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Premature Denial for Failure to Appear at EUO Fails\\n\\nIt is not Reasonable to Deny a Claim for Failure to Appear for EUO \\nBefore the Date the EUO was Scheduled to Occur\\n\\nIn March 2021, an arsonist destroyed a building on the Brockton Fair \\nfairgrounds known as the "State Building," owned by BAS Holding \\nCorporation ("BAS") and, according to BAS, insured against loss by \\nPhiladelphia Indemnity Insurance Company ("Philadelphia"). Philadelphia \\nundertook an investigation to determine coverage. The insurer sought an \\nexamination under oath ("EUO") of George Carney, the president and owner\\n of BAS.\\n\\nIn Philadelphia Indemnity Insurance Company v. BAS Holding Corporation, \\nBrockton Agricultural Society, No. 22-1296, United States Court of \\nAppeals, First Circuit (August 17, 2023) the First Circuit recognized \\nthat a requirement for EUO must be reasonable and the claimed premature \\ndenial was probably not reasonable.\\n\\nFACTUAL BACKGROUND\\n\\nPhiladelphia sued seeking a declaration that BAS breached the insurance \\npolicy\'s EUO condition. In its answer, BAS denied that it had refused to\\n submit to an EUO. On cross-motions for summary judgment, the district \\ncourt granted judgment for Philadelphia on the ground that BAS failed to\\n cooperate by not providing Carney for an EUO. BAS appealed.\\n\\nBAS is the record owner of the State Building, a landmark building \\nlocated on the Brockton Fair fairgrounds in Brockton, Massachusetts. The\\n interior of the building was mostly open space used for exhibits or \\nstorage at the annual agricultural fair. The fire set by the arsonist on\\n March 17, 2021, caused a total loss of the structure. The remains of \\nthe building were razed that same day.\\n\\nAt the time of the fire, BAS held a policy (the "Policy") issued by \\nPhiladelphia that BAS claimed covered the State Building.\\nOn June 16, 2021, Philadelphia also sought an EUO of BAS in accordance \\nwith the Policy\'s EUO condition.\\n\\nBAS presented Susan Rodrigues as its designee to attend the EUO. She \\ndid "everything" to help put on the fair and also oversaw maintenance \\nwork on the fairgrounds and buildings throughout the year, including the\\n State Building.\\n\\nDuring her examination, Rodrigues identified six people \\u2013 five \\nmaintenance workers and Carney \\u2013 who might be able to provide additional information in response to BAS\'s questions.\\n\\nANALYSIS\\n\\nUnder Massachusetts law, attendance at reasonably requested EUOs is a \\ncondition precedent for insurance coverage. Thus, the question before \\nthe First Circuit was a narrow one: did the district court rule \\ncorrectly -- as a matter of law -- that BAS willfully and without excuse\\n refused Philadelphia\'s request for an EUO of Carney, thereby breaching \\nthe insurance contract?\\n\\nThe timeline of Philadelphia\'s denial weighs heavily against any \\nconclusion that BAS refused to produce Carney for an EUO. \\n\\nThe entire discussion between the parties about whether there should be \\nadditional EUOs of Carney and the five maintenance workers spanned only \\nnine days. The First Circuit vacated the district court\'s grant of \\nsummary judgment for Philadelphia and remanded for further proceedings \\nnot inconsistent with the opinion.\\n\\nZALMA OPINION\\n\\nI have personally taken hundreds of EUOs. I, like the First Circuit, \\ncannot understand how an insurer can deny a claim for failure to appear \\non a date prior to the date scheduled for the EUO to take place. Such a \\ndenial makes no sense. I have sat with a court reporter at the time and \\nplace scheduled for an EUO and no one appeared and, thereafter denied \\nthe claim only to withdraw the denial when the witness produced an \\nexcuse like the birth of a child or the hospitalization of the witness. \\nThe failure to wait a week or two to deny the claim gained Philadelphia \\nnothing more than the ire of the First Circuit.\\n\\n(c) 2023 Barry Zalma & ClaimSchool, Inc.\\n\\nFOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257\\n Go to the Insurance Claims Library \\u2013 \\nhttps://zalma.com/blog/insurance-claims-library