A Florida appeals court has ruled in favor of the Florida Insurance Guaranty Association (FIGA), holding that a condominium association missed the deadline to sue over a Hurricane Irma insurance dispute - affirming that insurer insolvency doesn’t reset the clock on legal deadlines.
The case began after Hurricane Irma struck in 2017, damaging multiple buildings at the Golf Villas II condominium complex, managed by the Condominium Association of Golf Villas II, Inc. The association submitted a property damage claim to its insurer, American Capital Assurance Corporation. But before the claim could be fully resolved, American Capital became insolvent and entered liquidation.
As required under Florida law, FIGA stepped in to take over covered claims from the failed insurer. The insolvency court overseeing the liquidation set April 14, 2022, as the deadline for policyholders to file claims and temporarily halted lawsuits against FIGA. That stay expired on February 14, 2022.
FIGA continued reviewing claims during that time. However, on October 13, 2022, more than five years after the hurricane, the condominium association filed a lawsuit against FIGA, accusing the guaranty association of breaching both the original insurance contract and its statutory duties under Florida’s guaranty association laws.
FIGA responded by asking the court to dismiss the case, arguing that the claim was filed too late. Specifically, FIGA pointed to Florida’s five-year statute of limitations for contract disputes involving property insurance, which starts running from the date of loss - in this case, Hurricane Irma in September 2017. Since the lawsuit was filed after that five-year period expired, FIGA argued the claim was time-barred.
FIGA also invoked section 631.57(1)(b), Florida Statutes (2020), which says that FIGA “shall have all rights, duties, defenses, and obligations of the insolvent insurer as if the insurer had not become insolvent.” That means FIGA can use the same legal defenses the original insurer could have used - including arguing that the lawsuit came too late.
The association countered that a different law should apply - one that gives just one year to file suit after the court sets a liquidation claim deadline. It pointed to sections 631.68 and 95.11(5)(d), arguing that these insolvency-specific provisions replaced the usual five-year limit.
But both the trial court and the Fourth District Court of Appeal disagreed.
In a decision issued on April 30, 2025, the appellate court upheld the lower court’s ruling. The judges found that the five-year statute still applied and that FIGA, standing in the shoes of the failed insurer, could use it as a defense. The court emphasized that insolvency rules like the one-year filing deadline don’t eliminate other defenses available under standard contract law.
In fact, the court said applying only the shorter deadline would improperly strip FIGA of its rights and go against the clear language of Florida law. The ruling confirmed that FIGA can rely on all time-based defenses the original insurer could have used, even while also benefiting from insolvency-specific limits.
Because the condominium association filed its lawsuit more than five years after the date of loss - and several months after the stay on litigation had expired - the court held the claim was too late.
The case offers an important reminder for insurers, policyholders, and claims professionals alike: insurer insolvency doesn’t stop the clock. FIGA may provide a financial safety net, but that net comes with legal boundaries—and those include the original statute of limitations on filing suit.
