Oregon Case Law Update: Reasonable Examinations Under Oath Permissible in PIP Claims
The Oregon statutes governing Personal Injury Protection (PIP) benefits, unlike those governing Uninsured Motorist (UM) claims, are silent on whether Examinations Under Oath (EUO) are permissible. As a result, it has been a continuing practice of Oregon insurers to include language in their policies requiring their insureds to submit to reasonable EUOs for PIP claims, but the issue has not been addressed by an appellate court until now.
Claims Pointer: In this case arising out of a dispute over PIP benefits, the Oregon Court of Appeals determined that the PIP statutes do not prohibit an insurer from reasonably demanding an EUO, and that allowing EUOs in the PIP context facilitates the efficient resolution of PIP claims. The case makes it clear that allowing insurers to demand an EUO is consistent with the insurer’s obligation to reasonably investigate claims. EUOs are therefore permitted in PIP claims so long as the circumstances make it reasonable for the insurer to request an EUO.
Kachan v. Country Preferred Ins. Co., 279 Or App 403 (July 7, 2016).
Nikolay Kachan (Kachan) was insured under an auto policy issued by Country Preferred Insurance Company (Country) that provided for Personal Injury Protection (PIP) benefits in the amount of $15,000. In March 2013, Kachan was injured in a rear-end collision, and he sought chiropractic treatment and made a claim for PIP benefits.
Country requested that Kachan participate in an independent medical examination (IME), which he did. The IME physician believed that Kachan sustained soft-tissue injuries in the accident and that it was reasonable for him to seek treatment for those injuries for no longer than six months post-accident. He further opined that the frequency of Kachan’s chiropractic treatment was unreasonable, recommending a reduced treatment regimen and a home-exercise program.
After receiving the IME report, Country notified Kachan that it would consider the treatment regimen recommended by the IME doctor to be reasonable and necessary, while treatment exceeding that recommendation would not be deemed reasonable or necessary and so would not be payable under the claim. Country also informed Kachan that if he contested that determination, he could file a civil action or request to arbitrate the dispute. Kachan responded that his chiropractor stood behind his treatment recommendations, supplied Country with additional medical documentation, stated that he thought he had a strong case in arbitration regarding his need for additional treatment, and asked how Country would like to proceed. Country then sent a letter requesting an Examination Under Oath (EUO), indicating it had elected to exercise its right under the insurance policy to take Kachan’s EUO. The letter also directed Kachan to bring with him written materials supportive of his claim. Kachan provided some of the requested documents, but he also questioned how much of the requested materials related to his claim for PIP benefits and why an EUO was needed to address the PIP claim given he already participated in the IME.
After several months of back-and-forth, Country denied the claim on the grounds that Kachan failed to submit to the EUO, and Kachan sued. At trial, Country moved for summary judgment of the grounds that Kachan’s failure to cooperate with the EUO violated the policy’s specification requiring the injured person to “submit to examinations under oath…when and as often as reasonably required.” Kachan opposed the motion, arguing that the policy provision violated the Oregon statues governing PIP and that there were factual disputes as to whether the EUO was “reasonably required.” The trial court agreed with Country and granted summary judgment. Kachan appealed.
The Oregon Court of Appeals acknowledged that the PIP statutes, unlike the statutes covering claims for uninsured motorist coverage, do not speak expressly to the permissibility of EUOs; however, it further stated there was nothing in the statutes suggesting that the legislature categorically intended to prohibit a PIP policy provision authorizing a defendant to “reasonably require” a plaintiff to submit to an examination under oath. In fact, the court determined that so long as an insurer complies with the applicable requirements of the PIP statutes, permitting the insurer to demand an EUO when reasonable to do so would facilitate the efficient resolution of PIP claim. Moreover, to allow insurers to demand an EUO is consistent with the insurer’s obligation to reasonably investigate claims.
The court also found that there were factual disputes as to whether Kachan’s refusal to comply with Country’s EUO request constituted a breach of the policy. The court pointed out that Country’s authority to demand an EUO was restricted by a reasonableness requirement, and Kachan had proffered evidence from which a fact finder could conclude that Country did not reasonably require the requested EUO. Summary judgment was therefore improper, and the case was remanded for additional proceedings.
View full opinion at: http://www.publications.ojd.state.or.us/docs/A158554.pdf
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.
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