April 21, 2026|Franchise Frontlines
April 21, 2026 | U.S. Court of Appeals for the Eleventh Circuit | Unpublished Opinion
Executive Summary
In an unpublished decision, the Eleventh Circuit affirmed dismissal of breach of contract and unjust enrichment claims against multiple affiliated insurance entities, holding that only the entity expressly identified in the policy’s declarations was the contracting insurer. Plaintiffs argued that various State Farm entities should be treated as a single enterprise based on shared branding and alleged apparent agency. The defendants countered that the policy unambiguously identified a single contracting party and that branding alone could not establish agency or liability. The Eleventh Circuit agreed with the defendants, rejecting the plaintiffs’ apparent agency theory and confirming that the use of logos, trademarks, and shared branding does not create contractual liability. The court also held that the district court erred in dismissing the action for lack of jurisdiction without properly analyzing Class Action Fairness Act (“CAFA”) jurisdiction at the time of filing.
Relevant Background
The plaintiffs purchased a personal articles insurance policy covering a diamond pendant. The policy consisted of several documents, including a renewal certificate, a policy booklet, and endorsements. The renewal certificate identified the insurer as State Farm Florida Insurance Company and contained the policy-specific information, including the insured parties, coverage amount, and premium. The remaining documents used generalized “State Farm” branding but did not identify a specific entity, aside from a copyright notice referencing a different affiliated company.
After a loss, the plaintiffs received payment for the replacement value of the pendant but did not receive a refund of allegedly unearned premiums. They filed a putative class action asserting breach of contract and unjust enrichment claims against multiple State Farm entities, including entities not identified in the policy’s declarations. Over successive amended complaints, the plaintiffs attempted to substitute different affiliated entities as defendants, asserting that the entities operated as a single enterprise or acted through apparent agency relationships.
The district court dismissed the claims against the non-contracting entities, concluding that the policy unambiguously identified a single insurer and that the plaintiffs failed to plausibly allege agency or unjust enrichment. After dismissing those defendants, the court dismissed the remaining claims for lack of subject matter jurisdiction, reasoning that the remaining parties were non-diverse.
Decision
The Eleventh Circuit affirmed the dismissal of claims against the non-contracting entities, emphasizing that the identity of the contracting party must be determined from the agreement as a whole. The court held that the policy’s declarations controlled and unambiguously identified State Farm Florida as the insurer. The court rejected the plaintiffs’ attempt to rely on isolated references within other policy documents, explaining that those documents incorporated the declarations and did not independently establish contractual relationships with other affiliated entities.
The court also rejected the plaintiffs’ apparent agency theory. Applying Florida law, the court explained that apparent agency requires a representation by the principal, reliance by the plaintiff, and a change in position based on that reliance. The plaintiffs relied primarily on the use of “State Farm” branding, logos, and generalized references within the policy documents. The court held that these allegations were insufficient as a matter of law, reiterating that branding and trademark use do not demonstrate the level of control necessary to establish agency. The court relied on precedent confirming that even pervasive brand identity and franchise-style support do not create apparent agency absent evidence of control over day-to-day operations or specific employment decisions.
With respect to unjust enrichment, the court concluded that the plaintiffs failed to plausibly allege that the non-contracting entities retained a benefit under circumstances that would make retention inequitable. The alleged inequity was entirely dependent on the interpretation of the contract itself, and the plaintiffs failed to identify any independent basis for recovery against non-parties to the agreement.
Finally, the Eleventh Circuit addressed the district court’s jurisdictional ruling. The court held that CAFA jurisdiction must be assessed at the time the complaint is filed, and that subsequent dismissal of defendants does not automatically defeat jurisdiction. Because the district court failed to analyze whether jurisdiction existed at the time of filing—and whether the claims against the dismissed defendants were frivolous—the Eleventh Circuit vacated the jurisdictional dismissal and remanded for further analysis.
Looking Forward
This decision reinforces several principles that are directly relevant to franchisors and other multi-entity systems. Most importantly, the court confirms that shared branding, trademarks, and system-wide identity do not, standing alone, create contractual liability or agency relationships. Courts continue to distinguish between brand-level uniformity and operational control, and they require specific allegations of control or reliance before extending liability beyond the contracting entity.
The opinion also underscores the importance of clear contractual drafting. The court placed significant weight on the policy’s declarations, which explicitly identified the contracting party and provided the operative terms of the agreement. For franchisors, this reinforces the value of maintaining clear and consistent documentation identifying the responsible entity, particularly where multiple affiliated entities operate under a common brand.
In addition, the rejection of the apparent agency theory highlights the limits of “single enterprise” arguments. Plaintiffs frequently attempt to collapse corporate structures by pointing to unified branding or marketing, but this decision illustrates that courts will require concrete allegations of control and reliance before disregarding corporate separateness.
Finally, the court’s treatment of CAFA jurisdiction provides a reminder that jurisdictional analysis must focus on the posture of the case at the time of filing. Even where claims against certain defendants are dismissed, courts must assess whether jurisdiction was properly invoked at the outset before declining to proceed.
Taken together, the decision reflects a continued judicial reluctance to expand liability based on generalized allegations of affiliation or branding. Instead, courts remain focused on contractual relationships and the actual exercise of control, providing a clear framework for structuring and defending multi-entity business models.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
