[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 18-13172 ________________________

D.C. Docket No. 8:17-cv-02106-SDM-CPT

THE TRAVELERS INDEMNITY COMPANY OF CONNECTICUT,

Plaintiff-Appellee,

versus RICHARD MCKENZIE & SONS, INC., HERMANNS REAL ESTATE VENTURES, LLC,

Defendants-Appellants.

________________________

Appeal from the United States District Court for the Middle District of Florida ________________________

(August 26, 2021) Before BRANCH, TJOFLAT, and ED CARNES, Circuit Judges. ED CARNES, Circuit Judge: USCA11 Case: 18-13172 Date Filed: 08/26/2021 Page: 2 of 24

It is sometimes said that the only way to find out if you can trust someone is to trust them. As this case proves, there is much truth in that adage. And in a related one, which is that trusting someone can lead to litigation.

I. FACTS AND PROCEDURAL HISTORY

When Richard Hermanns bought his first citrus grove in 2009, he hired Richard McKenzie — who had experience with starting and managing citrus groves — to take care of things for him. 1 He relied on McKenzie for everything: clearing the land, buying the supplies, planting the trees, keeping the trees healthy, maintaining the groves, and picking the fruit. McKenzie, in turn, billed Hermanns for materials purchased and labor expended. Hermanns left everything in McKenzie’s hands and did not visit the groves often.

Trusting McKenzie was a mistake. Hermanns would later allege that McKenzie billed him for hundreds of thousands of dollars’ worth of trees that were never planted, fertilizer that was never applied, and diesel fuel that was never delivered. He also stole some of Hermanns’ diesel fuel for his own use. And through his negligence, McKenzie damaged Hermanns’ groves: He planted only 115 trees per acre instead of the industry-standard 150, planted many of the trees

1 Hermanns and McKenzie both acted through their companies, but for simplicity we refer to the parties individually in place of the companies. Also for simplicity, when describing any action of their attorneys we will refer to the parties themselves. 2 USCA11 Case: 18-13172 Date Filed: 08/26/2021 Page: 3 of 24

too deep, failed to apply enough fertilizer and pesticides, failed to dig enough drainage ditches, and generally did a bad job of caring for the trees. Hermanns discovered McKenzie’s fraud, theft, and negligence and fired him.

Hermanns eventually convinced the State Attorney’s Office in Polk County to charge McKenzie for his alleged fraud and theft, but what happened with that criminal case does not matter given how we are deciding this case. On the civil side of things, Hermanns sued McKenzie in Florida state court. His original complaint alleged facts about McKenzie falsely billing Hermanns and stealing from him, and based on that it asserted claims for breach of contract, breach of fiduciary duty, and an equitable accounting. The complaint had no claim for negligence. Almost a year later, and two days after finding out that McKenzie had an insurance policy issued by Travelers, Hermanns moved to amend the complaint to add a claim for negligence; that motion was granted. Hermanns notified Travelers of the amended complaint against McKenzie. Travelers disclaimed coverage.

In the state court litigation, Hermanns and McKenzie entered into a settlement agreement. They settl