Heid v. Fla. Ins. Guaranty Ass'n

• Decision Date: 06 March 2020
• Docket Number: Case No. 2D18-737
• Citation: 311 So.3d 94
• Parties: Phylis HEID, Appellant, v. FLORIDA INSURANCE GUARANTY ASSOCIATION, Appellee.
• Court: Florida District Court of Appeals

311 So.3d 94

Phylis HEID, Appellant,

v.FLORIDA INSURANCE GUARANTY ASSOCIATION, Appellee.

Case No. 2D18-737

District Court of Appeal of Florida, Second District.

Opinion filed March 6, 2020

Richard N. Asfar of Vaka Law Group, P.L., Tampa (withdrew after briefing); George A. Vaka and Kurt J. Rosales of Vaka Law Group, P.L., Tampa; and Aaron S. Kling of Kling Law, P.A., Tampa, for Appellant.

Dorothy V. DiFiore of Quintairos, Prieto, Wood & Boyer, Tampa; and Lisa J. Augspurger of Bush & Augspurger, P.A., Orlando, for Appellee.

MORRIS, Judge.

Phylis Heid appeals an order denying her motion for attorney's fees and costs incurred in sinkhole litigation against Florida Insurance Guaranty Association (FIGA). In this appeal, Heid argues that the trial court misconstrued this court's prior holding in Miller v. Florida Insurance Guaranty Ass'n, 200 So. 3d 200 (Fla. 2d DCA 2016), which she claims supports her entitlement to fees. She also claims that she is entitled to costs pursuant to section 57.041, Florida Statutes (2012), because FIGA's ultimate concession that her claim is covered constitutes a confession of judgment. We agree that the trial court misconstrued our holding in Miller but affirm its decision that Heid is not entitled to fees and costs.

I. Facts

In 2010, believing that her home had suffered sinkhole damage, Heid reported a claim to her insurer, HomeWise Preferred Insurance Company. HomeWise hired an engineer to perform testing and advised Heid that there was no sinkhole damage in December 2010. Heid demanded additional testing, and after procuring a geological investigation, HomeWise again informed Heid that no sinkhole loss had occurred in June 2011.

HomeWise was declared insolvent in November 2011, and FIGA assumed responsibility for Heid's claim. In March 2013, FIGA advised Heid that there had been no evidence of sinkhole activity on the property but that FIGA was not denying her claim. In September 2013, Heid's attorney asked FIGA to either admit or deny coverage, and FIGA's adjuster responded that FIGA had not and was not denying Heid's claim. Heid then filed her lawsuit against FIGA in October 2013.

FIGA invoked the neutral evaluation process and peer review of prior testing, after which FIGA advised Heid in February 2015 that her claim was not a covered claim and that FIGA would not make payment. Heid then retained an engineering firm to conduct additional testing. The firm concluded that there was evidence of sinkhole activity that had caused damage to Heid's home. Heid shared the report with FIGA, which disagreed. Heid then retained a second firm to conduct additional testing, and Heid shared the report with FIGA. In December 2015, FIGA conceded that the report confirms the presence of sinkhole activity and that Heid's claim was a covered claim. FIGA and Heid resolved all issues except Heid's claim for attorney's fees and costs.

Heid moved for attorney's fees and costs, arguing that she is entitled to fees under sections 631.70 and 627.428, Florida Statutes (2012), and that she is entitled to costs under section 57.041 and the confession-of-judgment doctrine. FIGA responded by arguing that FIGA acted swiftly in agreeing to cover Heid's claim once scientific evidence of sinkhole activity was reported to FIGA. After this court issued its Miller decision, Heid filed an amended motion for fees, asserting that "when FIGA denies coverage for sinkhole loss, then later accepts coverage, the [i]nsured is entitled to fees pursuant to Florida statute 631.70." FIGA responded that fees were precluded under section 631.54(3)(c) because the fees were "in connection with a sinkhole loss," that a large portion of Heid's fees were for testing and thus prohibited by section 631.54(3)(c), that Heid's claim was not a "covered claim" at the time it was affirmatively denied by FIGA, and that Heid was not entitled to costs because no judgment had been entered.

After a hearing, the trial court denied Heid's motion for fees, concluding that the fees Heid spent on testing for a sinkhole loss were excluded under the definition of "covered claim" in section 631.54(3)(c) as interpreted by Miller and that any fees related to sinkhole repairs after FIGA agreed to coverage were also barred by section 631.54(3)(c). The trial court further found that FIGA's February 2015 denial did not constitute an affirmative denial of a "covered claim" for purposes of section 631.70 because at the time of the February 2015 denial, there was no scientific evidence that there was sinkhole activity. The trial court concluded that after scientific evidence supported a finding of sinkhole activity, FIGA never affirmatively denied the claim.

II. Analysis

"Whether a party is entitled to statutory attorney's fees is a matter of statutory interpretation, which this [c]ourt reviews de novo." Parker v. Bd. of Trs. of the City Pension Fund for Firefighters & Police Officers, 149 So. 3d 1129, 1132 (Fla. 2014). The Florida Legislature established FIGA, through the FIGA Act, to protect Florida citizens in the event their insurers become insolvent. Jones v. Fla. Ins. Guar. Ass'n, 908 So. 2d 435, 442 (Fla. 2005). The Legislature's expressed purpose is to "[p]rovide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer." § 631.51(1). The courts have been directed by the Legislature to liberally construe the FIGA Act to effect this purpose. See § 631.53; Jones, 908 So. 2d at 442.

In 2011, the Legislature, motivated by substantial losses in FIGA sinkhole cases, amended the definition of "covered claim" as set forth in section 631.54(3) so as "to limit FIGA's financial responsibility for sinkhole loss." de la Fuente v. Fla. Ins. Guar. Ass'n, 202 So. 3d 396, 401 (Fla. 2016) ; see also ch. 2011-39, § 30, Laws of Fla. Prior to 2011, the definition of a "covered claim" consisted of subsections (3)(a)-(b) of section 631.54(3). See § 631.54(3), Fla. Stat. (2010) ; de la Fuente, 202 So. 3d at 401. But in 2011, the Legislature added paragraph (3)(c). The 2011 definition of "covered claim" thus reads as follows:

(3) "Covered claim" means an unpaid claim, including one of unearned premiums, which arises out of, and is within the coverage, and not in excess of, the applicable limits of an insurance policy to which this part applies, issued by an insurer, if such insurer becomes an insolvent insurer and the claimant or insured is a resident of this state at the time of the insured event or the property from which the claim arises is permanently located in this state. For entities other than individuals, the residence of a claimant, insured, or policyholder is the state in which the entity's principal place of business is located at the time of the insured event. The term does not include:

(a) Any amount due any reinsurer, insurer, insurance pool, or underwriting association, sought directly or indirectly through a third party, as subrogation, contribution, indemnification, or otherwise;

(b) Any claim that would otherwise be a covered claim under this part that has been rejected or denied by any other state guaranty fund based upon that state's statutory exclusions, including, but not limited to, those based on coverage, policy type, or an insured's net worth. Member insurers have no right of subrogation, contribution, indemnification, or otherwise, sought directly or indirectly through a third party, against the insured of any insolvent member; or

(c) Any amount payable for a sinkhole loss other than testing deemed appropriate by the association or payable for the actual repair of the loss, except that the association may not pay for attorney's fees or public adjuster's fees in connection with a sinkhole loss or pay the policyholder. The association may pay for actual repairs to the property but is not liable for amounts in excess of policy limits.

§ 631.54, Fla. Stat. (2011) (emphasis added).¹ The language in subsection (3)(c) prevents FIGA from paying "[a]ny amount payable for a sinkhole loss other than testing deemed appropriate by the association or payable for the actual repair of the loss" and further specifically prevents FIGA from paying "attorney's fees ... in connection with a sinkhole loss."

Heid claims that she is entitled to attorney's fees under section 631.70, which provides that "[t]he provisions of s. 627.428 providing for an attorney's fee shall not be applicable to any claim presented to the association under the provisions of this part, except when the association denies by affirmative action, other than delay, a covered claim or a portion thereof." While section 631.70 generally applies to attorney's fees payable by FIGA when FIGA has denied a covered claim by affirmative action, section 631.70 does not specifically address sinkhole claims. Section 631.54(3)(c) addresses attorney's fees in connection with a sinkhole loss. "[A] specific statute covering a particular subject area always controls over a statute covering the same and other subjects in more general terms." McKendry v. State, 641 So. 2d 45, 46 (Fla. 1994) (first citing Adams v. Culver, 111 So. 2d 665, 667 (Fla. 1959) ; then citing State v. Billie, 497 So. 2d 889, 894 (Fla. 2d DCA 1986) ). "The more specific statute is considered to be an exception to the general terms of the more comprehensive statute." Id. (citing Floyd v. Bentley, 496 So. 2d 862, 864 (Fla. 2d DCA 1986) ). The more specific statute must control, and the specific statute that relates to attorney's fees in sinkhole cases is section 631.54(3)(c). Section 631.70 must now give way to the more specific language in section 631.54(3)(c) when attorney's fees are sought in connection with a sinkhole loss. By virtue of the 2011 addition of section 631.54(3)(c), the Legislature has put the public on notice that when it comes to attorney's fees, sinkhole claims involving FIGA now fall under...