An insurance company may have the right to examine its insured under oath in connection with its investigation and evaluation of an insurance claim. Most insurances entail an obligation for the insured to cooperate in the follow-up investigation. An insured's failure or refusal to fulfill an obligation to cooperate by submitting to an examination under oath ("EUO") may preclude recovery against the insurance company.
In a recent decision Nunez v Universal Property and Casualty Insurance Company 1 Florida's Third Board of Appeal dealt with a claim in which the insured failed to appear at a requested EUO. In April 2015, Ms Nunez reported two water losses that occurred days apart: one due to a leak in the kitchen and another due to a leak in the bathroom. Not only did the insurer request that Nunez submit a hard-hitting statement as evidence of loss, it requested ̵
At the trial, Nunez claimed that it was unreasonable for the insurance company to request an EUO 110 days after she reported the claim, made a recorded statement and the insurance company inspected the property. The insurance company claimed that this was reasonable because it did not receive Nunez's sworn proof of loss until early July (75 days after filing the claim and approximately thirty days before the insurer sent out the first letter requesting an EUO).
parties could not agree on the jury's instructions regarding Mrs Nunez's failure to join the EUO. The trial court ruled that the jury would have to answer the following question in its judgment:
Evidence Universal with the greater weight of the evidence that the plaintiff unreasonably failed to participate in her investigation under oath on 1 October 2015? 2 (Emphasis added)
The jury ruled in Nunez's favor for $ 15,000 for the kitchen claim and $ 20,000 for the bathroom claim. When the insurance company brought an assessment despite the fact that the judgment was based on Nunez's failure to attend its EUO, the court rejected the argument and explained in full that the jury did not consider Nunez to have failed to participate in the EUO. The insurance company then submitted a renewed request for a judgment or, alternatively, a proposal for a new trial. A successor judge, chairing the hearing, entered into a detailed arrangement that partially granted the insurer's renewed draft judgment and ordered a new trial:
Given that: (a) Universal's unplanned EUO defense was apparently tried with consent  and (b) significant precedents at the time of the trial supported the view that a carrier could not avoid payment unless an insured's failure to participate in an EUO caused prejudice, the plaintiff was obliged to request a jury order in this matter, as well as an obligation to request that the jury be asked whether Universal was in fact harmed by its failure to secure an EUO. As it did not do so, this avoidance was undoubtedly exempted, which justified Universal's judgment. On the other hand, the trial court found – without having heard any substantive arguments – that no prejudice is needed, which undoubtedly made any attempt to request a jury instruction / interrogation meaningless. In addition, the EUO's defense has never been invoked in the first place and – as a result – never had to be avoided in a formal submission. Finally, neither party had the benefit of the third district decision [Estrada] which exhaustively reviewed the law on this point and finally decided it in this district. 3
Fru. Nunez appealed against the decision of the Court of Justice (1) to grant the insurance company's request for a judgment on whether Nunez materially breached the insurance contract by not participating in an EUO, and (2) to grant a new trial, in accordance with the decision of American Integrity Insurance Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019), to give Nunez an opportunity to show that her "violation of [this] obligation after loss did not affect the insurer.
The third district court ruled that the result is controlled by its previous decision American Integrity Insurance Co. v. Estrada 276 So. 3d 905 (Fla. 3d DCA 2019), which was released 1 day before the proposed judgment in Nunez and which was treated as a first impression " if, after a discovery has been made that an insured person substantially violates a provision on insurance after loss, a further assessment must be made that the policyholder's non-compliance caused damage to the insurer. ” Estrada 276 So. 3d at 914- 15.
The Board of Appeal ruled that a new trial was required where the plaintiff could determine whether the insurer had proved that Nunez's failure to participate in the EUO was a material breach of the contract and Mune Nunez then proved that this material infringement did not harm the insurer: 4
Nowhere in the judgment or jury instructions was the jury instructed to consider whether, in the light of the evidence presented, Universal found that Nunez had materially breached the agreement by not participate in its EUO. Nor was there any additional instruction or provision in the judgment for the jury to consider (provided evidence of a material offense) if Nunez found that Universal was not harmed by the infringement.
In accordance with our holding in Estrada we confirm the decision of the Court of Justice to grant a new trial, but reverse the decision of the Court of Justice which directs a judgment to Universal in favor of the materiality of the infringement. Furthermore, and in accordance with our arrest warrants in Estrada (and in view of the fact that the parties in this case also did not have the advantage of holding in Estrada at the time of trial) we detain the reason for a new trial in which the applicant can consider and determine whether Universal proved that Nunez did not participate in the EUO was a material breach of contract and, if so, whether Nunez then proved that this material breach did not affect Universal. The Parties should be authorized to amend the submissions as appropriate and necessary in the light of this Opinion and Estrada .
This decision is an important reminder to all policyholders of the importance of following an insurance company's request for an EUO in a timely manner.
1 Nunez v Universal Prop. & Cas. Ins. Co. No. 3D19-1614, 2021 WL 898179 (Fla. 3d DCA March 10, 2021).
2 Nunez 2021 WL 898179, at * 2.
3 Nunez 2021 WL 898179, at * 5.