Examinations Under Oath: Request Them!

In our Fall 2009 issue, we discussed a critical new evidence rule in Tennessee which now allows attorneys to use certain types of prior inconsistent statements as substantive proof in court. Previously, attorneys could only use prior inconsistent statements for impeachment (i.e., to show that a witness had changed his or her story and was possibly being untruthful). This rule change elevates the advantages and importance of obtaining an effective Examination Under Oath during claim investigation.

Don’t be bullied when an insured, either directly or through an attorney, refuses to cooperate with your insurance claim investigation. Tennessee is an insurer-friendly state when it comes to enforcing “duty to cooperate” clauses in insurance policies. For example, in, Tom Spears v. Tennessee Farmers Mutual Insurance Company, the Court of Appeals found that language in a policy requiring the insured to “answer questions under oath” when requested was not ambiguous and ruled that submission to such an examination was a condition precedent to recovery. 300 S.W.3d 671, 679, 681 (Tenn. Ct. App. 2009). In Spears, one insured gave two recorded statements and another insured submitted to part of an Examination Under Oath, but left before the examination was completed. Id. at 674. Although they did submit some documentation, the insureds eventually refused to submit to Examinations Under Oath and filed suit against the insurer. Id. at 675.

The Spears Court found that a recorded statement is not the same as answering questions under oath, regardless of verification after the fact. Id. at 682. Also, the insurer did not have to justify an initial request to question an insured under oath; under the policy language at issue, reasonableness only became an issue if there were multiple requests to question an insured under oath. Id. at 683. The Court squarely rejected the insureds’ argument that giving deposition testimony after filing suit against an insurer for failure to pay a claim constituted cooperation under the policy. Id. at 682. Finally, the Court held that the insureds’ efforts to cooperate (i.e., giving recorded statements and providing documents), did not alter the fact that they materially breached the contract by refusing to answer question under oath when the insurer requested. Id. at 683.

In light of Tennessee’s willingness to enforce cooperation clauses, make sure you are covering your bases and properly documenting your file in order to preserve a possible defense to payment of the claim based on an insured’s failure to cooperate. Remember that you must give reasonable notice in writing. Any letter requesting an insured to submit to questions under oath should at least include the following: (1) a definite time, (2) the address of a place in the county of the insured’s residence where the examination is to be held, (3) a designation of the person who will be taking the examination. Shelter Insurance Companies v. Spence, 656 S.W.2d 36, 38-39(Tenn. Ct. App. 1983). You should also notify the insured that while he or she may have an attorney present, the attorney may not participate in the questioning. Id. After the examination is completed, you must submit the original and a copy to the insured for signature, and you must provide the insured with a copy to keep. Id. Consider sending scheduling requests through both regular and certified mail and always retain copies of return receipts.

For additional information on this Tort & Insurance article, please contact:

Casey Smith

(731) 426-8122

csmith@raineykizer.com

Source: Rainey, Kizer, Reviere & Bell

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Tags: tort & insurance