The District Court of Appeal of Florida recently ruled on a case involving the Florida Insurance Guaranty Association (FIGA) and Synergy Contracting Group, Inc. The court reversed a lower court's decision that required FIGA to pay $20,000 in attorney fees as part of a settlement agreement. This ruling affects how insurance claims are handled, particularly regarding attorney fees and the obligations of the guaranty association.
The case, Florida Insurance Guaranty Association v. Synergy Contracting Group, Inc., Schmidt, was filed under docket number 2D2025-0999. The dispute arose after Synergy, which had taken over the claims of Arlette Schmidt, entered a settlement agreement with United Property & Casualty Insurance Company (United). When United became insolvent, FIGA stepped in to address the claims.
Synergy and United had agreed on a settlement amount of $90,000, which included $20,000 specifically allocated for attorney fees. However, after United's insolvency, FIGA argued that it was not responsible for paying the attorney fees as part of the settlement because they were not covered under the insurance policy. The case was brought to the appellate court after Synergy sought to enforce the settlement agreement against FIGA.
The court ruled that FIGA was not obligated to pay the $20,000 in attorney fees because they did not fall within the coverage of the insurance policy issued by United. The opinion stated, "Because the $20,000 obligation was for attorney's fees that were 'not within the coverage of [the] insurance policy' issued by United to Synergy's predecessor, we reverse." The judges involved in the ruling included Judge Atkinson, Judge Northcutt, and Judge Rothstein-Youakim.
The court emphasized that FIGA's obligations are defined by statute, and it is only responsible for claims that are covered under the insurance policy. The ruling referenced previous cases, including Petty v. Florida Insurance Guaranty Association, which clarified that covered claims must arise from an insurance policy and be within its coverage.
As a result of this ruling, FIGA will not be liable for the attorney fees in this case, which could set a precedent for similar disputes in the future. This decision highlights the limitations of FIGA's responsibilities and clarifies that claims for attorney fees must be explicitly covered by the underlying insurance policy.
The impact of this ruling is significant for policyholders and insurance claimants in Florida. It reinforces the idea that any claims made against FIGA must be grounded in the coverage provided by the insurance policy, limiting the potential for claims that fall outside of that coverage. This ruling may affect how future settlements are structured and how parties negotiate terms related to attorney fees.
Looking ahead, the case may not be the last word on this issue. Synergy could potentially appeal the ruling, but details were not available in the court filing regarding any plans for further legal action. The outcome of this case could influence how similar disputes are handled in the future, particularly as it relates to the obligations of insurance guaranty associations.