Nunez v. Geico Gen. Ins. Co., No. SC12—650, 2013 WL 3214407 (Fla. June 27, 2013)
Under Florida’s No-Fault Law, section 627.736, Florida Statutes (2008), an insurer cannot require an insured to attend an examination under oath (“EUO”) as a condition precedent to recovery of personal injury protection (“PIP”) benefits. Any such condition is invalid and contrary to the mandatory terms of the PIP statute. Although a recent amendment to § 627.736 permits an insurer to condition benefits on the insured’s attendance at a EUO, the amendment did not take effect until January 1, 2013, and it does not apply retroactively.
The insured’s an automobile insurance policy with Geico included PIP coverage and a condition that the insured or any other person seeking coverage under the policy “must submit to an examination under oath by any person named by us when and as often as we may reasonably require.” Geico denied the insured’s PIP claim for failing to satisfy the foregoing condition after she was injured in a car accident on September 17, 2008.
The insured filed a class action complaint seeking a declaratory judgment in state court, alleging that Geico had violated Florida’s PIP statute by conditioning benefits on the insured’s attendance at an EUO. The action was removed to the United States District Court for the Southern District of Florida, which granted Geico’s dismissal motion, ruling that there is no language in the PIP statute prohibiting an insurer from requiring a EUO. The matter was subsequently appealed to the Eleventh Circuit Court of Appeals.
While the appeal was pending, the Supreme Court of Florida issued its opinion in Custer Medical Center v. United Automobile Ins. Co., 62 So. 3d 1086, 1091 (Fla. 2010) (stating that Florida’s mandatory No-Fault statute does not recognize a condition requiring the insured to submit to a EUO as a condition precedent to recovery of PIP benefits and, therefore, any such provision is invalid and contrary to the statutory terms). The parties in Nunez, however, disputed whether the foregoing statement in Custer amounted to a holding or dicta. The Eleventh Circuit concluded that Florida law was unclear and, therefore, certified the following question to the Supreme Court of Florida: “Whether, under Fla. Stat. § 627.736, an insurer can require an insured to attend a EUO as a condition precedent to recovery of PIP benefits?”
Shortly after the foregoing question was certified to the Supreme Court of Florida, Governor Rick Scott approved amendments to the PIP statute, effective January 1, 2013, including the requirement that insureds seeking benefits “comply with the terms of the policy, which include, but are not limited to, submitting to an examination under oath.” (Now codified in § 627.736(6)(g), Fla. Stat. (2012)).
The court addressed the issue of whether, under the PIP statute in effect in 2008, an insurer can require an insured to attend a EUO as a condition precedent to the recovery of PIP benefits.
Under the 2008 version of the PIP statute, an insurer cannot require an insured to attend a EUO as a condition precedent to the recovery of PIP benefits.
In reaching its decision, the Supreme Court of Florida discussed its recent Custer decision, wherein it stated (in apparent dicta) that an insurer cannot require an insured to attend a EUO as a condition precedent to the recovery of PIP benefits because the PIP statute is mandatory and any such condition would be, therefore “invalid and contrary to the statutory terms.” The court acknowledged, however, that EUOs were not directly at issue in Custer. The court stated that it’s primary holding in Custer was that the appellate court had misapplied the standard of review in a case involving an insurer’s denial of PIP benefits based on the insured’s failure to appear for a medical examination (not a EUO). Nonetheless, the court noted that most reported county and circuit court cases have since “affirmatively applied Custer in the EUO context.” The court stated, “More than just persuasive, Custer is correct under the terms of the PIP statute, its underlying purpose of swift and virtually automatic payment to the insured, and relevant case law.”
The court rejected Geico’s assertion that EUOs do not interfere with the PIP statute’s objective of requiring swift payment of benefits. The court stated the present case illustrates how delay and denial based on the EUO condition can keep an insured from recovering in a “swift and virtually automatic” way, as approximately four years, have passed since the insured filed her claim and she has still not received PIP benefits.
The court stated that the Florida Legislature—in an apparent response to Custer—amended the PIP statute in 2012 to permit the requirement that insureds seeking benefits “comply with the terms of the policy, which include, but are not limited to, submitting to an examination under oath.” However, because the insured’s policy with Geico was issued in 2008, her accident occurred in 2008, and she filed her class action complaint in 2009, this amendment did not apply to the present case.
Additionally, the court rejected Geico’s argument that the statutory amendment should be viewed as a “legislative interpretation of the original law and not as a substantive change thereof.” The court found that the 2012 amendment amounts to a substantive change, not simply a legislative clarification, of the PIP statute, particularly considering the court’s responsibility to construe the provisions of the PIP statute liberally in favor of the insured.