MELVIN LAKECHEA, APPELLANT,
v.
MAGNOLIA INSURANCE COMPANY, APPELLEE
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A homeowner appealed a trial court order that vacated substitution of the Florida Insurance Guaranty Association (FIGA) in place of an insolvent insurer and transferred the case to a different county. The District Court of Appeal reversed, holding that FIGA must be substituted as the proper defendant and the case should proceed in the original forum.
The court reversed the transfer order, holding that there is no authority for collateral transfer of the case to Leon County. When an insurer becomes insolvent, FIGA is deemed the insurer to the extent of covered claims and has the same obligations as the insolvent insurer. FIGA is amenable to suit in connection with unpaid claims and must be substituted as defendant in the original proceeding.
[1] When an insurer becomes insolvent, the Florida Insurance Guaranty Association (FIGA) is deemed the insurer to the extent of covered claims and has the same obligations as…
[2] A trial court errs by ordering a case to be transferred to the circuit court that appointed a receiver for an insolvent insurer to determine FIGA's role in the proceeding…
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Join FLexlaw to unlock all legal intelligence“FIGA is deemed the 'insurer' to the extent of covered claims and has the same obligations as the insolvent insurer.”
Establishes that FIGA assumes all of the insolvent insurer's obligations and is the proper defendant in insurance claims
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Join FLexlaw to unlock all legal intelligenceMelvin Lakechea held a homeowner's insurance policy with Magnolia Insurance Company and suffered water damage to his home on January 30, 2009. He sued…
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Melvin Lakechea, an insured under a policy of homeowner’s insurance issued by Magnolia Insurance Company, appeals a trial court order vacating an order substituting Florida Insurance Guaranty Association (FIGA) in the stead of Magnolia, which is insolvent, and staying the ease below to allow Lakechea to “proceed with any actions regarding this case with the [Circuit] Court of Leon County Florida and/or the receiver for the insolvent insurer.” For the reasons explained below, we reverse the order on appeal and remand for further proceedings.
This case arises out of a dispute between Lakechea and Magnolia for water damage to his home, alleged to have been suffered on January 30, 2009. On April 30, 2010, while an action for damages brought by Lakechea against Magnolia for recovery on the policy was pending in Miami-Dade County Circuit Court, the Leon County Circuit Court entered a consent order appointing the Florida Department of Financial Services (DFS) receiver, pursuant to Chapter 631 of the Florida Statutes, for the purpose of the liquidation of Magnolia. Magnolia, by notice, informed the Miami-Dade court of the consent order, and that, pursuant to sections 631.50-70 of the Florida Statutes, it was henceforth the responsibility of FIGA to process pending claims against Magnolia. Soon thereafter, Magnolia moved and obtained an order dismissing it from the action. Lakechea, in turn, submitted his claim to FIGA and sought to substitute FIGA in place of Magnolia in the lawsuit.
Puzzlingly, after being dismissed from the lawsuit, Magnolia, through private counsel separate from counsel for the receiver, objected to FIGA being substituted in its place. Several motions, responses, and hearings later, the trial court ordered that FIGA’s role in the instant action should be determined by the Leon County Circuit Court, which appointed the receiver. This was error.
We know of no authority to support a collateral transfer of this case to the Leon County Circuit Court to determine whether FIGA should become a party to the proceedings below, and the parties have provided us none. We therefore reverse the order of the trial court transferring the case below to Leon County. See Kuvin, Klingensmith & Lewis, P.A. v. Fla. Ins. Guar. Ass’n, 371 So.2d 214 (Fla. 3d DCA 1979).
*1209When an insurer becomes insolvent, “FIGA is deemed the ‘insurer’ to the extent of covered claims and has the same obligations as the insolvent insurer.” Jones v. Fla. Ins. Guar. Ass’n, 908 So.2d 435, 454 (Fla.2005); see also, § 631.57, Fla. Stat. (2010). Although there is a permanent stay on any action against DFS as receiver, FIGA is amenable to suit in connection with any unpaid claims. Compare § 631.041, Fla. Stat. (2010) with § 631.57(2)(c). Accordingly, we reverse that portion of the order vacating the order substituting FIGA and remand the case to the trial court for further proceedings.
Reversed and remanded with directions.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Jones v. Fla. Ins. Guar. Ass'n, Inc., 908 So. 2d 435 (Fla. 2005)
- Kuvin, Klingensmith & Lewis, P. A. v. Fla. Ins. Guar. Ass'n, Inc., 371 So. 2d 214 (Fla. 3d DCA 1979)