A Florida appellate court has reversed a default judgment against the Florida Insurance Guaranty Association, Inc. (FIGA) in a case involving Restore All, LLC and the now-insolvent Southern Fidelity Insurance Company. This decision, issued on September 30, 2026, is significant as it highlights the importance of due process in legal proceedings, particularly the necessity of proper notice before a default judgment can be entered.
The court's ruling affects FIGA, which had been substituted as the defendant in a lawsuit after Southern Fidelity Insurance Company was liquidated. The reversal of the default judgment means that FIGA will have another chance to respond to the claims made against it by Restore All, LLC, which had sued for breach of contract regarding insurance coverage for repairs.
The case began when Restore All, LLC filed a lawsuit against Southern Fidelity Insurance Company for not covering repairs. As the lawsuit progressed, Southern Fidelity became insolvent, leading to a stay in the proceedings. On January 13, 2025, the county court lifted the stay and allowed Restore All to substitute FIGA as the defendant. The court's order stated that if Restore All filed an amended complaint, FIGA must respond or risk a default judgment. After Restore All filed its amended complaint on January 23, 2025, FIGA's counsel filed a notice of appearance just two days earlier.
However, on February 17, 2025, the county court entered a default against FIGA without any notice of the application for default being served. Following this, FIGA filed motions to dismiss and multiple motions to vacate the default, all of which were denied by the county court. Eventually, the court entered a default final judgment against FIGA, prompting the appeal.
The District Court of Appeal of Florida ruled that the default and the default final judgment were void. Judge Shaw, writing for the court, stated, "A judgment is void if, in the proceedings leading up to the judgment, there is a violation of the due process guarantee of notice and an opportunity to be heard." The court found that since FIGA had filed a notice of appearance, it was entitled to notice of the application for default, which had not been provided.
The court referenced a previous case, Turan v. Nationstar Mortgage, LLC, where a similar situation occurred. In that case, the court had ruled that a default judgment entered without proper notice was invalid. The court concluded that the county court had erred in entering the default and default final judgment against FIGA, as the self-executing language in the court's order did not comply with the rules governing defaults.
This ruling has implications for future cases, particularly those involving insurance companies and their obligations to respond in legal proceedings. It reinforces the necessity for courts to adhere to due process standards, ensuring that all parties receive proper notice before any judgments are made against them. The decision may also influence how lower courts handle defaults and the importance of following procedural rules.
Moving forward, FIGA now has the opportunity to respond to Restore All's claims. The case will return to the county court, where the default and default final judgment will be vacated, allowing for a fair hearing on the merits of the case. This ruling may also prompt other parties in similar situations to consider their rights regarding notice and the potential for default judgments.
As of now, it is unclear if Restore All will appeal the decision or if there are any related cases pending that might further clarify the issues surrounding default judgments in Florida. However, this ruling serves as a reminder of the critical importance of due process in the legal system.