worth. And that brings us back to the purpose Heliac alleges

for Klioner’s alleged misrepresentations: to secure a commission.

So the market-value damages Heliac sought did not “arise

out of ” the conversion, but rather, out of the allegedly pressured

sale of the condominium, which, in turn, Heliac asserts resulted

from Klioner’s desire to earn a commission. And while General

Star may suggest that market-value damages are a novel theory of

recovery, we must resolve any uncertainty about coverage in favor

of One Sotheby’s. Carithers v. Mid-Continent Cas. Co., 782 F.3d 1240,

1246 (11th Cir. 2015) (holding that the insurer “was required to of-

fer a defense in the underlying action unless it was certain that there

was no coverage for the damages sought” where there was an un-

resolved split amongst courts as to whether the underlying theory

for damages was viable). Where a jury could find One Sotheby’s

liable for negligent misrepresentation and negligent training but

not conversion, it could also make One Sotheby’s pay the market-

value damages but not the lost sale-proceeds damages. Under the

Policy, then, One Sotheby’s could be made to pay the market-value

damages because they are not “in connection” with a claim “arising

out of . . . [a]ny dispute involving” conversion.

In short, Florida law commands us to consider whether “the

facts alleged show any basis for imposing liability upon the insured

that falls within policy coverage.” Lime Tree Vill. Cmty. Club Ass’n,

Inc., 980 F.2d at 1406 (emphasis added). When we find such basis,

“the insurer has a duty to defend.” Id. Here, it’s true that conver-

sion certainly “punctuates” the allegations in the Heliac complaint.

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20 Opinion of the Court 23-11064

But “it [i]s but one of the many” injuries (such as market-value

damages) Heliac’s complaint alleges. Guideone Elite Ins. Co., 420 F.3d

at 1328. A jury could find One Sotheby’s guilty of negligent mis-

representation and negligent training while also finding that no

conversion occurred. That theory of liability would involve no

conversion whatsoever, in the claims or the market-value damages

paid on those claims. As a result, at least one basis for liability—

negligent misrepresentation or negligent training, and the resulting

market-value damages—exists that does not arise out of a dispute

involving conversion. Because Counts I and III can fairly be read

to at least partially fall under coverage and outside of exceptions,

the conversion exception does not absolve General Star of its duty

to defend One Sotheby’s from the Heliac Lawsuit. 2

B.

The future-value exclusion similarly fails to apply to at least

some of the allegations in the Heliac complaint, so it also does not

relieve General Star of the duty to defend.

We again begin with the text of the exclusion. The future-

value exclusion bars coverage for claims “based on or arising out

of . . . [a]ny guarantee or promise of future status, performance or

valuation in the course of performing Professional Services by the

2 General Star has forfeited its argument, raised for the first time in its reply

brief on appeal, that the Policy’s exclusion for damages that arise out of “[a]ny

disputes involving any Insured’s fees, commissions or charges” also precludes

coverage for the market-value damages. United States v. Whitesell, 314 F.3d

1251, 1256 (11th Cir. 2002).

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23-11064 Opinion of the Court 21

Insured.” The Policy does not define “Guarantee” and “promise,”

so we give the words their “plain and ordinary meaning” by look-

ing to legal and nonlegal dictionary definitions. Deutsch, 284 So. 3d

at 1076.

“Promise” and “guarantee” have varying definitions. But

both terms suggest that the speaker binds herself to some future

action or responsibility. Merriam Webster’s defines “promise” as “a

declaration that one will do or refrain from doing something spec-

ified,” or “a legally binding declaration that gives the person to

whom it is made a right to expect or to claim the performance or

forbearance of a specified act.” Promise, MERRIAM-WEBSTER’S

ONLINE DICTIONARY (last visited Feb. 7, 2024), https://www.mer-

riam-webster.com/dictionary/promise [https://perma.cc/Z48N-

V4QJ]; Gen. Star Nat’l Ins. Co., 2023 WL 2436148, at *6 (giving addi-

tional definitions for promise: “reason to expect something;” “to

pledge to do, bring about, or provide”; “warrant, assure”; or “to

give ground for expectation.”).

Reasonable definitions of “guarantee” also evoke the impo-

sition of an obligation, conditional on some future happening or

nonhappening. Guarantee, MERRIAM-WEBSTER’S ONLINE

DICTIONARY, (last visited Feb. 7, 2024), https://www.merriam-

webster.com/dictionary/guarantee [https://perma.cc/GZ9A-

N25B] (defining “guarantee” as “an assurance for the fulfillment of

a condition” such as securing another’s possession or assuring the

quality or length of use of a product with a promise of reimburse-

ment); Gen. Star Nat’l Ins. Co., 2023 WL 2436148, at *6 (citing the

USCA11 Case: 23-11064 Document: 45-1 Date Filed: 02/21/2024 Page: 22 of 23

22 Opinion of the Court 23-11064

same definition); see also condition, MERRIAM-WEBSTER’S ONLINE

DICTIONARY (last visited Feb. 7, 2024), https://www.merriam-web-

ster.com/dictionary/condition [https://perma.cc/VV9F-6CEF]

(defining “condition” as “a premise upon which the fulfillment of

an agreement depends[,]” “a provision making the effect of a legal

instrument contingent upon an uncertain event[,]” and “something

essential to the appearance or occurrence of something else[,]”

such as a prerequisite). 3

Under a reasonable, plain reading of either word, none of

the statements Klioner made to induce the sale of the condomin-

ium qualify as “promises” or “guarantees.” The statements pre-

dicted future happenings (the crash of the market, the drop in

value of the condo, the inability to sell in the future, the loss of

3 Some definitions of “promise” and “guarantee” overlap. E.g., promise,

OXFORD ENGLISH DICTIONARY (last visited Feb. 7, 2024)

https://www.oed.com/dictionary/promise_n?tab=mean-

ing_and_use#28177403 [https://perma.cc/JN33-ZNB2] (defining “promise”

as “guaranteeing that a specified thing will or will not happen.”). But under

Florida law, we must “give meaning to each and every word” in a contract.

Equity Lifestyle Properties, Inc. v. Fla. Mowing and Landscape Serv., Inc., 556 F.3d

1232, 1242 (11th Cir. 2009). So to the extent possible, we avoid treating “prom-

ise” and “guarantee” as redundant of each other, giving each word an inde-

pendent meaning. Id. Read distinctly, a “promise” involves the assurance to

act to bring about a condition or to be responsible for that condition; but a

“guarantee,” under at least one reasonable interpretation, is the assurance that

an obligation will be triggered if (and only if) a condition occurs. In other

words, one reasonable way of distinguishing between “promises” and “guar-

antees” is that “guarantees” are conditional, but “promises” are not.

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23-11064 Opinion of the Court 23

Heliac’s money), but they did not bind or commit Klioner or One

Sotheby’s to performance or forbearance of a specific act.

Klioner did not promise to sell the condominium at a specific

price; he merely predicted that Heliac would lose money in the fu-

ture, which required no action or obligation on his part. He also

did not promise to forbear from selling the condominium in the

future; rather, Klioner stated that the market—not Klioner—would

prevent Heliac from selling the unit. Nor did Klioner suggest that

he or One Sotheby’s would become responsible for the effects of

the happenings he predicted. He did not promise to continue

working with Heliac even if the market dropped, or guarantee that

Heliac would make more on a sale at the time of his statements

than it would have in several months, or Klioner or One Sotheby’s

would cover the difference. These statements were predictions of

future value, and they may or may not have been “material” in

terms of how they affected Heliac’s behavior. But Klioner did not

commit to performing or taking on an obligation related to these

predictions, so they were not “promises” or “guarantees.” As a re-

sult, the future-value exclusion does not apply and does not relieve

General Star of its duty to defend.

III.

For the foregoing reasons, we affirm the district court’s or-

ders granting One Sotheby’s motion for judgment on the pleadings

and denying General Star’s motion for summary judgment.

AFFIRMED.