The California Court of Appeal upheld the trial court's award of summary judgment to the insurer who had denied a claim for failure to attend a second Examination Under Oath (EUO). Munoz v. State Farm General Ins. Co., 2017 Cal. App. Unpub. LEXIS 7728 (Cal. Ct. App. Nov. 9, 2017).
The insured, Tomasa Munoz, had a policy for her vacant commercial property through State Farm. On September 22, 2013, fire damaged her property. Munoz promptly reported the loss and submitted a claim. A fire investigation report concluded the fire was "suspicious in nature and potentially incendiary."
The policy provided that in the event of a loss, the insured, if requested, would permit State Farm to ask questions under oath. The policy further stated that no legal action could be filed against the insurer unless there had been full compliance with all terms of the policy.
State Farm took recorded statements of Munoz and her son who was designated by Munoz as her representative for making the insurance claim. The son advised he was alone on a Carnival cruise at the time of the fire and unable to use his cell phone while on the ship. He learned of the fire when he used the ship's phone to retrieve messages. Documents later showed, however, that the son's cell phone was used while he was on the cruise.
In January 2014, State Farm requested Munoz's EUO and her son's statement under oath (SUO). She was also asked to provide documents.The EUO and SUO took place on March 26, 2014. Over the next nine months, State Farm sought additional information to support the son's SUO testimony. The son responded that some of the documentation did not exist. Therefore, State Farm sent a letter to Munoz asking for a second EUO and SUO.
Shortly thereafter, an attorney representing Munoz contacted State Farm advising of his representation. State Farm renewed its request for a supplemental EUO and SUO in a letter to the attorney.
Munoz then filed a complaint against State Farm on January 30, 2015. State Farm again asked for the EUO and SUO, but counsel responded he preferred that Munoz and her son submit to depositions. Although State Farm scheduled the EUO and SUO, neither Munoz or her son appeared. State Farm wrote again, asking that Munoz and her son appear for the examinations, but the requests were ignored.
Consequently, State Farm denied the claim for fire loss based upon failure to appear for the examinations and to provide requested documentation. Munoz filed a first amended complaint asserting causes of action for breach of contract and breach of the duty of good faith and fair dealing. Munoz also sought punitive damages.
State Farm moved for summary judgment based upon the insured's failure to submit to a reasonable request for a second EUO and SUO. The trial court granted the motion and Munoz appealed.
The Court of Appeal affirmed. An insured's compliance with a policy requirement to submit to an examination under oath was a prerequisite to the right to receive benefits under the policy. There were no triable issues of material fact as to the reasonableness of State Farm's request for the supplemental examinations of Munoz and her designated representative. The court rejected Munoz's argument that there was no difference between an EUO and a deposition which she agreed to submit to. Finally, the punitive damages claim could not survive because without a viable cause of action to support an award of general damages, punitive damages could not be awarded.