18 Fla. L. Weekly Supp. 575a

Online Reference: FLWSUPP 1807DOLZ Insurance — Personal injury protection — Examination under oath — Failure to answer questions — Trial court properly denied insurer’s motion for summary judgment on issue of whether insured unreasonably refused to submit to EUO and sent issue to jury where insured did attend EUO and refused to answer certain questions on advice of counsel — Attendance at EUO is not condition precedent to filing suit for PIP benefits or recovery of benefits — To extent that policy provisions requiring attendance at EUOs are valid, EUO is condition subsequent that requires showing of prejudice on part of insurer

MERCURY INSURANCE COMPANY OF FLORIDA, Appellant, v. DR. EDUARDO GARRIDO, P.A., a/a/o ERIX DOLZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 09-545AP. L.T. Case No. 06-2580 CC 21. April 7, 2011. An appeal from the County Court in and for Miami-Dade County, Florida, Ana M. Pando, Judge. Counsel: Hinda Klein, for Appellant. Marlene Reiss, for Appellee.

(Before CABALLERO, SAMPEDRO-IGLESIA, and RODRIGUEZ-CHOMAT, JJ.)

(SAMPEDRO-IGLEASIA, Judge) This is an appeal from a jury trial, in which the jury determined that Mercury Insurance Company’s insured did not “unreasonably refuse” to submit to an Examination Under Oath (EUO); did not breach the insurance policy by “failing to cooperate;” and, that Mercury was not prejudiced by the insured’s refusal to answer certain questions at his EUO.

We affirm the final judgment for the following reasons.Factual Background

Mercury’s insured, Eric Dolz made a claim for Personal Injury Protection (PIP) benefits arising out of medical treatment that he received in connection with a car accident in September of 2005.

Before the lawsuit was filed by Mr. Dolz’s medical provider, Mercury scheduled Mr. Dolz for an EUO on December 16, 2005, which Mercury does not dispute was attended by Mr. Dolz. It is also undisputed that Mr. Dolz had counsel, at the time, who attended the EUO via telephone. At the EUO, Mr. Dolz answered all of the questions posed to him by Mercury’s counsel that related to this accident and his injuries, as well as all questions about prior accidents and injuries. Mr. Dolz was advised by his counsel not to answer questions about an unrelated EUO that he attended in connection with an unrelated accident, and questions about Mr. Dolz’s father’s treatment by this medical provider — also unrelated to this case.

When the lawsuit was filed, Mercury alleged an affirmative defense, which stated that its insured “did not cooperate with conditions precedent under the policy of insurance, and therefore is in breach of a condition precedent to the underlying policy of insurance,” which according to Mercury precluded the medical provider’s claim for PIP benefits.

Mercury moved for summary judgment, based on its defense. In its Motion for Summary Judgment, Mercury argued that Dolz failed to cooperate with Mercury by refusing to answer certain questions asked during the EUO, at the instruction of his counsel. Mercury’s Motion for Summary Judgment further argued that Mr. Dolz“failed to cooperate with the Defendant insurance provider’s investigation by terminating an Examination Under Oath after fifteen (15) minutes,” and that Mr. Dolz “unambiguously and purposefully breached the policy conditions by failing to cooperate.”

In support of its Motion for Summary Judgment, Mercury filed the affidavit of its litigation adjuster, who attested that Mr. Dolz did appear for his EUO, and who attested to the legal conclusion Mr. Dolz “refused to answer relevant questions and improperly terminated the Examination Under Oath.” The adjuster attested that Mercury “was prejudiced in [its] investigation of this claim by the claimant’s refusal to cooperate at the Examination Under Oath,” but specified no particular prejudice.

Mercury has not provided this Court with any hearing transcript or with the trial transcript.¹ Mercury’s argument on appeal, that reversal is required on the basis that the record is incomplete, ignores the fact that it was Mercury who failed to satisfy its burden as the appellant, which normally would require this Court to affirm the final judgment.

The trial court denied Mercury’s Motion for Summary Judgment, finding that “the EUO is a condition precedent,” but that fact questions exist as to whether Mr. Dolz’s refusal to answer certain questions at the attended EUO was unreasonable and constituted a failure to cooperate.²

Eventually, a jury found that Mr. Dolz did not unreasonably refuse to submit to an EUO, did not “fail to cooperate,” and that Mercury suffered no prejudice as a result of the unanswered questions. The jury rendered a verdict in favor of the medical provider.

We affirm the final judgment on the basis that the trial court correctly sent the issue of whether Mr. Dolz “unreasonably refused” to submit to an EUO to the jury, but find that the trial court incorrectly determined that an EUO is a “condition precedent” in the context of statutorily mandated insurance coverage, i.e., PIP. See Custer Medical Center (a/a/o Maximo Masis) v. United Auto. Ins. Co., 35 Fla. L.Weekly S640a (Fla., November 4, 2010).

Bases for Affirmance

A panel of this Court recently issued an opinion in the case styled United Auto. Ins. Co. v. Francisco Diaz, FLWSUPP 1804DIAZ (Fla. 11th Cir., February 3, 2011) [18 Fla. L. Weekly Supp. 348a], in which the Court affirmed a directed verdict in favor of United Auto’s insured, relying in part on the recent Florida Supreme Court decision in Custer Medical Center (a/a/o Maximo Masis) v. United Auto. Ins. Co., 35 Fla. L. Weekly S640a (Fla., November 4, 2010).

Although the issues are not identical, Diaz also involved an insured’s alleged “unreasonable refusal” to submit to an EUO. Similar to Diaz, we find that the Florida Supreme Court’s reasoning in Custer Medical is pertinent to this case.³

First, there can be no question that an insured’s “unreasonable refusal” to submit to an EUO is a defense that the insurer must prove. See Custer, supra.; Hough v. Menses, 95 So.2d 410 (Fla. 1957). Thus, Mercury’s burden in this case was to conclusively demonstrate that Mr. Dolz unreasonably refused to submit to an EUO, which it did not do at the summary judgment stage.

It is undisputed that Mr. Dolz attended his EUO. On summary judgment, Mercury did not — and could not — conclusively demonstrate the absence of any fact questions as to whether Mr. Dolz “unreasonably refused” to submit to his EUO — because he attended the EUO. Thus, the trial court properly sent the question of “unreasonableness” to the jury.

Moreover, we refuse to extend the “unreasonable refusal” to submit to an EUO to instances in which an insured undisputedly attends an EUO, but does not answer certain questions at the EUO, based on the advice of counsel.

We cannot equate an insured’s refusal to answer certain questions at an attended EUO that the insured’s counsel deems harassing and irrelevant to an “unreasonable refusal” to submit to an EUO. Whether an insured’s refusal to answer certain questions, upon the advice of counsel, at an EUO amounts to a failure to cooperate — which is what Mercury argued throughout the proceedings below — is a question for the jury to decide.⁴ Here, the jury decided that Mr. Dolz did not fail to cooperate when he refused to answer questions that the jury also apparently found were not relevant to Mercury’s investigation of this claim.

The EUO demonstrates — and it cannot be disputed — that Mr. Dolz answered all questions asked of him by Mercury’s counsel that related to this accident and prior accidents. He answered questions about his injuries; the treatment that he sought; whether he had been involved in an earlier accident; what injuries he sustained in the earlier accident; whether he was treated by the same doctor who treated him for injuries he sustained in the earlier accident; how he came to treat with Dr. Garrido; how long his injuries lasted after this accident; whether he had had any injuries prior to the 2005 accident; why he stopped his treatment; whether he related continuing pain to his doctor; whether he sought any further treatment; how much he paid Dr. Garrido; what his diagnosis was; whether Dr. Garrido had diagnosed him with any medical condition; what kind of treatment he had from the earlier accident; whether he had been involved in any other accidents besides the 2005 accident and the accident two to three years earlier.

The questions that Mr. Dolz was instructed not to answer by his counsel were questions about an entirely unrelated EUO that Mr. Dolz had attended after an entirely unrelated car accident, at the request of a different insurance company, in a matter completely unrelated to this case. Mercury sought information about the types of questions asked of Mr. Dolz by another insurance company at an entirely unrelated EUO; whether Mr. Dolz was represented by counsel at the entirely unrelated EUO; and, whether Mr. Dolz’s father had ever treated with Dr. Garrido. Throughout the EUO, Mercury’s counsel issued no fewer than five (5) warnings that Mr. Dolz’s refusal to answer the questions was “a failure to cooperate.”EUO as a “Condition Subsequent” vs. “Condition Precedent”

On appeal, notwithstanding that Mercury never put its policy into evidence, Mercury argues its policy language for the first time. We will not consider non-record matters that were not brought to the trial court’s or the jury’s attention. See Fla.R.App.P. 9.200; Pedroni v. Pedroni, 788 So.2d 1138 (Fla. 5th DCA 1981). Although we will note, since Mercury has brought its policy to this Court’s attention, that the Policy includes a “cooperation clause,” which requires Mercury’s insureds to submit to EUOs when requested by Mercury.

In this regard, we conclude that, although the trial court reached the correct result, i.e., sending the issue of Mr. Dolz’s EUO to the jury, the trial court did so for the wrong reason. On what appears to be a conflicting basis, the trial court found that an EUO is a condition precedent, but sent the question of whether Mr. Dolz unreasonably failed to cooperate to the jury, which necessarily involved the issue of whether Mercury was prejudiced by Mr. Dolz’s refusal to answer the subject questions.

We take this opportunity to explain that a condition precedent, which does not require a showing of prejudice, is different than a condition subsequent, which does require a showing of prejudice. Bankers Ins. Co. v. Macias, 475 So.2d 1216 (Fla. 1985)(“A failure to cooperate is a condition subsequent and it is proper to place the burden of showing prejudice on the insurer.”) For an excellent discussion of the critical distinctions between conditions precedent and conditions subsequent, see Judge Juan Ramirez’s dissent in United Auto. Ins. Co. v. Custer Medical Center (a/a/o Maximo Masis), 990 So.2d 633 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D2146a], Ramirez, J., dissenting (“A condition precedent is one that is to be performed before the contract becomes effective, while a condition subsequent pertains to the contract of insurance after the risk has attached and during its existence.”)

Finally, we hold that, pursuant to Custer Medical, supra, an EUO cannot be a condition precedent to filing a lawsuit for PIP benefits or to the recovery of PIP benefits, because cases that discuss EUOs as a condition precedent do not deal with statutorily mandated insurance coverage. 

See Custer Medical, supra.

The Court in Custer states:

A purported verbal exam under oath without counsel in the PIP context is invalid and more restrictive than permitted under the statutory provisions. The prohibition of policy exclusions, limitations, and non-statutory condition on coverage controlled by statute is clear. See Flores v. Allstate Ins. Co., 819 So.2d 740, 745 (Fla. 1972)(noting that courts have an obligation to invalidate exclusions on coverage that are inconsistent with the purpose of the statute that mandates the coverage); Salas v. Liberty Mut. Fire Ins. Co., 272 So.2d 1, 5 (Fla. 1972) (recognizing that insurance coverage that is a creature of statute is not susceptible to the attempts of the insurer to limit or negate the protection afforded by the law); Mullis v. State Farm Mut. Auto. Ins. Co., 252 So.2d 229, 232-34 (Fla. 1971) (stating that automobile liability insurance and uninsured motorist coverage obtained to comply with or conform to the law cannot be narrowed by the insurer through exclusions and exceptions contrary to the law); Diaz-Hernandez v. State Farm Mut. Casualty Co., 19 So.3d 996, 1000 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1046a; Rehearing denied 34 Fla. L. Weekly D2112b] (concluding that a provision in a policy was invalid because it was against the public policy of the statute); Vasques v. Mercury Cas. Co., 947 So.2d 1265, 1269 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D363a] (stating that restrictions on statutorily mandated coverage must be carefully examined because exclusions that are inconsistent with the purpose of the statute are invalid)(citing Flores, 819 So.2d at 745). PIP insurance is markedly different from homeowner’s/tenants insurance, property insurance, life insurance, and fire insurance, which are not subject to statutory parameters and are simply a matter of contract not subject to statutory requirements.

Custer, supra at n. 1.

Although the PIP statute discusses other conditions precedent, like the submission of a pre-suit Demand Letter, pursuant to Fla.Stats. §627.736(10), the statute does not require attendance at an EUO as a condition precedent to filing a PIP suit or to recovery of benefits.

To the extent that EUO provisions in PIP policies are valid provisions at all, they can only be conditions subsequent, falling with a policy’s “cooperation clause,” which requires a showing of prejudice on the part of the insurer. Moreover, if EUOs are valid policy provisions at all in the context of PIP, they should not be used for purposes of harassment, intimidation or annoyance, nor should EUOs be employed as a trap for the unwary insured. The only reason offered by Mercury’s counsel at oral argument for the questions asked by its counsel at Mr. Dolz’s EUO was that Mercury has the right to investigate potential fraud. No fraud was alleged or even suggested in this case. EUOs should not be “fishing expeditions.” If a higher Court determines unequivocally that EUOs are valid provisions in PIP policies, we are confident that any such Court will determine that, while EUOs may be useful investigative tools for insurers, they should not be abused. This case is a prime example of such abuse.

Here, the jury found that Mr. Dolz did not unreasonably fail to cooperate with Mercury and that Mercury was not prejudiced by Mr. Dolz’s refusal to answer the subject questions, which appear to have nothing whatsoever to do with Mercury’s investigation of this claim.

We will not reverse the trial court’s denial of Mercury’s Motion for Summary Judgment, because the trial court correctly found that fact questions existed for the jury to decide. Whether an insured’s reason for refusing to attend an EUO is “unreasonable” or not is clearly a fact question for the jury. See Custer, supra. Nor will we disturb the jury’s determination that Mr. Dolz did not fail to cooperate with Mercury or that Mercury was not prejudiced by Mr. Dolz’s failure to answer the subject questions, since those were proper questions for the jury to resolve in accordance with the evidence presented.

For these reasons, we AFFIRM the final judgment in favor of the Appellee/Plaintiff.

As the prevailing party on appeal, the Appellee is entitled to its appellate attorney’s fees and costs, and remand to the trial court for a determination of such reasonable attorney’s fees and costs. (CABALLERO and RODRIGUEZ-CHOMAT, JJ., concur.)

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¹Although we find that Mercury has not satisfied its burden as the appellant by failing to provide this Court with a complete record on appeal, our holding is based on substantive law. We note, however, that an appellant carries the burden of providing a reviewing court with an adequate record on appeal, particularly in instances of summary judgment where the trial court must make a determination of whether the presentation of evidence is dispositive of the trial court’s ruling as to whether any fact questions exist to preclude summary judgment. See Applegate v. Barnett Bank of Tallahassee, 377 So.2d 1150 (Fla. 1979); Weinberg v. Bort, 861 So.2d 1017 (Fla. 4th DCA 2007) [32 Fla. L. Weekly D1667c]; Rose v. Clements, 973 So.2d 529 (Fla. 1st DCA 2007) [33 Fla. L. Weekly D56a]; O’Byrne v. Miller, 965 So.2d 316 (Fla. 2d DCA 2007) [32 Fla. L. Weekly D2225a]; Chisholm v. Chisholm, 538 So.2d 961, 962 (Fla. 3d DCA 1989).

²We note that Mercury’s affirmative defense, although it generally pled a “failure of conditions precedent” did not mention any unreasonable refusal to attend an EUO. Granting Mercury a summary judgment on what amounts to an insufficiently pled affirmative defense, i.e., an unreasonable refusal to attend an EUO would be improper. See Arky, Freed, et. al. v. Bowmar Instrument Corp., 537 So.2d 561, 563 (FIa. 1989), Dober v. Worrell, 401 So.2d 1322 (Fla. 1981).

³Regardless of whether the Florida Supreme Court’s discussion of EUOs in the Custer case is viewed as the holding, an alternative holding, or simply dicta, this Court finds the reasoning persuasive and bases its decision on similar reasoning. We do not reach the issue of whether EUOs, in the context of statutorily mandated insurance coverage, are valid policy provisions because, even assuming that they are, they can only be conditions subsequent and the pleadings in this matter implicate Mercury’s cooperation clause, which is a condition subsequent.

⁴The fact that Mercury’s policy may attempt to include what it characterizes as a “condition precedent” in its “cooperation clause” does not turn the cooperation clause into a condition precedent, nor does it impose a condition precedent upon an insured when the policy clearly requires the insured to “cooperate.” As we explain below, a condition cannot be both precedent and subsequent at the same time. Moreover, an insurer may not impose additional conditions precedent upon an insured, in the context of statutorily mandated insurance coverage, that do not appear in the PIP statute.