FLORIDA INSURANCE GUARANTY ASSOCIATION, APPELLANT,
v.
JAMES PRICE, APPELLEE
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Florida Insurance Guaranty Association (FIGA) appealed a trial court decision awarding Price pre-insolvency court costs after his insurer Kenilworth became insolvent. The court reversed the award of pre-insolvency court costs, holding that such costs are not 'covered claims' under Florida's Insurance Guaranty Association statute because Price did not personally incur them.
Pre-insolvency court costs are not 'covered claims' under section 631.54(4) because they were incurred by Kenilworth, not by Price personally. Therefore, FIGA is not liable for the $44.60 in pre-insolvency court costs, and the trial court's award of such costs must be reversed.
[1] A Florida Insurance Guaranty Association (FIGA) is not liable for pre-insolvency attorney's fees incurred by an insured in defense of lawsuits, where the insured did not…
[2] Pre-insolvency court costs incurred by an insurer in defense of lawsuits are not 'covered claims' under Florida Statutes section 631.54(4) when the insured did not person…
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Kenilworth Insurance Company, pursuant to its contractual duty to defend Price, incurred the $44.60 in court costs through the Piper firm. As Price did not incur the costs, they are not covered claims under section 631.-54(4).”
The court's principal holding establishing that costs incurred by the insurer, not the insured, do not constitute covered claims under the statute.
Previewing 1 of 2 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligencePrice obtained automobile insurance from Kenilworth Insurance Company and was involved in an accident resulting in litigation. Kenilworth selected the…
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RYDER, Judge.
James Price, the plaintiff below, had obtained automobile insurance from Kenil-worth Insurance Company. During the policy period, Price was involved in an automobile accident which resulted in litigation.
The insurance policy included a-provision that Kenilworth “will settle or defend, as we consider appropriate, any claim or suit asking for these damages. Our duty to settle or defend ends when our liability for this coverage has been exhausted.” Kenil-worth selected a law firm (herein referred to as “the Piper firm”) to represent Price and Kenilworth.
Subsequently, Kenilworth underwent liquidation and an ancillary receiver was ap pointed. Additionally, Florida Insurance Guaranty Association (FIGA) was appointed to fulfill Kenilworth’s obligations.
In June 1982, Price filed a complaint seeking a declaratory judgment that FIGA was responsible for the continued defense of the two lawsuits which had been filed against Price as a result of the automobile accident. Also, the complaint sought to hold FIGA responsible for the payment of attorney’s fees and costs incurred both before and after Kenilworth’s insolvency.
The trial court found, inter alia, that Price was not personally liable for the Piper firm’s fees which were incurred prior to Kenilworth’s insolvency, in defense of the two negligence lawsuits, and FIGA was not liable to Price for these pre-insolvency fees. The court found that Price could recover from FIGA pre-insolvency court costs and personal costs, as well as post-insolvency attorney’s fees. Attorney’s fees for the case sub judice were also awarded by the trial court. Notices of appeal and cross-appeal were timely filed by the parties.
After an examination of the various issues raised on appeal and cross-appeal and the applicable statutory and case law, we find only one issue which warrants discussion: whether the trial court’s award of pre-insolvency court costs is erroneous.
Apparently, the trial court believed that the pre-insolvency court costs were “covered claims” within the meaning of section 631.54(4), Florida Statutes (1981). Kenil-worth Insurance Company, pursuant to its contractual duty to defend Price, incurred the $44.60 in court costs through the Piper firm. As Price did not incur the costs, they are not covered claims under section 631.-54(4). See Argonaut Insurance Co. v. Maryland Insurance Co., 372 So. 2d 960 (Fla. 3d DCA 1979). Appellee’s argument that Argonaut is not applicable is unpersuasive. Therefore, we reverse the award of the pre-insolvency court costs. On remand, the trial court shall strike the award of $44.60 in court costs. The remaining portion of the trial court’s order is affirmed.
AFFIRMED in part, REVERSED in part, and REMANDED with instructions.
GRIMES, A.C.J., and SCHEB, J., concur.
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Argonaut Ins. Co. v. Md. Cas. Co., 372 So. 2d 960 (Fla. 3d DCA 1979)