For decades, if an insured did not comply with an insurer’s request for an examination under oath (“EUO”), the insurer was entitled to summary judgment finding that there was no coverage for the claim. In 2012, however, in Whistler’s Park, Inc. v. FIGA, 90 So. 3d 841 (Fla. 5th DCA 2012), Florida’s Fifth District Court of Appeals suggested that the answer is not so clear.
In Whistler’s Park, the insured never submitted to the EUO, however, the insured’s attorney contacted the insurer and provided the identity of the corporate representative for the insured. In addition, the insured’s attorney asked the insurer to contact his office to schedule the EUO, but the insurer never did. The insured subsequently filed suit. After suit, and as the summary judgment hearing approached, the insured’s attorney continued to offer to submit to the EUO, but did not attempt to schedule the EUO as the insurer requested. The court discussed two distinct questions: (1) whether there was a breach; and (2) whether any such breach was material.
Interestingly, the court did not expressly answer the first question. Although the court appears to recognize that the insured’s failure to comply with the EUO provision can be a breach, the court spent the majority of the opinion describing how the parties essentially responded to each other by asking the other to schedule the EUO. The court did not, however, explain whether this was a breach.
Instead, the court focused on whether the breach was material. In prior Florida cases on the issue, courts held that because the EUO was a condition precedent to coverage, an insured’s failure to submit to an EUO was a de facto material breach. The Fifth DCA in Whistler’s Park, however, determined the EUO provision was a condition subsequent. As such, the court placed the burden on the insurer to show that the breach resulted in prejudice. The insurer did not plead and prove prejudice, likely because no court in Florida has ever required the insurer to do so under these circumstances. Nevertheless, the court determined the insurer’s failure to plead and prove prejudice warranted reversal of the trial court’s summary judgment.
By contrast, the Fourth, Fifth, and Second Districts have suggested there is no requirement for the insurer to plead and prove prejudice. In Goldman v. State Farm, 660 So. 2d 300 (Fla. 4th DCA 1995), the Fourth DCA held that an EUO is a condition precedent to suit. The insurer therefore did not need to plead prejudice to obtain summary judgment in that jurisdiction. Goldman is the oft-cited gold standard for cases on the issue. Until Whistler’s Park, insurers had no obligation to plead and prove prejudice.
In short, the answer to the question posed in the title of this article is that it depends on the jurisdiction. In November, 2012, the Florida Supreme Court heard oral arguments in Curran, a case the Whistler’s Park decision relies on for its ultimate finding. Until the Florida Supreme Court issues its opinion, insurers and insureds must pay close attention to the jurisdiction in which their case is pending. If they do not realize the need to plead and prove prejudice in the Fifth District, they might be in for a surprise at the summary judgment stage.
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