Full Opinion

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT FLORIDA INSURANCE GUARANTY ASSOCIATION, Appellant, v. SYNERGY CONTRACTING GROUP, INC. a/a/o ARLETTE SCHMIDT, Appellee. No. 2D2025-0999 September 2, 2026 Appeal from the Circuit Court for Pinellas County; Patricia Muscarella, Judge. Megan G. Colter and Dorothy DiFiore of Quintairos, Prieto, Wood & Boyer, P.A., Tampa, for Appellant. Steven I. Battisti of Battisti Felce, P.A., Celebration, for Appellee. ATKINSON, Judge. Florida Insurance Guaranty Association (FIGA) appeals a final judgment enforcing a settlement agreement entered into between Synergy Contracting Group, Inc., as assignee of Arlette Schmidt (Synergy), and FIGA's predecessor in the underlying action, United Property & Casualty Insurance Company (United), including an obligation to pay Synergy $20,000. Because the $20,000 obligation was for attorney's fees that were "not within the coverage of [the] insurance policy" issued by United to Synergy's predecessor, we reverse. See Petty v. Fla. Ins. Guar. Ass'n, 80 So. 3d 313, 315 (Fla. 2012). Synergy, an assignee of the insured under an insurance policy provided by United, sued United for breach of the policy. Synergy and United settled the claim. The "Settlement Amount" of $90,000 was to be "issued . . . in two checks," with $83,887.32 payable to Synergy and $20,000 payable directly to Synergy's attorney. The agreement included the following: [Synergy] agrees that the Settlement Amount is inclusive of attorneys' fees, costs, and interest. Therefore, [Synergy] agrees that TWENTY THOUSAND Dollars and ZERO Cents ($20,000.00) of the total Settlement Amount will be made out solely to the Battisti Felce, P.A.. Any remaining costs and fees will be the responsibility of the parties. After the settlement agreement was entered into but before its terms were performed, United became insolvent, and the trial court granted its motion to substitute FIGA as the defendant in the case. See § 631.55(1), Fla. Stat. (2023) (creating the "Florida Insurance Guaranty Association, Incorporated"); § 631.57(1)(b), Fla. Stat. (2023) (providing that the association "[b]e deemed the insurer to the extent of its obligation on the covered claims, and, to such extent, shall have all rights, duties, defenses, and obligations of the insolvent insurer as if the insurer had not become insolvent"). Synergy filed a motion seeking enforcement of all the settlement agreement's terms against FIGA. FIGA argued that it was not obligated to pay a portion of the settlement agreement allocated to attorney's fees and costs because those fall outside its statutory duty to pay "covered claims." As "a creature of statute," "the statutory language defines the extent of FIGA's obligations," and "FIGA is not responsible for claims against an insurer that do not fall within FIGA's statutory obligations." 2 Fla. Ins. Guar. Ass'n v. Devon Neighborhood Ass'n, 67 So. 3d 187, 190 (Fla. 2011) (first quoting Fla. Ins. Guar. Ass'n v. All the Way with Bill Vernay, Inc., 864 So. 2d 1126, 1129 (Fla. 2d DCA 2003)), and then quoting Fla. Ins. Guar. Ass'n v. Petty, 44 So. 3d 1191, 1194 (Fla. 2d DCA 2010)). Pertinent to this case, FIGA is "obligated to the extent of the covered claims existing" "[p]rior to adjudication of [the insurer's] insolvency." § 631.57(1)(a)1.a. Thus, for FIGA to be obligated, the claim must fit the statutory definition of a "covered claim": "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. § 631.54(4), Fla. Stat. (2023); see Petty, 80 So. 3d at 316 ("[A] covered claim must meet two distinct requirements: (1) it must arise, or originate, from an insurance policy and (2) it must be within the coverage of, or be included within the risks taken on and losses protected against in, an insurance policy.") (citing § 631.54(3), Fla. Stat. (2008)). Like the appraisal award of statutory attorney's fees in Petty that, according to the Florida Supreme Court, was "not a covered claim that FIGA must pay" because it was "not within the coverage of [the] underlying insurance policy," the $20,000 settlement agreement obligation to pay Synergy's attorney in this case is not a covered claim for which FIGA was liable. See id. at 316–17 (rejecting the insured's argument "that her fee award [wa]s impliedly covered by her underlying policy because Florida law subjects every Florida insurance policy to section 627.428(1)," explaining that "[t]here is a clear difference between an obligation to pay fees that is imposed by operation of law upon a party 3 due to its behavior under the insurance contract and an obligation imposed upon a party by an express provision for which the party contracted"). The $20,000 payment obligation was the product of post- loss, post-suit negotiation to resolve United's liability; it "does not alter the coverage provisions of the insurance contract itself," which did not include coverage for attorney's fees. See id. at 317 (noting that the "underlying insurance policy d[id] not expressly provide coverage for [the insured's] section 627.428(1) fee award"); Fla. Ins. Guar. Ass'n v. Waterfire Restoration, LLC, 427 So. 3d 996, 999 (Fla. 4th DCA 2025) (concluding "the trial court erred by determining that FIGA must pay the portion of the settlement attributable to attorney's fees" because "covered claims which FIGA pays must come from coverage within the policy, and not merely from a post-loss settlement agreement"); Fla. Ins. Guar. Ass'n v. Ramos, 427 So. 3d 187, 190 (Fla. 3d DCA 2026) ("[C]overed claims which FIGA pays must come from coverage within the policy, and not merely from a post-loss settlement agreement."). Synergy and FIGA debate whether the settlement agreement clearly delineates the $20,000 as a portion of the Settlement Amount representing United's obligation to pay Synergy's attorney's fees as a negotiated resolution of attorney's fee liability incurred by the insurer prior to insolvency. FIGA argues that the language of the settlement indicates that the $20,000 payment to Synergy's attorney was for the purpose of resolving Synergy's claim for attorney's fees against FIGA's successor United, premised on United's pre-insolvency liability for such an award. Synergy, on the other hand, advances a different theory to account for the settlement agreement language referencing attorney's fees. Synergy contends that the language of the settlement agreement does not indicate that the payment to its attorney represented fee liability 4 on the part of United. Instead, Synergy raises the specter that the entire settlement amount represents FIGA's predecessor's liability for claims covered under the insurance policy and that the obligation to pay $20,000 directly to Synergy's attorney was merely for convenience— consistent with a common practice of structuring payments under a settlement agreement in a manner that allows some of the settlement amount to be diverted to a plaintiff's attorney. In other words, the argument goes, the $20,000 sum reflects Synergy's obligation under its own agreement with its attorney for legal services, not a negotiated amount to resolve attorney's fee liability incurred by FIGA's predecessor United. Even leaving aside that Synergy's argument is speculative and without record support, it fails for two important reasons. First, the settlement agreement does not say what Synergy says it does. The settlement agreement explicitly indicates that the Settlement Amount includes attorney's fees and that, for that reason, the parties agree that a portion of the entire amount will be paid directly to Synergy's attorney: "[Synergy] agrees that the Settlement Amount is inclusive of attorneys' fees, costs, and interest. Therefore, [Synergy] agrees that TWENTY THOUSAND Dollars and ZERO Cents ($20,000.00) of the total Settlement Amount will be made out solely to the Battisti Felce, P.A." (Emphasis added.) Moreover, the following sentence of the agreement provides that "[a]ny remaining costs and fees will be the responsibility of the parties," indicating that the preceding $20,000 amount is not the responsibility of the parties but rather is the responsibility of United. Further supporting this reading of the settlement agreement is the fact that in its complaint against United, Synergy sought an award of fees under section 627.428—not, of course, pursuant to the insurance policy, which did not provide coverage for 5 attorney's fees. Cf. Ramos, 427 So. 3d at 190 (noting that "the insurance policy did not provide coverage for attorney's fees and costs," "[t]he Appellees' complaint pled entitlement to attorneys' fees pursuant to section 627.428," "the only legal basis for the insurance company owing Appellees attorneys' fees was section 627.428," and concluding that the settlement agreement expressly requiring payment of a specified amount to Appellees' attorney for fees and costs "could only be read as being intended to cover Appellees' entitlement to fees under section 627.428"). There is nothing in the language of the settlement agreement to indicate that the $20,000 payment to the law firm is for anything other than attorney's fees to which the insured is entitled pursuant to the insurer's liability to pay such fees. Second, Synergy must establish the amount for which FIGA is liable and cannot do so by mere speculation. The Legislature circumscribed FIGA's liability, effectuating its "purpose" of "[p]rovid[ing] a mechanism for the payment of covered claims" of insolvent insurers, see § 631.51(1), Fla. Stat. (2023) (emphasis added), and confining the definition of "[c]overed claim[s]" to those that "arise[] out of, and [are] within the coverage, and not in excess of, the applicable limits of an insurance policy," see § 631.54(4) (emphasis added). FIGA is "obligated to the extent of the covered claims," see § 631.57(1)(a), and any such claim "must be within the coverage of, or be included within the risks taken on and losses protected against in, an insurance policy," see Petty, 80 So. 3d at 316. See also Waterfire Restoration, 427 So. 3d at 997 ("FIGA does not simply step into the shoes of the insolvent insurer and is not obligated to the same extent as that insurer would be." (quotation marks and alteration omitted) (quoting Alessio ex rel. Estate of Garza v. Fla. Ins. Guar. Ass'n, 91 So. 3d 910, 913 (Fla. 2d DCA 2012))). Synergy's 6 right to recover against FIGA is derived solely from statute, and it therefore must establish its entitlement to payment from FIGA within the legislative circumscription of FIGA's liability. See Fla. Ins. Guar. Ass'n v. Cadet, 431 So. 3d 276, 278 (Fla. 4th DCA 2026) ("FIGA cannot be compelled to pay the portion of the settlement amount attributable to 'attorneys' fees and costs, and other good and valuable consideration' because the insured has not demonstrated that it was included within the risks taken and losses protected against in the subject insurance policy." (emphasis added)). Synergy cannot establish that amount by referring to the possibility that the language obligating United to pay attorney's fees directly to Synergy's attorney might have been merely for convenience as opposed to an obligation born of asserted attorney fee liability. In the face of the legislative limitation on the payment obligations of the statutorily created FIGA, courts are not at liberty to err on the side of speculative or merely possible FIGA liability; courts are not free to give an insured or its assignee the benefit of the doubt about whether an insurer's pre-insolvency settlement obligation falls within the statutory criteria for a covered claim that FIGA is obligated to pay. Rather, an insured or its assignee must establish that what it seeks from FIGA constitutes a "covered claim." See Petty, 80 So. 3d at 315–17 ("In order to recover from FIGA, . . . Petty's claim for fees must also be within the coverage of her underlying insurance policy." (citing § 631.54(3)). The record before this court does not indicate that the $20,000 payment obligation in the settlement agreement constituted "a covered claim under section 631.54(3) that FIGA must pay," see id. at 317, and the trial court erred by ordering FIGA to pay it. 7 The final judgment is reversed, and the case is remanded for further proceedings consistent with this opinion. Reversed and remanded. NORTHCUTT, J., Concurs specially with opinion. ROTHSTEIN-YOUAKIM, J., Concurs specially with opinion. NORTHCUTT, Judge, Specially concurring. I concur in the reversal because the language of the settlement agreement makes it clear that the payment to the insured's attorneys was meant to satisfy the insurer's attorneys fee and costs obligation, which was not within the insurance policy coverage. However, I disagree with the majority's reliance on Florida Insurance Guaranty Ass'n v. Ramos, 427 So. 3d 187, 190 (Fla. 3d DCA 2026), insofar as the opinion in that case incorrectly posits that when the insured's complaint has pleaded an entitlement to fees, a settlement provision for payment of some of the proceeds directly to the insured's attorney "could only be read as being intended to cover [the insured's] entitlement to fees under section 627.428." ROTHSTEIN-YOUAKIM, Judge, Specially concurring. I join the decision to reverse. In granting Synergy's renewed amended motion to enforce settlement, the trial court clearly construed the diversion of $20,000 in settlement funds to be consistent with a claim by Synergy for attorney's fees and costs and then erroneously relied on authority that the supreme court has expressly disapproved to obligate FIGA to pay that claim: "The Court finds that the Plaintiff's claim for attorney's fees and costs is valid pursuant to the decision in Fla. Ins. Guar. Ass'n v. Soto, 979 So. 2d 964 ([Fla.] 3[]d DCA[] 2008), as the 8 Plaintiff's case closely mirrors the facts and circumstances in Soto." (Emphasis added.) See Petty v. Fla. Ins. Guar. Ass'n, 80 So. 3d 313, 317 (Fla. 2012) ("Accordingly, we approve the Second District's decision in [Florida Insurance Guaranty Ass'n v. Petty, 44 So. 3d 1191 (Fla. 2d DCA 2010),] and disapprove the Third District's decision in Soto."). Synergy asserts on appeal that the entire $90,000 instead represented a settlement of its claim for damages and that the $20,000 was to be sent directly to counsel merely as a matter of custom and convenience. But this assertion was not urged in Synergy's motions below and is not clear from the language of the Settlement Agreement or from anything else in the record.1 Accordingly, we cannot consider it as an alternative basis for affirmance under the "tipsy coachman" doctrine, see Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644 (Fla. 1999) ("[I]f a trial court reaches the right result, but for the wrong reasons, it will be upheld if there is any basis which would support the judgment in the record."), and I therefore agree that reversal is warranted. Opinion subject to revision prior to official publication. 1 Neither party objects that the record is incomplete. 9