21 Fla. L. Weekly Supp. 50a
Online Reference: FLWSUPP 2101MCMUInsurance — Attorney’s fees — Florida Insurance Guaranty Association — Action to recover section 627.428 attorney’s fees from FIGA — Award of attorney’s fees pursuant to section 627.428 can constitute covered claim under FIGA Act if there is explicit provision in insurance contract which states that attorney’s fees awards are part of coverage — Trial court erred in denying motion to amend complaint to include insurance policy and dismissing claim as precluded as matter of law
CORBIN S. MCMULIN, Appellant, vs. FLORIDA INSURANCE GUARANTY ASSOCIATION, INC., Appellee. Circuit Court, 20th Judicial Circuit (Appellate) in and for Collier County. Case No. 08-28 AP. L.C. Case No. 04-2403 CC. August 21, 2013. Appeal from the County Court for Collier County; Robert Crown, Judge. Counsel: Perry Tanksley, Sarasota, for Appellant. Dorothy V. Difiore, Tampa, for Appellee.
(PER CURIAM.) Corbin S. McMulin (hereinafter “Appellant”) appeals the trial court’s order granting Florida Insurance Guaranty Association, Inc.’s (hereinafter “Appellee”) motion to dismiss the cause of action for failure to state a claim. We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1). For the reasons that follow, we reverse the trial court’s order granting the motion to dismiss and remand for further proceedings.I. Factual Basis
On or about April 27, 1999, Appellant sustained property damages that were covered by his insurance contract with American Skyhawk Insurance Co. (hereinafter ASI). Appellant filed an action against ASI to recover unpaid insurance benefits. On December 31, 2000, ASI merged with Aries Insurance Co. (hereinafter Aries). On or about May 7, 2002, a final judgment was rendered against Aries, awarding Appellant $4,459.78 in damages, $9,585.50 in attorney’s fees, and interest. Subsequently, Aries was declared insolvent, and Appellant timely submitted a claim to Appellee because Appellee was created by statute to “[p]rotect the interests of policyholders, creditors, and other claimants and the public” in the event that an insurance provider becomes insolvent. See § 631.001(3)(a), Fla. Stat. Appellee accepted the claim, deducted $100, as required by statute, and paid Appellant $3,456.44; however, Appellee refused to pay Appellant (1) the $9,585.50 in attorney’s fees and (2) the interest on the May 2002 judgment. As a result, Appellant filed a complaint and amended complaint against Appellee on November 5, 2004, and December 8, 2004, respectively, alleging that Appellee was liable for the attorney’s fees and interest from the May 2002 judgment.
On December 20, 2004, Appellee did not file an answer, but instead moved to dismiss the cause of action for failure to state a claim. On March 2, 2005, the trial court rendered an order granting Appellee’s motion with regards to the attorney’s fees, but leaving the “case . . . open . . . for collection of the amount still owing in damages and interest” under the original judgment. On June 8, 2005, the trial court held a hearing on Appellant’s motion for rehearing. On December 13, 2005, the trial court rendered a “Final Judgment of Dismissal,” dismissing the claim. Numerous motions were filed by both parties before the trial court under a successor judge rendered a final order on August 22, 2008, which adopted the predecessor judge’s December 13, 2005, order and dismissed the claim with prejudice. Finally, on September 15, 2008, Appellant filed the instant notice of appeal.II. Standard of Review
When a case is dismissed for failure to state a cause of action, the standard of review is de novo. Siegle v. Progressive Consumers Ins. Co., 819 So. 2d 732, 734 (Fla. 2002) [27 Fla. L. Weekly S492a] (citing W.R. Townsend Contracting, Inc. v. Jensen Civil Constr., Inc., 728 So. 2d 297, 300 (Fla. 1st DCA 1999) [24 Fla. L. Weekly D559a]).III. Availability of Attorney’s Fee
In the proceedings below, the trial court dismissed Appellant’s claim for attorney’s fees as a matter of law. The trial court ruled that section 631.70 precluded the attorney’s fees sought from being a “covered claim” within the meaning of the “Florida Insurance Guaranty Association Act” (hereinafter “the Act”), even if the insurance contract itself contained “an explicit provision stating that an award of attorney’s fees pursuant to section 627.428 was part of the coverage.” § 631.70, Fla. Stat. The trial court based its ruling upon Florida Insurance Guaranty Association, Inc. v. All the Way with Bill Vernay, Inc., 864 So. 2d 1126 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D85a], and did not consider the insurance contract itself. However, the Florida Supreme Court recently ruled on this particular issue. See Petty v. Fla. Ins. Guar. Ass’n, Inc., 80 So. 3d 313, 317 (Fla. 2012) [37 Fla. L. Weekly S34a].
In Petty, the Court held that an award of attorney’s fees pursuant to section 627.428 can constitute a “covered claim” within the meaning of the Act, but only if there is an explicit provision in the insurance contract which states that such an award is part of the coverage. Petty, 80 So. 3d at 316-17. The trial court denied Appellant’s motion to amend the complaint to include the insurance policy itself because it believed that a section 627.428 award was unavailable as a matter of law, and that, therefore, to review the policy would be “an exercise in futility.” However, in light of the Petty decision, consideration of the insurance policy is necessary, and so the trial court’s order must be reversed, and Appellant’s motion to amend must be granted. On remand, the trial court must determine whether there is an explicit provision in the insurance contract which states that attorney’s fees are part of the coverage before deciding whether or not Appellant’s Section 627.428 motion is a “covered claim” within the meaning of the Act.
Accordingly, we REVERSE, and remand to the trial court for further proceedings in accordance with this opinion. (WINESETT, KRIER, and B. KYLE, JJ., concur.)
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