Tag Archives: Examinations Under Oath

Florida Appellate Court on Rodrigo v. State Farm and Insurance Policy Conditions Precedent After Curran

Florida Homeowners Insurance Claims and Litigation Handbook

A Florida appellate court recently made some important decisions for anyone interested in Florida homeowners insurance.  Do you need to know about the legal impact of issues with Examinations Under Oath, Proofs of Loss, and the Other Policy Conditions.  Then you must read this article.


The Fourth District Court Appeals recently issued the first decision on conditions precedent in insurance policies since the Curran case.

Download (PDF, 132KB)

Things are too busy at Todd Legal, P.A. to do the usual “deep dive” into the ruling and the impact, but I wanted to make sure everyone was aware of the decision.  As you know, we at Todd Legal provide software and other innovative services to Florida’s property insurers and their attorneys to deliver legal services that are smarter, cheaper, and quicker than what insurers have come to expect.  We are nearing the delivery stage, so I am not going to be able to timely analyze this Rodrigo decision in enough detail to assess its overall impact.

In summary, the Fourth DCA held that the proof of loss provision is still a condition precedent after Curran.  I encourage you to read the full opinion and focus on how the requirement was laid out in this policy, including the loss settlement provision.  Once again, we will await the next decision to see how courts may eventually interpret the EUO provision after Curran, but this decision certainly helps insurers and their attorneys when they try to explain to the judges that Curran may only apply to auto accident/UM cases.  I apologize for the brief analysis and will try to supplement this article in the near future.

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A $7M Alleged Insurance Fraud and the Espinosa Arrest Affidavit

Florida Homeowners Insurance Claims and Litigation Handbook

Overview:

It’s not too often that suspicions of insurance fraud lead to a lot of evidence, but First Party Property Insurance Blog’s article on this public adjuster’s alleged fraud ring has plenty of details regarding how Miami-Dade police plan to prove their case.  This is a story about arrests, fires, water leaks, public adjusters, and more.  Check this article out to learn more about the Jorge Espinosa case and what you need to know.

And check out our update from May 22, 2015 after the break.


Update

May 22, 2015

31 people have now been arrested. Police raided Espinosa’s house and arrested him for the additional charges of racketeering, arson, and grand theft. As this article explains, police allege Espinosa is responsible for 20 fires and 5 floods.

As discussed below, if this turns out to be true, this is very unfortunate. As I said one year ago on the subject, Florida’s public adjusters can make plenty of money without defrauding insurers. Most public adjusters do practice within the confines of the law, but these bad apples ruin it for everyone – increased scrutiny, increased claim costs, increased policy premiums.

Additionally, this is just more lesson for homeowners insurers. It’s 2015: technology can provides insurers with the ability to know everything about their claims in an instant. Claims professionals armed with technology identify fraud better, faster, and cheaper than professionals using antiquated claims systems.

With the right time and effort, any insurer can have automated reports on all of the key claim factors. Or, without any effort at all, any insurer can use CaseGlide to have vendors populate this data for them, and arm their claims team with actionable analytics on all of their claims.


Original Story

For those of you who missed it, Miami detectives recently concluded a thorough investigation into a potential $7.6M homeowner’s insurance fraud scheme, and arrested 22 people.

from http://4.bp.blogspot.com/-HWm_qXNcim4/TpxrZhFP7EI/AAAAAAAAAPw/SyoyB9ayj7U/s320/20070727_sbcfire_house_fire3.jpg


Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.


If you haven’t heard about this fraud ring, here is the complete arrest affidavit. It’s a must read:

Download (PDF, 3.96MB)

Although I recommend reading the affidavit front to back, here is my summary:

The fraud investigation centers on Jorge Espinosa of Nationwide Adjusters, LLC.  In short, the arrest affidavit alleges that Espinosa and dozens more had a relatively complex ring involving several parties and a referral network. They allegedly had “runners” recruiting homeowners, remediation companies creating exorbitant bills, and fire and water leak creators.  Further, the arrest affidavit details that certain attorneys allegedly knew that the claims were fraudulent, not covered, yet allegedly continued to represent the homeowners.  The alleged fraud amounts to over $7M.

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Frankly, if the allegations are true, there is no place for this.  There are hundreds of Florida public adjusters and policyholders’ attorneys that make plenty of money without filing any fraudulent claims. Furthermore, claims personnel will never forget this, and now they must to increase their claim scrutiny moving forward to make sure they are doing their job, whether it means conducting more examinations under oath or enforcing other conditions precedent.  This slows the claim process for innocent homeowners. In addition, instead of helping resolve new claims, insurers must assign personnel to investigate their old claims to see if they may have been defrauded.

Ultimately, this investigation is in its very early stages.  We will see whether there is more cooperation that could result in revelations about additional schemes.

Disclaimer: All of the people in the arrest affidavit are innocent until proven guilty.  Charges are often dropped or reduced.


Takeaway:

How can something like this happen? It’s easy when homeowners insurers have hundreds of people handling claims and cases without any ability to easily share and retrieve information. Although most insurers probably had personnel talk about these things at the water cooler at lunch, only one carrier had the wherewithal to take the time to stop this alleged fraud.  What does this say about the way homeowners insurers do business?  Shouldn’t every insurer set up their staff to have the opportunity, time, and resources to conduct this investigation when they need to.

If you want to be able to have all of your claim and case information searchable, reportable, easily retrievable, and usable for the next case, please message me.


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The Florida Policyholders Bill of Rights Working Group Issues its Final Report

Florida Homeowners Insurance Claims and Litigation Handbook


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As discussed this summer, Florida’s Insurance Consumer Advocate Robin Westcott organized a Bill of Rights Working Group to create a Bill of Rights for Florida’s insureds.  They addressed the following issues in great detail:

  • education, transparency, and monitoring the insurance marketplace;
  • improvements to the claim process;
  • assignment of benefits and emergency remediation companies;
  • examinations under oath;
  • alternative dispute resolution;
  • post-claim underwriting; and
  • coverage provided by repair rather than indemnity payments.

The final report is here:

Download (PDF, 2.16MB)

The Group wants the Bill of Rights to have a lasting impact.  For the parts of the Bill that reflect existing case law, they want the Bill to codify the existing case law into statutory law.  For the parts of the Bill that are not yet law, they want the Bill to make new law. Lastly, there is an educational component.  To help insureds navigate claims, they want insurers to provide insureds with a copy of the Bill when they file a claim.

The report is a great snapshot of today’s insurance industry concerns.  I think the Group did a great job of addressing the current landscape.  My only criticism is that I would have liked the Group to disclose, in the Bill, some of the data on these claims.  To get the new recommendations turned into law, the Group should disclose the data that proves these concerns are justified.  In all fairness, the Group might not have needed the data.  The Group was comprised of several insurance professionals with decades of experience.  Thus, they likely used their private data to form their conclusions and recommendations, even if they did not disclose it.

I think the Bill of Rights will be very helpful for insureds when navigating a claim; however, the Bill’s primary impact on insurers appears to be focused on the assignment of benefit-water extraction claims.  If the legislature adopted all the recommendations, AOB contractors will have some new obstacles to deal with, including licensing requirements; limitations to the scope of their AOB contracts; and compliance with certain standards for water extraction.

Aside from the AOB-related recommendations, the rest of the Bill codifies/creates obligations and limitations for insurers, including more standards for communicating during the claim and examination under oath process; prohibitions on post-claim underwriting; and expectations for insurers when they elect to repair.  Ultimately, some of these obligations are already existing law, and I bet most insurers already comply with the majority of the recommendations.

Only time will tell the impact of the Group and its recommendations. There is no doubt that they discussed a lot of major concerns.  We will wait and see what the legislature does with these recommendations. When that time arises, I will keep you posted.

Takeaway:

The assignment of benefits issue is not going way, and its up to insurers to not let this be the next attorney-driven trend.

How can insurers deal with the assignment of benefits issue?  First, get the best management and attorneys together and decide exactly what to do on these cases. Second, pay for routine documents and evaluations only once, then automate any documents or processes that will occur in all of these cases.  Third, enter all of the case information into software (instead of Word documents and emails) so that you can use data to help guide you towards settlement.  Fourth, as failures and successes arise, continue to optimize your system to ensure you achieve the best possible outcomes while spending the least.

If you have any questions or would like to see checklists or guides for handling assignment of benefits cases, please message me.


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Did the Florida Supreme Court’s Decision in Geico v. Nunez Affect A Homeowners Insurer’s Right to an Examination Under Oath?

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Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

If you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

Questions?

Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.


On June 27, 2013, the Florida Supreme Court issued an opinion in Geico v. Nunez that appears to limit an insurer’s right to deny a claim based on an insured’s failure to comply with the examination under oath (“EUO”) provision.A more accurate interpretation, however, is that the Court opined that personal injury protection coverage (“PIP”) insurers cannot deny an insured’s claim based on a failure to submit to an EUO.

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In Geico, the insured was allegedly injured in a car accident on September 17, 2008.On October 26, 2009, Geico filed a declaratory action in a Florida trial court which was subsequently removed to federal court.Geico asked the court to determine whether the insured could obtain PIP benefits despite failing to submit to Geico’s requested EUO.Nunez argued in response that Geico’s position conflicted with Florida’s PIP statute, Fla. Stat. 627.736 (2008).The federal district court, finding no cases supporting Nunez’s position, held Geico was entitled to dismissal because Nunez failed to submit to the EUO. On appeal, the Eleventh Circuit “punted” the decision to the Florida Supreme Court.

from http://wklawyers.com/blog/wp-content/uploads/2011/11/florida_pip.gif

The Florida Supreme Court held in favor of Nunez, finding that Florida’s No-Fault statute was mandatory and the EUO provision was inconsistent with the statute’s purpose of promptly providing “virtually automatic” coverage for PIP claims.The Court further found the EUO provision was “unreasonable and unnecessary under Florida law.”The Court also determined the EUO provision was “invalid.”Accordingly, it appears that EUOs are no longer a condition precedent to PIP coverage.

Does this harsh language against insurers’ policy rights apply to property insurance claims?While the Court does not promise that property insurers are exempt from this holding, the Court does not disturb any property cases upholding an insurer’s right to demand an EUO.The Court also makes clear that this holding should be distinguished from cases that do not involve PIP claims.In other words, although the Court went to great lengths to say that its holding does not apply to any other type of claim at this time, the Court does not guarantee anything to property insurers.

The opinion seems to say that property insurers are exempt from its holding, however, expect insureds and their attorneys in property claims to make arguments similar to the one made by Nunez. Property insurance is not mandatory like PIP insurance, so the Court’s plain language should shield property insurers from its holding. Furthermore, because the Court limited its application to the PIP statutes, Florida law still holds that EUOs are still conditions precedent in property claims (depending on the jurisdiction).

In short, given that the Court did not disturb the holdings in all of the property cases cited in its opinion, I believe the Court has held that Nunez’s arguments will not suffice in the context of the property insurance claim.

 


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Testifying to the Facts of Someone Else’s Investigation

Florida Homeowners Insurance Claims and Litigation Handbook

A very informative article on Examinations Under Oath (“EUOs”) appears in the summer 2013 edition of Litigation Management. The article, written by Tower Hill’s Lincoln LeVarge and Butler Pappas’s Gerald Albrecht, can be accessed here:

http://www.litigationmanagementmagazine.com/litigationmanagementmagazine/summer_2013#pg1

The most interesting takeaway from the article that I want to emphasize is that insurers may have to submit representatives to testify about facts that attorneys obtain through the EUO process, especially if the insurer relies on those facts to issue a coverage determination.

This consequence of the EUO process is often overlooked. As you know, an insurer often retains an attorney to conduct to an EUO and relies on the information obtained during the EUO. If the case proceeds to litigation, the insured’s attorney will typically request that the insurer produce representatives to testify regarding how the EUOs led to coverage determinations, regardless of the insurers’ representatives’ level of involvement in the EUOs and without providing privileged information. A representative who can demonstrate active involvement in the coverage determination, as well as a strong grasp of the EUO results, will present well during the deposition and to a jury.

A similar situation is when insurers retain experts to investigate claims during the coverage stage. Often, expert reports are so detailed that claim examiners do not confirm the findings with the expert. If the case proceeds to litigation, however, an insured’s attorney will try to determine to what extent the insurer relied on the expert. Indeed, when an insured’s attorney conducts the deposition of the claims examiner, the attorney will typically ask about every fact surrounding the coverage process, including whether the representative called the expert to inquire about the report. Like the EUO process, if a claims examiner can testify that he or she spoke with the expert about the report, then the insurer’s reliance on the expert will be more credible. This is true for long term water claims, sinkhole claims, and, most importantly, late notice cases.

These are simple but helpful points to think about. Of course, insurers are entitled to a variety of privileges against disclosure of certain aspects of the coverage process, and I will discuss that in great detail in future posts. Privileges aside, all parties involved in a coverage investigation should still be aware that someone may ultimately have to testify testify to the facts supporting the defenses. If those facts involve an insurer’s reliance on his or her attorney and expert, then a claims representative should try to be able to testify why such reliance was reasonable.


Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

If you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

Questions?

Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.

 

Does a Defense Based on an Insured’s Failure to Submit to an Examination Under Oath Require the Insurer to Show Prejudice?

Florida Homeowners Insurance Claims and Litigation Handbook

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*April 30, 2014 Update: I want you to read this article because it has the best explanation of the hotly debated condition precedent vs. condition subsequent issue on this site; however, when you are finished, you need to read this article to learn about the latest developments from courts evaluating what type of condition the EUO provision is.*

If an EUO does not happen, can the insurer move for summary judgment and get an order by simply showing that the insurer requested the EUO and it did not happen? In other words, can an insurer obtain a summary judgment on that issue without pleading and proving prejudice? Yes and no, depending on where in Florida you live.

picture from http://www.florida-lawblog.com/2010/05/examination-under-oath-euo.html

The Fifth DCA is the DCA making some waves. While old news, the Fifth DCA in State Farm Ins. Co. v. Curran held that a failure to appear at a compulsory medical examination was a breach, but maybe not a material breach because the insurer did not plead and prove prejudice. 83 So. 3d 793 (Fla. 5th DCA 2011). Following that decision, the Fifth DCA issued another opinion denying an insurer summary judgment based on an insured’s alleged failure to submit to an EUO. Whistler’s Park, Inc. v. FIGA, 90 So. 3d 841 (Fla. 5th DCA 2012). In Whistler’s Park, Inc., the Fifth DCA considered the insured’s arguments that it responded to the insurer’s EUO request by naming a corporate representative to testify at the EUO and promising to produce the documents. The insurer had previously asked the insured to call the insurer to schedule the EUO. Leading up to the summary judgment hearing, the insured continued to offer to submit to the EUO, but did not call to schedule. The Fifth DCA once again held that the insurer’s failure to plead and prove prejudice thwarted its ability to obtain summary judgment on the EUO provision, which they called a condition subsequent. The Fifth DCA said that to show a breach of a condition subsequent was material, the insurer needs to plead and prove prejudice. So we know where the Fifth DCA stands: an insurer must plead and prove prejudice.

No other DCA has expressly taken this position. The Third DCA, however, has denied an insurer’s motion for summary judgment on the issue when counsel for the insurer asked improper questions to an insured that the insured refused to answer. De Leon v. Great American Assur. Co., 78 So. 3d 585 (Fla. 3d DCA 2011).

The Fourth, Fifth, and Second DCAs all have opinions suggesting there is no need to plead and prove prejudice. The Fourth DCA’s decision in Goldman v. State Farm suggests that an insurer does not need to plead prejudice to obtain summary judgment in that jurisdiction. 660 So. 2d 300 (Fla. 4th DCA 1995). However, the Fifth DCA in Curran suggested that a portion of the Goldman decision considered the prejudice issue when it discussed how remanding the case to proceed with the EUO would be fruitless because two years had passed since commencement of the suit. Insurers often point to two other decisions suggesting that prejudice does not need to be pled and proven to obtain summary judgment in the Second and Fifth DCAs. See Amica Mutual Ins. Co. v. Drummond, 970 So. 2d 456 (Fla. 2d DCA 2007); Starling v. Allstate Floridian Ins. Co., 956 So. 2d 511 (Fla. 5th DCA 2007).

So the answer to the question posed is, once again, that it appears to depend on the jurisdiction. In November of 2012, the Florida Supreme Court heard oral arguments in Curran. I am not sure when to expect the Florida Supreme Court to issue the order but hopefully it will shed some light on whether the Fifth DCA is right, or whether the issue will return to a bright line rule. Until the Supreme Court issues its opinion, it might be best to plead and prove prejudice just to be safe.

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

If you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

Questions?

Have any questions about Florida’s homeowners insurers, policies, and claims, please feel free to contact us.