Divorce is devastating. It can get worse when a couple has an insurance claim. Often, one spouse  refuses to participate in the claim process, leaving the one attempting to collect in turmoil with the insurance company. This was the case in a recent decision, Heike Blake v. First Home Ins. Co., No. 09-245 (Fla. 11th Cir. Ct. May 12, 2010.)

The significant and sad facts of this case are as follows:

Mrs. Blake’s first language is German and she speaks English as a second language. She was the only listed named insured on the policy…Mr. Blake is not expressly named in the policy. Her home was burglarized by an unknown assailant on November 4, 2005. She furnished First Home with timely notice of loss, proof of claim and otherwise performed all conditions precedent to coverage. First Home requested an EUO and Mrs. Blake attended the EUO…During the EUO, the examiner asked her, “Who lives in the home with you?” Mrs. Blake replied, “Me, my husband and my daughter.”

This non-date specific question appears to be the only question that asks about the status of who was living at the home. Nothing in the answer suggested when precisely Mr. Blake lived with Mrs. Blake and her daughter. As Mr. Blake is not listed on the policy, it would have been highly probative and relevant to ask about the time period that Mr. Blake resided in the home. After the EUO concluded, First Home proceeded to request the EUO of Mr. Blake. The first request was addressed to Mrs. Blake’s attorney Ryan Ratliff on July 27, 2006. Mr. Ratliff did not forward this notice to Mr. Blake, as he did not represent him. The second request was sent directly to the home address that is the subject of the policy, certified mail return receipt requested. First Home has not come forth with a return receipt indicating that Mr. Blake ever signed for the letter.

Mrs. Blake filed an affidavit in opposition to First Home’s summary judgment motion, pointing out her language problem and clarifying her testimony during the EUO by bringing forth a certified copy of a permanent domestic violence injunction…It ordered Karl Blake could “not go to, in, or within 500 feet” of Mrs. Blake’s residence….

Mrs. Blake argued that Mr. Blake was not an insured. More importantly, counsel for Mrs. Blake argued that “[t]he noncooperative spouse cannot hold a cooperative spouse’s claim hostage.” To this point, he cited…case law…that “the refusal by insured’s husband to submit to an examination under oath did not operate to prevent insured from recovering for loss of her property . . . but merely prevented husband from recovering benefits or any loss he might have suffered.” First Home conceded that Mr. Blake was not a named insured, but was an “additional insured.” Counsel for Mrs. Blake brought to the trial court’s attention the “innocent co-insured” exception.

Notwithstanding, the trial court granted summary judgment. It was concerned that Mrs. Blake’s failure to advise First Home, that she and her husband had separated, prejudiced First Home. The trial court further felt that First Home could have attempted to locate and serve Mr. Blake, if it had been aware that he was no longer living in the home. This appeal followed."

Interestingly, the Court found that the husband was "an insured" under the policy at the time of the loss:

[W]e find that Mr. Blake was an additional insured on the date of incident. Seitlin & Co. v. Phoenix Ins. Co., 650 So. 2d 624 (Fla. 3d DCA 1994) (holding that university student living at off-campus apartment was an additional insured because he had not permanently left his parent’s home). We also find Mr. Blake ceased to be an additional insured, as of the date he permanently moved out of the home. Allstate Ins. Co. v. Fulton, 345 So. 2d 854, 855 (Fla. 3d DCA 1977) (“[O]nce she ceased to be a resident spouse ‘of the Named Insured’s household,’ she ceased to be an insured.”) While he is no longer currently an insured of First Home for any losses that arose after he left the home permanently, that does not mean he is no longer covered by First Home with respect to the loss that occurred on November 24, 2005. Therefore, we hold that Mr. Blake was an insured, and was required to attend an EUO…. (emphasis added)

The hurdle and issue for the innocent spouse is whether the failure of another spouse to appear for an examination will prevent recovery to the innocent spouse. The Court ruled for the innocent spouse in this case, reasoning:

We find that First Home’s policy only mandated that at least one insured attend an EUO, not that every insured attend an EUO to satisfy a condition precedent to coverage for the claim of each insured. First Home could have required the joint attendance of all insured in its policy language, but did not expressly do so. See USAA Cas. Ins. Co. v. Gordon, 707 So. 2d 1185, 1186 (Fla. 4th DCA 1998) (court found that the use of the term “any insured” was unambiguous as compared to the vague term “the insured”). If properly worded, certain policy terms can expressly create joint obligations and defeat recovery by an innocent co-insured. Kattom v. New Hampshire Indem. Co., 968 So. 2d 602, 605 (Fla. 2d DCA 2007). Nonetheless, where a policy does not express whether the obligation to attend an EUO is joint or several, the ambiguity should be resolved as requiring the obligations and coverage to apply severally. Overton v. Progressive Ins. Co., 585 So. 2d 445 (Fla. 4th DCA 1991) (“We conclude that the policy must be interpreted to provide several rather than joint coverage and that appellant, as an innocent insured, is to be afforded coverage under the Progressive policy.”) Therefore, we hold that First Home was free to deny Mr. Blake’s claim because he failed to attend an EUO, but should have covered Mrs. Blake based on the language of its own policy. (emphasis added)

This is an issue that is not going away. Insurance companies will write policies requiring joint obligations, which present an opportunity for one person involved to breach the contract and threaten chances of recovery for an insured who fulfills all the required obligations. When emotions run high,  "resident relatives" who are "omnibus policyholders" sometimes act in spite to the detriment of all involved. It is tough enough to insure against perils of God that cause misfortune and collect from an insurer. Making an honest and innocent insurance customer dependent on third parties, who often don’t care and may even hate the policyholder, adds another uncertain variable to recovery.