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EXCERPT FROM THE BOOK

Chapter 6: Effect of Failure to Submit

A) Conduct Constituting Breach

6. Invocation of the “Fifth Amendment”

The vast majority of the decisions hold that an insured cannot invoke the so-called “Fifth Amendment” privilege against self-incrimination at an examination under oath. The insurer’s right to an examination under oath is derived from the contract of insurance, a voluntary undertaking between the insured and the insurer. The right to conduct the examination under oath is a condition with which the insured must comply before recovering benefits under the policy. Although the insured has an absolute right to decline to give an examination under oath, the insured must do so with the understanding that the failure to give the examination under oath will preclude any right to recovery under the contract of insurance.

The Fourth Circuit Court of Appeals addressed the issue of whether an insured can avoid giving an examination under oath by invoking the privilege against self-incrimination in Powell v. United States Fidelity & Guaranty Co., 88 F.3d 271 (4th Cir. 1996). In Powell, the insurers submitted to examinations under oath but refused to answer a number of questions or to turn over financial and other documents requested by USF&G. The insurers argued that the examination under oath clause of their homeowners’ policy was not intended to permit USF&G to delve into financial or other information relating to their possible motives to intentionally set the fire which destroyed their property. The court rejected the insured’s’ argument that giving the examination under oath provision a broad scope would effectively abnegate their right against self-incrimination:

Any argument of the Powells, that giving the provision such a broad scope would effectively abnegate their right against self-incrimination, is unavailing; they may avoid incriminating themselves by refusing to submit to relevant requests made by USF&G under the policy provisions, although to do so may ultimately cost them insurance coverage under the terms of the contract for which they and USF&G bargained. We agree with the district court that the Virginia courts would read the examination under oath language of § 38.2-2105 broadly enough to encompass financial motivations for suspected fraudulent conduct, given the overwhelming force of authority from other jurisdictions regarding the construction of the precise language at issue in this case, and we therefore affirm the grant of summary judgment to USF&G on the reasoning of the district court.


88 F. 3d at 274.

The Fourth Circuit reiterated its Powell ruling in U.S. Specialty Insurance Co. v. Skymaster of Virginia, 26 Fed. App. 154, 2001 WL 1602030 (4th Cir.) (Unpublished). In Skymaster of Virginia, an officer and shareholder of the corporate insured crashed a plane, injuring several people. The insurer sought to avoid coverage on the basis that the officer and shareholder who crashed the plane did not have a valid medical certificate when he flew the plane, as required by the policy. The Fourth Circuit affirmed the district court’s granting of summary judgment in favor of the insurer, but on an alternative basis. The court held that the corporate officer failed to cooperate by refusing to answer questions at his examination under oath based on the invocation of the “Fifth Amendment.” The court “easily dispose [d]” of the Fifth Amendment issue, citing Powell v. United States Fidelity & Guaranty Co. The court concluded that the corporate officer could not rely on the Fifth Amendment to avoid a contractual obligation to cooperate by submitting to an examination under oath. 26 Fed. App. at 158, 2001 WL 1602030, *3.

The Eleventh Circuit reached the same conclusion in Pervis v. State Farm Fire & Casualty Co., 901 F.2d 944 (11th Cir. 1990). In Pervis, the insured contended that the privilege against self-incrimination excused him from complying with the provisions of the insurance contract requiring him to submit to an examination under oath. The court rejected the argument:

Pervis instituted this civil suit against State Farm. He chose to seek enforcement of a contract at a time when he had no right of action under that agreement. The entry of summary judgment against Pervis does not subject him to a deprivation of constitutional magnitude. As was stated in United States v. White, 589 F.2d 1283, 1287 (5th Cir. 1979):

The Fifth Amendment preserves the right to choose, and the voluntariness of the choice is always affected in some way by the exigencies of a particular situation . . .. [D] Defendant cannot be free from conflicting concerns, and in any case, defendant must weigh the relative advantages of silence and explanation

901 F.2d at 947 (quoting White, 589 F.2d at 1287). The court noted that after refusing State Farm’s request to be examined, the insured testified at his criminal trial and obviously did not see fit to invoke his right to remain silent in that proceeding. The court also noted that the insured made no offer to submit to an examination under oath at anytime during the four months between the completion of his criminal trial and the filing of his civil lawsuit against State Farm. The court held that State Farm had no obligation to repeat its request for an examination after the insured breached the contract and the insured’s offer to be examined, as expressed on appeal, simply came too late to be considered. 901 F.2d at 948.

Interestingly, in the Pervis case, the court also rejected the insured’s complaint that State Farm allegedly only sought a sworn statement after it became aware of the pending grand jury indictment against its insured. The insured complained that State Farm actively assisted prosecutors in obtaining the grand jury indictment. State Farm denied the insured’s allegations, and noted that it was required by Georgia law to cooperate with law enforcement officials in the case of a suspicious fire pursuant to O.C.G.A. § 25-2-33(b). The insured complained that his insurer intentionally placed him “in this quandary,” and that he should be excused from complying with State Farm’s request for an examination under oath. The court rejected the insured’s argument:

Whether or not State Farm knew of and cooperated with the prosecution of Pervis [the insured], appellate [State Farm] was entitled under the contract to seek a sworn statement and appellant is not excused for this reason.

901 F.2d at 946 n. 4.

The notion that an insured cannot defeat the insurer’s contractual right to an examination under oath is grounded upon the proposition that a plaintiff cannot utilize the privilege against self-incrimination not only as a shield, but also as a sword. In Kisting v. Westchester Fire Insurance Co., 290 F. Supp. 141, 149 (W.D. Wis. 1968), the court, in reviewing a long line of authorities, reasoned:

Plaintiff’s next contention is that the privilege against self-incrimination justifies Kisting’s refusal to answer the questions involved. Plaintiffs thus seek to utilize the privilege not only as a shield, but also as a sword. This they cannot do. A plaintiff in a civil action who exercises his privilege against self-incrimination to refuse to answer questions pertinent to the issues involved will have his complaint dismissed upon timely motion. See Stockham v. Stockham, 168 So.2d 320, 4 A.L.R. 3rd 539 (Fla. 1964); Lund v. Lund, 161 So.2d 873 (Fla. App. 1964); Lavine v. Borenstein, 13 Misc. 2d 161, 174 N.Y. S.2d 574 (S. Ct., Kings Co. 1958); aff’d 7 A.D.2d 995, 183 N.Y. S.2d 868 (2nd Dept.), aff’d 6 N.Y.2d 892, 190 N.Y. S.2d 702, 160 N.E.2d 921 (1959); Franklin v. Franklin, 365 Mo. 442, 283 S.W.2d 483 (1955); Ann. 4 A.L.R. 3rd 554. Cf. Zaczek v. Zaczek, 20 A.D.2d 902, 249 N.Y. S.2d 490 (2nd Dept. 1964).

The same rationale precludes a litigant from claiming the privilege against self-incrimination on cross-examination after he has testified fully on direct examination. See Brown v. United States, 356 U.S. 148, 78 S. Ct. 622, 2 L. Ed. 2d 589 (1958).

In Allen v. Michigan Basic Property Insurance Co., 249 Mich. App. 66, 74-75, 640 N.W.2d 903, 908 (2001), the court held that the insured cannot avoid the policy requirement of submitting to an examination under oath by invoking the Fifth Amendment because she herself triggered the policy provision by filing her claim. In Fassi v. American Fire & Casualty Co., 700 So. 2d 51, 22 Fla. L. Weekly D2130 (Fla. App. 5th Dist. 1997), the court noted that a civil litigant’s Fifth Amendment right to avoid self-incrimination may be used as a shield but not as a sword, and that an insured may not seek to recover benefits under an insurance policy for a fire loss and at the same time refuse to comply with the policy requirements to answer questions under oath because criminal charges relating to the cause of the fire were either contemplated or pending against him. 700 So. 2d at 51-52.

One court has held that an insured can invoke the Fifth Amendment privilege against self-incrimination if the insurance company shares information with the state. In Weathers v. American Family Mutual Insurance Co., 793 F. Supp. 1002 (D. Kan. 1992), the court concluded that, in conducting the examinations under oath, the insurer was acting as an agent of the state and thus, the insured’s and her son’s Fifth Amendment rights were implicated. 793 F. Supp. at 1022. The court stated that the Pervis decision was “factually distinguishable from the case at bar,” because Pervis and the other authorities relied upon by the insurer involved situations in which the insurer was conducting itself pursuant to an arson reporting immunity act. The court then reasoned:

In the instant case, the court has no doubt that any information revealed to [the insurer] during the examinations under oath would have in turn been given to the State for later use against plaintiff at her criminal trial. For [the insurer] to assert that plaintiff’s or her son’s Fifth Amendment rights were not operable at their examinations under oath is absurd. If [the insurer’s] argument had merit, then an insured in the plaintiff’s position would have to choose between possibly breaching her insurance contract and forfeiting her benefits thereunder or revealing critical information to State authorities which could be used against her in a criminal prosecution. Such a position is simply unacceptable and offensive to constitutional sensibility.

Weathers, 793 F. Supp. at 1022. The court cited no authority to support its remarkable interpretation of the Fifth Amendment and did not further explain in what way the insurer’s position was “offensive to constitutional sensibilities.”

Other courts have rejected the position taken in Weathers. In Allstate Insurance Co. v. Longwell, 735 F. Supp. 1187, 1194 (S.D.N.Y. 1990), the court rejected the argument that the state’s enactment of a regulation mandating the use of cooperation clauses in insurance contracts constituted the requisite state action necessary to find “compulsion under the Fifth Amendment.” The court held that the mere fact that the state has mandated that certain provisions appear in the insurance policies that are protective of both the insured and the insurer does not mean that the policy of insurance is somehow transformed into anything other than a private contractual relationship. 735 F. Supp. at 1194. The court rejected in its entirety the defendant’s contention that his breach of the policy provisions is excused by his invocation of the Fifth Amendment. The court followed the better-reasoned authorities from New York:

There is a line of cases in New York specifically holding that an insured may not refuse on Fifth Amendment grounds to submit to an EUO without breaching the cooperation clause in his contract. Dyno-Bite [Inc.] v. Travelers Cos., 80 A.D.2d 471, 473, 439 N.Y.S.2d 558, 560 (4th Dept. 1981); Lenteni Bros. Moving & Storage Co., Inc. v. New York Property Ins. Underwriting Asso., 76 A.D.2d 759, 428 N.Y.S.2d 684, 687 (1st Dept. 1980), aff’d by 53 N.Y.2d 835, 442 N.E.2d 819, 440 N.Y.S.2d 174 (1981); Gross v. United State Fire Ins. Co., 71 Misc. 2d 815, 337 N.Y.S.2d 221 (Sup. Ct. Kings Co. 1972); Restina v. Aetna Casualty & Surety Co., 61 Misc. 2d 574, 306 N.Y. S.2d 219 (Sup. Ct. Schen. Co. 1969)].

735 F. Supp. at 1193.

In United States v. Moeller, 402 F. Supp. 49 (D. Conn. 1975), the district court rejected the argument that the state statute requiring the standard form fire insurance policy constituted “state action.” The court noted that long before the statute was enacted, insurance companies were entitled to condition payment of insurance benefits upon an insured’s submitting to an examination under oath upon request. The court reasoned that the insurers needed no legislation to continue to assert that prerogative. The court further noted that the statute involved did not require the insurer to conduct an examination at all, and that the state could not compel the insured to give an examination under oath if he refused to testify. 402 F. Supp. at 55-56. The court reasoned:

The statute does not require the insurer to conduct an examination at all. Whether an examination occurs is entirely up to the insurance company. Nor does the statute, of its own force, require [the insured] to answer any questions. If he refuses to testify, the State has no power to compel answers [citation omitted] nor does it have the power to impose adverse consequences [citation omitted]. In the event of a refusal to be examined, the insurance company, not the State, makes a determination whether to assert that the condition of cooperation has been breached.

At most, the State has by statute authorized a private entity to do exactly what it was entitled to do in the absence of legislation.

402 F. Supp. at 56.

The conclusion that a civil litigant cannot invoke the Fifth Amendment right against self-incrimination to gain a tactical advantage in civil litigation is not limited to cases involving insurance claims. In Jacksonville Savings Bank v. Kovack, 326 Ill. App. 3d 1131, 1137, 762 N.E.2d 1138, 1142 (4th Dist. 2002), the Illinois appellate court sitting in the fourth district determined that a former bank officer could not stay civil proceedings against him to recover monies wrongfully obtained by the defendant based on his intent to invoke his Fifth Amendment privilege against self-incrimination in criminal proceedings relating to the same occurrences. The court, citing the Ninth Circuit Court of Appeal’s decision in Keating v. Office of Thrift Supervision, 45 F.3d 322, 324 (9th Cir. 1995), noted that the defendant had no absolute right not to be forced to choose between testifying in a civil matter and asserting his Fifth Amendment privilege. The court further noted that it was permissible to conduct the civil proceedings at the same time the related criminal proceedings were being conducted, even if the simultaneous proceedings necessitated the defendant’s invocation of the Fifth Amendment privilege in the civil proceedings. Indeed, the court, following Keating, found that it was even permissible for the trier of fact to draw adverse inferences from the invocation of the Fifth Amendment in the civil proceeding. 96 S. Ct. 1551, 1558, quoting Keating, 45 F.3d at 326, and citing Baxter v. Palmigiano, 425 U.S. 308, 318, 47 L. Ed. 2d 810, 821, (1976). The court, in affirming the denial of the motion to stay the civil proceedings pending the outcome of the criminal proceedings, noted:

It would be perverse if plaintiffs who claimed to the victims of criminal activity were relegated to receive slower justice than other plaintiffs simply because the behavior they allege is egregious enough to attract the attention of criminal authorities.

326 Ill. App. 3d at 1137, 762 N.E.2d at 1142.

The courts have also rejected attempts by insureds to delay submitting to examinations under oath until criminal actions brought against them were resolved. In Mello v. Hingham Mut. Fire Ins. Co., 421 Mass. 333, 341, 656 N.E.2d 1247, 1252 (1995), the court held that a fire insurer is not required to wait until the conclusion of criminal proceedings against the insured for arson before requiring the insured to submit to an examination under oath. The court also noted that the privilege against self-incrimination did not excuse non-compliance with the insurer’s request that the insured submit to an examination under oath regarding the insured’s fire claim even though the defendant was the subject of criminal investigation. 421 Mass. at 340, 656 N.E.2d at 1251.

In Marquis v. Farm Family Mut. Ins. Co., 628 A.2d 644 (Me. 1993), the Supreme Court of Maine reached a contrary result. In Marquis, court held that the insured’s decision to postpone an examination under oath until the conclusion of his criminal case, on the advice of his attorney, was reasonable under the circumstances. The court, remarkably, claimed that the insurer was unable to demonstrate any prejudice from the insured’s delay of the examination under oath. The court reasoned:

Finally, Farm Family has failed to demonstrate any prejudice as a result of the postponement of Wayne’s examination under oath until the conclusion of the criminal proceedings. In fact, waiting until a final adjudication on the merits in Wayne’s criminal case aids Farm Family by shedding light on the ultimate question with which it should be concerned, namely, whether the insured intentionally burned his potatoes and farm equipment to collect the insurance proceeds.

621 A.2d at 649-50.

The court’s reasoning is, of course, flawed, because the adjudication of the criminal proceeding will only determine whether the state was able to prove the insured guilty beyond a reasonable doubt. In civil cases, when the burden of proof is lower, the jury’s finding would have no collateral estoppel effect. Indeed, the result of the criminal trial may not even be mentioned in a civil proceeding between the insured and the insurer. American Home Assurance Co v. Sunshine Supermarket, Inc., 753 F.2d 321, 324-25, 76 A.L.R. Fed. 605, 19 Fed. R. Evid. Serv. 374 (3rd Cir. 1985); Galbraith v. Hartford Fire Ins. Co., 464 F.2d 225, 227-228 (3rd Cir. 1972); Kelly’s Auto Parts No. 1, Inc. v. Boughton, 809 F.2d 1247, 1254 (6th Cir. 1987); Rabon v. Great Southwest Fire Ins. Co., 818 F.2d 306, 309, 22 Fed. R. Evid. Serv. 1641 (4th Cir. 1987); Kafka v. Truck Ins. Exchange, 1992 WL 159387 (N.D. Ill. 1992); Weathers v. American Family Mutual Ins. Co., 793 F. Supp. 1002, 1015 (D. Kan. 1992); Groves v. Auto Owners Ins. Co., 459 F. Supp. 490, 490-91, 3 Fed. R. Evid. Serv. 41 (E.D. Tenn. 1978); District of Columbia v. Gandy, 458 A.2d 414, 415 (D.C. App. 1983); Cook v. Auto Club Ins. Assoc., 217 Mich. App. 414, 417-18, 552 N.W.2d 661, 662 (1996); Brown v. Allstate Ins. Co., 337 S.C. 499, 506, 523 S.E.2d 807, 811 (S.C. App. 1999); Radicia v. Aetna Casualty & Surety Co., 145 A.D.2d 994, 536 N.Y.S.2d 359 (4th Dep’t 1988); Group Hospital Serv., Inc. v. Daniel, 704 S.W.2d 870 (Tex. App. Corpus Christi 1985).

The court’s reasoning in Marquis is also flawed since it assumes that no prejudice results from delay in conducting an examination under oath and follow-up investigation. The result places the insurer at the mercy of the speed at which the criminal justice system proceeds with virtually no control over those proceedings.

In Winters v. State Farm Fire & Cas. Co., 35 F. Supp. 2d 842 (E.D. Okla. 1999), the insureds refused to comply with the insurer’s demands to submit to examinations under oath while arson charges were pending against them. The court denied the insurer’s motion for summary judgment based on the insured’s failure to comply with the policy provision, reasoning that the purpose of the examination under oath was to enable the insurance company to investigate and pay the claim without prejudice, and that the insurer, therefore, was required to prove prejudice before denying coverage. 35 F. Supp.2d at 846. The court held that whether the insurer was prejudiced was a question of fact for the jury.

In the corporate context, a corporate officer’s refusal to submit to an examination under oath or to answer questions based on his or her Fifth Amendment privilege against self-incrimination may not constitute a failure to submit to an examination under oath if the examination under oath occurs after the officer resigns from the corporation. In Green v. St. Paul Fire & Marine Insurance Co., 691 F. Supp. 700, 703 (S.D.N.Y. 1988), by the time the insurer sent its demand for examination to the officer in question, he was no longer a director or an officer of the insured corporation. The court noted that the insurer failed to heed the warning of its adjustor, who earlier noted that since the insured corporation might be non-existent as a going business, the insurer may wish “now to consider preserving your rights to . . . examine the assured’s principal’s (and others) under oath.” 691 F. Supp. at 703-704. A corporation’s failure to produce a principal or officer for examination under oath, absent such circumstances, constitutes a material breach of the insurance policy precluding recovery. Ausch v. St. Paul Fire & Marine Insurance Co., 125 A.D.2d 43, 511 N.Y.S.2d 919 (2d Dep’t 1987). The cooperation provision of an insurance policy is breached when a current officer of the insured corporation asserts the Fifth Amendment privilege against self-incrimination at an examination under oath. Dyno-Bite, Inc. v. Travelers Cos., 80 A.D.2d 471, 439 N.Y.S.2d 558 (4th Dept. 1981).

An interesting variation of the Fifth Amendment issue was presented in State Farm Indem. Co. v. Warrington, 350 N.J. Super. 379, 795 A.2d 324 (2002). In Warrington, the insured was allegedly injured in an automobile accident and received personal injury protection benefits under his automobile policy from his insurer. He received treatment from a chiropractic corporation of which he was a member of the board of directors. The insurer was investigating possible fraud with respect to the chiropractic corporation, and attempted to schedule an examination under oath of its insured almost four years after the automobile accident.

In oral argument, counsel for the insured explained that the state’s Attorney General’s office raided the chiropractic corporation’s office and also arrested a current city police officer and a former city police officer. The officers were obtaining police accident reports generated each week and going to the doors of the accident victims and recruiting them for treatment at the chiropractic facility. Counsel for the insured represented that the Attorney General expected indictments to occur in the near future and that the insured was a target of the case.

The New Jersey superior court noted that the defendant had a contractual obligation to submit to an examination under oath and that the obligation “cannot be in dispute.” The insured did not deny the obligation, but claimed the right not to answer any questions based upon the Fifth Amendment. The court questioned whether the examination under oath could be considered a “proceeding” or “action” within the protection of the Fifth Amendment. 350 N.J. Super. at 381, 795 A.2d at 325. The court also noted that there was no state-imposed choice presented in the case between remaining silent and risking a protectable “important interest.” 350 N.J. Super. at 384, 795 A.2d at 327. The court observed:

Indeed, we are convinced there is a serious question as to whether defendant has a Fifth Amendment privilege in the context of his private contractual obligations to the insurer. . . . The weight of authority would seem to be that the Fifth Amendment privilege cannot be invoked in the context of a contractual examination under oath to avoid answering material questions. . . .

350 N.J. Super. at 384, 795 A.2d at 328.

The court, in reviewing the cases addressing the issue, noted that most of the cases discussed in the annotation relating to the issue (16 A.L.R. 5th 412) arose in the context of an insured who has filed a suit for coverage under an insurance policy but had refused to comply with the insurer’s request for examination under oath. The court noted that the universal rule, in that context, is that the insured cannot use the Fifth Amendment, on the one hand, to avoid the contractual obligation to cooperate with the insurer, and, on the other hand, compel the insured to provide coverage. 350 N.J. Super. at 385, 795 A.2d at 329. (reviewing applicable authorities).

The court noted that the issue presented in the case before it did not arise in the context of litigation brought by an insured seeking coverage, since the insurer had already provided the requested coverage to the insured. Rather, the assertion of the Fifth Amendment right arose in the context of the insurer’s separate efforts to investigate possible fraud. Moreover, the court noted that the appeal arose in the context of a blanket refusal on the part of the insured to answer any questions so that the materiality of any particular question could not be determined. 350 N.J. Super. at 387, 795 A.2d at 329-330. The court, rather than addressing the issue presented to it, explained:

We are convinced that whether defendant may properly invoke his Fifth Amendment right and, if so, what consequences should flow therefrom are far too important to resolve in the present setting. To begin with, the parties have only half briefed the issues, at best. More importantly, they are not easily resolvable without knowing precisely what questions plaintiff [the insurer] seeks to ask and what information it wishes to probe.

. . . But the point is, plaintiff has a right to conduct an examination under oath. Whether defendant may properly assert a Fifth Amendment privilege and not answer incriminating questions is highly questionable, but at least he does not have a “blanket” right to refuse all the questions.

350 N.J. Super. at 388, 795 A.2d at 331.

In a recent decision of the Ohio court of appeals, the court addressed the issue of the effect of the invocation of the Fifth Amendment in an unusual context. In Williams v. Permanent General Assurance Corp. of Ohio, 2002 WL 1980853 (Ohio App. 8th Dist.), the insured’s leased vehicle was severely damaged by fire. The insured gave a recorded statement at the request of the insurer, and subsequently was interviewed by the Cleveland police department’s arson squad. Thereafter, the insurer informed the insured that it required a statement given under oath.

The policy of insurance required, as one of the duties after a loss, that the insured:

Submit to examinations under oath, or signed or recorded statements in connection with any accident or loss, when and as often as “we” reasonably require.

2002 WL 1980853, *1. The insured declined the request for an examination under oath, the insurer denied the insured’s claim, and the insured filed suit.

On appeal, the insured argued that the clause requiring the examination under oath was “ambiguous, doubtful and uncertain because it involves a person’s right to remain silent as provided in the Article I, Section 10, of the Ohio Constitution and the Fifth Amendment to the United States Constitution.” The insured further argued that the use of the word “or” in the policy was disjunctive and meant that the insurer could only require the insured to provide either an examination under oath or a signed statement, or a recorded statement, but not more than one of the three. The court, in an apparent attempt to balance what it perceived to be constitutional rights with the strong public policy in favor of permitting insurance companies to request and receive statements under oath, reasoned:

In the matter at hand, the parties do not contest the fact that the appellant complied with the appellee’s initial request for information, but rather they disagree as to her right to refuse to make an additional statement under oath. Once again, this court notes that the appellant’s claim was for a fire loss caused by arson. As noted [in another case], there are strong public policy reasons for permitting an insurance company to request and receive a statement under oath from the insured when a claim is made for this type of loss. It is also of great import that the appellee recognized the appellant’s Constitutional right to refrain from self-incrimination and did not attempt to force her to forego those rights. The appellee merely requested that the appellant make a sworn statement as to her knowledge of the events surrounding the loss. The appellant could have complied with this request, i.e., presented herself for examination, and still decline to make any statement that would have been self-incriminatory. There was no abridgement of the appellant’s State or Federal Constitutional rights in this particular set of circumstances.

2002 WL 1980853, *5.

It is not clear what the court meant by its observation that it was of “great import” that the insurer recognize the insured’s “constitutional right” to refrain from self-incrimination and did not attempt to force her to forego those rights. The insurer’s counsel sent a letter to the insured’s counsel addressing the right to avoid self-incrimination:

With regard to your concerns regarding insurance fraud and arson, there is nothing that prevents your client from stating that she refuses to answer a question as it may incriminate her. Also, if she does not wish to participate in the exam, I will not attempt to force her to do so. However, such refusal will be deemed a valid basis for denying her claim until such time as she does cooperate.

2002 WL 1980853, *1. It is also not clear whether the court would have permitted the insured to appear at the examination under oath and not answer any question that she or her counsel believed would be self-incriminatory. The decision does not cite any of the myriads of authorities addressing the issue of the effect of the invocation of the right against self-incrimination in the context of an insurer’s investigation into a loss.

In the event that an insurer finds itself in a jurisdiction that permits an insured to invoke the Fifth Amendment privilege, the insurer, if sued by the insured after denying the claim, should ask the court to instruct the jury that an adverse inference can be drawn against the party refusing to answer questions on the grounds of self-incrimination. See, e.g., Baxter v. Palmigiano, 425 U.S. 308, 318, 96 S. Ct. 1551, 1558, 47 L. Ed. 2d 810, 821, (1976); U. S. v. 4003-4005 Fifth Avenue, 55 F. 3d 78, 83 (2d Cir. 1995); S.E.P. v. Colello, 139 F. 3d 674, 678 (9th Cir. 1998); Keating v. Office of Thrift Supervision, 45 F.3d 322, 326 (9th Cir. 1995); U. S. v. Private Sanitation Industry of Nassau/Sufffolk, Inc., 899 F. Supp. 974, 982 (E.D. N.Y. 1994); LiButti v. U. S., 968 F. Supp. 71, 75-77 (N.D. N.Y. 1997); Lentz v. Metropolitan Property & Cas. Ins. Co., 2001 Mass. App. Div. 52, 2001 WL 389346 (2001); Jacksonville Savings Bank v. Kovack, 326 Ill. App. 3d 1131, 1137, 762 N.E.2d 1138, 1142 (4th Dist. 2002); See also, People v. $1,124,905 U.S. Currency & One 1998 Chevrolet Astro Van, 117 Ill. 2d 314, 332, 685 N.E.2d 1370, 1379 (1997). In the event the examiner finds an insured refusing to answer questions on the basis of privilege, the examiner should seek invocation of the privileges on ultimate issues by asking questions such as:

Q. Did you set your house on fire for the purpose of obtaining insurance proceeds because you were in poor financial condition?

After detailed questioning on issues concerning opportunity, motive, incendiary origin, or any other subject relating to the claim, the insurer should have sufficient ammunition to use at trial to demonstrate to the jury why the invocation of the privilege in a civil context should convince them to find for the insurer on the ultimate issues in the case.