Citing the recent case of California Fair Plan v. Superior Court, previously discussed here, the Second District Court of Appeal has reaffirmed that the failure of an insured to undergo an examination under oath as called for by the terms of the insurance policy is sufficient grounds for the insurer to deny the claim altogether.
Sergio Brizuela purchased a market, and insured the business with CalFarm Insurance Company. A month after the close of escrow, the market was destroyed in a fire. Brizuela submitted a claim on his policy and he, his wife and an employee all spoke with the insurer's investigator. As the investigation proceeded, CalFarm concluded that the claim was potentially fraudulent. It hired counsel and requested that Brizuela appear for an examination under oath, to which Calfarm was entitled under the language of the policy. Over the course of several months, Brizuela failed to appear for a series of scheduled examination dates. CalFarm eventually denied the claim. Brizuela sued for breach of contract and "bad faith." The trial court granted summary judgment in CalFarm's favor, and the Court of Appeal has now affirmed that judgment.
Among other claims, Brizuela argued that he should have been permitted to require CalFarm to provide him copies of his earlier statements as a pre-condition his participation in the examination. The Court of Appeal did not agree:
Brizuela complained at length about the alleged unreasonableness of CalFarm’s conduct without ever agreeing to submit to examination on any date. CalFarm’s refusal to provide Brizuela with copies of previously-recorded statements was not justification for his actions. It was not unreasonable for CalFarm to reject Brizuela’s request for copies of his previously recorded statement. There is no authority for the proposition that an insurer is under a legal obligation to provide an insured with a copy of the insured’s previously recorded statements taken before a civil action has been filed and discovery commenced. If an insured seeks the statement to refresh a recollection at an examination under oath, the insurer’s refusal to provide the statement may affect the insured’s ability to provide information at the examination. But that normally is the insurer’s choice. Even if there might be circumstances when it might be unfair or unreasonable for an insurer to demand an examination under oath without complying with an insured’s request for an earlier recorded statement, here, Brizuela has given no reason why CalFarm’s refusal to provide the statement was unfair or unreasonable.
The Court of Appeal concludes, among other things, that the requirement for the insured to participate in examination(s) under oath is essentially unconditional: the insurer does not need to demonstrate that it has been "prejudiced" by the insured's non-cooperation as a prerequisite to denying the claim. Moreover, the availability of the same information through depositions or other procedures in a later lawsuit does not relieve the insured of the obligation to undergo the requested examination.
The decision in Brizuela v. CalFarm Insurance Company (March 3, 2004), Case No. B160875, can be found at these links in PDF and Word formats.
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