McClune v. Farmers Insurance Co., Inc., No. 20-1768 (8th Cir. 2021)
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After settling with the liability carrier, plaintiff filed an Underinsured Motorist (UIM) claim with her insurer, Farmers. Farmers made a settlement offer that was rejected by plaintiff when she presented a significantly higher counteroffer. In response to the counteroffer, Farmers continued its investigation by requesting updated medical documents and informing plaintiff that she needed to submit to an examination under oath (EUO). Plaintiff refused and filed this action.
The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Farmers, concluding that, by commencing suit, plaintiff materially breached the cooperation clause with Farmers. The court explained that nothing in the language of the policy draws a distinction between an initial investigation or a reopened investigation, and plaintiff has cited nothing in either her policy or Missouri law supporting her claim that her duty to cooperate was extinguished under these circumstances. Furthermore, plaintiff waived her argument that she was excused from waiving her duty to cooperate and the evidence does not support her claim that Farmers waived its right to request an EUO. The court concluded that when plaintiff failed to submit to the requested EUO, she prevented Farmers from continuing its investigation of her claim. Consequently, her refusal prejudiced Farmers. Finally, the record demonstrates that Farmers was reasonably diligent in its decision to require plaintiff's participation at an EUO.
Court Description: [Erickson, Author, with Smith, Chief Judge, and Colloton, Circuit Judge] Civil case - Insurance. In this suit under the Underinsured Motorist provision of plaintiff's insurance policy with defendant seeking medical damages, the district court did not err in finding plaintiff had materially breached the cooperation clause of the policy by failing to submit to an examination under oath regarding her claim and that the breach prejudiced the insurer by denying it an opportunity to gather additional information and investigate her claim and counteroffer; there were insufficient facts from which a fact finder could conclude the insurer acted unreasonably in investigating and processing her claim or that its request for the examination under oath was a delay tactic; because of plaintiff' breach, the insurer had a right to deny plaintiff's claim under the terms of the policy and Missouri law.
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