Examination Under Oath
What is an Examination Under Oath (EUO)?
“Most insurance policies include provisions allowing the insurance carrier to take the sworn testimony of one or all insured. The EUO is a contractual provision. Some courts have held that an insured’s failure to comply results in a breach of contract and the insurer will owe nothing for the claim, so if you want to keep your insurance coverage, you must attend the examination and bring the documents which you are reasonably required to bring. An examination under oath (EUO) usually takes several hours and is a lot like a deposition: The insurance company’s attorney verbally questions the insured under oath. A court reporter swears the insured in and records the questions and answers via audio recording and via note taking. The insured is allowed to bring his or her own attorney and it is not advisable to attend an EUO without your own attorney. “An examination under oath, effectively conducted, is a useful and expedient method for assisting the insurer in reaching a wise and fair coverage decision respecting a claim; and, it also provides an opportunity to the insured to explain, at length, the circumstances of the loss, and provides the insured an opportunity to substantiate the value and its interest in the property claimed.” (1)
“Almost every insurance policy requires an insured to appear for an Examination Under Oath as one of the duties after loss. When the right is invoked, it is usually near the end of the investigation and is one of the final steps to be completed. The Examination Under Oath is a formal proceeding taken before a court reporter and recorded in a verbatim transcript. Every question which is asked and every answer which is given is made a part of the record. Many insurance companies now videotape the Examination Under Oath, as well. It is usually conducted by an attorney hired by the insurance company for that purpose. The insured has the right to be represented by an attorney and often appears with counsel. Unlike a deposition or court proceeding, however, the attorney for the insured has no right to raise evidentiary objections or ask questions of the client. The attorney is only allowed to offer legal advice to the insured when issues arise during the Examination Under Oath. The scope of the Examination Under Oath is broad. The proceeding typically lasts several hours and may last even longer. The insured will be asked questions in a number of subject areas. Everything about the personal and professional background of the insured will be covered: his legal name and other names used, his date of birth and social security number, marital status and marital history, the identity of children and other relatives, his current place of residence and prior residences, his current employment and prior employment history, his criminal arrest record, his civil litigation involvement, his ownership history of the insured property or business, the insurance history of the insured or the business (especially any prior fire claims), the circumstances of obtaining the specific policy involved in the claim and all related personal information.” (2)
Is an Examination Under Oath the same as a Recorded Statement?
No, although they are similar. “A recorded statement is no substitute for an exam under oath. Where the insured gave a statement, however, must the carrier provide a copy prior to the exam? Some are refusing to do so. The statement of a party or a non party to litigation is obtainable without any showing of necessity, hardship, or any showing at all. The courts seem to see such statements as the property of the maker. CR 26(b)(4) provides:
A party may obtain without the required showing a statement concerning the action or its subject matter previously made by that party. Upon request, a person not a party may obtain without the required showing a statement concerning the action or its subject matter previously made by that person.
In Farm Bureau Ins. v. Leyendekker, 17 Wn. App. 304, 562 P.2d 285 (1977), the court said, “…once the demand by a nonparty witness is made, a copy of that statement must be delivered to that witness … Any person giving a statement is entitled to a copy of that statement, and once received, is entitled to do with it as he desires. Id., at 17 Wn. App 307. The problem, of course, is that the claim is seldom in litigation when the issue arises. The letter of the court rules does not apply, but the spirit certainly does. The carrier may argue that it meets that requirement by offering copies after the EUO was concluded. This argument was rejected in Tury v. Superior Court, 505 P.2d 1060, 19 Ariz. App. 169 (1973), where plaintiffs in a dogbite case asked for statements they had given the defendant’s insurer. Defendant offered to give them the statements, only after they were deposed. Defendant noted the depositions, and plaintiffs refused to appear. The court cited 8 Wright & Miller, Federal Practice and Procedure, 2027 (1970) to support its view that parties have an absolute right to a copy of any statements made by the party prior to the retention of counsel. This “absolute right” cannot be defeated by withholding the statements, or delaying their production. See also, Watts v. Superior Court, 347 P.2d 565 (1959).” (3)
“Generally, insurance policies contain a requirement that the insured must give both a recorded statement and an Examination Under Oath (EUO) in the “Conditions” section of a policy. A recorded statement may be used to gather information by insurance company at the onset of the claim. An EUO is a more in-depth interrogation by a lawyer for the insurance company. The requirements of policyholders in connection with an EUO depend on the policy language. Many policies require insureds to sit for an EUO, sign the recorded transcription, and give the EUO while not in the presence of any other insured. Essentially, an attorney for the insurance company asks a long series of questions while a court reporter records the whole thing. An EUO is more similar to a deposition than a simple recorded statement, except that the EUO is governed by the rules explained in the policy and not the Rules of Civil Procedure. EUOs are adversarial.” (4)
Do I have to attend an Examination Under Oath (EUO)?
Yes, “while auto insurance policies differ somewhat amongst insurers, most policy forms provide the insurer with a right to demand the “examination under oath” (“EUO”) of its insured, and a right to demand records and documents in support of the presented claim. The standard policy provision respecting an insurer’s right to conduct an EUO typically provides: YOUR DUTIES AFTER LOSS: After a loss to which this insurance may apply, you shall see that the following duties are performed: As often as we reasonably require: Provide us with records and documents we request and permit us to make copies; submit to examinations under oath and subscribe the same; Simply, an EUO is a formal proceeding during which an insured, while under oath, and typically in the presence of a court reporter, is questioned by a representative of the insurer regarding the presented claim.” (1)
What Happens If I Do Not Attend the Examination Under Oath (EUO)?
“An insured’s failure to comply with an insurer’s demand for an EUO generally constitutes a material breach of contract which renders the insurer void of liability for the presented claim. Saucier v. U.S. Fidelity & Guar. Fund Co., 765 F. Supp. 334 (S.D. Miss. 1991), and Stover v. Aetna Casualty, 658 F. Supp. 156 (S.D.W. Va. 1987). Moreover, the insurer need not show prejudice from the insured’s refusal to comply so long as the refusal resulted in an unreasonable delay. U.S. Fidelity & Guar. Co. v. Wigginton., 964 F.2d 487 (5th cir. 1992). Even a belated offer by the insured to comply with a demand for an EUO may not excuse its breach if, as a result of the delay, information is difficult to recall or evidence is destroyed. Watson v. National Sur. Corp. of Chicago, IL, 468 N.W.2d 448 (Iowa 1991). Further, if an insured makes its first offer to comply with an insurer’s demand for an EUO while the case is on appeal, such an offer may likely be viewed as insufficient to constitute reasonable compliance and will not likely excuse the earlier breach. Pervis v. State Farm, 901 F.2d 944 (11th Cir. 1990), cert den. 498 U.S. 899 (1990). As an aside, the Court in Pervis held that recorded statements taken of the insured by the insurer are not a substitute for an EUO and do not excuse the insured from submitting to one. The Court also held that the insurer was under no obligation to repeat its formal demand for an EUO once the insured had refused. Id. at 908. An insurer’s “demand” for an EUO is generally a condition precedent to the insureds’ obligation to comply. The demand must designate the time and location of the EUO, as well as the identity of the individual conducting the exam. (See Weber v. General Accident Fire & Life Assurance Corp., 10 Ohio App.3d 305, 462 N.E.2d 422 (1983) and Huggins v. Hartford Ins. Co., 650 F.Supp. 38 (E.D.NC. 1986). In addition, an EUO should be held within a reasonable distance from the insured’s home. The Weber Court also held that notice must be sent not just to the insured’s attorney, but also to the insured. Failure to comply with these notice provisions may result in the insurer’s waiver of its defense that the insured failed to submit to an EUO. 462 N.E.2d at 424.” (1)
Who Must Attend the Examination Under Oath (EUO)?
“In State Farm Fire & Casualty Ins. Co. v. Miceli, 164 Ill.App.3d 874, 115 Ill. Dec. 832, 518 N.E.2d 357, at 363 (1987), the Illinois Appellate Court (1st Dist.) held that a duty to demand an EUO applied only to named insureds and not their children, even though coverage extended to them. In apparent response to the Court’s holding in Miceli, many insurers have modified their policy language with respect to their right to demand an EUO. The modified policy language typically provides: YOUR DUTIES AFTER LOSS:
After a loss to which this insurance may apply you shall see that the following duties are performed: [A]s often as we reasonably require, submit to and subscribe, while not in the presence of any other insured…, examinations under oath; and produce employees, members of the insured’s household or others for examination under oath to the extent it is within the insured’s power to do so…(emphasis provided). Accordingly, unlike a deposition, an insurer, by right of contract, may be allowed to close the exam to anyone other than the insured being examined and their legal counsel. It should also be noted that where the insured is a corporation, its officers may also be subject to an EUO. Ausch v. St. Paul Fire & Marine Ins. Co., 511 NYS2d 919, 125 A.D.2d 43 (1987), appeal denied 516 N.E.2d 1223 (1987).” (1)
Does a Medical Provider Who Has Accepted Assignment of Benefits (AOB) have to Attend an Examination Under Oath (EUO)?
“In Shaw v. State Farm Fire and Casualty Company (5D07-3136), a divided panel of the Fifth District certified a question to the Florida Supreme Court and resolved “whether an Examination Under Oath (EUO) clause in an insurance policy is binding on an assignee of the No-Fault benefits and the cause of action to recover those benefits, thereby prohibiting a noncompliant assignee from making a claim or seeking payment under the policy. The clause provides in pertinent part that ‘any person or organization making claim or seeking payment . . . must, at our option, submit to an examination under oath, provide a statement under oath, or do both, as reasonably often as we require.’ (Emphasis omitted). The trial court held that this EUO provision is a condition precedent with which the assignee must comply in order to make a claim and file suit. Because the assignee refused to comply, the trial court rendered summary judgment in favor of the insurer. We affirm.
The court continued: The courts have consistently held that an EUO provision in an insurance policy is a condition precedent that must be complied with in order to maintain an action to recover policy benefits…Courts in other jurisdictions also interpret EUO provisions to be conditions precedent to making a claim and filing suit to recover the claim under the policy. The dissent contends that because the EUO provision is included in a section of the policy captioned “Reporting A Claim – Insured’s Duties,” only the insured is required to attend an EUO. We note that is an argument that the Appellants did not assert. In any event, the dissent further contends that, therefore, the assignees must specifically agree to be bound by that duty or take an assignment of the entire policy. We disagree. The plain language of the EUO provision states that “any person or organization making claim or seeking payment” may be required to attend the examination. “An assignment is a transfer of all the interests and rights to the thing assigned.”
The majority certified the following to the Florida Supreme Court:
We certify to the Florida Supreme Court the following question of great public importance: WHETHER THE EUO PROVISION IN STATE FARM’S POLICIES IS A CONDITION PRECEDENT THAT MUST BE COMPLIED WITH WHEN A MEDICAL CARE PROVIDER TAKES AN ASSIGNMENT OF NO-FAULT BENEFITS AND CAUSE OF ACTION FROM THE INSURED WITHOUT SPECIFICALLY AGREEING TO BE BOUND BY THAT CONDITION?
The dissent begins: The majority is wrong for two reasons. First, under the law of assignments, State Farm, as obligor, does not have the power to create conditions with which an assignee of the obligee’s right to payment must comply. Second, even if such were possible, the language of the policy does not accomplish what State Farm claims.” (5).
What Type of Questions Are Asked During an Examination Under Oath (EUO)?
“We all know the rules of discovery depositions. The rules for EUOs are much less understood. They don’t neatly appear in court rules or statutes. If a policy has an EUO clause, it will simply say the insured must submit to examination under oath, as often as the carrier reasonably requests. Some policies insist that multiple insureds submit separately, or that the insured obtain the cooperation of others whom the carrier wants to examine. At least in the property insurance context, these additional requests may be invalid.” (3)
During an EUO, all questions considered material and relevant to the claim must be answered by the insured. The refusal of an insured to answer such questions, whether under advice of an attorney or not, may result in a legitimate denial of the claim. While Courts have given broad scope to what an EUO may encompass, (See Passero v. Allstate Ins. Co., 196 Ill.App.3d 602, 143 Ill.Dec. 449, 554 N.E.2d 384, at 387 (1990)), the scope has been limited to whatever is material. Thus, the EUO may include anything considered material for the purpose of determining the insurer’s liability to a claim, and may include anything that reasonably allows the insurer to protect itself from false claims. (See Passero, 554 N.E.2d at 388).For example, in a case of suspected arson, the insurer generally may question the insured on matters relating to the insured’s financial condition in an effort to establish whether a motive for arson existed. Accordingly, in Gipps Brewing v. Central Manufacturers, 147 F.2d 6 (1945), the Court allowed a “searching exam” of the insured where the insurer had a reasonable basis for suspecting fraud by the insured.” (1)
“Unlike depositions, the insurer may be allowed several “bites at the apple”. Thus, as noted previously, the policy language in many property policies provide that an insurer may exam its insured “as often as we reasonably require”. Thus, if prior to reaching a coverage decision, and subsequent to an EUO, the insurer uncovers additional facts which reasonably require further questioning of the insured, another demand for the insured’s exam may by considered appropriate if the contract provides accordingly. Note, however, that the Court in Watson, 468 N.W.2d 448 (1991), held that the insured does not breach the policy where it has substantially complied with the insurer’s demand for an EUO.” (1)
Do I Have To Bring Records and Other Documents to the Examination Under Oath (EUO)?
“Generally the insurer, in addition to a demand for an EUO, will demand that the insured produce certain documents to assist in substantiating their claim. Refusal to comply with the demand to produce the requested documents, if material and relevant to the insurer’s investigation, will likely result in a legitimate basis for denial of the claim. Courts have frequently allowed the insurer to demand from the insured, as part of its claims investigation, material documents such as income tax returns and bank statements. (See U.S. Fidelity & Guaranty Co. v. Conaway, 674 F.Supp. 1270 (N.D.Miss. 1987); Stover v. Aetna Casualty, 658 F.Supp. 156 (S.D.W.Va. 1987); and Kisting v. Westchester Fire Ins. Co., 290 F.Supp. 141 (W.D. Wis.1968), aff’d 416 F.2d 967 (7th Cir. 1969)). However, in Chavis v. State Farm, 317 N.C. 683, 346 S.E.2d 496 (1986), the Court qualified the above-stated general rule and held that an insurers’ request for financial documents must be both reasonable and specific.” (1)
Can I Have My Attorney Attend the Examination Under Oath (EUO) With Me?
Yes. “Typically, an attorney is retained to represent the insurer and will make the demand and conduct the exam. In many cases, the insured will likewise retain legal counsel who, needless to say, will request to be present during the proceeding. Courts have held that while an insured has a right to have its own attorney present at any EUO, the insured’s attorney can not participate in the EUO. (see Hart v. Mechanics & Traders Ins. Co., 46 F.Supp. 166 (1942) and Shelter Ins. Co. v. Spence, 656 S.W.2d 36 (Tenn App. 1983)). Also, it is important to mention that denial of an insured’s right to legal representation may bar the insurer from denying a claim on the basis of the insured’s failure to comply with its demand for an EUO.” (1)
Sources: 1. Examination Under Oath “Not Just Another Deposition” by Rick Hammond; 2. Interfire.org 3. areyoucovered.com, 4. Propertyinsurancelawblog.com, 5. Floridalegalblog.org.