In Curran, the Florida Supreme Court addressed the following certified
question: When an insured breaches a compulsory medical examination provision
in an uninsured motorist contract, does the insured forfeit benefits under
the contract without regard to prejudice? If prejudice must be considered,
who bears the burden of pleading and proving that issue? The Florida Supreme
Court answered the first question in the negative. As to the second question,
the Court held that the insurer as the defensive party pleading an affirmative
defense has the burden of pleading and proving prejudice.
The case involved an automobile accident in which the plaintiff was injured.
The plaintiff settled with the underinsured tortfeasor, and then demanded
that her uninsured policy limits be tendered. In response, State Farm
contacted the plaintiff’s counsel to schedule a compulsory medical
examination. State Farm indicated that the insurance policy provided that
the plaintiff had a duty to be examined by a physician chosen and paid
for by the insurer as often as the insurer reasonably may require. The
Court further noted that the policy elsewhere provided that there is no
right of action against the insurer until all terms of the policy have
been met. The plaintiff refused to attend a compulsory medical examination.
After judgment was entered in favor of the plaintiff, the 5th DCA, on
appeal, found, among other things, that the plaintiff had breached the
policy provisions when she failed to attend the compulsory medical examination.
The Court first determined that a claimant does not forfeit benefits under
a policy without regard to prejudice by failing to attend a compulsory
medical examination. The Court began by noting that Fla. Stat. 627.727,
which mandates uninsured motorist coverage unless the insured expressly
rejects the coverage, “was intended to place the injured party in
the same position as he or she would have been had the tortfeasor been
insured.” The Court further noted that the role of a compulsory
medical examination is “to provide the insurer additional information
used to determine whether the insured is legally entitled to recover damages
after an injury is sustained and a UM claim has been submitted.”
With that as background, the Court addressed State Farm’s specific
argument – that the provision in the policy requiring attendance
at a CME is a condition precedent to coverage and to suit, the breach
of which constitutes a material breach of the policy resulting in forfeiture
of coverage irrespective of any showing of prejudice to the insurer. The
plaintiff, on the other hand, argued that the provision was a condition
subsequent requiring proof of prejudice.
The Court agreed with the Plaintiff, and ruled that a CME provision in
the UM context is a post-loss obligation of the insured and is not a condition
precedent to coverage. First, the Court noted that a compulsory medical
examination may be requested by an insurer after a policy has been issued,
after an insured had sustained an accident or loss, and after an insured
had submitted a claim for UM benefits – a compulsory medical examination
is not requested prior to the policy being issued. Second, the Court noted
that the “no action” language in the policy applies to every
term of the policy, regardless of whether the insured’s duties are
capable of being performed prior to filing an action against the insurer.
The Court suggested that such a reading would be impracticable. The Court
therefore concluded that a CME provision in the UM context is not a condition
precedent to coverage, and that an insured’s breach of a CME provision
should not result in post-occurrence forfeiture of insurance coverage
without regard to prejudice.
The Court then turned to the second certified question. The Court stated
that having concluded that prejudice is a necessary consideration when
the insured breaches a CME provision, the Court holds that the burden
of pleading and proving the issue of prejudice is on the insurer. The
Court found that the issue of prejudice resulting from failure to attend
a compulsory medical examination is an affirmative defense. The plaintiff
is not bound to prove that an affirmative defense does not exist. Because
the insurer is the defensive pleader, it has the burden of pleading and
persuasion of each element of the defense.
Accordingly, based upon the Florida Supreme Court’s opinion in Curran,
an insurance company cannot deny coverage simply because an insured refuses
to attend a compulsory medical examination. However, the opinion clearly
provides that failure to attend a CME is a condition subsequent, and an
insurance company may avoid providing coverage if it can establish that
the insured’s failure to attend the CME caused prejudice to the
insurer. Should the insurance company choose to make that argument, the
burden of pleading and persuasion falls on the insurer.