In a recent case, a federal appeals court held that named insureds’ son and daughter-in-law were required to submit to an examination under oath (“EUO”) because they resided in the insureds’ house, and that their failure to do so precluded recovery on the insurance claim.1

In that case, two fires hit the insureds’ home in just seven months. At the time of both fires, the insureds lived with their two sons, their daughter-in-in law, and their grandchild. After the first fire, which was caused by cooking efforts that went awry, the insureds filed an insurance claim. Their insurer subsequently paid them over $600,000, and also paid for the family to live in an apartment temporarily due to the damage to their home.

While the family was still living in the apartment, the insureds filed a second insurance claim seeking approximately $330,000 for additional damage to their home from the second fire. In reviewing the second claim, the insurer hired a private investigator who determined that someone intentionally started the fire. The insurer also discovered that one of the insureds’ sons had been at the house the night of the second fire.

To determine how much coverage, if any, it should provide for the second fire claim, the insurer requested the adult family members to submit to an EUO and asked the insureds to provide tax, bank, phone and Facebook records. The insureds’ son and daughter-in-law refused to make themselves available for a full EUO. Moreover, the insureds never gave the insurer the requested documents.

The insureds filed a breach of contract action when the insurer denied coverage on the second claim. In its defense, the insurer maintained it properly denied the claim because the insureds did not honor the conditions in their insurance policy.

The insureds’ insurance policy required, as a precondition of coverage, that “the insured person … submit to examinations under oath.” The policy defined “insured person” to include the person named in the insurance agreement and that person’s relatives who live in the same house.

The court found that the son and daughter-in-law qualified as insured persons under the policy’s definition. Consequently, their failure to appear for an EUO after repeated requests was a violation of a condition precedent that precluded recovery on their second fire claim. Furthermore, the court held that the named insureds’ failure to provide the requested documents, which were all relevant to whether the insureds committed fraud by starting the second fire, was a violation of the policy’s cooperation clause that also precluded recovery.

If your EUO is requested by an insurer, contact your local Merlin Law Group attorney for proper representation with regard to the EUO.
1 Durasevic v. Grange Ins. Co. of Michigan, No. 18-2035, 2019 WL 3035750 (6th Cir. July 11, 2019).