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State Farm Mutual Automobile Insurance Co. v. Robin Curran, Case No. SC12-157 (Florida Supreme Court)

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.

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