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,
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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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