Eight reasons why a car accident victim must give an examination under oath

Eight reasons why a car accident victim must give an examination under oath

Must a car accident victim give a statement under oath to the insurance company when making a claim for uninsured motorist benefits, underinsured motorist benefits or a personal injury protection benefits. The simple answer is yes.

In order to file an uninsured motorist claim, underinsured motorist claim or a personal injury protection claim, a person considered an insured under the policy must comply with the requirements of the policy or could risk a disclaimer of insurance coverage being upheld by the courts of Maryland.

In Gary Dolan, et al. v. Kemper Independence Insurance Company, No. 0084, September Term, 2017. Opinion by Arthur, J. the Maryland Court of Special Appeals held that if a policy of insurance provides as a condition precedent to perfecting a claim for uninsured motorist benefits, underinsured motorist benefits or a personal injury protection benefits, that the insured must submit to an examination under oath, then the insured failure to do so when requested will likely result in a disclaimer of coverage which the courts are going to uphold.

In addition, if the policy of insurance provides as a condition precedent to perfecting a claim for uninsured motorist benefits, underinsured motorist benefits or a personal injury protection benefits, that the insured must submit to an examination under oath before filing suit if one is requested, then the insured failure to submit to an examination under oath before filing suit when requested will likely result in a disclaimer of coverage which the courts are going to uphold.

Further, if no request for an examination under oath is made until after suit is filed, the court will not allow a disclaimer of coverage as long as the insured does provide an examination under oath in a timely manner after suit is filed.

Further, if a party commits a material breach of an insurance contract by appearing at an Examination under oath but failing to answer some relevant and material questions is also a material breach and can justify the insurance company disclaiming coverage

In addition, if the policy provided as a condition precedent to coverage multiple examinations under oath, the language of the opinion seemed to suggest the court would have no problem enforcing the request for multiple examinations.

Further the court held that the offer to provide a deposition as part of normal discovery in lieu of a examination under oath would not be sufficient to avoid a disclaimer of coverage and the court suggested that requiring a regular deposition as well as an examination under oath is reasonable.

Next, the court held that even if the underinsured motorist carrier, paid the amount to settle amount of insurance to preserve their right to contest liability, the insurer can still disclaim coverage for the rest of the policy and will not be prejudiced by their payment.

Finally, the court clarified that there is no requirement that the insurance carrier prove prejudice under section Under § 19-110 of the Insurance Article of the Annotated code of Maryland, because this section applies to liability sections of a policy which are considered third party claims and not to uninsured motorist claim, underinsured motorist claim or a personal injury protection claims which are considered third party claims.

 

Specifically, the Court stated “The circuit court correctly held that an insured’s willingness to submit to a deposition was not the equivalent of submitting to an examination under oath (“EUO”) as required under his insurance policy. Submitting to a deposition will not satisfy the requirement of submitting to an EUO, because “[a]n examination under oath and a pretrial deposition ‘serve vastly different purposes.’” Brizuela v. CalFarm Ins. Co., 116 Cal. Rptr. 3d 661, 671 (Cal. Ct. App. 2004) (quoting Goldman v. State Farm Fire Gen’l Ins. Co., 660 So. 2d 300, 305(Fla. Dist. Ct. App. 1995)). “The purpose of an examination under oath is to obtain information as part of the insurer’s investigation of the insured’s claim” – to assist the insurer in deciding whether to allow or deny the claim – “rather than for the litigation.” Id. at 671-72. The procedures are also different. An EUO is not strictly subject to the rules of civil procedure. Id. at 672. Additionally, the rules concerning the form and substance of a notice of deposition (Md. Rule 2-412), the place where a deposition may occur (Md. Rule 2-413), the persons who may attend the deposition (Md. Rule 2-413.1), the procedure to be followed at and after the deposition .”(Md. Rule 2-415), and the use of a deposition at trial (Md. Rule 2-419), all differ between depositions and EUO’s. Hence, the insured’s refusal to sit for an EUO constituted a material breach under the insurance policy, and the insurance company was not obligated to pay any benefits under the policy

 

It is beyond any dispute that an insured breaches the insurance contract when he or she refuses to submit to an EUO. In Phillips v. Allstate Indemn. Co., 156 Md. App. at 743, this Court held that an insured breached the contract when he appeared at an EUO, but refused “to answer relevant, material questions.” We reasoned that the failure to answer “questions that are relevant and material to an insurer’s liability for a loss and the extent of that loss” “constitutes a failure to comply with a policy requirement to submit to an EUO.” Id. at 745. Furthermore, we concluded that the breach entitles the insurer to disclaim coverage even in the absence of a showing of actual prejudice. Id. at 746-47.5

Under § 19-110 of the Insurance Article, “[a]n insurer may disclaim coverage on a liability insurance policy on the ground that the insured or a person claiming the benefits of the policy through the insured has breached the policy by failing to cooperate with the insurer or by not giving the insurer required notice only if the insurer establishes by a preponderance of the evidence that the lack of cooperation or notice has resulted in actual prejudice to the insurer.” (Emphasis added.) A liability insurance policy, however, is a policy issued to protect an insured against the claims of injured third parties. See Phillips v. Allstate Indemn. Co., 156 Md. App. at 746. Thus, in the cases that address § 19-110, “the issue has been whether an insurer could disclaim coverage and not pay benefits to a third party when the insured either failed to cooperate or to give timely notice.” Id. Phillips did not involve a third party’s claim against the insured, but rather a so-called “first-party” claim by the insured himself against his own insurer. Id. at 747. Therefore § 19-110 did not apply. Id

If a party commits a material breach of an insurance contract by appearing at an EUO but failing to answer some relevant and material questions, then the total failure to submit to an EUO at all must certainly constitute a material breach as well.

It is also beyond any dispute that an insured cannot pursue a claim against an insurer if he or she has failed to satisfy a condition precedent to coverage. For example, in Huntt v. State Farm Mut. Auto. Ins. Co., 72 Md. App. 189, 198 (1987), this Court affirmed the entry of summary judgment against an insured who had failed to comply with a contractual condition precedent that required her to submit to a physical examination that would allow the insurer to evaluate her PIP claim.

The policy language in question is “On that next page, Section III, Part F, states, in pertinent part, that: “No legal action may be brought against us until there has been full compliance with all the terms of this policy.” Section III, Part E, paragraph B(3)(b), requiring an insured to submit to an EUO, is obviously a “term” of the Kemper policy. Therefore, no legal action may be brought against Kemper until an insured has submitted to an EUO, if one has been requested.

We agree that submitting to a post-litigation EUO could not possibly be a condition precedent to filing a lawsuit that had already been filed. Under Section III, Part E, of the Kemper policy, however, it would be a condition precedent to Kemper’s “duty to provide coverage”: Kemper might have the right to deny coverage if an insured refuses to submit to a second EUO after he or she has filed suit.

The same would be true if Kemper did not request an EUO until after an insured had filed suit: submitting to a post-filing EUO would be a condition to the insured’s right to recover benefits under the policy.

The Kemper policy plainly states that “[n]o legal action may be brought” at all “until there has been full compliance with all the terms of this policy.” Therefore, the Kemper policy expressly creates a condition precedent to the commencement of a legal action, and not merely to a recovery under the policy. Second, unlike the insured in McCullough (who failed to attend an EUO only because the insurer had unilaterally selected a date on which his counsel was unavailable, and who had expressed his willingness to submit to an EUO), Mr. Dolan repeatedly failed to cooperate in the scheduling of an EUO and categorically refused to submit to an EUO after he had filed suit.

Finally, Mr. Dolan argues that Kemper was able to obtain the substantial equivalent of an EUO when it took his deposition. Submitting to a deposition will not satisfy the requirement of submitting to an EUO, because “[a]n examination under oath and a pretrial deposition ‘serve vastly different purposes.’” Brizuela v. CalFarm Ins. Co., 10 Cal. Rptr. 3d at 671 (quoting Goldman v. State Farm Fire Gen’l Ins. Co., 660 So. 2d at 305). “The purpose of an examination under oath is to obtain information as part of the insurer’s investigation of the insured’s claim” – to assist the insurer in deciding whether to allow or deny the claim

“rather than for the litigation.” Id. at 671-72. In addition, the procedures are different, because an EUO is not strictly subject to the rules of civil procedure (id. at 672), such as the rules concerning the form and substance of a notice of deposition (Md. Rule 2-412), the place where a deposition may occur (Md. Rule 2-413), the persons who may attend the deposition (Md. Rule 2-413.1), and the procedure to be followed at and after the deposition (Md. Rule 2-415). In short, Mr. Dolan did not comply with his contractual obligation to submit to an EUO when he complied with his obligation under the Maryland Rules to submit to a pretrial deposition.

 



FREE CASE EVALUATION
close slider

FREE CASE EVALUATION EASY. QUICK. CONFIDENTIAL.