Courts Offer Different Opinions on Uninsured Motorist Policy Conditions

Multiple Florida court decisions have addressed the distinction between “conditions precedent” and “conditions subsequent” in uninsured motorist policies. In addition, the decisions discuss the impact of that distinction on issues of prejudice and burden of proof at trial. Unfortunately, these court opinions vary in their interpretations, making them difficult to reconcile.

The Curran Case

In the case, State Farm Mut. Ins. Co. v. Curran, the Florida Supreme Court ruled that a condition precedent is a condition that must happen before the insurance contract becomes effective. In contrast, a condition subsequent presupposes the insurer’s obligation under the policy; however, the obligation will be negated if the condition is not performed or does not occur.

This case arose as a result of a June 2006 traffic accident involving Robin Curran, insured by State Farm, and the underinsured motorist who rear-ended Ms. Curran’s car. Ms. Curran requested her $100,000 underinsured motorist policy limits, and State Farm attempted to schedule a compulsory medical examination (CME). Ultimately, however, Curran refused to attend a CME despite receipt of a reservation of rights letter from State Farm stating that her failure to “assist and cooperate” with the insurer may result in a denial of coverage.

Instead, Ms. Curran filed suit against State Farm. State Farm answered and asserted an affirmative defense contending that Curran was not entitled to coverage under the policy because she breached the CME provision, which State Farm characterized as a condition precedent to coverage under the policy.

The trial court found for Ms. Curran, and the appellate court affirmed by reasoning that the policy’s CME clause was a condition subsequent, thereby requiring State Farm to plead and prove prejudice to defeat coverage. The Florida Supreme Court affirmed the decision in a divided court and relied on precedent holding that a CME provision is a condition subsequent, the nonoccurrence of which is an affirmative defense. The court reasoned that uninsured motorist coverage is statutorily required, and so that insurers are precluded from imposing conditions that are not authorized by Statute and “directly contrary to the statutory purpose of Uninsured Motorist benefits.”

The Rodrigo Case

Several months after the Curran case was decided, the Florida Fourth District Court of Appeals reached a different result in their definitions of “conditions precedent” and “conditions subsequent.” In Rodrigo v. State Farm Inc. Co., Judy Rodrigo’s next door neighbor died, and time passed before the body was discovered. During that time, bodily fluids leaked through the walls of Ms. Rodrigo’s apartment causing damage. She filed a claim with her insurer, State Farm, but she forgot to file the sworn proof of loss. However, an insurance adjuster did contact a contractor who inspected Ms. Rodrigo’s apartment and signed an appraisal award. State Farm attempted to tender payment for that amount but denied the personal property damage. Ms. Rodrigo then filed the lawsuit against State Farm.

The trial court granted summary judgment to State Farm, and the Fourth District affirmed the ruling. It reasoned that the sworn proof of loss was a condition precedent to relief. The court went further and distinguished Curran from the issues in Rodrigo and stated that “Curran rendered the sworn proof of loss a condition subsequent rather than a condition precedent . . . our supreme court limited its rationale and holding to the unique subject of uninsured motorist coverage and compulsory medical exams.”

The Solano Case

Again, several months after Rodrigo, the Fourth District Court of Appeals Court in Florida reached another, different, result regarding issues of “conditions precedent” and “conditions subsequent” for insurance claims. In Solano v. State Farm Ins. Co., the plaintiffs, Dr. and Mrs. Solano, owned residential property that was insured by State Farm. The property was damaged in Hurricane Wilma in 2005, and the insurance policy required compliance with certain post-loss conditions including submitting to an examination under oath (EUO), submitting sworn proofs of loss, giving timely notice of damages, and exhibiting damages.

After the third sworn proof of loss, State Farm requested that the couple and their public adjuster submit to a EUO. Only Dr. Solano testified at the EUO, appeared with a fourth sworn proof of loss, and deferred the answers of many questions to the adjuster, who refused to testify. The couple later submitted a fifth proof of loss and filed a complaint against the insurer to compel an appraisal. State Farm moved to dismiss the complaint and for summary judgment, arguing that the Solanos had failed to comply with their post-loss obligations.

The trial court issued the summary judgment to State Farm, and the Solanos appealed. The Fourth District Court reversed the ruling, and admitted that the refusal to provide an EUO was a failure of a condition precedent. However, the court found that there was a factual issue over whether the couple had totally failed to comply with the condition. As a result, the court made the condition precedent an issue of sufficient compliance, and not an all or nothing scenario.

In this case, the court refused to address the possible conflict with Curran, and stated that “while the issue addressed in Curran is similar to the issue addressed here, the Court’s analysis hinges on matters which are not present in this case.”

Impact on Uninsured Motorists Claims

The courts have not only made the type of insurance claim an issue in these cases, but also a matter of degree in others to determine whether an insured’s failure to comply with the policy is a condition precedent or failure of a condition subsequent, the latter of which would shift the burden to insurance company to prove that the insured breached the policy. It seems as though the Florida Supreme Court will have to revisit the issue and clarify whether the holding in Curran applies only to uninsured motorist claims or all insurance claims in the state.

Contact a Florida Attorney Today

If you have questions regarding uninsured motorist policies or how these decisions may affect your claims in the Orlando, Tampa, Fort Myers, Jacksonville, or West Palm Beach areas, let the experienced attorneys at The Pendas Law Firm help today. Call the office or contact us for a free and confidential consultation of your case.