Florida Insurance Guaranty Ass'n v. Bernard
140 So. 3d 1023
Fla. Dist. Ct. App.2014Background
- Bernard’s home insured by First Home in 2010; sinkhole damage claimed and subsurface repairs required but policy conditions delayed payment until a contract for repairs was entered.
- First Home denied the claim after geotechnical investigation; Bernard filed suit against HomeWise, successor-by-merger.
- HomeWise was adjudicated insolvent on November 18, 2011 and placed under DF S receiver; FIGA activated under the FIGA Act.
- FIGA used a neutral evaluation process (section 627.7074) to determine sinkhole causation and repair costs; evaluator found about $170,000 subsurface remediation and $57,000 cosmetic repairs were necessary.
- Bernard amended the complaint substituting FIGA for HomeWise; Bernard sought direct payment by FIGA for above-ground repairs; subsurface costs were not sought for direct payment by Bernard.
- At issue was whether FIGA’s liability for a “covered claim” used the 2010 definition or the 2011 definition, with the trial court applying the 2010 definition and ordering direct payment to Bernard; on appeal, the court held the 2011 definition governs because insolvency occurred after 2011 amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statutory definition of ‘covered claim’ applies | Bernard: 2010 definition governs since loss occurred then | FIGA: 2011 definition governs as insolvency occurred after 2011 | 2011 definition applies; timing of insolvency determines coverage. |
| Whether applying the 2011 definition retroactively is appropriate | Retroactivity not intended; relied on Devon ruling | Definitions determined by insolvency date; not retroactive | Not retroactive; applicable definition is the one in effect at insolvency. |
| Interpretation of §631.57(l)(a)1.a. regarding when claims exist | Claims exist prior to adjudication; supports 2010 rule | Claims exist only when insolvency triggers; supports 2011 rule | Better reading construes it as a temporal limit; liability governed by insolvency-date definition. |
Key Cases Cited
- Devon Neighborhood Ass’n v. Fla. Ins. Guar. Ass’n, Inc., 67 So.3d 187 (Fla. 2011) (insolvency-date definition governs FIGA liability; retroactivity context discussed)
- Prejean v. Dixie Lloyds Ins. Co., 660 So.2d 303 (La. 1995) (insolvency timing determines covered-claim liability; retroactivity concerns)
- Agency Budget Corp. v. Washington Insurance Guaranty Ass’n, 610 P.2d 361 (Wash. 1980) (insolvency date controls liability; retroactivity not applied to pre-insolvency events)
- Durish v. Channelview Bank, 809 S.W.2d 273 (Tex. Ct. App. 1991) (date of impairment determines covered-claim liability; amendments may cut off rights)
- Brennan v. Kansas Insurance Guaranty Ass’n, 264 P.3d 102 (Kan. 2011) (insolvency-date rule governs claims; retroactivity concerns noted)
- Petty v. Fla. Ins. Guar. Ass’n, Inc., 80 So.3d 313 (Fla. 2012) (discusses scope of ‘covered claim’; related retroactivity considerations)
- Menendez v. Progressive Express Insurance Co., 35 So.3d 873 (Fla. 2010) (time-of-contract rule; distinguishes contract-based substantive issues)