Under a typical policy condition, an insurer may require an insured to sit for an examination under oath (EUO) about a property claim. The standard fire policy form in California allows an insurer to require an EUO (Insurance Code section 2071), and the California Supreme Court has approved of the process as a reasonable means to verify an insured’s claim. (Hickman v. London Assurance Corp. (1920) 184 Cal. 524.) Now it is clear that a claimant seeking policy benefits as an insured’s successor in interest (Insurance Code section 303) must abide by the EUO condition as well.
In Estrada v. State Farm General Insurance Company, 2020 WL 467789 (unpublished), a recent case handled by Pacific Law Partners, the Court of Appeal affirmed that an insured’s successors in interest must abide by the EUO condition as a prerequisite to recovery of claim benefits. In Estrada, the named insured died soon after the fire loss occurred. To investigate the personal property claim, State Farm requested the EUOs of the insured’s daughters who had information about the existence, ownership, and value of claimed items. State Farm made numerous attempts to take the EUOs but was met with repeated postponements, and ultimately cancellations, by the daughters’ attorney. State Farm then denied the claim due to breach of the EUO condition.
In the ensuing lawsuit, State Farm successfully moved for summary judgment based on breach of the policy’s EUO condition. State Farm argued that the EUOs were warranted and the insured’s successors in interest had inexcusably refused to attend. The Court of Appeal agreed, holding that “[a]s successors to Estrada’s interest in the policy, plaintiffs are bound by the policy’s terms and conditions, including the duty to submit to an EUO reasonably requested by State Farm.” Notably, the appellate court also rejected plaintiffs’ argument that their offer to sit for EUOs in the litigation cured their prior breach of the policy.
Estrada provides further support for an insurer’s use of an EUO as an investigative tool, including when an insured’s successor in interest presents a claim.