Court Opinion

ID: 4127041
Source: CourtListenerOpinion
Date Created: 2017-02-17 14:05:17.681932+00
Date Added: 2024-06-11T07:46:26.301414
License: Public Domain

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
      FIFTH DISTRICT

                                                NOT FINAL UNTIL TIME EXPIRES TO
                                                FILE MOTION FOR REHEARING AND
                                                DISPOSITION THEREOF IF FILED

PATRICIA MORRISON,

                Appellant,

 v.                                                   Case No. 5D15-4312

HOMEWISE PREFERRED INSURANCE
COMPANY AND FLORIDA INSURANCE
GUARANTY ASSOCIATION,

           Appellees.
________________________________/

Opinion filed February 10, 2017

Appeal from the Circuit Court
for Hernando County,
Richard Tombrink, Jr., Judge.

Michael V. Laurato, Kimberly Hendee,
Hannah Austin, and Christopher Tumminia,
of Austin & Laurato, P.A., Tampa, for
Appellant.

Dorothy V. DiFiore, of Quintairos, Prieto,
Wood & Boyer, Tampa, for Appellee Florida
Insurance Guaranty Association.

No Appearance for Appellee, Homewise
Preferred Insurance Company.

SAWAYA, J.

       The Legislature adopted the Florida Insurance Guaranty Association Act (“FIGA

Act”) 1 for the stated purpose of preventing losses to claimants and policyholders after

       1   §§ 631.50-.70, Fla. Stat. (2011).
their insurers have become insolvent. § 631.51(1), Fla. Stat. (2011). The FIGA Act is

administered by the Florida Insurance Guaranty Association, Inc. (“FIGA”), and contains

a statute of limitations found in section 631.68, Florida Statutes (2011).          Another

applicable statute of limitations is found in section 95.11(5)(d), Florida Statutes (2011).

The issue presented in this case is whether an insured, who had filed a first-party action

to recover policy benefits against the insurer prior to it becoming insolvent, must file suit

against FIGA within the limitation periods of these statutes to recover under the FIGA Act.

       This issue arose when Patricia Morrison filed a motion to amend her complaint

alleging breach of her insurance policy (originally filed against Homewise Preferred

Insurance Company (“Homewise”), prior to it becoming insolvent) to include FIGA as a

defendant. Morrison also filed a motion to substitute FIGA as defendant in the suit. The

trial court denied these motions as untimely and dismissed her suit with prejudice,

concluding that Morrison failed to file suit against FIGA within the time period prescribed

in the statutes of limitation previously cited.

       The underlying suit Morrison filed against her insurer, Homewise, is founded on a

homeowners insurance policy that contained provisions for sinkhole coverage. When

Morrison’s home suffered physical damage allegedly caused by sinkhole activity, she

notified Homewise and filed a claim for benefits. Homewise denied the claim, and

Morrison filed suit for breach of the insurance policy. Homewise filed an answer denying

the allegations in the complaint and containing numerous affirmative defenses. While the

lawsuit was pending, Homewise met its financial demise and became insolvent.

       A consent order was entered appointing the Department of Financial Services as

receiver for Homewise for purposes of rehabilitation and issuing an automatic mandatory

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stay under section 631.041(1), Florida Statutes (2011), of all legal proceedings against

Homewise. We momentarily digress to note that section 631.67, Florida Statutes (2011),

provides other stay provisions that apply to FIGA, which will become pertinent to the

discussion later. The trial court stayed the case based on the consent order. Homewise

was declared insolvent, and FIGA was activated to handle covered claims. Thereafter,

FIGA notified Morrison it had been reassigned her claim due to the insolvency of

Homewise.

       When Morrison subsequently filed the motions to amend her complaint and for

substitution of parties to name FIGA as a defendant in her pending lawsuit, the time

limitation provided in sections 95.11(5)(d) and 631.68 had expired. After the trial court

denied these motions and dismissed her suit with prejudice, Morrison filed this appeal,

contending that the statutes of limitation do not apply because her lawsuit was filed

against Homewise prior to its insolvency. FIGA contends that the general provisions of

the FIGA Act required that Morrison file suit against FIGA within the prescribed limitation

period and that, because her motions to make FIGA a party were not timely filed, the trial

court’s rulings should be affirmed. Resolution of the issue before us requires analysis of

the two statutes of limitation and other pertinent provisions of the FIGA Act.

       The statutes of limitation both specify a time limitation period of one year. The first

is found in the FIGA Act and states:

              A covered claim as defined herein with respect to which
              settlement is not effected and suit is not instituted against the
              insured of an insolvent insurer or the association within 1 year
              after the deadline for filing claims, or any extension thereof,
              with the receiver of the insolvent insurer shall thenceforth be
              barred as a claim against the association and the insured.

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first-party suits. We decline to do so because such an interpretation would violate our

judicial obligation to construe statutes in accordance with their plain meaning to effectuate

the intent of the Legislature. See G.E.L. Corp. v. Dep’t of Envtl. Prot., 875 So. 2d 1257,

1264 (Fla. 5th DCA 2004). If FIGA does encounter difficulties emanating from our

construction of the FIGA Act, and we do not believe it will, FIGA’s recourse is amendment

through the legislative process rather than judicial rewriting of the pertinent statutory

provisions. See id.

       We conclude that section 631.68 and section 95.11(5)(d) do not apply to first-party

actions filed against the insurer prior to its insolvency. Therefore, the trial court erred in

applying the limitation period to Morrison’s suit and dismissing her suit with prejudice. Her

motions to amend the complaint and substitute parties should have been granted, and

her suit should have been allowed to proceed against FIGA. Accordingly, we reverse the

orders denying Morrison’s motions and remand this case to the trial court for further

proceedings consistent with this opinion.

       REVERSED and REMANDED.

EDWARDS, J., and BLACKWELL, A.L., Associate Judge, concur.

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covered claims.” § 631.67, Fla. Stat. (2011). This stay is specific to FIGA. The reference

to “pending causes of action” clearly evinces that the Legislature intended the stay to

apply to actions that have already been filed against the insurer. It would make little sense

to stay a pending action to allow FIGA time to undertake defense of the suit and also

require that suit be filed against FIGA within the limitation period. See City of Boca Raton

v. Gidman, 440 So. 2d 1277, 1282 (Fla. 1983) (stating that when courts construe statutes,

“[t]he law favors a rational, sensible construction”).

       Equally important, our analysis of the pertinent statutes and case law takes into

consideration the requirement that the FIGA Act be “liberally construed” to effectuate the

purposes for which it was enacted. § 631.53, Fla. Stat. (2011). Those purposes provide

aid and guidance to courts when interpreting the FIGA Act’s various provisions. Id. As

previously explained, one of the stated purposes is to protect insureds from financial

losses resulting from the insolvency of their insurers. See Fla. Ins. Guar. Ass’n, Inc., v.

Devon Neighborhood Ass’n, Inc., 67 So. 3d 187, 190 (Fla. 2011) (“The FIGA act is

expressly designed to protect the insured, rather than the insurance industry.”). It would

be antithetical to that purpose if the courts required an insured, like Morrison, who has

filed suit against her insurer prior to insolvency, subsequently to initiate suit against FIGA

within specified time limits contained in statutes clearly intended to apply to suits that have

not been filed.

       We believe that the clear meaning of the statutory provisions we have analyzed

leads to the conclusion we have reached.          We also believe that our interpretation

comports with the statutory provisions that make FIGA “the insurer to the extent of its

obligation on the covered claims, and, to such extent, shall have all rights, duties,

                                              5
defenses, and obligations of the insolvent insurer as if the insurer had not become

insolvent.” § 631.57(1)(b), Fla. Stat. (2011); see also § 631.57(1)(a)1.a., Fla. Stat. (2011)

(stating that FIGA shall “[b]e obligated to the extent of the covered claims” that exist

“[p]rior to adjudication of insolvency and arising within 30 days after the determination of

insolvency”); Mendoza, 193 So. 3d at 945. The delineation of FIGA’s obligations as an

insurer regarding covered claims under the policy vitiates the need to have it separately

sued or served with process when that was essentially accomplished in the suit previously

filed against the insurer prior to its insolvency.

       In Mendoza, which is strikingly similar to the instant case, the Third District Court

came to the same conclusion. In affirming the trial court’s order granting the insured’s

motion to substitute FIGA as a defendant in the pending first-party action, the court

explained:

              Section 631.68 must be read in harmony with section 631.67,
              and all other related provisions of chapter 631, in order that
              the objectives of each of the chapter’s provisions not be
              sacrificed. We must construe related statutes in harmony with
              each other. Vill. of Doral Place Ass’n v. RU4 Real, Inc., 22
So. 3d 627, 631 (Fla. 3d DCA 2009). Against this backdrop,
              we conclude that the limitations period in section 631.68 is
              inapplicable to first-party lawsuits pending against the insurer
              when the insurer is declared insolvent.
193 So. 3d at 945-46. We agree with this rationale.

       FIGA presents a number of reasons why it believes that the Mendoza decision

portends dire consequences for its ability to handle claims under the FIGA Act and should

not be followed by this court. At the forefront of its parade of horribles is FIGA’s broad

declaration that Mendoza is wrongly decided. FIGA therefore implores this court to adopt

a different interpretation of the statutes of limitation that makes them applicable to pending

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first-party suits. We decline to do so because such an interpretation would violate our

judicial obligation to construe statutes in accordance with their plain meaning to effectuate

the intent of the Legislature. See G.E.L. Corp. v. Dep’t of Envtl. Prot., 875 So. 2d 1257,

1264 (Fla. 5th DCA 2004). If FIGA does encounter difficulties emanating from our

construction of the FIGA Act, and we do not believe it will, FIGA’s recourse is amendment

through the legislative process rather than judicial rewriting of the pertinent statutory

provisions. See id.

       We conclude that section 631.68 and section 95.11(5)(d) do not apply to first-party

actions filed against the insurer prior to its insolvency. Therefore, the trial court erred in

applying the limitation period to Morrison’s suit and dismissing her suit with prejudice. Her

motions to amend the complaint and substitute parties should have been granted, and

her suit should have been allowed to proceed against FIGA. Accordingly, we reverse the

orders denying Morrison’s motions and remand this case to the trial court for further

proceedings consistent with this opinion.

       REVERSED and REMANDED.

EDWARDS, J., and BLACKWELL, A.L., Associate Judge, concur.

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