(Note: This guest blog is by Nicole Vinson, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series she is writing on Examinations Under Oath and Public Adjusters).
In my post last week, I explained the new provision in Citizens’ homeowners policy and received many comments that address great issues.
In Part I of this series, I posed several questions for discussion:
- What happens if the Public Adjuster refuses to sit for an EUO?
- Is the Public Adjuster always required to give an EUO?
- Can the Public Adjuster fill the shoes of the policyholder and give the only EUO?
- How can the statements given by the Public Adjuster during an EUO change a claim decision?
I want continue evaluating these questions and pose a few more. How each of the questions can be answered depends on many factors. Discussing this policy change is important because it can change the way a claim is presented and the obligations of those involved.
Before the change in Citizens’ policy, analysis of a requirement for an examination focused on the word “insured.” The insured is usually required to submit to an examination under oath when demanded. The term insured is usually defined in the policy, and this helps lawyers to determine who is required to give an EUO. A look at the case law shows that arguments have been made about how far the definition of insured can stretch with respect to commercial policies and commercial- residential policies. This debate has been going on for decades.
Recently, in Florida Gaming Corp. v. Affiliated FM Ins. Co., 502 F. Supp. 2d 1257 ( S.D. Fla. 2007), the U.S. District Court for the Southern District of Florida addressed issues regarding who is required to give an examination under oath under the Affiliated policy issued to Florida Gaming. It is important to remember that in Florida Gaming, the policy language was different than the policy considered in this blog. The facts of this case, like all cases, are unique.
In Florida Gaming, the Court considered who should be required to give an EUO. The Vice President of the company gave a lengthy EUO but could not answer all questions. He admitted that he had no personal knowledge relating to the amount of loss and relied on the public adjuster’s analysis and the contractor, who was hired by the public adjuster, to estimate the damages. The insurance company requested that the contractor be subject to an EUO. Based upon the policy and the facts, the Court declined the request, stating:
Affiliated argues that Florida Gaming must submit Al Paxton to an examination under oath because PCA performed the analysis upon which Florida Gaming has relied in its sworn proof of loss. Florida Gaming responds that the policy requires only that “the insured” submit to examinations under oath. The Court agrees with Florida Gaming, that given the language of the policy, which authorized the examination of “the insured,” an examination of the insured’s adjuster (or its agents or representatives) does not appear to have been contemplated. The Court therefore applies the rule requiring that the policy be interpreted in favor of the insured, and finds as a matter of law that Al Paxton is not required to submit to an examination under oath.
The Court’s explains is important; the obligations of those involved were determined by the policy provisions and what was contemplated by the wording of the policy at the time of drafting. This is how insurance policies and other contracts are routinely interpreted, and it provides some guidance in interpreting the new Citizens policy.
Does the exact wording of the provision matter?
In Florida Gaming, the Court also explained that when a policy of insurance is ambiguous, the ambiguity is resolved in favor of the insured. This may be an angle used to help public adjusters determine their responsibility with the Citizens policy. The language requesting the EUO does not say “public insurance adjuster,” it says “anyone you hire in connection with your claim.” Perhaps there is enough ambiguity here for a court to agree the policy is unclear and overly burdensome.
What about the policyholder?
One of the common themes in the comments and the discussion about this provision relates to the policyholder. Suppose the insured has a loss and has problems or a complicated claim. The policyholder needs help and hires a public adjuster. The public adjuster’s contract is signed and the claim is presented to Citizens. Citizens demands examinations under oath and lawyers are hired. There is a dispute concerning the obligations of all involved, and the matter ends up in court. The matter is one of many pending on a very full docket. Meanwhile, the insured has to wait just to figure out what is required under the policy. The insured’s home or business is in limbo and the public adjuster is spending more and more time attempting to figure out how to help the client.
While the purpose of this blog is to have a discussion and evaluation of this issue, I also want to remind everyone that examinations under oath must be demanded. If there is no demand, there is no issue. Until an EUO of a public adjuster is demanded and the matter litigated, we will have no definitive guidance on the issue. While no one can predict the future and changes are always happening with property insurance, everyone should understand the policy provisions and be aware of new policy language that could affect your job and your clients’ claims. In the meantime, taking extra care to be prompt in communications and forthcoming with the claim presentation may save unnecessary headaches later.