What’s in a Name (Insured)? Pennsylvania Federal Court Holds Homeowners’ Insurance Policy’s Requirement to Submit to Examination Under Oath Applies Only to Named Insured

A federal court recently held that an insurer could not deny coverage under a homeowner’s policy based upon the failure of the named insured’s son, an “insured person,” to submit to an examination under oath (“EUO”). In Michelle Adeola v. Allstate Vehicle and Property Insurance Company, Civil Action No. 23-cv-4643 (E.D. PA February 16, 2023), the Eastern District of Pennsylvania denied defendant-insurer’s motion for reconsideration of the lower court’s denial of its motion for judgment on the pleadings, and held that the defendant-insured did not present any errors of law or fact, or new evidence, or a change in controlling law that would preclude coverage based upon the named insured’s son’s failure to submit to an EUO. Specifically, the Court affirmed that the duty to submit to an EUO, as included in the insurance policy, applied only to a “named insured” and not an “insured person” and, as such, the named insured’s son failure to comply did not constitute a material breach of the insurance policy.

Plaintiff, the “Named Insured” on the policy, made an insurance claim to her insurer Allstate Vehicle and Property Insurance Company (“Allstate”) for fire damage to her property located in Philadelphia, Pennsylvania, where she resided with her two sons. The policy conditions stated: “you must[,] [a]s often as we reasonably require[,] at our request, submit to examinations under oath, separately and apart from any other person defined as you or insured person[.]” The policy defined the term “you” as the named insured and that person’s resident spouse and defined “insured persons” as “’you’; any relative residing in the household; and any person under the age of 21 residing in the household and in the named insured’s care.”

During the claim investigation, Allstate conducted EUOs of the Plaintiff and one of her sons, but Plaintiff’s efforts to produce her second son were unsuccessful. Allstate informed Plaintiff that this constituted a material breach of the policy, and it had no obligation to provide coverage to Plaintiff “so long as the breach continued.” Plaintiff then filed suit arguing that Allstate had no power under the policy to force her son to submit to an EUO. Allstate removed the case to federal court and then filed a motion for judgment on the pleadings, which was denied.

In denying Allstate’s motion for reconsideration, the Eastern District of Pennsylvania held that the policy language noted above clearly distinguishes between “You” and “insured persons” in assigning obligations, including EUO requirements. Although Plaintiff’s sons were “insured persons,” the policy’s plain language required only that “You” (Plaintiff and resident spouse) submit to EUOs. The Court found Allstate’s argument that the policy imposed joint obligations to be unavailing and held that Allstate failed to “present[] errors of law or fact, new evidence, or a change in controlling law to warrant reconsideration of the Court’s Order…”.

The Eastern District of Pennsylvania’s decision should encourage insurers to clearly define the roles of all parties to their insurance policies and to plainly delineate the duties and responsibilities of same in the event of a loss. This is particularly important if an insurer’s preference is for the policy to allow for and require the EUOs of all residents of a premises after a loss.

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