A Florida court has reversed a decision that awarded attorney's fees and costs to homeowners Daniel and Theresa Carman in their sinkhole claim against the Florida Insurance Guaranty Association (FIGA). This ruling, issued by the District Court of Appeal of Florida on June 12, 2020, affects homeowners seeking legal fees in similar insurance disputes involving sinkhole damage.
The Carmans reported sinkhole damage to their insurance provider, HomeWise Preferred Insurance Company, in 2011. When HomeWise became insolvent, FIGA took over the claim but initially denied it, leading the Carmans to file a lawsuit in March 2014. The case highlights the complexities of insurance claims related to sinkhole damage and the legal implications of attorney's fees in such cases.
The dispute began when the Carmans sought compensation for repairs after FIGA had assumed their claim. The homeowners argued that they were entitled to attorney's fees under Florida law after FIGA accepted the findings of a neutral evaluator and agreed to cover the claim. The circuit court agreed, awarding the Carmans $63,144.30 in fees and costs.
However, FIGA appealed this decision, arguing that Florida law, specifically section 631.54(3)(c), prohibits the payment of attorney's fees in sinkhole claims. The case eventually reached the District Court of Appeal, which had recently ruled on a similar issue in a case known as Heid v. Florida Insurance Guaranty Ass'n. In that case, the court determined that section 631.54(3)(c) is the more specific statute governing sinkhole claims and prevents homeowners from recovering attorney's fees from FIGA.
The court ruled, “Bound by Heid, we conclude that it was error to award attorney's fees and costs to the Carmans.” The judges emphasized that the language in section 631.54(3)(c) takes precedence over section 631.70, which the Carmans relied on for their claim for fees. The decision effectively means that homeowners cannot recover attorney's fees from FIGA in sinkhole cases.
This ruling has significant implications for homeowners in Florida. It clarifies that even if a claim is ultimately accepted, the homeowner may not be entitled to recover legal fees from FIGA. This could discourage homeowners from pursuing claims if they believe they will not be able to recover their legal costs.
The court's decision also certifies a question of great public importance regarding the interpretation of the law. The question posed is whether the language in section 631.54(3)(c) operates to prevent a sinkhole claimant from receiving attorney's fees from FIGA under section 631.70. This certification indicates that the issue may require further clarification by the Florida Supreme Court.
As for what’s next, the Carmans may consider appealing this decision to the Florida Supreme Court, especially given the certification of the legal question. The outcome could have broader implications for similar cases across the state. Meanwhile, other homeowners with sinkhole claims against FIGA will need to navigate this new legal landscape, which may limit their ability to recover attorney's fees.