EUO REFUSAL IS A FAILURE TO COOPERATE AND VOIDS COVERAGE ....

Federal Court’s holding under New York law.

                When the policyholder refused to submit to an examination under oath during the investigation of its fire loss claim, that act of refusal barred recovery on the insurance policy under New York law in the case of The Wingates, LLC v. Commonwealth Ins. Co. of Am., 21 F. Supp. 3d 206, 220 (E.D.N.Y. 2014):

   In sum, the Court finds that the Plaintiffs' willful violation of the Examination Under Oath clause in the Policy precludes recovery as a matter of law. Therefore, that portion of the Commonwealth's motion seeking summary judgment on that ground that the Plaintiffs failed to cooperate is granted, and the complaint is dismissed.

                The Federal Court set out the steps to ponder in useful detail whenever parties and their lawyers are confronted with requests or refusals for an Examination Under Oath in a first-party case, particularly when New York law applies, as it did here:  The Wingates, LLC v. Commonwealth Ins. Co. of Am., 21 F. Supp. 3d 206, 217-20 (E.D.N.Y. 2014).  A notice of appeal was docketed by the Clerk of the Second Circuit Court of Appeals on June 18, 2014; oral argument has tentatively been set by the Second Circuit for May, 2015.

                Both the insurance carrier and the Court treated a refusal to provide an EUO the same as a breach of cooperation under the policy at issue, on the other hand.  Both used those terms interchangeably, namely, a failure to provide an EUO was equated with a failure to cooperate, and breach of an EUO clause was equated with breach of a cooperation clause.

               Commonwealth and the Court quoted from the policy’s EUO provisions, as you would expect.  But neither of them ever quoted from a cooperation clause, probably because this policy, like most first-party policies, presumably did not have a cooperation clause.  In this case, Commonwealth prevailed because the Court ruled that its policy’s EUO clause was breached; everything else about that is dicta.

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