Florida Insurance Guaranty Association v. Synergy Contracting Group, Inc., a/a/o Arlette Schmidt
The Second District reversed a judgment compelling FIGA to pay the $20,000 attorney's fee component of a pre-insolvency settlement agreement. Because attorney's fees were not within the coverage of the underlying homeowners policy, that obligation is not a statutory 'covered claim' under section 631.54(4) that FIGA must pay. The court also held that the insured or its assignee bears the burden of proving the amount sought is a covered claim and cannot carry that burden by speculating that a direct payment to counsel was merely a convenience.
Key facts
- Synergy Contracting Group, as assignee of homeowner Arlette Schmidt, sued United Property & Casualty Insurance Company for breach of a homeowners policy.
- The parties settled for a $90,000 'Settlement Amount' to be issued in two checks — $83,887.32 to Synergy and $20,000 payable solely to Synergy's law firm — with the agreement reciting that the Settlement Amount was 'inclusive of attorneys' fees, costs, and interest' and that 'any remaining costs and fees will be the responsibility of the parties.'
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Holdings
- FIGA is not obligated to pay the portion of a pre-insolvency settlement agreement allocated to the insured's attorney's fees, because a fee obligation imposed by operation of law under…
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Why it matters
This aligns the Second District with the Third and Fourth Districts (Ramos, Waterfire Restoration, Cadet) on a question that recurs constantly in post-insolvency property claims: whether FIGA must fund the fee component… — full analysis with a trial
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