Who Pays the Litigation Expenses FIGA or Insurer ?
In Fla. Ins. Guar. Ass'n v. Johnson, 654 So. 2d 239, 241 (Fla. 4th DCA 1995), the district court held the Florida Insurance Guaranty Association (FIGA) responsible for court costs in excess of the underlying policy's liability limits. See 654 So. 2d at 240.
The Court applied the court costs through a supplementary payment provision that obligated the insolvent insurer to pay on behalf of a covered person reasonable expenses incurred in the litigation. Id. at 240.
The district court reasoned that the insurer had decided against settling the claim and that the resulting litigation expenses were therefore a responsibility to be covered. See id. In Steele v. Kinsey, 801 So. 2d 297 (Fla. 2d DCA 2001), the Second District reached the opposite conclusion, not on the basis that fees and costs in excess of policy limits could not be assessed against FIGA through supplementary payment provisions, but based on its conclusion that the language promising payment of expenses incurred at the insurer's request could not be reasonably interpreted to include litigation expenses. See id. at 300.
The Kinsey court certified a conflict with Johnson.
This Court initially accepted the case, but subsequently discharged jurisdiction as improvidently granted. See Steele v. Kinsey, 840 So. 2d 1023 (Fla. 2003).