An insurance company may have the right to examine its insured under oath in connection with its investigation and evaluation of an insurance claim. Most insurance policies impose an obligation on the insured to cooperate with the post-loss investigation. An insured’s failure or refusal to comply with an obligation to cooperate by submitting to an examination under oath (“EUO”) may preclude recovery against the insurance company.

In a recent decision, Nunez v. Universal Property and Casualty Insurance Company,1 Florida’s Third District Court of Appeal addressed a claim where the insured failed to appear at a requested EUO. In April 2015, Ms. Nunez reported two water losses occurring days apart: one due to a leak in the kitchen, and a second due to a leak in the bathroom. Not only did the insurer request that Nunez submit a sworn statement in proof of loss, it requested— 110 days after the claim was reported—that she attend an examination under oath. After three letters by the insurer requesting a date for the EUO, Ms. Nunez failed to appear for the unilaterally scheduled EUO. Not surprisingly, the insurer denied her claims based upon this failure to appear and also failure to provide certain requested documentation. The insurer filed a motion for summary judgment arguing that Ms. Nunez’s failure to attend the EUO was a material breach of the insurance contract. The trial court denied the motion for summary judgment.

At trial, Ms. Nunez argued that it was unreasonable for the insurance carrier to request an EUO 110 days after she reported the claim, provided a recorded statement, and the insurance carrier inspected the property. The insurance carrier argued that it was reasonable because it did not receive Nunez’s sworn proof of loss until early July (75 days after she reported the claim and approximately thirty days before the insurer sent out the first letter requesting an EUO).

The parties could not agree on the jury instructions regarding Ms. Nunez’s failure to attend the EUO. The trial court determined the jury would be required to answer the following question in its verdict:

Did Universal prove by the greater weight of the evidence that Plaintiff unreasonably failed to attend her Examination Under Oath on October 1, 2015?2 (Emphasis added)

The jury returned a verdict in Nunez’s favor for $15,000 for the kitchen claim and $20,000 for the bathroom claim. When the insurance carrier moved for a judgment notwithstanding the verdict based on Nunez’s failure to attend her EUO, the trial court rejected the argument, explaining under the totality of the circumstances that the jury did not find Nunez’s failure to attend the EUO unreasonable. The insurance carrier then filed a renewed motion for directed verdict or, in the alternative, motion for new trial. A successor judge, who presided over the hearing, entered a detailed order, granting in part the insurer’s renewed motion for directed verdict and ordering a new trial:

Given that: (a) Universal’s unpled EUO defense was obviously tried by consent[3], and (b) considerable precedent at the time of trial supported the position that a carrier could not avoid payment unless an insured’s failure to attend an EUO caused prejudice, Plaintiff had an obligation to request a jury instruction on this issue, as well as an obligation to request that the jury be asked the question of whether Universal in fact was prejudiced by its failure to secure an EUO. Because it did neither, this avoidance was arguably waived, thereby entitling Universal to a directed verdict. On the other hand, the trial court — without hearing any substantive argument — did state on the record that ‘there is no prejudice required,’ arguably making any attempt to request a jury instruction/interrogatory futile. On top of that, the EUO defense was never pled in the first place and — as a result — never had to be avoided in a formal pleading. Finally, neither party had the benefit of the Third District’s [Estrada] decision which exhaustively surveyed the law on this point and definitely settled it in this district.3

Ms. Nunez appealed the trial court’s order (1) granting the insurance carrier’s motion for directed verdict on whether Nunez materially breached the insurance contract by failing to attend an EUO, and (2) granting a new trial, pursuant to the decision in American Integrity Insurance Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019), to provide Nunez an opportunity to show that her “breach of [this] post-loss obligation did not prejudice” the insurer.

The Third District Court of Appeal determined the result is controlled by its prior decision in American Integrity Insurance Co. v. Estrada, 276 So. 3d 905 (Fla. 3d DCA 2019), which was released 1 day prior to the motion for directed verdict in Nunez, and that addressed as a matter of first impression “whether, after a finding has been made that an insured materially breached a post-loss policy provision, a further finding must also be made that the insured’s non-compliance caused prejudice to the insurer.” Estrada, 276 So. 3d at 914-15.

The appellate court determined a new trial was required at which the factfinder can determine whether the insurer proved that Ms. Nunez’s failure to attend the EUO was a material breach of the contract and, if so, whether Ms. Nunez then proved that this material breach did not prejudice the insurer:4

Nowhere in the verdict form or the jury instructions was the jury instructed to consider whether, in light of the evidence presented, Universal established that Nunez materially breached the contract by failing to appear for her EUO. Nor was there any corollary instruction or provision in the verdict form for the jury to consider (assuming proof of a material breach) whether Nunez established that Universal was not prejudiced by the breach.

Consistent with our holding in Estrada, we affirm the trial court’s order granting a new trial, but reverse the trial court’s order directing a verdict in favor of Universal on the materiality of the breach. Further, and consistent with our remand instructions in Estrada (and in light of the fact that the parties in this case likewise did not have the benefit of our holding in Estrada at the time of trial) we remand the cause for a new trial at which the factfinder can consider and determine whether Universal proved Nunez’s failure to attend the EUO was a material breach of the contract and, if so, whether Nunez then proved that this material breach did not prejudice Universal. The parties should be granted leave to amend the pleadings as appropriate and necessary in light of this opinion and Estrada.

This decision is an important reminder for all policyholders of the importance to timely comply with an insurance carrier’s request for an EUO.
1 Nunez v. Universal Prop. & Cas. Ins. Co., No. 3D19-1614, 2021 WL 898179 (Fla. 3d DCA Mar. 10, 2021).
2 Nunez, 2021 WL 898179, at *2.
3 Nunez, 2021 WL 898179, at *5.
4 Id.