Last week, Shaun Marker wrote in “How Many Examinations Under Oath Can an Insurer Demand of an Association,” that the answer is “it depends.” This reminded me of the second part of a case I wrote about a few weeks on the Property Insurance Coverage Law Blog. The first part of Vision I Homeowners Ass’n, Inc. v. Aspen Specialty Ins. Co., 674 F. Supp. 2d 1333 (S.D. Fla. 2009) dealt with late notice of claims, but the second part of the case dealt with Examinations Under Oath (EUO).
The relevant facts of Vision I were similar to those that Shaun wrote about and were fairly common for Examinations Under Oath with condominium associations. The insurer requested an EUO and the insured complied, but the insurer did not get all of the answers it wanted, so it requested additional EUOs from additional condominium representatives and agents. The insured filed suit before complying with the additional EUO requests, and the insurer argued that was a material breach under the policy that precluded the insured from any recovery.
The condominium association argued that it had complied with the EUO policy provision, and cited the policy provision along with its assertion that there were no contractual requirements to sit for more than one EUO:
We may examine any insured under oath, while not in the presence of any other insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an insured’s books and records. In the event of an examination, an insured’s answers must be signed.
The court looked back to Paulucci v. Liberty Mut. Fire Ins. Co., 190 F. Supp. 2d 1312
(M.D. Fla. 2002), in which the insurer alleged a similar breach when the insured filed suit after one EUO but before sitting for additional requested EUOs. The Paulucci court reasoned that since neither side had submitted controlling authority for the premise that all EUO requests must be complied with in order to satisfy that pre-suit condition, four hours of questioning and submission of numerous documents substantially satisfied the pre-suit requirements. The court did note that additional facts that were not present in that case could defeat the substantial nature of performance that it found, but held the fact that the insurer still had some unanswered questions was not enough to support the insurer’s claim of material breach.
Back to Vision I, the court reasoned that the facts of Vision I were similar to Paulucci, in that both insureds filed suit after submitting to one EUO, but before complying with subsequent requested EUOs. The court held that the insured’s sitting for one EUO was enough to prevent it from finding that the insured failed to comply with the EUO requirement as a matter of law, and, at the most, the single EUO created a dispute of fact that would preclude summary judgment.
It is clear that the broad contractual language of an EUO provision like the one from Vision I places no numeric requirement as to how many EUOs must be complied with before an insured may file suit. I could not help but wonder why neither party in Paulucci cited legal authority for the premise that all EUO requests must be complied with before suit may be filed. My first assumption was that there was no controlling legal authority on point, but I know what happens when you assume, so I knew I must do some research on the topic. I set out on a research project to try to find any legal authority for the idea that all EUO requests must be complied with. The results of that quest will have to come in another post.