7.23 - A. Appearance

• Jurisdiction: New York

a. Appearance

Service of notice of the EUO upon the insured triggers the insured’s obligation. The insured’s failure to meet that obligation through certain actions or inactions can result in extensive litigation and the ultimate forfeiture of insurance. Such actions or inactions include the failure to (1) submit to the EUO, (2) respond to the demand for documents, (3) answer material questions, (4) sign the transcript of the examination and (5) complete the examination or submit to further demands.¹⁹⁴⁰

It almost goes without saying that an integral refusal to appear at an examination or to produce documents without an appropriate excuse can lead a court to hold that the insured has not complied with the cooperation clause.¹⁹⁴¹ The courts have held that a pattern of noncooperation for which there is no reasonable excuse for noncompliance can result in a material breach of the policy. In Rosenthal v. Prudential Property & Casualty Co.,¹⁹⁴² for example, a case involving multiple adjournments, the court held: “When the insured’s failure to fulfill his obligation under an insurance policy ‘is indicative of a pattern of non-co-operation . . . for which no reasonable excuse for non-compliance has been proffered,’ his conduct is properly deemed willful.”¹⁹⁴³

Counsel representing the insured should know that when an adjournment of a noticed EUO is requested, the obligation to reschedule the examination rests with the insured.¹⁹⁴⁴ Once the insured appears at the examination, the insured is required to respond to all material and relevant questions, and the failure to so respond constitutes a breach of the cooperation clause.

What is material and relevant is, of course, fact-specific to the particular case.¹⁹⁴⁵ The court in Fine v. Bellefonte Underwriters Insurance Co.¹⁹⁴⁶ held that the materiality requirement is satisfied “if the false statement concerns a subject relevant and germane to the insurer’s investigation.”¹⁹⁴⁷ Further, the court noted that an answer is material if it is calculated to discourage, mislead or deflect the company’s investigation in any area that might seem to the company, at that time, a relevant or productive area to investigate.¹⁹⁴⁸

When the plaintiff gives no response, responds vaguely or gives general answers, the insurer will challenge the failure to respond to material questions.¹⁹⁴⁹ The question of materiality is generally a question of fact for a jury, but if there is undisputed evidence upon which reasonable minds could not differ, the question can be decided...