Florida Insurance Guaranty Association v. Petty, ___ So. 3d ___, 35 Fla. L. Weekly D2149 (Fla. 2d DCA 9/29/10)

An award of attorney’s fees under Section 627.428, Florida Statutes, for compelling appraisal, was not a “covered claim” under the Florida Insurance Guaranty Association Act, Section 631.50 et seq., Florida Statutes.  Section 631.70 provides that Section 627.428 is inapplicable unless “the association denies by affirmative action, other than delay, a covered claim or a portion thereof.”   Section 631.57(1)(a) defines a “covered claim” as “an unpaid claim . . . which arises out of, and is within the coverage, and not in excess of, the applicable limits of an insurance policy.”  In the court’s “view, the fact that section 627.428 is an implicit part of an insurance policy does not mean that the insured’s claim against the insurer for fees and costs is part of the policy’s ‘coverage.’ As FIGA argues in its reply brief, to rely on the fee statute being ‘implied in every policy fails to appreciate the distinction between liabilities arising by operation of law and liabilities arising by express contractual terms. . . .  By linking covered claims to coverage provisions, rather than legal liabilities, the legislature limited FIGA’s obligation to the express terms of the policy.’ Notably, the parties have not pointed to any language in the applicable insurance policy that provides coverage for fees awarded under section 627.428.  Thus, we conclude that section 631.54(3) does not impose coverage for fees claimed under section 627.428 when such fees are not within the insurance policy’s coverage provisions.”  The court certified conflict with Florida Insurance Guaranty Association v. Soto, 979 So. 2d 964 (Fla. 3 DCA 2008).