A standard clause in most property insurance policies requires an insured to sit for an examination under oath (EUO) if the insurance company requests one during the claims process. This clause is often listed as one of the insured’s duties after loss. A separate clause, sometimes entitled “Suit Against Us,” may also require that the insured comply with its post-loss duties before suit may be filed against the insurer. The question of whether an insured condominium association complied with its duty to sit for an EUO before filing suit was one of the issues discussed in the case of El-Ad Enclave at Miramar Condo. Ass’n, Inc. v. Mt. Hawley Ins. Co., 752 F. Supp. 2d 1282 (S.D. Fla. 2010).

The El-Ad Enclave Condominium Association suffered a loss from Hurricane Wilma in 2005 and made a claim to its property insurer, Mt. Hawley. On February 4, 2009, the insurer requested that the insured sit for an EUO and produce documents to the insurer. On February 18, 2009, the insured responded to the request and attempted to coordinate the EUO and production of documents. The EUO was rescheduled a few times before finally being set for June 9, 2009. Meanwhile, on May 15, 2009, before the insured had appeared for the EUO or produced documents, it filed suit against the insurance company.

The condominium association’s insurance policy permitted the insurer to “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 claim, including an insured’s books and records.” The policy also required that no legal action could be taken against the insurer unless “[t]here has been full compliance” with all terms of the policy. The insurer filed a motion for summary judgment, arguing that the condominium association had not fully complied with its duties before filing suit because the EUO had not actually taken place before suit was filed.

In support of its motion, the insurance company cited case law in which insureds refused to comply with requests for or failed to appear for an EUO, and eventually never complied with the EUO request. The court distinguished those cases by saying:

In Goldman, for example, the insured had yet to submit to an EUO two years after having filed suit. See Goldman, 660 So.2d at 305. The Fourth District noted that an insured’s “refusal to comply with a demand for an examination under oath is a willful and material breach of an insurance contract.” See id. at 303 (emphasis added). Accordingly, it held that the insured’s refusal to comply prohibited a suit concerning the policy. See id. at 306. In another similar case cited by Mt. Hawley, the insured failed to show for scheduled EUOs, and never fulfilled the EUO requirement. The Second District held that the insureds’ “failure to submit to the EUOs was a material breach of a condition precedent to [the insurer’s] duty to provide coverage under the policy.” See AMICA Mut. Ins. Co. v. Drummond, 970 So.2d 456, 459 (Fla. 2d DCA 2007).

The Court found that summary judgment was not proper because the condominium association had amicably attempted to coordinate both the production of documents and the examination under oath and ultimately did both, albeit briefly, after suit was filed. Because there was an agreement in place to produce documents and sit for the examination under oath before suit was filed, the court denied the insurance company’s motion for summary judgment on the basis that there was an issue of fact as to whether the condominium association’s actions in agreeing to comply before filing suit, and complying briefly after filing suit, amounted to full compliance under the terms of the policy. The court noted that:

Moreover, if an insured has not demonstrated willful disregard of the policy preconditions, courts have either stayed the action or dismissed the suit without prejudice in order to allow belated compliance. See, e.g., Central Metal Fabricators v. Travelers Indemnity Company of America, 703 So.2d 1251, 1251 (Fla. 3d DCA 1998) (staying claim pending compliance with EUO); Southgate Gardens Condominium Association, Inc. v. Aspen Specialty Insur. Co., 622 F.Supp.2d, 1332, 1337 (S.D.Fla.2008) (dismissing suit without prejudice to allow belated compliance is “most prudent course of action”). Here, such relief is not necessary because Enclave produced the documents and the EUO was taken less than a month after the action was filed. But regardless, these cases indicate that dismissal is not appropriate here.

In the end, it is usually better to play it safe than sorry and actually sit for an EUO and produce documents before filing suit, but this case shows that the facts may permit the actual EUO to take place after filing suit, as long as there has been initial cooperation. Again, the facts and timeline will be key in the determination of whether the insured has complied, and some judges may be less inclined to find compliance under the above facts, so be sure to consult with your legal counsel regarding compliance.

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