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Office Depot, Inc. v. Nat'l Union Fire Ins. Co.

Office Depot, Inc. v. Nat'l Union Fire Ins. Co.

United States Court of Appeals for the Eleventh Circuit

October 13, 2011, Decided; October 13, 2011, Filed

No. 11-10814 Non-Argument Calendar

Opinion

 [*873]  PER CURIAM:

Office Depot, Inc. ("Office Depot") appeals the district court's grant of summary judgment in favor of National Union Fire Insurance Company ("National Union") and American Casualty Company ("American") (collectively, "carriers"). Office Depot filed for declaratory judgment,  [**2] seeking coverage under its insurance policy for more than $20 million in legal fees that it incurred while responding to Securities and Exchange Commission ("SEC" or "the Commission") inquiries. The National Union policy—providing "organization insurance," inter alia—carried $25 million worth of insurance for covered claims, subject to a $2.5 million retention1 and a 20% co-insurance provision. The American insurance policy used identical policy language and provided coverage for losses above $25 million.2 The district court determined that most of the legal fees were not covered by the policy and granted summary judgment in the carriers' favor. After extensive review of the parties' briefs, the insurance policy, and the record, we affirm.

The following dates and occurrences are relevant to the disposition of this appeal:

June 2007—An article on the Dow Jones Newswire reported that Office Depot  [**3] may have violated federal securities laws by selectively disclosing nonpublic information.

July 11, 2007—Office Depot forwarded a copy of the article to the carriers as "notice of circumstances" that a claim might be filed against it in the future.

July 2007—Office Depot received an internal letter alleging problems with various accounting practices. That prompted an independent review, which included the use of outside legal counsel and forensic accountants.

July 17, 2007—The SEC sent Office Depot a letter advising it that the Commission would begin conducting an inquiry into Office Depot to determine whether Office Depot had violated securities laws.3

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453 Fed. Appx. 871 *; 2011 U.S. App. LEXIS 20759 **

OFFICE DEPOT, INC., Plaintiff - Appellant, versus NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Defendant - Appellee, AMERICAN CASUALTY COMPANY OF READING, PA, Intervenor Defendant - Appellee.

Notice: PLEASE REFER TO FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 GOVERNING THE CITATION TO UNPUBLISHED OPINIONS.

Prior History:  [**1] Appeal from the United States District Court for the Southern District of Florida. D.C. Docket No. 9:09-cv-80554-KAM.

Office Depot v. Nat'l Union Fire Ins. Co., 734 F. Supp. 2d 1304, 2010 U.S. Dist. LEXIS 109929 (S.D. Fla., 2010)

Disposition: AFFIRMED.

CORE TERMS

Insured, notice, coverage, Costs, circumstances, district court, insurance policy, carriers, letters, Wrongful Act, investigating, contends

Securities Law, Regulators, US Securities & Exchange Commission, General Overview, Civil Procedure, Appeals, Standards of Review, De Novo Review, Insurance Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Summary Judgment Review, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Claim, Contract & Practice Issues, Judicial Review