               NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED


                                              IN THE DISTRICT COURT OF APPEAL
                                              OF FLORIDA
                                              SECOND DISTRICT

PHYLIS HEID,                                  )
                                              )
              Appellant,                      )
                                              )
v.                                            )         Case No. 2D18-737
                                              )
FLORIDA INSURANCE GUARANTY                    )
ASSOCIATION.,                                 )
                                              )
              Appellee.                       )
                                              )

Opinion filed October 11, 2019.

Appeal from the Circuit Court for
Hillsborough County; E. Lamar Battles,
Judge.

Richard N. Asfar of Vaka Law Group, P.L.,
Tampa (withdrew after briefing); George
A. Vaka and Kurt J. Rosales of Vaka Law
Group, P.L., Tampa; and Aaron S. Kling
of Kling Law, P.A., Tampa, for Appellant.

Dorothy V. DiFiore of Quintairos, Prieto,
Wood & Boyer, Tampa; and Lisa J.
Augspurger of Bush & Augspurger, P.A.,
Orlando, for Appellee.


MORRIS, Judge.

              Phylis Heid appeals an order denying her motion for attorney's fees and

costs incurred in sinkhole litigation against Florida Insurance Guaranty Association

(FIGA). In this appeal, Heid argues that the trial court misconstrued this court's prior
holding in Miller v. Florida Insurance Guaranty Ass'n, 200 So. 3d 200 (Fla. 2d DCA

2016), which she claims supports her entitlement to fees. She also claims that she is

entitled to costs pursuant to section 57.041, Florida Statutes (2012), because FIGA's

ultimate concession that her claim is covered constitutes a confession of judgment. We

agree with both of her arguments and reverse the decision of the trial court.


             I. Facts

             In 2010, believing that her home had suffered sinkhole damage, Heid

reported a claim to her insurer, HomeWise Preferred Insurance Company. HomeWise

hired an engineer to perform testing and advised Heid that there was no sinkhole

damage in December 2010. Heid demanded additional testing, and after procuring a

geological investigation, HomeWise again informed Heid that no sinkhole loss had

occurred in June 2011.

             HomeWise was declared insolvent in November 2011, and FIGA assumed

responsibility for Heid's claim. In March 2013, FIGA advised Heid that there had been

no evidence of sinkhole activity on the property but that FIGA was not denying her

claim. In September 2013, Heid's attorney asked FIGA to either admit or deny

coverage, and FIGA's adjuster responded that FIGA had not and was not denying

Heid's claim. Heid then filed her lawsuit against FIGA in October 2013.

             FIGA invoked the neutral evaluation process and peer review of prior

testing, after which FIGA advised Heid in February 2015 that her claim was not a

covered claim and that FIGA would not make payment. Heid then retained an

engineering firm to conduct additional testing. The firm concluded that there was

evidence of sinkhole activity that had caused damage to Heid's home. Heid shared the



                                           -2-
report with FIGA, which disagreed. Heid then retained a second firm to conduct

additional testing, and Heid shared the report with FIGA. In December 2015, FIGA

conceded that the report confirms the presence of sinkhole activity and that Heid's claim

was a covered claim. FIGA and Heid resolved all issues except Heid's claim for

attorney's fees and costs.

              Heid moved for attorney's fees and costs, arguing that she is entitled to

fees under sections 631.70 and 627.428, Florida Statutes (2012), and that she is

entitled to costs under section 57.041 and the confession-of-judgment doctrine. FIGA

responded by arguing that FIGA acted swiftly in agreeing to cover Heid's claim once

scientific evidence of sinkhole activity was reported to FIGA. After this court issued its

Miller decision, Heid filed an amended motion for fees, asserting that "when FIGA

denies coverage for sinkhole loss, then later accepts coverage, the [i]nsured is entitled

to fees pursuant to Florida statute 631.70." FIGA responded that fees were precluded

under section 631.54(3)(c) because the fees were "in connection with a sinkhole loss,"

that a large portion of Heid's fees were for testing and thus prohibited by section

631.54(3)(c), that Heid's claim was not a "covered claim" at the time it was affirmatively

denied by FIGA, and that Heid was not entitled to costs because no judgment had been

entered.

              After a hearing, the trial court denied Heid's motion for fees, concluding

that the fees Heid spent on testing for a sinkhole loss were excluded under the definition

of "covered claim" in section 631.54(3)(c) as interpreted by Miller and that any fees

related to sinkhole repairs after FIGA agreed to coverage were also barred by section

631.54(3)(c). The trial court further found that FIGA's February 2015 denial did not




                                            -3-
constitute an affirmative denial of a "covered claim" for purposes of section 631.70

because at the time of the February 2015 denial, there was no scientific evidence that

there was sinkhole activity. The trial court concluded that once scientific evidence

supported a finding of sinkhole activity, FIGA never affirmatively denied the claim.


              II. Analysis

              "While orders on attorney's fees are generally reviewed for an abuse of

discretion, the issue before us is one of statutory interpretation, to which the de novo

standard of review applies." Miller, 200 So. 3d at 203 (citation omitted). The Florida

Legislature established FIGA, through the FIGA Act, to protect Florida citizens in the

event their insurers become insolvent. Jones v. Fla. Ins. Guar. Ass'n, 908 So. 2d 435,

442 (Fla. 2005). The Legislature's expressed purpose is to "[p]rovide a mechanism for

the payment of covered claims under certain insurance policies to avoid excessive

delay in payment and to avoid financial loss to claimants or policyholders because of

the insolvency of an insurer." § 631.51(1). The courts have been directed by the

Legislature to liberally construe the FIGA Act to effect this purpose. See § 631.53;

Jones, 908 So. 2d at 442.

              Heid sought attorney's fees under section 631.70, which provides that

"[t]he provisions of s. 627.428 providing for an attorney's fee shall not be applicable to

any claim presented to the association under the provisions of this part, except when

the association denies by affirmative action, other than delay, a covered claim or a

portion thereof." We first address the trial court's conclusion that FIGA did not

affirmatively deny a covered claim. FIGA denied Heid's claim in February 2015 but then




                                            -4-
determined that it was a covered claim in December 2015. There is no indication that

the status of the sinkhole activity changed during those months. A "covered claim" is an

              unpaid claim, including one of unearned premiums, which
              arises out of, and is within the coverage, and not in excess
              of, the applicable limits of an insurance policy to which this
              part applies, issued by an insurer, if such insurer becomes
              an insolvent insurer and the claimant or insured is a resident
              of this state at the time of the insured event or the property
              from which the claim arises is permanently located in this
              state.

§ 631.54(3).1 The statute goes on to describe certain things that the term does not

include, but the definition of "covered claim" does not contain any language regarding

FIGA's determination or assessment of the claim. At the time that FIGA affirmatively

denied Heid's claim, it was a covered claim. As Heid argues, FIGA's and the trial court's

interpretation of a "covered claim" would allow FIGA to "deny statutory benefits by

affirmative action, litigate with the insured for years on the ground that there was no

'evidence' of a sinkhole, and then confess judgment by acknowledging the claim is a

'covered claim' with no adverse consequences." This would frustrate the purpose of

section 631.70, as well as one of the stated purposes of the FIGA Act, which is "to avoid

excessive delay in payment," § 631.51(1). Because FIGA affirmatively denied Heid's

claim, which was a covered claim, section 631.70 is satisfied.

              We now turn to the trial court's ruling that fees are precluded under section

631.54(3). Section 631.54(3) provides that a covered claim does not include:

              (c) Any amount payable for a sinkhole loss other than testing
              deemed appropriate by the association or payable for the
              actual repair of the loss, except that the association may not
              pay for attorney's fees or public adjuster's fees in connection


              1In
                2015, the definition of "covered claim" was renumbered as subsection
(4). Ch. 2015-65, § 1, Laws of Fla.


                                           -5-
              with a sinkhole loss or pay the policyholder. The association
              may pay for actual repairs to the property but is not liable for
              amounts in excess of policy limits.

(Emphasis added.)

              In Miller, this court considered whether an insured could obtain attorney's

fees under section 631.70, even though the definition of a covered claim contains

language specifically excluding attorney's fees in section 631.54(3)(c). This court

reconciled the language of the two statutes and held that "the language of section

631.70 . . . allows the insured to seek attorneys' fees related to the enforcement of the

policy itself." Miller, 200 So. 3d at 203. In other words, section 631.70 allows "fees in

connection with the policy itself and FIGA's refusal to honor it." Miller, 200 So. 3d at

204. On the other hand, section 631.54(3)(c) disallows "attorney's fees related to: (1)

testing for a sinkhole loss, and (2) repair of a sinkhole loss." Id. at 203. The court noted

that "there are indeed other circumstances in which the insured could potentially seek to

recover attorney's fees under his or her insurance policy and related to the testing for or

repair of a sinkhole loss." Id. In those circumstances, FIGA would be insulated from

paying such fees according to the language in section 631.54(3)(c). Id.

              The trial court misconstrued our holding in Miller as barring Heid from

recovering attorney's fees in this case. Based on the clear language in Miller, Heid is

entitled to attorney fees that are related to the enforcement of the policy itself. Heid

spent several years attempting to get FIGA to honor her policy; Heid is entitled to fees

incurred in that effort. The fact that intermittent testing occurred during the litigation and

Heid's effort to enforce her policy does not bar Heid from recovering fees related to

enforcing her policy under section 631.70. These statutes represent a legislatively




                                             -6-
created incentive for FIGA to move swiftly to pay covered claims in order to avoid costly

litigation and to assume attendant responsibility for a claimant's attorney fees. It would

be inconsistent with the legislative directives for this court to hold that FIGA is

impervious to attorney’s fees claims after it has denied a covered claim and has forced

an insured to litigate the enforcement of his or her policy.

              Last, Heid moved for costs under section 57.041, but the trial court denied

costs without specifically addressing this claim, instead lumping Heid's claim for costs in

with her claim for attorney's fees under section 631.70. However, costs are not

mentioned in sections 631.70 or 627.428. Section 57.041 provides in relevant part that

"[t]he party recovering judgment shall recover all his or her legal costs and charges

which shall be included in the judgment." Even though Heid did not obtain a judgment

against FIGA, FIGA ultimately admitted coverage and paid Heid's claim. In the context

of attorney's fees, "it is well settled that the payment of a previously denied claim

following the initiation of an action for recovery, but prior to the issuance of a final

judgment, constitutes the functional equivalent of a confession of judgment." Johnson

v. Omega Ins. Co., 200 So. 3d 1207, 1215 (Fla. 2016); see also Fla. Ins. Guar. Ass'n v.

Messina, 69 So. 3d 304, 305 (Fla. 4th DCA 2011) (on motion for rehearing) (applying

the confession-of-judgment doctrine to claim for attorney's fees in FIGA case). We see

no reason why the confession-of-judgment doctrine should not also apply in the context

of costs under section 57.041(1).2



              2In Rahabi v. Florida Insurance Guaranty Ass'n, 71 So. 3d 241, 244 n.1
(Fla. 4th DCA 2011), the court held that the insured was entitled to attorney's fees under
section 631.70 but remanded for the trial court to consider whether the insured was
entitled to recover costs from FIGA under section 57.041(1) and the confession-of-
judgment doctrine.


                                             -7-
             Accordingly, we reverse the trial court's order denying attorney's fees and

costs and remand for further proceedings consistent with this opinion.



NORTHCUTT and ROTHSTEIN-YOUAKIM, JJ., Concur.




                                          -8-
