Refusal to Testify at Examination Under Oath is a Breach Condition Precedent


Court of Appeal Requires Third Trial of Breach of Condition Precedent Case

Generally, across the country, testifying at a properly noticed Examination Under Oath (EUO) is a condition precedent to coverage for any claim. In SAFECO Insurance Company Of Illinois v. Fleurimond Barthelemy, No. 4D20-1045, Florida Court of Appeals, Fourth District (July 14, 2021), in its second trip to the Florida Court of Appeal, the insurer appealed a verdict in favor of the insured.


The insured filed a claim with his insurer, seeking coverage for injuries sustained in an automobile accident. The insurer asked the insured for a statement regarding the accident, but the insured refused to give one. This prompted the insurer to investigate the insured’s prior claim history.

The insurer ran a report revealing multiple bodily injury claims. The extensive loss history caused the insurer to suspect fraud. As a result, the insurer asked the insured to submit to an examination under oath (“EUO”). The insured refused. The insurer scheduled two more EUOs, but once again the insured refused or failed to appear. The insured’s failure to submit to an EUO caused the insurer to deny coverage. It also refused to defend the insured against the other parties’ claims.

The insured sued the insurer for declaratory relief, seeking coverage for the policy limits. The insurer moved for summary judgment, arguing that, as a matter of law, the insured’s failure to comply with the EUO constituted a material breach of the policy that caused the insurer substantial prejudice. The trial court denied the motion.

The First Trial

The insurer raised fraud and breach of contract as affirmative defenses.

The jury answered three questions:

  • the insured failed to comply with his post-loss obligations;
  • the insurer was “actually” prejudiced by the insured’s failure to comply; and
  • the insurer failed to prove the insured engaged in fraudulent conduct.

Because the insurer proved the insured breached the contract with resulting prejudice, the trial court entered final judgment in its favor.

The insured appealed.  See Barthelemy v. Safeco Ins. Co. of Ill., 257 So.3d 1029, 1031 (Fla. 4th DCA 2018)where the Court of Appeal concluded that the trial court erred in instructing the jury and reversed and remanded the case for a new trial.

The Second Trial

Before the second trial, the insured moved in limine to prevent the insurer from mentioning or implying the insured committed fraud or that the insurer suspected fraud. The insured argued that because the insurer did not cross-appeal the jury’s unfavorable finding on fraud in the first trial, the issue could not be retried. The insurer responded that it needed to address fraud to show that the insured’s material failure to comply with the EUO substantially prejudiced the insurer. The trial court reasoned that any reference to fraud was precluded by the previous verdict in the first trial. The trial court granted the motion in limine and ruled that no party was to mention or imply fraud or any wrongdoing on the part of the insured. At most, the parties and witnesses could use general terms like “concerns.”

This time, the jury once again found the insured materially breached his post-loss obligations but the jury found the insurer did not prove substantial prejudice. The trial court entered a final judgment for the insured. The insurer moved for new trial and for directed verdict. The trial court denied both motions. From these rulings, the insurer now appeals.


The insurer argued at the second appeal that the trial court erred in denying its motions for directed verdict and new trial because the trial court incorrectly excluded all evidence of fraud and wrongdoing. This prevented the insurer from proving substantial prejudice resulting from the insured’s material breach of the policy. The insurer argued the question of whether it was prevented from conducting a proper fraud investigation was not settled as the law of the case.

The appropriate standard of review applied to a trial court’s denial of a motion for a new trial is whether the trial court abused its discretion

The doctrine of “law of the case,” a principle of judicial estoppel, requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings.

When the case was retried, the trial court excluded all evidence of the insured’s wrongdoing and prevented the insurer from proving the insured’s material breach substantially prejudiced its fraud investigation. The fact that the insurer demanded an EUO to investigate the possibility of fraud was relevant and material to determine substantial prejudice to the insurer. As the insurer argued, without the EUO it had almost no information about the details of the accident that it could have used to assess and defend against the insured’s liability. This information could have avoided all the litigation, including this case. The jury could not have possibly understood the importance of an EUO without knowing the insurer wanted to investigate insurance fraud.

The purpose of an EUO is to enable the insurer to possess itself of all knowledge and all information as to other sources and means of knowledge, in regard to the facts, material to its rights, to enable it to decide upon its obligations and to protect it against false claims. [Claflin v. Commonwealth Ins. Co., 110 U.S. 81 (1884).]

The trial court’s ruling on the motion in limine impacted the witnesses’ testimony, the documentary evidence, and the insurer’s case. The trial court’s exclusion of evidence and limitation on the insurer’s argument directly related to the core issue of the case — whether the insured’s failure to cooperate prevented the insurer from conducting a meaningful fraud investigation.

Indeed, an implication that the insured committed fraud would have been prejudicial. Nevertheless, the probative value of the highly relevant evidence outweighed the danger of unfair prejudice. Therefore, the case was remanded to the trial court so that the parties my try the case again.


The Florida Court of Appeal, although reaching a correct result that reversed the trial court finding in favor of the insured, should have followed the decision of the U.S. Supreme Court in Claflin, found that the refusal to testify at an EUO was a breach of a material condition precedent and entered judgment in favor of the insurer. Rather, it now requires SAFECO to go through a third trial to again prove the breach of a material condition sufficient to allow it to refuse to pay neither defense nor indemnity.

© 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

He is available at and Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at;  Follow Mr. Zalma on Twitter at; Go to Barry Zalma videos at at; Go to Barry Zalma on YouTube-; Go to the Insurance Claims Library – Read posts from Barry Zalma at; and the last two issues of ZIFL at  podcast now available at



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