16 Fla. L. Weekly Supp. 1136b

Online Reference: FLWSUPP 1612JEAN

Insurance — Personal injury protection — Attorney’s fees — Where Florida Insurance Guaranty Association failed to respond to demand letters, but did not affirmatively deny claim and stated in answer and affirmative defenses that it had approved payment of medical bills up to policy limits and less deductible, insured is not entitled to award of attorney’s fees against FIGA — FIGA is also not liable for interest

FLORIDA INSURANCE GUARANTY ASSOCIATION, INC. (FIGA), Appellant/Petitioner vs. ESTANISE METELLUS JEAN, Appellee/Respondent. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. 09-12731 (26). L.T. Case No. 06-4777 COCE (52). September 15, 2009. Counsel: Helen Ann Hauser, Restani, Dittmar & Hauser, P.A., Coral Gables. Adolfo Podrecca, Fazio, deSalvo, Cannon, Abers, Podrecca, Fazio & Carroll, Ft. Lauderdale. Christian D. Valois, Hernandez & Hicks, P.A., Ft. Lauderdale.

OPINION

(CHARLES M. GREENE, J.) THIS CAUSE is before the Court on Petition for Writ of Certiorari by Petitioner Florida Insurance Guaranty Association, Inc. (FIGA). The Court having considered the Petition, the Response and the Reply, the applicable law and being otherwise duly advised in premises, dispenses with oral argument and finds and decides as follows:

The instant matter arises from a claim for PIP benefits for a 2004 accident which the insurance company denied. On or about March 29, 2006, Jean/Respondent Estansie Metellus Jean (hereinafter “Jean”) filed this lawsuit against Vesta Fire Insurance Company, a Texas company. On or about May 1, 2006, Vesta filed an Answer and Affirmative Defenses asserting that the subject policy was not in full force and effect on the date of the alleged accident because it was voided back to inception in accordance with Florida Statutes Section 627.409 because Jean failed to disclose all residents and made material misrepresentations on the application for insurance.

On or about August 8, 2006, a Notice of Automatic Stay was filed pursuant to an Order of Liquidation placing Vesta into rehabilitation.¹ On or about November 1, 2006, counsel for Jean filed a motion to strike notice of automatic stay arguing that Vesta did not show that Texas was a reciprocal state so as to be entitled to a stay of the proceedings pursuant to Florida Statutes §631.015.² On or about January 19, 2009, counsel for Jean filed a motion to lift stay and join FIGA, asserting that since FIGA has assigned a claim number to Jean’s claim there was not further need for the stay. On or about February 23, 2007, the trial court denied the motion to join FIGA without prejudice and provided that counsel for Jean could deal directly with FIGA until Vesta’s attorney notifies the Jean that the attorney represents FIGA. The trial court did not address the Jean’s request to lift the stay. Counsel for Jean subsequently sent FIGA a demand for the PIP benefits under the policy of insurance. On or about July 5, 2007, prior to the lifting of the automatic stay, counsel for Jean filed an amended motion for summary judgment and motion to allow additional interrogatories. On or about August 2, 2007, the trial court granted the motion to lift the stay and join FIGA. Jean filed an amended complaint on or about August 7, 2007 and filed a third motion for summary judgment on August 10, 2007. FIGA filed a motion to dismiss asserting that the complaint failed to allege that insured was a resident of Florida and also arguing that Jean’s claims for attorney’s fees and prejudgment interest were barred pursuant to Florida Statutes §631.70 and §631.57(3)(b). The motion to dismiss did not deny that Jean was entitled to benefits. Jean filed a second amended complaint and FIGA filed a motion to dismiss for the same reasons as in its original motion to dismiss. Again, the motion to dismiss did not deny that Jean was entitled to benefits. The trial court denied the motion to dismiss and gave FIGA twenty (20) days to file and Answer and Affirmative Defenses. FIGA filed its Answer and Affirmative Defenses on or about February 22, 2007. As its first Affirmative Defense, FIGA stated that Jean’s medical bills up to the policy limit and less the applicable $100.00 FIGA deductible had been approved for payment by FIGA. FIGA remaining Affirmative Defenses asserted that pursuant to Florida Statutes §631.70, Jean was not entitlement to an assessment of attorney’s fees and costs against FIGA; and pursuant to Florida Statutes §631.57, Jean was not entitled to an assessment of interest against FIGA. Thereafter, counsel for Jean filed motions for judgment on the pleadings, summary judgment, to enforce settlement agreement and for interest and fees. At the hearing before the trial court, FIGA represented that a check had been sent to Jean’s counsel for the entire PIP amount less the $100 FIGA statutory deductible in March, however Jean’s counsel denied receiving it. FIGA reissued a check which was received by counsel for Jean in September. FIGA argued at the hearing that it could not be responsible for fees and costs since it is immune from attorneys’ fees unless it denies a claim by affirmative action, other than delay, which it had never done. Counsel for Jean argued that by failing to respond to the demand letters, FIGA should be deemed to have denied the claim. Counsel for Jean also argued that PIP claims include an interest obligation which can be enforced against FIGA. The trial court did not issue a ruling at the August hearing. In February 2009, the parties again appeared before the trial court on the same issues after which the trial court granted Jean’s motion for entitlement to fees and costs, and interest against FIGA. FIGA has filed the instant Petition for Writ of Certiorari. This Court previously found that it would exercise its discretionary jurisdiction and entertain FIGA’s Petition for Writ of Certiorari.

FIGA is a statutory creature which is designed to serve solely as “the mechanism for the payment of covered claims under certain classes of insurance policies of insurers which have become insolvent.” §631.51, Fla. Stat., Fernandez v. Florida Insurance Guaranty Association, Inc., 383 So.2d 974, 975 (Fla. 3d DCA 1980) citing O’Malley v. Florida Insurance Guaranty Association, 257 So.2d 9, 10 (Fla. 1971). “In establishing the institution, however, the legislature was careful to restrict it potential liability not only concerning it vicarious responsibility for the acts of the companies it succeeds . . . but also as to it own allegedly wrongful activities.” Id. (citations omitted). Section 631.66 provides:

There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, or the department or its representatives for any action taken by them in the performance of their powers and duties under this part.

Section 631.70 which specifically addresses “Attorney’s Fees” sets forth as follows:

The provisions of F.S. 627.428 providing for an attorney’s fee shall not be applicable to any claim presented to the association under the provisions of this part, except when the association denies by affirmative action, other than delay, a covered claim, or a portion thereof.

The statute explicitly excludes attorney’s fees for any covered claim unless FIGA specifically denies, by affirmative action, the claim. While this Court will concede that the terms of §627.428, Fla. Stat., are an implicit part of every insurance policy issued in policy, it is clear that §631.70 limits the broad impact of §627.428.

Upon a review of the record below, this Court finds that FIGA is not liable for attorney’s fees to Jean pursuant to §631.70, Fla. Stat. In its Answer and Affirmative Defenses, FIGA asserted that “Jean’s medical bills up to the policy limit and less the applicable $100.00 deductible has been approved for payment by FIGA.” The record evidence is devoid of any affirmative denial by FIGA. Jean’s arguments to the contrary are without merit.

Based on the foregoing, this Court finds the trial court departed from the essential requirements of the law when it found that Jean was entitled to an award of attorney’s fees against FIGA. Furthermore, this Court further finds that FIGA is not liable for interest under the plain wording of §631.57(1)(b) which provides that FIGA is not “liable for any penalties or interest,” and therefore the trial court departed from the essential requirements of the law when it granted Jean’s request for interest.

Accordingly, it is hereby

ORDERED AND ADJUDGED that the trial court’s award against FIGA for attorney’s fees and costs, and interest is REVERSED.

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¹The Order Appointing a Rehabilitator and Permanent Injunction entered by the Texas court provided for an automatic and indefinite stay of proceedings against Vesta pursuant to Texas Ins. Code §21A.008(c); the six month stay provided for in Florida Statutes 631.67 had not been initiated.

²Although not raised below, even if the trial court did not afford Texas reciprocal state status, it could still extend comity to Texas by enforcing the Texas Order’s stay.