"Maybe if we think and wish and hope and pray it might come true"
            –The Beach Boys

A recent Florida case that involves examinations under oath demonstrates that insurers should  cooperate with policyholders and not try to use technicalities to prevent payment. In First Home Ins. Co. v. Fleurimond, 3D09-2034, 2010 WL 2178839 (Fla. 3rd DCA June 2, 2010), policyholders were allegedly yelled at and badgered during an examination under oath. They left, obtained counsel, and the insurer then refused to reconvene the examination under oath. The policyholders filed suit, demanded an appraisal, and the insurer refused. The trial court ruled that the matter should proceed to appraisal, and the insurer appealed.

The Florida appellate court found as follows:

We have held that “the insured must meet all of the policy’s post-loss obligations before appraisal may be compelled.” U.S. Fid. & Guar. Co. v. Romay, 744 So.2d 467, 468 (Fla. 3d DCA 1999) (en banc). This includes the obligation to submit to an EUO. Id. at 469. Our court has said, “ ‘[T]he failure to submit to an examination under oath is a material breach of the policy which will relieve the insurer of its liability to pay.’ “ Stringer v. Fireman’s Fund Ins. Co., 622 So.2d 145, 146 (Fla. 3d DCA 1993). The insurer argues that, at a minimum, the lawsuit must be dismissed and appraisal must be denied.

We agree with the trial court in rejecting the insurer’s arguments. First, the insured and his wife appeared for the EUO at the designated time and place. The substantial issue before the trial court was whether the insured and his wife were justified in leaving the EUO. The insured testified that he was badgered and yelled at, and that he was required to answer the identical series of questions twice, once in English and once in Creole.

After the insured’s exit from the EUO, he obtained counsel who offered to present the insured and his wife for a resumption of the EUO. This was before the insured filed suit against the insurer. The insurer refused the offer. It was not until after the insurer refused the offer that the insured filed suit. On these facts we entirely agree with the trial court that the lawsuit was not premature, and appraisal was properly ordered. (emphasis added)

There are a number of lessons to be learned from this case. First, policyholders should seek to retain counsel to prepare them for and attend the examination under oath. Usually, reputable policyholder’s counsel can move the matter along.

Second, the demeanor of opposing counsel and the insurer is important. Professional conduct is required of insurance counsel. Policyholders and policyholder’s counsel should indicate on the record when the tone of the questioning by the insurer’s counsel becomes badgering, demeaning, unfair, or unprofessional. Insurers and their representatives have an obligation to cooperate and treat their customers in good faith.

Finally, refusing to adjust, investigate or take any action in response to a reasonable request by  recently retained policyholder’s counsel may not be the best course of action for an insurer, especially after prior problems dealing with the insured. The insurer should not force a situation where the insured is not in compliance with technical pre-loss conditions and then use it as an excuse to avoid payment obligations. This has become a frequent tactic by some insurers and their counsel.

"Wouldn’t it be nice" if insurers and policyholders cooperated and got along with each other?