In Royce v. Erie Insurance Exchange, the insured brought breach of contract and bad faith claims against an insurer for the insurer’s purported failure to fairly evaluate the insured’s claim and to promptly offer payment of the claim. The insurer sought summary judgment on the basis that the policy included a “suit against us” provision, which precluded the insured from bringing suit against the insurer unless the insured had fully complied with the policy.
The underlying claim involved a burglary to the insured property. Two days after his home was burglarized, the insured reported the burglary to the insurer and submitted a personal property inventory form as requested by the insurer, as well as a list of personal property stolen and lost from the burglary.
The policy at issue provided that the insurer could not be sued unless the insured complied with all the terms of the policy, which included the duty to submit to examinations and statements under oath at the request of the insurer. After the insurer requested that the insured and his wife submit to an examination under oath (“EUO”), counsel for the insured stated that while his clients were willing to submit to the EUO, it may be necessary to schedule the EUO by video conference as the insured and his wife were now residents of the state of Florida.
Counsel for the insurer responded by e-mail and explained that the insurer “could not agree to an EUO by video conference because a video conference would make the use of exhibits extremely difficult, if not impossible.” The insurer’s counsel further stated that because the claim arose out of a Pennsylvania contract and claim of loss, the EUOs would properly be taken in Pennsylvania. The insured’s counsel did not respond to this e-mail.
Over the next several months, the insurer’s counsel sent periodic e-mails to the insured’s counsel inquiring as to possible dates to schedule the EUOs in Pennsylvania. The insured’s counsel did not respond to any of these e-mails, and maintained that a response was not necessary because the insured and his wife had “previously made their position clear [that they would appear by video conference for the EUO] and any follow up letter was only repetitive and unnecessary given the [insurer’s] refusal to cooperate and act in good faith to investigate the loss given [the insured’s] physical condition.”
Subsequently, the insured’s counsel e-mailed the insurer’s counsel a doctor’s note restricting the insured’s travel due to the insured’s medical condition. Sometime prior to the burglary, the insured had allegedly been involved in a car accident, which caused him severe physical injury that prevented him from traveling. However, no mention had been made of this accident or the insured’s medical condition in his counsel’s previous request to the insurer for an EUO by video conference. In its reply brief to its motion for summary judgment, the insurer questioned the legitimacy of the doctor’s note and travel restrictions, specifically, “how [the insured] was able to travel from the Commonwealth of Pennsylvania to his current residence in Florida after the purported motor vehicle accident that caused his physical injuries.” The insurer also questioned how a “Pennsylvania physician was able to issue an ‘Excuse Slip’ noting [the insured’s] physical condition and travel restrictions when [the insured] was living in Florida and therefore, had not been physically examined by the Pennsylvania physician.” To date, there is no evidence in the record that the insured ever submitted to an EUO.
The insured filed suit and asserted breach of contract and bad faith claims against the insurer “on the basis that [the insurer] purportedly failed to, inter alia, fairly evaluate [the insured’s] claim and promptly offer payment of the claim.” The insured asserted that the insurer acted in bad faith “by failing to accommodate [the insured’s] disability in scheduling an EUO by video conference.” The insurer moved for summary judgment, and argued that because the insured failed to fully comply with the policy, he was precluded from bringing suit under the Policy’s “suit against us” provision. Specifically, the insurer alleged that the insured failed to comply with the Policy by “failing to (1) submit to an EUO in Pennsylvania and (2) provide documentation relating to his claim that [the insurer] had previously requested.”
The Court first acknowledged that the “suit against us” provision was enforceable under Pennsylvania law. The Court also noted that the insured had complied with the Policy in several ways, but at issue was whether the insured complied with the Policy’s requirements to (1) provide all supporting documentation related to his claim as [the insurer] may reasonably require and (2) submit to an EUO.” More specifically, at issue was whether the insured complied with three provisions of the Policy.
The first required the insured to submit certain documentation relating to his claim. The insurer asserted that the insured failed to submit this documentation, while the insured asserted that he did in fact produce the requested documents. The Court determined that it was unclear what other documentation had been requested by the insurer that had not been provided by the insured. Thus, a genuine issue of material fact existed with regards to this issue.
The second required the insured to submit to an EUO. The Court noted that “[r]egardless of whether or not [the insured’s] medical condition restricts him from traveling to the Commonwealth of Pennsylvania to physically appear for an EUO, he agreed to submit to an EUO by video conference, and it is not clear from the terms of the Policy that this constitutes a failure to fully comply ….” The Court further acknowledged that the provision only required the insured to submit to an EUO, but did not reference where the examination must take place. Thus, a genuine issue of material fact existed as to whether the insured’s offer to submit to an EUO by video conference was in full compliance with the Policy.
The third required the insured to “cooperate with [the insurer] in [their] investigation of a loss and any suits.” The Court determined that it was a question for the fact-finder as to whether the insured’s offer to submit to an EUO by video conference satisfied this provision to “cooperate” with the insurer in its investigation. In addition, the Court found that “a reasonable juror could find that the repeated failure by [the insured] and his counsel to respond to [the insurer’s] letters and e-mails over a course of four (4) months requesting an EUO and additional documentation also fails to satisfy this provision.” Thus, genuine issues of material fact existed as to whether or not the insured fully complied with the Policy such that he would be precluded from filing suit, and the Court denied the insurer’s motion for summary judgment.
Date of Decision: August 21, 2015
Royce v. Erie Ins. Exch., Case No. 3:15-CV-00058, 2015 U.S. Dist. LEXIS 110656 (M.D. Pa. August 21, 2015) (Caputo, J.)