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Florida Second DCA rules that a new lawsuit need not be filed against FIGA when an insurer is declared insolvent during a first party breach of contract action against the insurer

On February 15, 2017, in Gonzalez v. Homewise Preferred Insurance Company, No. 2D15-425, the Florida Second DCA reversed a trial court’s dismissal of a first party insured’s breach of contract action their insurer. The trial court had dismissed the action on statute of limitations grounds, holding that when the defendant insurer became insolvent during the lawsuit, the insured was required to institute a new lawsuit against FIGA, the Association that administers the Florida Insurance Guaranty Act. The plaintiff had failed to do so within the statute of limitations period applicable to claims against FIGA, i.e., within one year of the deadline for filing claims with the receiver of the insolvent insurer. The Second DCA ruled that when an insurer is declared insolvent during the pendency of a lawsuit, there is no requirement to file a new lawsuit, or even to move to substitute FIGA, because FIGA automatically steps into the shoes of the insolvent insurer. The Second DCA noted that its holding was consistent with an identical holding by the Third DCA in Florida Insurance Guaranty Ass’n v. Mendoza, 193 So. 3d 940 (Fla. 3d DCA 2016).