Florida Supreme Court Decides Curran Regarding Compulsory Medical Examination in Uninsured and Underinsured Case is a Condition Subsequent

Florida Homeowners Insurance Claims and Litigation Handbook

Florida’s Supreme Court recently issued an opinion that could change the way insurance claims and evaluated.  Do you know what the Court said?

In March, Florida’s Supreme Court decided whether an insurer of uninsured motorist (“UM”) coverage has to prove prejudice when the insured fails to attend a compulsory medical examination (“CME”).  As you know, we first addressed this issue almost a year ago in this article.

Here is the Court’s complete decision in Curran v. State Farm:

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The Curran decision contains a lengthy analysis of the relevant Florida case law; however, in summary, the Court determined that a CME provision in the UM insurance policy context is a condition subsequent to coverage for UM benefits; therefore, State Farm was required to plead and prove that the insured’s failure to attend the CME prejudiced State Farm.

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Ultimately, the Curran decision hinged on what type of policy provision the CME provision is: a condition subsequent or a condition precedent. State Farm argued that the CME was a condition precedent to coverage. If State Farm prevailed, then it would have had a presumption throughout the litigation that the insured’s failure to attend the CME prejudiced State Farm (like breach of the prompt notice provision). By contrast, the insured sought to have the CME be characterized as a condition subsequent because, if so, State Farm would have to plead and prove that the insured’s failure to attend the CME prejudiced State Farm.repair 1

The Court agreed with the insured; therefore, the Court required State Farm to prove it was prejudiced.  The Court started the analysis by describing the public policy behind the UM statute, Fla. Stat. 627.727(1). The Court explained its decision must include the public policy behind this statute. Next, the Court simply stated that the CME occurs after the parties enter into a contract and after a claim occurs; therefore, the Court opined that the CME provision was a condition subsequent to coverage. The Court reasoned that the CME provision was a part of the cooperation clause. Under Florida law, insurers have the burden of proving prejudice for breach of the cooperation clause provisions.

Importantly, the Court did not remand the case for further fact finding; instead, it determined that State Farm failed to prove prejudice as a matter of law.  Thus, not only did State Farm fail to obtain the presumption, they lost the issue altogether.

What does Curran mean for Examinations Under Oath in homeowners insurance cases? Advocates for insurers would argue nothing, and insureds’ attorneys would argue everything. The Court was careful to explain that this decision was strongly influenced by the UM statute and public policy, and the Court did not mention whether the cases it cited on the EUO provision were incorrectly decided.  Thus, insurers’ and insureds’ attorneys have room to argue their points on whether Curran should be extended to property insurance EUO failures; however, neither has direct support from the Florida Supreme Court. This decision is similar to the Court’s decision in GEICO v. Nunez, where the Court heavily relied on the specific statute at issue, and not just the insurance policy.

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