Federal Deposit Insurance Corporation v. Certain Underwriters at Lloyd's of London, No. 20-13604 (11th Cir. 2022)Annotate this Case
A federal district court decision in a declaratory judgment action that an insurance policy issued by Certain Underwriters at Lloyd’s, London (“Underwriters”) covered certain negligent actions undertaken by the former directors and officers of Omni National Bank (“Omni”) during the 2008 banking crisis. The Federal Deposit Insurance Corporation (“FDIC”), acting in Omni’s name as Omni’s receiver, demanded payment and prejudgment interest from Underwriters under the insurance policy for a stipulated judgment previously entered against three of Omni’s former directors and officers for $10 million, the limit of Underwriters’ insurance policy. Underwriters paid the $10 million once the Supreme Court denied certiorari for its appeal from the declaratory judgment but refused to pay prejudgment interest, causing the FDIC to institute this action.
On appeal, the FDIC argues that demands for prejudgment interest are timely under Georgia law so long as they are made before the entry of a coercive final judgment, which declaratory judgments are not. The Eleventh Circuit agreed, concluding that the district court erred by granting summary judgment for Underwriters. Accordingly, the court remanded for the determination of when prejudgment interest began to run.
The court explained that Underwriters’ argument that it lacked a full and fair opportunity to litigate the issue of prejudgment interest, as Section 9–11–54(c)(1) requires, is false on its face. This entire lawsuit has been dedicated to extensively litigating prejudgment interest. Further, the court held that FDIC’s claim is not barred.