Gonzalez v. Homewise Preferred Insurance Company , 2017 Fla. App. LEXIS 1958 ( 2017 )

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
OLIVERO GONZALEZ and CAROL )
PERDOMO, )
)
Appellants, )
)
v. ) Case No. 2D15-425
)
HOMEWISE PREFERRED )
INSURANCE COMPANY and )
FLORIDA INSURANCE GUARANTY )
ASSOCIATION, )
)
Appellees. )
)
Opinion filed February 15, 2017.
Appeal from the Circuit Court for
Hillsborough County; Charles E. Bergmann,
Judge.
Kimberly Hendee, Michael V. Laurato, and
Hannah Austin of Austin & Laurato, P.A.,
Tampa, for Appellants.
G. William Bissett, Jr. of the Law Firm of
Kubicki Draper, P.A., Miami, for Appellee,
Homewise Preferred Insurance Company.
No appearance for Appellee, Florida
Insured Guaranty Association.
SLEET, Judge.
Oliver Gonzalez and Carol Perdomo challenge the trial court's order
dismissing with prejudice their breach of insurance contract action as to the Florida
Insurance Guaranty Association (FIGA). Because an insured who has already instituted
an action against his or her homeowner's insurance carrier prior to the carrier being
declared insolvent is not statutorily required to file a new action against FIGA or
separately serve FIGA in the pending action, we reverse.
In 2009, Gonzalez and Perdomo timely filed a cause of action for breach
of insurance contract against their homeowner's insurance carrier, Homewise Preferred
Insurance Company, and the case was set for jury trial. However, in 2011 Homewise
became insolvent, and pursuant to section 631.67, Florida Statutes (2011), the
proceedings were automatically stayed for six months "to permit proper defense by
[FIGA]." During the stay, FIGA notified Gonzalez and Perdomo that it had assumed
their claim and had assigned it to an adjuster. FIGA also advised them that the
deadline for filing suit against it was the one-year statutory period set forth in section
631.68. Gonzalez and Perdomo subsequently moved to amend their complaint to
substitute FIGA for Homewise as the defendant. The trial court granted the motion and
ordered Gonzalez and Perdomo to serve FIGA with process.
The one-year statutory deadline that FIGA gave Gonzalez and Perdomo
for instituting a new lawsuit against it expired without their effecting service upon FIGA.
FIGA's counsel then made a limited appearance and filed a motion to dismiss this
action. The trial court granted FIGA's motion to dismiss, interpreting section 631.68 to
require that when FIGA assumes the defense of a covered claim, an insured who has
already filed a timely lawsuit against its homeowner's insurance carrier must file a new
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lawsuit against FIGA within section 631.68's one-year filing period or be forever barred.
This appeal ensued.
On appeal, Gonzalez and Perdomo argue that the trial court erred in
granting FIGA's motion to dismiss for lack of jurisdiction because section 631.68 only
applies to new lawsuits filed against FIGA after an insurer is declared insolvent. They
maintain that the statute is inapplicable here because they instituted their suit against
Homewise prior to insolvency and such suit was still pending at the time of insolvency.
We agree.
Chapter 631, part II, known as the "Florida Insurance Guaranty
Association Act," § 631.50, created FIGA in part 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 insurer," § 631.51(1). The Act expressly states that it is to be liberally
construed to achieve its purpose. § 631.53.
When an insurer is declared insolvent, FIGA is "deemed the insurer to the
extent of its obligation on the covered claims, and, to such extent, shall have all rights,
duties, defenses, and obligations of the insolvent insurer as if the insurer had not
become insolvent." § 631.57(1)(b). As such, the Act contemplates that FIGA will step
into the shoes of the insolvent insurer. Therefore, in cases where the insolvent insurer
is already the defendant in a pending lawsuit, FIGA becomes the defendant in that
pending lawsuit. To that end, section 631.67 of the Act explicitly states that it applies to
pending proceedings and automatically stays those proceedings for a period of six
months. Id. ("All proceedings in which the insolvent insurer is a party or is obligated to
defend a party in any court or before any quasi-judicial body or administrative board in
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this state shall be stayed for [six] months . . . ."). The Act also automatically extends to
FIGA certain rights that only a party to those pending proceedings would have, including
the right to "apply to have any judgment, order, decision, verdict, or finding based on the
default of the insolvent insurer or its failure to defend an insured set aside . . . and . . . to
defend against such claim on the merits." Id. Accordingly, in cases where a lawsuit is
pending at the time of insolvency, FIGA becomes the party defendant by operation of
statute and there is no need for the filing of a new lawsuit against FIGA or for FIGA to
be separately served in the pending lawsuit.
We therefore must conclude that the reliance by FIGA and the trial court
on section 631.68 as a bar to the instant action is misplaced. Section 631.68 is entitled
"Limitation; certain actions" and states as follows:
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
[one] 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.
This section addresses instances where no lawsuit was filed before the insurer was
declared insolvent. Such is not the case here. Gonzalez and Perdomo filed their
lawsuit against Homewise prior to the declaration of insolvency. Upon the declaration of
Homewise's insolvency, FIGA statutorily became Gonzalez and Perdomo's insurer,
having the duty to defend against their first-party lawsuit as if Homewise had not
become insolvent. See § 631.57(1)(b). As such, Gonzalez and Perdomo were not
required to file a new lawsuit against FIGA or to even move to substitute FIGA as a
party and serve process upon it in their pending lawsuit.
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Our conclusion is in line with the Third District's recent opinion in Florida
Insurance Guaranty Ass'n v. Mendoza, 193 So. 3d 940 (Fla. 3d DCA 2016), a case that
is factually indistinguishable from the instant case. Like Gonzalez and Perdomo, Ms.
Mendoza filed a first-party breach of contract action against her insurance carrier based
on a coverage dispute. Her insurer subsequently was declared insolvent. FIGA then
began negotiating a settlement with Mendoza. Ultimately, Mendoza filed a motion to
substitute FIGA for her insolvent insurer as the first-party defendant in her still pending
lawsuit. FIGA responded by filing a limited appearance to contest the trial court's
jurisdiction, arguing that the trial court lacked jurisdiction because Mendoza's motion to
substitute was filed after the statute of limitations governing claims against FIGA had
already run. The trial court disagreed with FIGA and granted Mendoza's motion to
substitute.
On appeal, the Third District looked at the entire "statutory scheme [of
chapter 631] governing insolvent insurers[] and the role of FIGA in that scheme." Id. at
943. Specifically, the court pointed out that "Mendoza's substitution motion merely
reflected what had already occurred by operation of section 631.57(1)(b) when [the
insurer] was declared insolvent." Id. at 944. The court also noted the automatic stay
provided by section 631.67, as well as its stated purpose of permitting a proper defense
by FIGA of all pending causes of action on covered claims and that the statute "allows
FIGA to request from the trial court that the stay be enlarged, shortened[,] or waived."
Id. Noting that "[s]ection 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," id. at 945, the Third District concluded that
"FIGA's interpretation of section 631.68 would impair those specific [sections of chapter
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631] that address pending cases," id. at 944. The court therefore concluded that
"[s]ection 631.68 bars suits that have not yet been filed (in other words, non-pending
[sic] lawsuits) from being filed more than one year beyond the deadline for filing claims
with the receiver for the insolvent insurer." Id.We agree with the Third District's reasoning in Mendoza and its conclusion
that "[n]othing in chapter 631 contemplates the necessity for the plaintiff in a pending
first-party lawsuit either to bring a new action against FIGA, or separately to serve FIGA
in the pending action, in order for the trial court to obtain jurisdiction over FIGA." Id. at
946. Accordingly, we must reverse the trial court's order dismissing Gonzalez and
Perdomo's lawsuit and remand with instructions that the trial court reinstate their action
against FIGA.
Reversed and remanded.
LaROSE and SALARIO, JJ., Concur.
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