What happened: A Florida appeals court voided a default judgment entered against FIGA without mandatory notice
Who's involved: Florida Insurance Guaranty Association (FIGA) and a restoration company assignee
What's at stake: A default final judgment entered without due process
Why it matters: Guaranty associations inheriting insolvent insurers' cases face procedural traps when courts skip notice rules
Where it stands: Reversed and remanded with instructions to vacate
A restoration company sued Southern Fidelity Insurance Company for denying coverage on repair work. Southern Fidelity went insolvent, and the litigation froze.
In January 2025, a Broward County court lifted the stay and swapped in Florida Insurance Guaranty Association - the entity that steps in when a Florida insurer fails - as the new defendant. But the substitution order carried a clause: if the plaintiff filed an amended complaint and FIGA did not respond, the court would enter a default "without further notice or hearing."
Two days later, FIGA's lawyers filed a notice of appearance. Eight days after that, the amended complaint landed. Nobody served FIGA with an application for default. On February 17, 2025, the court entered one on its own motion.
FIGA moved to vacate. Denied. Filed again. Denied. Default final judgment entered. Rehearing denied.
Florida's Fourth District Court of Appeal wiped the slate.
Under Rule 1.500(b) of the Florida Rules of Civil Procedure, once a party has filed any document in a case, it must receive notice of an application for default before one can be entered. A notice of appearance counts. FIGA filed one on January 15, 2025.
No application ever existed here. The self-executing language did not satisfy the rule. The appeals court cited a 2018 decision striking down identical language, and its own precedent in Rangel v. MidFirst Bank, which held such clauses "not authorized by law."
Both the default and the judgment were void - legally empty from the start.
The case goes back to the county court to vacate both orders. Whether coverage was owed for the restoration work has never been decided. The opinion, handed down September 30, 2026, is not yet final pending any timely rehearing motion.
For claims teams and coverage counsel on guaranty association files: check substitution orders for self-executing default language. Florida appellate courts keep striking it down.
The ruling addressed only the procedural validity of the default. The underlying coverage dispute remains unresolved.
