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Heid v. Florida Insurance Guaranty Association

Florida Court of Appeals, Second District

October 11, 2019

PHYLIS HEID, Appellant,


          Appeal from the Circuit Court for Hillsborough County; E. Lamar Battles, Judge.

          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 with both of her arguments and reverse the decision of the trial court.

         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 once scientific evidence supported a finding of sinkhole activity, FIGA never affirmatively denied the claim.

         II. Analysis

         "While orders on attorney's fees are generally reviewed for an abuse of discretion, the issue before us is one of statutory interpretation, to which the de novo standard of review applies." Miller, 200 So.3d at 203 (citation omitted). 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 ...

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