LUIS A. LORENZO-MARTINEZ & another [Note 1] vs. SAFETY INSURANCE COMPANY & another. [Note 2]

PORADA, J. The principal issue presented by this case is whether an insurer may deny uninsured motorist coverage under the standard Massachusetts motor vehicle insurance policy to a claimant who refuses to comply with his or her obligation under the policy to "submit to an examination under oath . . . within a reasonable time after [the insurer is] notified of the claim," without proof by the insurer of actual prejudice to its interests caused by the claimant's refusal. In separate motions for summary judgment filed by the insurers, Trust Insurance Company (Trust) and Safety Insurance Company (Safety), two Superior Court judges ruled that the submission to an examination under oath by the respective claimants, Luis A. Lorenzo-Martinez and Sylvia I. Suarez, was a condition precedent for coverage under their policies and that, by refusing to submit to an examination under oath, Martinez and Suarez had forfeited their coverage under their policies. Judgments entered dismissing Martinez's and Suarez's complaint seeking to compel their respective insurers to proceed to arbitration of their claims for uninsured motorist benefits. For the reasons stated, we affirm the judgment, as modified herein, for Trust but vacate the judgment for Safety, and we remand the action to the Superior Court for further proceedings.

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We recite the pertinent undisputed facts and procedural background. On July 19, 1998, Suarez was the operator of, and Martinez was a passenger in, a vehicle owned by Martinez when it was struck on a public highway by an unidentified pick-up truck. The driver of the truck left the scene without making his or her identity known. Martinez was insured under a Massachusetts motor vehicle insurance policy issued by Trust. Suarez was insured under a Massachusetts motor vehicle insurance policy issued by Safety. The policies each contained the following pertinent clauses:

"We may . . . require you and any person seeking payment under any part of this policy to submit to an examination under oath at a place designated by us, within a reasonable time after we are notified of the claim.

"After an accident or loss, you or anyone else covered under this policy must cooperate with us in the investigation, settlement and defense of any claim or lawsuit."

Martinez filed a claim with Trust for uninsured motorist benefits on July 23, 1998. In response, Trust requested that Martinez provide it with a recorded statement. On May 14, 1999, after numerous requests for a recorded statement from Martinez, to which Martinez did not respond, Trust requested that Martinez submit to an examination under oath in order for it to complete its investigation of the accident. Martinez refused to submit to an examination under oath on the ground that the request was not made within a reasonable time after Trust's receipt of notice of the claim as required under the policy. Based upon Martinez's refusal, Trust denied Martinez's claim.

Suarez submitted a notice of her claim to Safety for uninsured motorist benefits on August 19, 1998. There is nothing in the record to indicate that there was any further contact between Safety and Suarez until May 10, 1999, when Suarez's attorney made a demand upon Safety in writing for settlement of her claim and asserted claims under G. L. c. 93A and G. L. c. 176D, § 3. On June 2, 1999, Safety made an offer of $3,000 to settle her claim. On August 6, 1999, Safety sent a letter to Suarez's attorney requesting confirmation of the medical expenses paid by the personal injury protection carrier.

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On September 14, 1999, Martinez and Suarez filed a complaint in the Superior Court requesting appointment of an arbitrator to resolve their claims against Trust and Safety for uninsured motorist benefits under their respective motor vehicle insurance policies. On September 29, 1999, Safety made a demand upon Suarez for an examination under oath, which she refused. Both Trust and Safety filed answers in opposition to the appointment of an arbitrator and counterclaims seeking a declaration that Martinez and Suarez were not entitled to coverage under their policies because of their refusal to submit to examinations under oath. Arbitration was stayed pending resolution of the defendants' counterclaims for declaratory relief. Both Trust and Safety moved separately and at different times for summary judgment. Upon allowance of both motions and separate judgments in favor of Trust and Safety, Martinez and Suarez filed this appeal.

On appeal, both Martinez and Suarez claim that the allowance of summary judgment was error because Trust and Safety failed to request an examination under oath within a reasonable time after receipt of notice of the claim, and coverage cannot be denied without the insurers' demonstration that they suffered actual prejudice by the refusal.

In Ellis v. Safety Ins. Co., 41 Mass. App. Ct. 630 , 638-639 (1996), we held that the submission to an examination under oath is a condition precedent to recovery under an automobile insurance policy and that the unexcused failure to submit to such examination constitutes a material breach of the contract. We based our holding on Mello v. Hingham Mut. Fire Ins. Co., 421 Mass. 333 , 336- 337 (1995), in which the Supreme Judicial Court ruled that submission to an examination under oath, if the request is reasonable, is strictly construed as a condition precedent to the insurer's liability and that the insured's refusal to comply with such reasonable request results in forfeiture of coverage without proof of prejudice to the insurer's interest. The result reached in Mello was in stark contrast to prior rulings by the Supreme Judicial Court holding that an insured's failure to discharge other responsibilities under his or her insurance policy would not constitute a breach of the insurance contract without both proof of breach and actual prejudice to

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the insurer's interests resulting from the breach. See Johnson Controls, Inc. v. Bowes, 381 Mass. 278 , 280-282 (1980) (failure to give notice of claim within time period required by policy); MacInnis v. Aetna Life & Cas. Co., 403 Mass. 220 , 223 (1988) (failure to obtain consent of insurer to insured's settlement of her claim against tortfeasor); Darcy v. Hartford Ins. Co., 407 Mass. 481 , 490-491 (1990) (failure to cooperate with insurer in defense of underlying claim). It is not clear from the Mello decision what distinguishes the insured's obligation to submit to an examination under oath in an insurance contract from those other recited obligations which require both proof of breach and actual prejudice. The Supreme Judicial Court in Mello, 421 Mass. at 336-337, apparently relied upon the fact that G. L. c. 175, § 99, prescribed the form of the fire insurance policy in question, including the provision obligating an insured to submit to an examination under oath, and that the insured's failure to submit to an examination under oath might significantly hamper the insurer's ability to investigate the claim, particularly where the claim is suspect. [Note 3] Although in Ellis we applied the holding of the Mello decision to the automobile insurance policy in question, we noted that the insured's claim preceded the decision of Darcy v. Hartford Ins. Co., 407 Mass. at 488-489, in which the Supreme Judicial Court expressly limited to future cases its ruling that an insured's failure to cooperate would not bar recovery under an insurance policy absent proof by the insurer of prejudice to its interests resulting from that failure. Ellis v. Safety Ins. Co., 41 Mass. App. Ct. at 638-639 & n.11.

We now clarify our holding in Ellis and decide that a wilful, unexcused refusal to submit to an examination under oath, without proof of actual prejudice to the insurer's interests resulting from the refusal, constitutes a material breach of the insurance contract discharging the insurer's liability under the contract. As in Mello, the provision for the submission to an examination under oath contained in the standard automobile insurance policy was not prescribed by the insurance

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company. [Note 4] The provision ostensibly exists to weed out fraud by providing an insurer with a mechanism for obtaining formal corroboration of a claim. This mechanism is particularly important in situations like the hit-and-run accident at issue here, where information about the claim is primarily or exclusively within the possession of the insured. Because of the insurer's heightened need for reliable information from the insured in such cases, we are of the opinion that the obligation to submit to an examination under oath is distinguishable from other obligations of the insured under the insurance contract, in which breach and actual prejudice must be shown. Consequently, an insured's wilful, unexcused failure to submit to an examination under oath constitutes a breach of the standard automobile insurance contract resulting in forfeiture of coverage for uninsured motorist benefits without proof of actual prejudice resulting to the insurer's interests. Our ruling appears to comport with the law in other jurisdictions. See 13 Couch, Insurance § 196.23 (3d ed. 1999) ("Generally, in the absence of a reasonable excuse, when an insured fails to comply with the insurance policy provisions requiring an examination under oath . . . the breach generally results in forfeiture of coverage, thereby relieving the insurer of its liability to pay, and provides the insurer an absolute defense to an action on the policy").

Accordingly, the only question remaining in this case is whether Martinez and Suarez had an excuse that relieved them from submitting to an examination under oath. We consider their reasons separately.

Martinez refused to submit to an examination under oath on the ground that the request for an examination under oath, which was made approximately nine months after he gave notice of his claim, was not made within a reasonable time after Trust's receipt of notice of his claim. What is a reasonable time is usually a question of fact, but if the facts are not in dispute, it is a question of law. Powell v. Fireman's Fund Ins. Cos., 26 Mass. App. Ct. 508 , 513 (1988). Determining what is a reasonable time involves examining "the nature of the contract, the probable intention of the parties, and the attendant circumstances."

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Plymouth Port, Inc. v. Smith, 26 Mass. App. Ct. 572 , 575 (1988). Here, it is undisputed that the request for an examination under oath was made after Trust had made seven requests for a re-corded statement [Note 5] without any response to these requests from Martinez and only after Trust was faced with a claim under G. L. c. 93A and G. L. c. 176D without having had the benefit of a statement from Martinez about the accident, a refusal to give a recorded statement, or any explanation of why a recorded statement was not forthcoming. Trust was not required to utilize what would obviously be a more costly and time-consuming mechanism to investigate a claim that it did not consider suspect before it made its demand for an examination under oath, in light of Martinez's obligation under the policy to cooperate with Trust's investigation of the claim and Trust's reciprocal obligation to exercise good faith and diligence in securing that cooperation. Imperiali v. Pica, 338 Mass. 494 , 498-499 (1959). Once Trust had exhausted its efforts to secure that cooperation (certainly after seven attempts had been made to obtain, without additional expense, a statement to which it was entitled) and was faced on May 10, 1999, with a potential law suit for unfair settlement practices without the prospect of a statement from its claimant, its request for an examination under oath was made within a reasonable time after receipt of notice of the claim in accord with the policy provision. In those circumstances, Martinez's refusal to submit to an examination under oath was both wilful and unexcused, resulting in the forfeiture of coverage of his claim for uninsured benefits under his policy. Summary judgment was appropriate on his claim. [Note 6]

We now turn to the allowance of Safety's motion for summary

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judgment. Suarez argues that her refusal to submit to an examination under oath was justified because Safety filed its request for such an examination on September 29, 1999, some thirteen months after Safety's receipt of notice of her claim on August 23, 1998. Unlike Trust, which promptly undertook an investigation of its insured's claim and made repeated attempts to secure a statement from its insured, the record does not disclose that Safety made any attempt to contact Suarez or investigate her claim after receipt of her notice of claim until May, 1999. In fact, in June, 1999, Safety was prepared to settle the claim without a statement from Suarez. Thereafter there is nothing on the record that indicates that Safety did anything to investigate the claim until after Suarez had initiated this action. In these circumstances, mindful that an insurer has a reciprocal duty to exercise good faith and diligence in seeking cooperation from its insured, Imperiali v. Pica, 338 Mass. at 498-499, we are of the opinion that Safety's request for an examination under oath some thirteen months after receipt of notice of the claim was not made within a reasonable time and that Suarez's refusal to submit to an examination under oath was justified. For this reason, summary judgment should not have been granted for Safety.

The judgment dismissing Martinez's complaint against Trust is affirmed, and a judgment shall enter on Trust's counterclaim declaring that Martinez is not entitled to uninsured coverage under his motor vehicle insurance policy issued by Trust because of his wilful, unexcused failure to submit to an examination under oath. [Note 7] The judgment dismissing Suarez's complaint is vacated, and a judgment shall enter on Safety's counterclaim declaring that Suarez's refusal to submit to an examination under oath did not constitute a breach of the automobile insurance

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contract issued by Safety to her which is the subject of this action. The matter is remanded to the Superior Court for further proceedings consistent with this opinion.

So ordered.