Petty v. Florida Insurance Guaranty Ass'n
80 So. 3d 313
| Fla. | 2012Background
- Petty's home was insured by Florida Preferred; after partial payments, Petty sought appraisal and an award showing Florida Preferred owed more under the policy.
- Florida Preferred paid more benefits but became insolvent; an automatic stay ensued in the litigation.
- Petty moved to lift the stay, reopen, and substitute FIGA as defendant; the dispute narrowed to whether FIGA must pay Petty’s attorney’s fees under §627.428(1).
- Trial court treated Florida Preferred's payment of the appraisal award as a confession of judgment and invoked §627.428; it held FIGA liable to the extent of pre-insolvency covered claims.
- Second District reversed, holding §627.428(1) fees are not covered by the policy and thus not payable by FIGA; it certified conflict with Soto (3d DCA) which had held otherwise.
- The Florida Supreme Court approved the Second District’s ruling and disapproved Soto, concluding no coverage for §627.428(1) fees under §631.54(3).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §627.428(1) fees are within policy coverage to be paid by FIGA. | Petty argues all sections of Florida law imply coverage for §627.428(1) fees. | FIGA contends fees are not within the policy’s coverage and thus not a covered claim under §631.54(3). | No; §627.428(1) fees are not within coverage under §631.54(3). |
| Whether legislation implying coverage (via §627.428(1)) makes fees a covered claim. | Petty relies on Palma that §627.428(1) is an implicit policy term. | Implied inclusion does not equal policy coverage; fees are not expressly covered by the policy. | No; implied coverage does not render §627.428(1) fees a covered claim under §631.54(3). |
Key Cases Cited
- Pepper’s Steel & Alloys, Inc. v. United States, 850 So.2d 462 (Fla. 2003) (fees recoverable to discourage insurer contesting valid claims)
- Bell v. U.S.B. Acquisition Co., 734 So.2d 403 (Fla. 1999) (purpose of §627.428 to reimburse insureds for attorney’s fees)
- State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830 (Fla. 1993) (§627.428 implied part of every policy; limitations on coverage)
- What An Idea, Inc. v. Sitko, 505 So.2d 497 (Fla. 1st DCA 1987) (attorney’s fees within certain policy considerations)
- Soto v. Florida Insurance Guaranty Ass’n, 979 So.2d 964 (Fla. 3d DCA 2008) (held §627.428(1) fees were covered under §631.54(3))