CASE LAW UPDATE
HANDYMAN AND WATER RESTORATION EMPLOYEE NOT REQUIRED TO APPEAR FOR AN EXAMINATION UNDER OATH
Diva N. Totten, Associate Attorney – Maitland Office
On April 22, 2020, in Avatar Property & Casualty Insurance Company v. Castillo, Florida’s Fourth District Court of Appeal affirmed the trial court’s final declaratory judgment entered in favor of Insureds, Cecilia Castillo and Jorge Guillen (“Insureds”), holding that the policy did not require Insureds to produce the handyman or water restoration employee for examinations under oath (“EUOs”) as they were not the Insureds’ “agents” or “representatives,” as defined in the policy of insurance.
After reporting a water damage claim, the Insureds hired a handyman and a water restoration company to complete repairs. As part of its claim investigation, Avatar Property & Casualty Insurance Company (“Avatar”) requested the Insureds produce themselves, the handyman, and the water restoration company’s employee for EUOs pursuant to the policy. Avatar relied upon the “Duties After Loss” provision of the policy, which required that, “[i]n the County where the ‘residence premises’ is located you, your agents, your representatives, including any public adjuster … and any and all ‘insureds’ must submit to EUOs…” (Emphasis supplied). However, the policy did not define the terms “agents” or “representatives.”
In litigation, the Circuit Court held a hearing on each parties’ respective motions for declaratory judgment, and ruled in favor of the Insureds, finding that the insurance policy did not require EUOs by those who simply perform repairs or mitigation services on an insured’s property, as they were not considered “agents” or “representatives.” The Circuit Court relied upon the plain meaning of these terms due to the fact that they were not defined in the policy.
On appeal, the Fourth District Court of Appeal affirmed the circuit court’s decision, holding that the policy did not require the Insureds to produce the handyman and the water restoration company’s employee for EUOs based on the fact that there was nothing in the record to indicate that the handyman and water restoration employee were “agents” or “representatives,” in that they were not “authorized to act for or in place of” the Insureds or that they “stood for or acted on behalf of” the Insureds. Instead, the record indicated that the handyman and water restoration company’s employee simply performed repairs to the Insureds’ home.
Note that this case did not include an assignment to the handyman or water restoration company. Under Florida Statute 627.7152(4)(d), an assignee must submit to examination under oath as a condition precedent to filing a lawsuit. This case also highlights the importance of memorializing situations where an insurer requests information from an insured and the insured defers to the contractor or handyman. In such a case, an insurer should send a reservation of rights, putting the insureds on notice of their duties after loss and advising if prejudice will result from the insured’s failure to obtain the information.