The Eleventh Circuit determined that the trial court did not err by refusing to give preclusive effect to findings made in the underlying state-court action because there was no collateral estoppel. Nationwide Mut. Ins. Co. v. Sharif, 2014 U.S. App. LEXIS 2114 (11th Cir. Feb. 4, 2014).

   Bashir's owned a grocery and was insured by Nationwide. The decedent was accidentally killed by a pistol stored under the cash register. The decedent's personal representative sued Bashir in state court. Nationwide declined to defend because it maintained that the employment exclusion applied to bar coverage. 

   The personal representative argued two alternative claims, the first assuming the decedent was not an employee of Bashir's and the second assuming that he was. The state court granted a motion to dismiss the second claim that the decedent was an employee. In a subsequent trial, judgment was awarded against Bashir and another defendant in the amount of $950,000. 

    The personal representative sought to recover the judgment from Nationwide. A complaint was filed by Nationwide in federal court for a declaration that it owed no duty to defend or indemnify Bashir. The district court ruled on partial summary judgment that Nationwide was not estopped from challenging in the coverage action certain findings rendered by the state court in the liability action because it was not a party to the liability action.

   At trial, the jury found Nationwide breached the policy by failing to defend Bashir in the liability action but that the employment exclusion eliminated any duty of indemnification. The jury awarded Bashir $9,000 for the cost of the defense. Bashir filed a motion for judgment as a matter of law, arguing it was inappropriate for Nationwide to attempt to prove the decedent was an employee in light of the state cour'ts contrary finding. The district court denied the motion because there was no privity to establish collateral estoppel. 

   The Eleventh Circuit affirmed. Nationwide was not a party to the state-court action. Bashir could not show they were in privity with Nationwide. A finding that the decedent was employee by Bashir's would trigger the employment exclusion and eliminate Nationwide's duty to indemnify. Therefore, Bashir's and Nationwide's interests were opposed rather than identical, and collateral estoppel was not appropriate.