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Examinations Under Oath

In Adams v. State Farm Mut. Auto. Ins. Co., the Court of Appeals recently addressed Examinations Under Oath. In Adams, two passengers that were injured in an automobile accident were denied Basic Reparations Benefits for noncompliance with the terms of the applicable insurance contract "by failing to cooperate in the investigation of their claims when they did not participate in an Examination Under Oath (EUO...)." Adams v. State Farm Mut. Auto. Ins. Co., No. 2013-CA-002152-MR, 2015 WL 3638004, at *1 (Ky. Ct. App. June 12, 2015). The insurance company argued that "the EUO was a requirement under the contract of insurance [it] had with its insured. The trial court granted [the insurance company's] motion for declaratory and summary judgment on this issue. The Appellants then brought this appeal asserting that nothing in the Motor Vehicle Reparations Act (MVRA) allows for a dismissal by the court on these grounds." Id.

In reversing the trial court, the Court of Appeals addressed the spirit behind the Motor Vehicle Reparations Act, noting as follows: "In adopting the MVRA, "[t]he General Assembly was seeking to promote 'a system' where motor vehicle accident victims will seek payment for their losses before and, where possible, instead of filing tort actions." Id. (citing Crenshaw v. Weinberg, 805 S.W.2d 129, 132 (Ky.1991)). Further, the Court addressed KRS 304.39-280(3), which requires court oversight for depositions to occur in some circumstances under the MVRA. The statute reads as follows:
In case of dispute as to the right of a claimant or reparation obligor to discover information required to be disclosed, the claimant or reparation obligor may petition the Circuit Court in the county in which the claimant resides for an order for discovery including the right to take written or oral depositions.

KRS 304.39-280(3). Here, the Court of Appeals pointed out that the facts at issue did not seemingly support the need for an EUO because of the existence of "medical reports and police reports indicating injuries and the events that occurred . . . ." Adams, 2015 WL 3638004, at *2. Notwithstanding, if the insurer felt it needed a statement, it should have sought recourse per KRS 304.39-280(3). Id.

In sum, Adams makes it clear that the denial of Basic Reparations Benefits for refusal or unwillingness to participate in an EUO that is being required simply as a term of the insurance contract is not a valid basis for denial of Basic Reparations Benefits under Kentucky law.

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