ADJUSTERSINTERNATIONAL.COM 7 area that might seem to the insurer, at that time, a relevant or productive area to investigate.62 Conclusion An EUO can be an effective tool in the investigation and the resolution of a property insurance claim. Yet, the escalating number of EUO cases throughout the country appear to be more about strategy than truth.63 This cottage industry of EUO litigation shows that wrong advice given by counsel to an insured can lead to a material breach of the EUO requirement, resulting in a forfeiture of coverage. Because an EUO is not just another deposition, an insured’s counsel must be well-versed on the nature and the extent of the contractual duty of an insured to submit to an EUO and the consequence of non-compliance. ____________________ 1 Insurance Services Office, Inc. (“ISO”) Homeowners (“HO”) Form 00 03 10 00 at p. 13 of 22; ISO Commercial Property (“CP”) Form 00 10 04 02 at p. 9 of 14. 2 Claflin v. Commonwealth Ins. Co., 110 U.S. 76, 82 (1884). 3 Like deposition testimony, EUO testimony can impeach an insured if his or her testimony at trial is inconsistent or conflicts with such testimony. Hart v. Mechanics & Traders Ins. Co., 46 F.Supp. 166 (W.D.La. 1942). Like deposition testimony, EUO testimony also is an admission of a party opponent, and admissible as direct evidence in support of an insurer’s affirmative defenses. McIntosh v. Eagle Fire Ins. Co. of N.Y., 325 F.2d 99 (8th Cir. 1963); Lentz v. Metro. Prop. & Cas. Ins. Co., 2001WL 38934 (Mass. App. Ct.). 4 Ahmadi v. Allstate Ins. Co., 22 P.3d 576 (Colo. Ct. App. 2001). 5 Nat’l Athletic Sportswear, Inc. v. Westfield Ins. Co., 528 F.3d 508 (7th Cir. 2008). 6 See Gordon v. St. Paul Fire &Mar. Co., 163 N.W. 956 (Mich. 1917); Shelter Ins. Cos. v. Spence, 656 S.W.2d 36 (Tenn. Ct. App. 1983). 7 In Twin City Fire Ins. Co. v. Harvey, 662 F.Supp. 216 (D. Ariz. 1987), the district court declined to find that the insured breached the EUO requirement in failing to answer certain questions because the insurer’s counsel failed to explain during the EUO the relevance and the materiality of the questions. 8 See Lester v. Allstate Ins. Co., 743 F.3d 469 (6th Cir. 2014); Morris v. Econ. Fire & Cas. Co., 848 N.E.2d 663 (Ind. 2006). Nor is the insurer’s refusal to execute a confidentiality agreement that imposes limitations on the insurer’s use of the insured’s personal information an excuse for the insured’s non-compliance with the EUO requirement. Safeco Ins. Co. of Oregon v. Masood, 330 P.3d 61 (Or. Ct. App. 2014). 9 See Zavakos Enters, Inc. v. St. Paul Surplus Lines Ins. Co., 2006WL 83502 (S.D. Ohio); Nationwide Ins. Co. v. Nilsen, 745 So.2d 264 (Ala. 1998). 10 See, e.g., Staples v. Allstate Ins. Co., 295 P.3d 201 (Wash. 2013). 11 See, e.g., Brizuela v. CalFarm Ins. Co., 10 Cal.Rptr.3d 661 (Cal. Ct. App. 2004); Piser v. State FarmMut. Auto Ins. Co., 405 Ill.App.3d 341 (1st Dist. 2010). 12 See Goldman v. State Farm Fire Gen. Ins. Co., 660 So.2d 300 (Fla. Dist. Ct. App. 1995). 13 ISO HO Form 00 03 10 00 at p. 13 of 22 (“As often as we reasonably require…[s]ubmit to an examination under oath, while not in the presence of another ‘insured’….”); ISO CP Form 00 10 04 02 at p. 9 of 14 (“We may examine any insured under oath, while not in the presence of any other insured….”). 14 See State Farm Fire & Cas. Co. v. Tan, 691 F. Supp. 1271 (S.D. Cal. 1988); Lidawi v. Progressive County Mut. Ins. Co., 112 S.W.3d 725 (Tex. App. 2003). 15 See U.S. Fid. and Guar. Co. v. Welch, 854 F.2d 459 (11th Cir. 1988); U.S. Fid. & Guar. Co. v. Hill, 722 S.W.2d 609 (Mo. Ct. App. 1986). 16 See, e.g., Cordeck Sales, Inc. v. Constr. Systems, Inc., 382 Ill. App.3d 334 (1st Dist. 2008). 17 The insurer’s right to require an insured to submit to an EUO does not include the right to require the insured to submit to a polygraph test. Mize v. Hartford Ins. Co., 567 F.Supp. 550 (W.D.Va. 1982); Walker v. Tenn. Farmers Mut. Ins. Co., 568 S.W.2d 103 (Tenn. Ct. App. 1977). Nor does it include the right to conduct a warrantless search of an insured’s residence. Honeycutt v. Aetna Ins. Co., 510 F.2d 340 (7th Cir. 1975). 18 See Warrilow v. Superior Court of Arizona, 689 P.2d 193 (Ariz. Ct. App. 1984); Hickman v. London Assur. Corp., 195 P. 45 (Cal. 1920); Tarcicani v. Nationwide Mut. Ins. Co., 822 A.2d 341 (Conn. App. Ct. 2003); Abraham v. Farmers Home Mut. Ins. Co., 439 N.W.2d 48 (Minn. 1989). 19 Weathers v. Am. Fam. Mut. Ins. Co., 793 F.Supp. 1002 (D.Kan. 1992) (court’s instruction to jury allowed it to consider the insured’s constitutional rights in determining whether the insured breached the EUO requirement). 20 Under Federal Rule of Civil Procedure 30 (a) (2) (ii) for example, a party must obtain leave of court to take a second deposition. 21 ISO HO Form 00 03 10 00 at p. 13 of 22 (“As often as we reasonably require…submit to an examination under oath….”); ISO CP Form 00 10 04 02 at p. 9 of 14 (“We may examine any insured under oath…at such times as may be reasonably required….”). 22 Foster v. State Farm Fire and Cas. Co., 674 F.3d 663 (7th Cir. 2012). 23 Under Illinois Supreme Court Rule 207(a) and Federal Rule of Civil Procedure 30(f), the deponent is afforded the right to examine the deposition after it has been transcribed, which right may be waived. 24 ISO HO Form 00 03 10 00 at p. 13 of 22 (“As often as ‘we’ reasonably require…submit to an examination under oath,…and sign the same.”); ISO CP Form 00 10 04 02 at p. 9 of 14 (“In the event of an examination, an insured’s answers must be signed.”); Country Mutual Ins. Co. Home Insurance Policy Form at pp. 29-30 of 35 (“As often as ‘we’ reasonably require…submit to examinations under oath,…and sign the same within a reasonable amount of time of ‘our’ request, after having been informed: (1) of ‘your’ right to counsel; and (2) that ‘your’answers may be used against ‘you’ in later civil proceedings or criminal proceedings;”). 25 See Wood v. Allstate Ins. Co., 21 F.3d 741 (7th Cir. 1994); Varda, Inc. v. Ins. Co. of N.A., 45 F.3d 634 (2nd Cir. 1995); Campuzano v. Sentinel Ins. Co., 2015WL 520901 (S.D.Tex.). 26 See, e.g., Herman v. Safeco Ins. Co. of Am., 17 P.3d 631 (Wash. Ct. App. 2001). 27 Joe’s Mkt. Fish, Inc. v. Scottsdale Ins. Co., 1998WL 851504 (N.D. Ill.); Kamin v. Central States Fire Ins. Co., 22 F.R.D. 220 (E.D.N.Y. 1958). 28 Jones v. State Farm Fire & Cas. Co., 129 F.R.D. 170 (N.D. Ind. 1990). 29 See, e.g., GuideOne Mut. Ins. Co. v. Rock, 2009WL 1854452 (N.D. Miss.); State Farm Fire & Cas. Co. v. Miceli, 164 Ill. App. 3d 874 (1st Dist. 1987). 30 See ISO HO Form 00 03 10 00 at p. 13 of 22 (“These duties must be performed either by you, an ‘insured’ seeking coverage, or a representative of either.”). See also West v. State Farm Fire and Cas. Co., 868 F.2d 348 (9th Cir. 1990); Barrie v. Great N. Ins. Co., 2008WL 3984159 (E.D. Pa.). 31 The Illinois Insurance Code defines a public adjuster as a person, who for compensation, acts or aids an insured in adjusting a claim arising under an insurance contract insuring the real or personal property of the insured. 215 ILCS 5/1510. 32 See Palace Cafe v. Hartford Fire Ins. Co., 97 F.2d 766 (7th Cir. 1938); H.T. Cain v. U.S. Fire Ins. Co., 2008WL 2094235 (S.D. Miss.); Florida Gaming Corp. v. Affiliated FM Ins. Co., 502 F. Supp.2d 1257 (S.D. Fla. 2007). Although a public adjuster may not be not required to submit to an EUO, a public adjuster can attend an EUO unless the policy expressly excludes himor her fromattending. See Nawaz v. Universal Prop. & Cas. Co., 91 So.2d 187 (Fla. Dist. Ct. App. 2012). 33 See U.S. Fid. & Guar. Co. v. Annunziata, 67 N.Y.2d 229 (1986). A standard mortgagee clause grants special protection for the interest of a mortgagee named in the policy, in effect setting up a separate contract between the insurer and the mortgagee. Among other things, it grants continuing coverage for the benefit of the mortgagee in the event the policy is voided by some act of the insured, such as arson. See 4 Couch on Insurance 3d sec. 65:8 et. seq. (2018). 34 See, e.g., 2000 Leslie Condo Ass’n, Inc. v. QBE Ins. Corp., 965 F.Supp.2d 1386 (S.D. Fla. 2013); Paulucci v. Liberty Mut. Fire Ins. Co., 190 F.Supp.2d 1312 (M.D.Fla. 2002). 35 See, e.g., Green v. St. Paul Fire and Mar. Ins. Co., 691 F.Supp. 700 (S.D.N.Y. 1988); Miracle Sound, Inc. v. N.Y. Prop. Ins. Underwriting Ass’n, 564 N.Y.S.2d 346 (N.Y. App. Div. 1991). But see Glados, Inc. v. Reliance Ins. Co., 888 F.2d 1309 (11th Cir. 1987); Double G.G. Leasing, LLC v. Underwriters at Lloyd’s, London, 2008WL 2345205 (Conn. Super. Ct.). 36 See Marquis v. Farm Fam. Mut. Ins. Co., 628 A.2d 644 (Me. 1993); Home Ins. Co. v. M.T. Olmstead, 355 So.2d 310 (Miss. 1978). 37 See Crowley v. North British &Mercantile Ins. Co., 70 F.Supp. 547 (4th Cir. 1947); Willis v. Huff, 736 So.2d 1272 (Fla. Dist. Ct. App. 1999); In re Cypress Texas Lloyds, 437 S.W.3d 1 (Tex. App. 2011).
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