A Florida court of appeal recently held that an insured’s assignment of a claim did not relieve her of the obligation to appear for an examination under oath (EUO). This decision is significant because it makes a distinction between an assignment of proceeds of a property insurance policy and an assignment (or transfer) of the insured’s duties under the policy. Even where the former is permissible, the latter is not, according to the court.
In Citizens Prop. Ins. Corp. v. Ifergane, 2012 Fla. App. LEXIS 15236 (Fla. Dist. Ct. App. 3d Dist. Sept. 12, 2012), the Court of Appeal of Florida, Third District, addressed whether a named insured who had assigned her property insurance claim to her ex-husband as part of their marital settlement was obligated to attend an examination under oath (“EUO”) pursuant to the terms of the policy. The court held that a named insured’s assignment of her rights under a property insurance policy did not relieve her of her post-loss obligation to attend an EUO.
Haim and Alexandra Ifergane (“Haim” and “Alexandra”) jointly purchased a residential property in Miami Beach, Florida (the “Property”). The Property was insured by Citizens Property Insurance Corporation (“Citizens”) under a wind-only dwelling policy (the “Policy”). Alexandra was the only named insured on the Policy. On October 25, 2005, the Property sustained damage caused by Hurricane Wilma. In November of that year, Alexandra filed for divorce, and as part of her divorce settlement with Haim, she executed a quit claim deed assigning to him “all the right, title, interest, claim and demand which [she] has in and to the . . . [Property]” (the “Assignment”). Id. at *3.
Citizens made an initial payment of $44,955.08, and thereafter became concerned that the Property had sustained additional damage that was not covered. It therefore requested that both Alexandra and Haim attend EUOs. Haim sat for two EUOs, but Alexandra refused to attend an EUO. Citizens in turn notified Alexandra in March 2008 that it could not determine coverage for the claim. After Haim made a demand under the Policy for appraisal, Citizens filed an action for declaratory judgment in May 2008 with regard to its coverage obligations. Specifically, Citizens argued, among other things, that the Assignment did not relieve Alexandra of her policy obligations and sought summary judgment for breach of the insurance contract based on her failure to attend the requested EUO. The trial court denied Citizens’ motion, and granted Haim’s motion for partial summary judgment as to coverage. Haim then moved to compel appraisal, which was also granted.
The Court of Appeal reversed as to coverage, holding that the Assignment did not relieve Alexandra of her post-loss obligations under the policy. Significantly, the court made a distinction between an assignment of a right to proceeds under a policy and an assignment (or transfer) of the insured’s obligations under the policy. “Although Alexandra assigned her right to benefits under the policy, she did not assign to Haim her obligations under the policy . . . Citizens was entitled to an EUO from Alexandra, its named insured, regardless of the Assignment.” Id. at *16 (emphasis in original). The court further held that Alexandra’s refusal to submit to an EUO precluded recovery under the Policy because an EUO, when requested, stands as a condition precedent to coverage:
Citizens was entitled to an EUO from Alexandra, its named insured, regardless of the Assignment. Alexandra’s refusal to submit to a requested EUO precludes recovery under the policy, because the EUO stands as a condition precedent to coverage. . . . Accordingly, it was error for the trial court grant summary judgment, finding coverage as a matter of law, and to enter final judgment in favor of Haim Ifergane.
Id. at *16-17 (citations omitted).
Based on the court’s holding, insureds remain bound by post-loss duties despite assignment of proceeds of claims, and may void coverage based on their noncompliance. It is important to recognize that even where courts have permitted assignments of proceeds of a property insurance policy notwithstanding an anti-assignment clause, courts have not permitted an insured to transfer his or her duties under the policy, such as the obligations to produce records, sit for an examination under oath, etc.