Full Opinion

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 March 6, 2020. 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 that the trial court misconstrued our holding in Miller but affirm its decision that Heid is not entitled to fees and costs. 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 -2- evidence of sinkhole activity that had caused damage to Heid's home. Heid shared the 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 -3- 631.54(3)(c). The trial court further found that FIGA's February 2015 denial did not 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 after scientific evidence supported a finding of sinkhole activity, FIGA never affirmatively denied the claim. II. Analysis "Whether a party is entitled to statutory attorney's fees is a matter of statutory interpretation, which this [c]ourt reviews de novo." Parker v. Bd. of Trs. of the City Pension Fund for Firefighters & Police Officers, 149 So. 3d 1129, 1132 (Fla. 2014). 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. In 2011, the Legislature, motivated by substantial losses in FIGA sinkhole cases, amended the definition of "covered claim" as set forth in section 631.54(3) so as "to limit FIGA's financial responsibility for sinkhole loss." de la Fuente v Fla. Ins. Guar. Ass'n, 202 So. 3d 398, 401 (Fla. 2016); see also ch. 2011-39, § 30, Laws of Fla. Prior to 2011, the definition of a "covered claim" consisted of subsections (3)(a)-(b) of section 631.54(3). See § 631.54(3), Fla. Stat. (2010); de la Fuente, 202 So. 3d at 401. But in -4- 2011, the Legislature added paragraph (3)(c). The 2011 definition of "covered claim" thus reads as follows: (3) "Covered claim" means 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. For entities other than individuals, the residence of a claimant, insured, or policyholder is the state in which the entity's principal place of business is located at the time of the insured event. The term does not include: (a) Any amount due any reinsurer, insurer, insurance pool, or underwriting association, sought directly or indirectly through a third party, as subrogation, contribution, indemnification, or otherwise; (b) Any claim that would otherwise be a covered claim under this part that has been rejected or denied by any other state guaranty fund based upon that state's statutory exclusions, including, but not limited to, those based on coverage, policy type, or an insured's net worth. Member insurers have no right of subrogation, contribution, indemnification, or otherwise, sought directly or indirectly through a third party, against the insured of any insolvent member; or (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 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. § 631.54, Fla. Stat. (2011) (emphasis added).1 The language in subsection (3)(c) prevents FIGA from paying "[a]ny amount payable for a sinkhole loss other than testing deemed appropriate by the association or payable for the actual repair of the loss" and 1In 2015, the definition of "covered claim" was renumbered as subsection (4). Ch. 2015-65, § 1, Laws of Fla. -5- further specifically prevents FIGA from paying "attorney's fees . . . in connection with a sinkhole loss." Heid claims that she is entitled to 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." While section 631.70 generally applies to attorney's fees payable by FIGA when FIGA has denied a covered claim by affirmative action, section 631.70 does not specifically address sinkhole claims. Section 631.54(3)(c) addresses attorney's fees in connection with a sinkhole loss. "[A] specific statute covering a particular subject area always controls over a statute covering the same and other subjects in more general terms." McKendry v. State, 641 So. 2d 45, 46 (Fla. 1994) (first citing Adams v. Culver, 111 So. 2d 665, 667 (Fla. 1959); then citing State v. Billie, 497 So. 2d 889, 894 (Fla. 2d DCA 1986)). "The more specific statute is considered to be an exception to the general terms of the more comprehensive statute." Id. (citing Floyd v. Bentley, 496 So. 2d 862, 864 (Fla. 2d DCA 1986)). The more specific statute must control, and the specific statute that relates to attorney's fees in sinkhole cases is section 631.54(3)(c). Section 631.70 must now give way to the more specific language in section 631.54(3)(c) when attorney's fees are sought in connection with a sinkhole loss. By virtue of the 2011 addition of section 631.54(3)(c), the Legislature has put the public on notice that when it comes to attorney's fees, sinkhole claims involving FIGA now fall under the American Rule, which provides that all parties must bear their own fees no matter the outcome of the litigation. See Johnson v. Omega Ins. Co., 200 -6- So. 3d 1207, 1214 (Fla. 2016) ("Generally, the custom in American law is that each party is responsible for his or her own attorney's fees, regardless of the outcome of the action."); Topalli v. Feliciano, 267 So. 3d 513, 518 (Fla. 2d DCA 2019) ("Under the 'American Rule,' attorney's fees in civil litigation are ordinarily borne by the party who incurs them, and a court cannot award the recovery of attorney's fees from an opposing litigant unless 'authorized by statute or by agreement of the parties.' " (quoting Fla. Patient's Comp. Fund v. Rowe, 472 So. 2d 1145, 1148 (Fla. 1985)). In Miller, this court discussed the parties' arguments regarding how to reconcile the language of the two statutes, noting that "the language of section 631.70 . . . allows the insured to seek attorneys' fees related to the enforcement of the policy itself." 200 So. 3d at 203. However, this determination was not the basis for this court's ultimate resolution of Miller. The holding in Miller was that FIGA had not denied the homeowner's claim by affirmative action; therefore, he had not demonstrated entitlement to fees under section 631.70, and we affirmed the judgment on that basis. 200 So. 3d at 204-05. Because the homeowner was not entitled to fees under section 631.70, this court's discussion of the definition of "covered claim" in section 631.54(3)(c) was non-binding dicta that has no precedential authority. See Lewis v. State, 34 So. 3d 183, 186 (Fla. 1st DCA 2010) ("When a court makes a pronouncement of law that is ultimately immaterial to the outcome of the case, it cannot be said to be part of the holding in the case."); Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 Stan. L. Rev. 953, 1065 (2005) ("A holding consists of those propositions along the chosen decisional path or paths of reasoning that (1) are actually decided, (2) are based upon the facts of the case, and (3) lead to the judgment. If not a holding, a proposition stated -7- in a case counts as dicta."); see also Cont'l Assurance Co. v. Carroll, 485 So. 2d 406, 408 (Fla. 1986) ("[D]icta is at most persuasive and cannot function as ground-breaking precedent." (citations omitted)). Because section 631.54(3)(c) prevents Heid from recovering fees she incurred in connection with her sinkhole loss, we need not determine whether FIGA affirmatively denied her claim for purposes of section 631.70. Last, Heid moved for costs under section 57.041, but the trial court denied costs without specifically addressing this claim. Our analysis on Heid's entitlement to fees also applies here. Section 631.54(3)(c) prevents the payment of "[a]ny amount payable for a sinkhole loss other than testing deemed appropriate by the association or payable for the actual repair of the loss"; in other words, the statute makes clear the Legislature's intention that FIGA only be obligated to pay for "testing deemed appropriate" and the cost of "actual repairs to the property" and nothing more. As our Supreme Court has recognized, FIGA is a public, nonprofit corporation created by statute to provide a mechanism for payment of covered claims under certain classes of insurance policies issued by insurers which have become insolvent. Under Florida's statutory insurer liquidation system, when an insurer becomes insolvent, FIGA becomes obligated to respond to covered claims that arise prior to adjudication of the insurer's insolvency and within a specified period after insolvency. "FIGA is strictly a creature of statute." "Thus, 'the statutory language defines the extent of FIGA’s obligations. FIGA is not responsible for claims against an insurer that do not fall within FIGA's statutory obligations.' " de la Fuente, 202 So. 3d at 401 (citing Fla. Ins. Guar. Ass'n v. Devon Neighborhood Ass'n, 67 So. 3d 187, 189-90 (Fla. 2011)). Therefore, we conclude that the limiting language in section 631.54(3)(c) prevents an award of costs to be paid by FIGA. -8- For the reasons expressed above, we affirm the trial court's order denying attorney's fees and costs and remand for further proceedings consistent with this opinion. The specific issue addressed in this case has arisen, and continues to arise, in many cases before this court. Accordingly, we certify the following question to the Florida Supreme Court as one of great public importance: DOES THE LANGUAGE IN SECTION 631.54(3)(c) REGARDING ATTORNEY'S FEES IN CONNECTION WITH A SINKHOLE LOSS OPERATE TO PREVENT A SINKHOLE CLAIMANT FROM RECEIVING FEES FROM FIGA UNDER SECTION 631.70? Affirmed; question certified. NORTHCUTT and ROTHSTEIN-YOUAKIM, JJ., Concur. -9-