Opinion
A166946 A167445
01-30-2024
Vladimir MYASNYANKIN, Plaintiff and Respondent, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant and Appellant. Vladimir Myasnyankin, Plaintiff and Appellant, v. Nationwide Mutual Insurance Company, Defendant and Respondent.
BHC Law Group, LLP, Karen L. Uno, Emeryville; Hayes, Scott, Bonino, Ellingson & Guslani, LLP, Mark G. Bonino, Redwood City, and Donald L. Hall, III for Defendant and Appellant in Al66946 and Defendant and Respondent in A167445. Kerley Schaffer LLP, Dylan L. Schaffer, Pleasant Hill, for Plaintiff and Respondent in A166946 and Plaintiff and Appellant in A167445. Amy Bach, Mill Valley, and Richard B. Oatis for United Policyholders as Amicus Curiae on behalf of Plaintiff and Respondent in A166946.
Trial Judge: Hon. Tara Desautels, Trial Court: Alameda County Superior Court (Alameda County Super. Ct. No. 22-CV-011144)
BHC Law Group, LLP, Karen L. Uno, Emeryville; Hayes, Scott, Bonino, Ellingson & Guslani, LLP, Mark G. Bonino, Redwood City, and Donald L. Hall, III for Defendant and Appellant in Al66946 and Defendant and Respondent in A167445.
Kerley Schaffer LLP, Dylan L. Schaffer, Pleasant Hill, for Plaintiff and Respondent in A166946 and Plaintiff and Appellant in A167445.
Amy Bach, Mill Valley, and Richard B. Oatis for United Policyholders as Amicus Curiae on behalf of Plaintiff and Respondent in A166946.
SIMONS, J.
Residential property insurance policies commonly require an insured to submit to an examination under oath (EUO) if requested by the insurer in connection with the resolution of a claim. (Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2023) ¶ 6:289.) Insurance Code section 2071.1, subdivision (a)(4), provides that an insured subject to an EUO "may record the examination proceedings in their entirety." We are presented with an issue of first impression: whether this provision entitles an insured to make a video recording of the insurer’s participants in an EUO. After considering the statute’s plain language, statutory framework, and legislative history, we conclude the provision does confer such a right. In the unpublished portion of this opinion, we resolve a dispute over attorney fees.
All undesignated statutory references are to the Insurance Code.
BACKGROUND
The facts are not contested. Following water damage to his home, Vladimir Myasnyankin (Myasnyankin or plaintiff) filed a claim under his property insurance policy with Nationwide Mutual Insurance Company (Nationwide). Pursuant to the policy terms, Nationwide required plaintiff to submit to an EUO, which was scheduled to be in person. Relying on section 2071.1, subdivision (a)(4) (hereafter section 2071.1(a)(4)), plaintiff sought to video record the entire proceeding, including Nationwide’s attorneys and claims adjusters. Nationwide refused to proceed with the EUO, asserting section 2071.1(a)(4) only permitted plaintiff to video record himself. Further, Nationwide threatened to deny plaintiffs claim unless he agreed to proceed with the EUO. Plaintiff then sued Nationwide seeking a declaration of his rights under section 2071.1.
Nalini Kumar, a separate insured with a different claim subject to another policy, is no longer party to the action.
Nationwide filed a demurrer to the complaint on the grounds that neither the policy nor section 2071.1 vested plaintiff with the right to video record all participants at his EUO. Looking at the plain language of section 2071.1 and the legislative history, and examining the distinction between section 2071.1 and the rules of civil procedure regarding depositions (Code Civ. Proc., § 2025.330, subd. (c)), the trial court overruled Nationwide’s demurrer. The trial court interpreted the phrase "record the examination proceedings in their entirety" as including "video recording of the persons asking the questions, the person answering the questions, and any other aspect of the proceedings." At the trial court’s suggestion, the parties entered a stipulated judgment in favor of Myasnyankin. Nationwide appealed the judgment (No. A166946). The trial court denied plaintiff’s subsequent motion for attorney fees, and plaintiff appealed that order (No. A167445). We granted plaintiff’s motion to consolidate the appeals for argument and decision.
DISCUSSION
I. Demurrer Appeal
[1, 2] " ‘An insured’s compliance with a policy requirement to submit to an examination under oath is a prerequisite to the right to receive benefits under the policy.’ " (Abdelhamid v. Fire Ins. Exchange (2010) 182 Cal.App.4th 990, 1001, 106 Cal. Rptr.3d 26 (Abdelhamid).) "Examinations under oath are frequently conducted under circumstances where the loss is undocumented or suspect." (Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2023) ¶ 6:289.3.) "The purpose of the examination under oath is to enable the insurer to obtain the information necessary to process the claim: ‘ "As the facts with respect to the amount and circumstances of a loss are almost entirely within the sole knowledge of the insured, … it is necessary that it [the insurer] have some means of cross-examining, as it were, upon the written statement and proofs of the insured, for the purpose of getting at the exact facts before paying the sum claimed of it." ’ " (Brizuela v. CalFarm Ins. Co. (2004) 116 Cal.App.4th 578, 591-592, 10 Cal.Rptr.3d 661 (Brizuela).) "The examination is normally conducted orally before a court reporter who administers the oath and transcribes the proceeding." (Croskey at al., supra, ¶ 6:289.)
Section 2071.1, subdivision (a), applies to "any policy that insures property and contains a provision for examining an insured under oath," and enumerates a nonexclusive list of "rights of each insured who is requested to submit to an examination under oath." One such right is to "record the examination proceedings in their entirety." (§ 2071.1(a)(4).) The parties agree the provision grants insureds the right to make an audio or video recording, but dispute who can be recorded on video. Plaintiff argues the statute entitles an insured to video record the insurance company’s representatives, while Nationwide contends the provision only confers on insureds the right to video record themselves.
Section 2071. 1, subdivision (a), provides, in its entirety: "This section applies to an examination of an insured under oath pursuant to Section 2071 labeled ‘Requirements in case loss occurs’ and other relevant provisions of that section [setting forth the standard form of fire insurance policy], and to any policy that insures property and contains a provision for examining an insured under oath, when the policy is originated or renewed on and after January 1, 2002.
"The following are among the rights of each insured who is requested to submit to an examination under oath:
"(1) An insurer that determines that it will conduct an examination under oath of an insured shall notify the insured of that determination and shall include a copy of this section in the notification.
"(2) An insurer may conduct an examination under oath only to obtain information that is relevant and reasonably necessary to process or investigate the claim.
"(3) An examination under oath may only be conducted upon reasonable notice, at a reasonably convenient place and for a reasonable length of time.
"(4) The insured may be represented by counsel and may record the examination proceedings in their entirety.
"(5) The insurer shall notify the insured that, upon request and free of charge, it will provide the insured with a copy of the transcript of the proceedings and an audio or video recording of the proceedings, if one exists. Where an insured requests a copy of the transcript, the recording, or both, of the examination under oath, the insurer shall provide it within 10 business days of receipt by the insurer or its counsel of the transcript, the recording, or both. An insured may make sworn corrections to the transcript so it accurately reflects the testimony under oath.
"(6) In an examination under oath, an insured may assert any objection that can be made in a deposition under state or federal law. However, if as a result of asserting an objection, an insured fails to provide an answer to a material question, and that failure prevents the insurer from being able to determine the extent of loss and validity of the claim, the rights of the insured under the contract may be affected.
"(7) An insured who submits a fraudulent claim may be subject to all criminal and civil penalties applicable under law."
United Policyholders filed an amicus brief in support of plaintiff.
[3–8] " ‘As in any case involving statutory interpretation, our fundamental task here is to determine the Legislature’s intent so as to effectuate the law’s purpose.’ [Citation.] The well-established rules for performing this task require us to begin by examining the statutory language, giving it a plain and commonsense meaning. [Citation.] We do not, however, consider the statutory language in isolation; rather, we look to the statute’s entire substance in order to determine its scope and purposes. [Citation.] That is, we construe the words in question in context, keeping in mind the statute’s nature and obvious purposes. [Citation.] We must harmonize the statute’s various parts by considering it in the context of the statutory framework as a whole. [Citation.] If the statutory language is unambiguous, then its plain meaning controls. If, however, the language supports more than one reasonable construction, then we may look to extrinsic aids, including the ostensible objects to be achieved and the legislative history." (Los Angeles County Metropolitan Transportation Authority v. Alameda Produce Market, LLC (2011) 52 Cal.4th 1100, 1106–1107, 133 Cal.Rptr.3d 738, 264 P.3d 579.)
[9] We begin with the plain language. Section 2071.1 provides that "each insured who is requested to submit to an examination under oath … may be represented by counsel and may record the examination proceedings in their entirety." (§ 2071.1(a)(4), italics added.) "Entirety" is defined as "the state of being entire or complete;" "entire," in turn, is defined as "with no element or part excepted." (Merriam-Webster’s Unabridged Dict. Online, https://unabridged.merriam-webster.com/unabridged/entirety> & < https://unabridged.merriam-webster.com/unabridged/entire> [as of Jan. 22, 2024], italics added; see also Oxford English Diet. Online (2024) https://doi.org/10.1093/OED/8031425223> [as of Jan. 22, 2024] [phrase "in its entirety" means "in its complete form, as a whole"].) The plain language thus provides an insured may record every element and part of the examination proceeding.
[10] "Examination proceeding" is also a broad term. A different subdivision of section 2071.1 uses the term "testimony" to denote the insured’s answers to questions. (§ 2071.1, subd. (a)(5) ["An insured may make sworn corrections to the transcript so it accurately reflects the testimony under oath." (Italics added)].) " ‘[W]hen different words are used in contemporaneously enacted, adjoining subdivisions of a statute, the inference is compelling that a difference in meaning was intended.’ " (Kleffman v. Vonage Holdings Corp. (2010) 49 Cal.4th 334, 343, 110 Cal.Rptr.3d 628, 232 P.3d 625.) Thus, the use of "testimony" elsewhere in the same statute suggests that the Legislature intended the term "examination proceedings" to include more than just the insured’s responses to questions. Indeed, as plaintiff notes, a statute governing depositions expressly limits recording rights to "testimony." (See Code Civ. Proc., § 2025.330, subd. (c) [party noticing deposition "may … record the testimony by audio or video technology" (italics added)].) The insurer’s representatives at an EUO are an element or part of the examination proceeding, and therefore fall within the scope of the plain language. This construction is supported by the statutory framework. Section 2071.1, subdivision (a) provides a nonexclusive list of rights of insureds, indicating an obvious purpose to protect those subject to EUOs.
This purpose is not impacted by the statute’s recognition that "An insured who submits a fraudulent claim may be subject to all criminal and civil penalties applicable under law" (§ 2071.1, subd. (a)(7)), a provision that simply restates existing law.
To the extent the statutory language is susceptible to a different interpretation, the legislative history strongly supports our construction. The history of section 2071.1, added in 2001 (Stats. 2001, ch. 583, § 5), is unequivocal that the motivating purpose was to provide protections for insurance consumers during the claims process. Section 1 of the enacted bill expressly so provides: "Existing legal protections for insurance policyholders proved to be inadequate after the Northridge earthquake. The public requires additional safeguards against unfair claim settlement practices by insurance companies. It is the intent of the Legislature that the provisions of this act add basic consumer protections to those currently set forth in the Insurance Code and supporting regulations." (Stats. 2001, ch. 583, § 1, italics added.)
We grant plaintiff’s June 2, 2023 unopposed request for judicial notice of certain legislative history materials.
[11] As the bill’s author explained, "Existing law needs to be modernized. It allows insurers to use lawyers to delay claim settlements, conduct fishing expeditions, intimidate and harass innocent consumers while ostensibly investigating their claims, but provides few balancing protections for claimants." (Sen. Com. on Ins., Background Information Request for Sen. Bill No. 658 (2001-2002 Reg. Sess.), p. 3.) Other supporters of the bill similarly contended "that the current EUO process was enacted in 1949 and gives ‘virtually unlimited investigation rights to insurance companies’ with little consumer protection." (See Sen. Rules Com., Off. of Sen. Floor Analyses, analysis of Sen. Bill No. 658 (2001–2002 Reg. Sess.) as amended Sept. 12, 2001, p. 7.) "The author introduced this bill to address concerns by property owners who had been subjected to abuses by insurance companies during the insurance claim process, including individuals and victims of the 1991 Oakland firestorm and the 1994 Northridge earthquake. [¶] … [T]he bill establishes basic due process rights for insureds who are subjected to EUOs," among other protections. (Assem. Floor Analysis, 3d reading analysis of Sen. Bill No. 658 (2001-2002 Reg. Sess.) as amended Sept. 12, 2001, p. 3.) Thus, the legislation was intended to not only enhance the process due an insured but also provide consumer protection provisions, such as the right to record.
"Courts consider such background information documents in discerning legislative intent." (California Fair Plan Assn. v. Garnes (2017) 11 Cal.App.5th 1276, 1296, fn. 23, 218 Cal.Rptr.3d 246.)
The dissent suggests the Legislature intended to provide only due process protections. We see no basis in the statutory language or legislative history to so limit the statute. To the contrary, the Legislature’s express intent was to "add basic consumer protections to those currently set forth in the Insurance Code and supporting regulations." (Stats. 2001, ch. 583, § 1, italics added.)
[12] To be sure, the legislative history does not explicitly address whether section 2071.1(a)(4) encompasses the right to video record the insurer’s representatives. However, it demonstrates an express and unequivocal intent to protect insureds from harassment in EUO proceedings, and this purpose is served by granting insureds such a right. Significantly, video records nonverbal conduct, such as eye-rolls or glares, which would not be captured by audio recordings or reporter’s transcripts. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2023) ¶8:659.) In addition, the knowledge that a person is being video recorded may prompt that person to modify their behavior in a positive manner. (Cf. ibid. [video recording a deposition witness "tends to make the witness more candid. (The ‘eye of the camera’ is upon him or her, etc.)"].) " ‘[C]ivil statutes for the protection of the public are, generally, broadly construed in favor of that protective purpose.’ " (Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal.4th 524, 530, 120 Cal.Rptr.3d 531, 246 P.3d 612.) Granting insureds the right to record the insurer’s representatives furthers the Legislature’s purpose to protect insurance consumers from harassment during EUOs. For this reason, we reject Nationwide’s argument that video recording an insurer’s representatives is unreasonable.
Plaintiff argues it is important to capture the body language of not just the person examining the insured, but also "non-examining participants such as adjusters and fraud investigators … who are routinely present at EUOs." For in-person EUOs, such as plaintiff’s, we agree. For remote EUOs, however, we find that the face of a remote viewer whose camera is turned off or who is otherwise not visible on the teleconferencing platform—and who therefore cannot convey non-verbal signals—is not part of the proceedings for purposes of section 2071.1 (a)(4).
In addition, the legislative history reveals the Legislature expanded the scope of an insured’s right to record EUOs during the amendment process. As initially introduced, the bill amended section 2071, which sets forth the standard form of fire insurance policy, to afford an insured subject to an EUO the right to "tape-record the examination." (Sen. Bill No. 658 (2001–2002 Reg. Seas.) as introduced Feb. 23, 2001, § 5, p. 9.) Subsequently, the bill was amended both to apply the EUO protections more broadly to all property insurance policies, and to expand the recording right to encompass the right to "record the examination proceedings in their entirety." (Sen. Bill No. 658 (2001-2002 Reg. Sess.) as amended May 9, 2001, § 4, p. 11.) This expansion of the right to record—from "tape-recording]" to "record[ing]" and, more significantly for our purposes, from "the examination" to "the examination proceedings in their entirety"—reveals a legislative intent that the insured’s right to record the EUO proceedings be comprehensive. We see no basis to exclude from this broadly phrased and intentionally expanded right the right to video record the insurer’s representatives.
The dissent acknowledges the significance of this expanded language, but construes the expansion as temporal, such that the right to record extends beyond the questions and answers of the examination to encompass all discussions and exchanges from, presumably, the moment the participants enter the room or join the videoconference until the moment they leave. The parties did not brief this issue on appeal, so we need not resolve it. But we note that it may be reasonable to construe the statute to include such a temporal completeness. In any event, there is no reason why the interpretation proposed by the dissent precludes the construction adopted in this opinion that the right includes video recording the Insurer’s representatives. Indeed, as discussed above, our construction furthers the Legislature’s purpose of protecting insureds from harassment during EUO proceedings.
Nationwide argues that construing section 2071.1(a)(4) to entitle insureds to video record the insurer’s representatives in an EUO will increase costs and delays with no attendant benefit—in essence, an argument that such a construction would be contrary to "the presumption that the Legislature intends reasonable results consistent with its apparent purpose." (Catholic Mutual Relief Society v. Superior Court (2007) 42 Cal.4th 358, 372, 64 Cal.Rptr.3d 434, 165 P.3d 154.) We are not persuaded.
[13] Nationwide contends additional costs will flow from "requiring someone to manage the camera for the duration of the Examination Under Oath," and delays will ensue from "the amount of time needed to setup the additional camera(s)" and the possibility of "technical difficulties." The record before us indicates EUOs are held both in person (as plaintiff’s was scheduled to be) and on Zoom or other videoconferencing platforms (as Kumar’s was scheduled to be). With respect to the former, Nationwide does not claim video recording of EUOs must be done by a professional videographer, and the need for a videographer, or indeed for any person to constantly manage the camera, has been obviated by current technology. "Smartphones that become video cameras with the flick of a thumb are ubiquitous" (Nieves v. Bartlett (2019) — U.S. —, 139 S.Ct. 1715, 1739, 204 L.Ed.2d 1 (dis. opn. of Sotomayor, J.)), and such a smartphone can be placed on a tripod or otherwise propped up and left to record the insurer’s representatives, without the need for a person standing by. If the EUO is conducted on a videoconferencing platform, it is simply a matter of the insured recording the screen on their device. We presume the cost and delay attributable to recording an insurer’s representatives will be, in most if not all cases, de minimus.
Nationwide’s assertion that delay is exemplified by this action scarcely warrants mention. The delay in this case, of course, was not caused by any video recording arrangements—which Nationwide refused to permit—but rather by the parties’ dispute and subsequent litigation over whether plaintiff was entitled to make such arrangements.
At a hearing in a separate action, the transcript of which was submitted by Nationwide below, plaintiff’s counsel represented that his practice for videotaping everyone at EUOs is to set up "one tripod with an iPod (sic) on it," which is placed "in the corner of the room, and it … pretty much captures everyone, usually side or angled views."
To the extent there is a cost, counsel for both parties stated at oral argument that the insured bears the cost of any recording made pursuant to section 2071.1(a)(4). We agree that section 2071.1(a)(4) assigns any cost to the Insured. Although section 2071.1, subdivision (a)(5), entitles an insured to a free copy of any audio or video recording the insurer has elected to have made (see ante, fn. 3), subdivision (a)(4) provides the insured "may record" the proceedings. This difference supports the parties’ agreement that if the insured wants a recording beyond any that the insurer is making, the insured must arrange and pay for that recording.
Nationwide also argues there is no benefit to insureds to video record the insurer’s representatives. Nationwide contends other protections are sufficient, to wit, the ability of an insured to file a complaint about their insurer—including any improper conduct during an EUO—with the Department of Insurance (§ 12921.1, subd. (a)). This complaint procedure was in effect when section 2071.1 was enacted, and the Legislature found it insufficient to secure the rights of insureds in the EUO process. (See § 12921.1, subd. (a) [mandating complaint procedure be established "on or before July 1, 1991"]; Stats. 2001, ch. 583, § 5 [adding § 2071.1].) The Legislature may quite sensibly have concluded that such complaints would be more easily resolved if insureds could record all aspects of the proceedings, or that enabling insureds to record the insurer’s representatives could help prevent improper conduct in the first instance and thereby obviate the need for a complaint. Nationwide also asserts there is no need to video record the insurer’s participants because the questions asked by the insurer’s representative will be captured by the reporter’s transcript or on the audio portion of any video recording of the insured. As we have already discussed above, these methods do not capture nonverbal conduct, which may be intimidating or harassing.
In sum, the plain language, statutory framework, and legislative history all support a construction of section 2071.1(a)(4) granting insureds the right to make a video recording of the insurer’s representatives at an EUO, and such a construction is not unreasonable. II. Fees Appeal
The dissent also seems to argue that, even If we have properly interpreted section 2071.1(a)(4), the insurer may deny the claim if the insured insists on video recording all or some of the insurer’s participants at the EUO. The dissent relies on 3 cases as authority; we find each inapposite. In Hickman v. London Assurance Corp. (1920) 184 Cal. 524, 195 P. 45, the insured argued the privilege against self-incrimination permitted him to refuse to answer questions at the examination without suffering a forfeiture of its claim. The court disagreed with the underlying premise: no such privilege existed as to "a private examination arising out of a contractual relationship." (Id. at p. 532, 195 P. 45.) In Brizuela, supra, 116 Cal.App.4th 578, 10 Cal.Rptr.3d 661, the insured improperly conditioned his participation in an EUO on the insurer providing him with a copy of a prior recorded statement he had given. (Id. at p. 589, 10 Cal.Rptr.3d 661 ["There is no authority for the proposition that an insurer is under a legal obligation to provide an insured with a copy of the insured’s previously recorded statements taken before a. civil action has been filed and discovery commenced."].) The statutory provision discussed in Abdelhamid, supra, 182 Cal.App.4th 990, 106 Cal.Rptr.3d 26, granting insureds the right to object to certain questions, included the express qualification that if an insured asserts that statutory right, "the rights of the insured under the contract may be affected" if, "as a result of asserting an objection, an insured fails to provide an answer to a material question, and that failure prevents the insurer from being able to determine the extent of loss and validity of the claim." (§ 2071.1, subd. (a)(6); see Abdelhamid, at p. 1004, 106 Cal.Rptr.3d 26.) No such language appears in section 2071.1(a)(4), strongly suggesting the Legislature did not intend that right to be similarly qualified. Further, in each of these cases, the court could conclude that the insured’s conduct undermined the insurer’s ability to investigate the claims. In contrast, an insured’s exercise of the right to record the entire EUO proceedings has no impact on the insurer’s ability to investigate the underlying claim. There is no reason to construe the statute, as the dissent suggests, as obligating an insured to submit to an EUO despite the insurer’s refusal to comply with section 2071.1(a)(4).
See footnote *, ante.
DISPOSITION
In case number A166946, we affirm the judgment. In case number A167445, we reverse and remand. Plaintiff shall recover his costs on appeal.
I concur.
BURNS, J.
JACKSON, P. J., Dissenting:
I respectfully dissent from the majority’s opinion because I disagree with the majority’s interpretation of section 2071.1(a)(4).
Section 2071.1(a)(4) provides, in part, that an insured "may record the examination proceedings in their entirety." In this declaratory relief action, plaintiff sought and obtained a court order that Nationwide "violated" section 2071.1(a)(4) and the applicable insurance contract when it "demanded" an EUO of plaintiff "but refused to permit [plaintiff] to ‘record the examination proceedings in their entirety," and "actually conditioned or threatened to condition payment of policy benefits" on plaintiffs participation in an EUO "in which [he] would be forced to forgo exercising [his] rights under [section] 2071.1(a)(4)." This ruling is contrary to the applicable law and the terms of the parties’ agreement.
The standard form fire insurance policy, as set forth in section 2071, provides, in relevant part, "The insured, as often as may be reasonably required and subject to the provisions of Section 2071.1, shall … submit to examinations under oath by any person named by this company …. " (Italics added.) Section 2071.1, in turn, provides, in relevant part, "This section applies to an examination of an insured under oath pursuant to Section 2071 labeled ‘Requirements in case loss occurs’ and other relevant provisions of that section, and to any policy that insures property and contains a provision for examining an insured under oath …." (§ 2071.1, subd. (a).)
Under the section entitled "Duties After Loss," the standard Nationwide policy pro- vides, in part, as follows: "In case of a loss to covered property, we have no duty to provide coverage under this policy if you or an ‘insured’ seeking coverage fails to comply with the following conditions: [¶] … [¶] … As often as we reasonably require: [¶] … [¶] … Submit to an examination under oath by our representative …. Upon request, the exams will be conducted separately and not in the presence of any other persons except the legal representative of the person submitting to the examination under oath, our representatives and a court reporter …. " (Boldface omitted.)
Read together, the plain statutory and contract language unequivocally require an insured to submit to an EUO. Despite this clear directive, the trial court found Nationwide violated the law by requiring plaintiff to adhere to these statutory and contractual requisites. This conclusion is based on an erroneous interpretation of section 2071.1(a)(4).
Section 2071.1 provides an insured subject to an EUO "may record the examination proceedings in their entirety." (§ 2071.1, subd. (a)(4), italics added.) A preliminary, but crucial step, in interpreting this phrase is examining the word "may." Section 16 of the Insurance Code, one of the general provisions applicable to all sections of the code, instructs that the word "shall" is mandatory and the word "may" is permissive, unless otherwise provided from the context. Nothing in section 2071.1 provides that an EUO—beyond transcription—must be recorded in a particular manner. Indeed, subdivision (a)(5) provides an insurer "shall notify the insured that, upon request and free of charge, it will provide the insured with a copy of the transcript of the proceedings and an audio or video recording of the proceedings, if one exists." (Italics added.) The references to "shall" and "will" with regard to "the transcript" juxtaposed with "an audio or video recording … if one exists" reflect the former is required while the latter is permissive. Subdivision (a)(4)—which provides an insured may record the examination proceedings—is consistent with the interpretation that additional forms of recording are permitted but not required.
Had the Legislature wanted to confer specific recording rights, it could have done so as it has done in a variety of other contexts. For example, persons attending various public meetings "shall have the right to record the proceedings with an audio or video recorder …. " (Gov. Code, §§ 11124.1, subd. (a), 54953.5, subd. (a), italics added; see Welf. & Inst. Code, § 4660.) Similarly, in the context of certain licensing matters, "[a]ll proceedings relating to an application at a meeting of the commission or at an evidentiary hearing shall be recorded stenographically or by audio or video recording." (Bus. & Prof. Code, § 19870, subd. (e), italics added; see Health & Saf. Code, § 1736.5, subd. (g)(2) [disciplinary "hearing shall be audio or video recorded"]; Elec. Code, § 21160, subd. (g)(1) [in redistricting process "local jurisdiction shall either video or audio record or prepare a written summary of each oral public comment"]; but see Code Civ. Proc., § 2025.330, subd. (c) [party noticing deposition "may also record the testimony by audio or video technology if the notice of deposition stated an intention also to record the testimony by either of those methods" (italics added)].)
Here, the Legislature could have specified—but did not—that the insured "shall" have the "right to video record the examination proceedings." Nevertheless, even assuming the phrase "may record" bestows upon the insured the right to video record the proceedings, nothing in the statutory language suggests the insured has the right to video record the insurer’s participants, including its attorneys and claims adjusters.
Section 2071.1, does not define "examination," "proceedings" or "entirety" and does not otherwise address what acts are encompassed or excluded by these terms. In the absence of a legislative definition, it is permissible to look to case law as a source to define the terms in question. (Cleveland v. Taft Union High School Dist. (2022) 76 Cal.App.5th 776, 806, 291 Cal.Rptr.3d 759.) Words of a statute are given their usual and ordinary meanings. (Ibid.) " ‘When attempting to ascertain the ordinary, usual meaning of a word, courts appropriately refer to the dictionary definition of that word’ (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122, 29 Cal.Rptr.3d 262, 112 P.3d 647 [citations]), although the process of interpreting statutes involves more than simply stitching together dictionary definitions [citation]." (Ibid.)
" ‘Examination’ is defined as ‘(examination of the witness by counsel) [investigation, questioning, probing, probe, scrutiny, inquiry,’ in Statsky, West’s Legal Thesaurus/Dictionary (West, 1986) at page 291. The word is commonly understood to mean interrogation with questions and answers." (Globe Indemnity Co. v. Superior Court (1992) 6 Cal.App.4th 725, 730, 8 Cal. Rptr.2d 251.)
"Proceeding" has been defined in various ways, ranging from the broad to the specific. Definitions of the term fall into one of two categories: "Proceeding" may be used either in a general sense as " ‘the form and manner of conducting juridical business before a court or judicial officer;’ and more particularly as ‘[a]n act which is done by the authority or direction of the court …; an act necessary to be done in order to obtain a given end.’ " (People v. Silverbrand (1990) 220 Cal.App.3d 1621, 1627, 270 Cal.Rptr. 261.) Finally, "entirety" is defined as "[t]he whole, as opposed to a moiety or part." (Black’s Law Dict. (11th ed. (2019) p. 673, col. 2.)
As nothing in the plain statutory language or related definitions supports the meaning urged by plaintiff, it is necessary to consider the legislative history. It is undisputed that section 2071.1 was enacted due to concerns about perceived harassment of insureds by insurance companies. However, nothing in the legislative history suggests the Legislature intended to reduce harassment and intimidation by giving insureds the right to video record everyone present at an EUO. Rather, the legislative history reflects section 2071.1 was enacted to establish "basic due process rights" for insureds who are subject to EUOs. (Assem. Com. on Ins., Background Info Re: SB 658, p. 1.) Although the exact parameters of these "basic due process rights" were not otherwise specified, the legislative history reflects Senate Bill No. 658 (2001–2002 Reg. Sess.) (Senate Bill 658) was promulgated to provide greater protections to insureds by ensuring they are aware of the law of unfair claims practices and other insurance practices. (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 658 (2001–2002 Reg. Sess.) as amended May 25, 2001, pp. 1–2.) Senate Bill 658 also announced new restrictions on the taking of evidence during EUOs, most notably by limiting the scope to " ‘relevant’ " information that is reasonably necessary to process or investigate the claim. (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 658, supra, at p. 2.) Additionally, insurance companies, once unhindered in conducting EUOs, would be constrained by reasonable limits in terms of notice, place, and time. (Ibid.) Insureds could also be represented by counsel and assert any objection that could be made in a deposition under state or federal law. (Id. at pp. 2–3.) Other protections required that the same adjuster be used throughout the claim process to prevent insureds from having to go back to square one each time a new adjuster was assigned to the claim. (Id. at p. 3.)
Nothing in the legislative history suggests an insured’s ability to video record an EUO—let alone video record an insurance company’s participants—is necessary to safeguard an insured’s basic due process rights. In fact, there is little, if any, discussion in the legislative history about specific recording methods. And what minimal references there are, none mention an insured’s right to video record an insurer’s participants.
Indeed, in California, criminal defendants are not entitled to video recorded interrogations except under extremely limited circumstances. (See Pen. Code, § 859.5; Welf. & Inst. Code, § 626.8 [adults and juveniles suspected of murder]; see also Bang et al., Police recording of custodial interrogations: A state-by-state legal inquiry (2018) 20(1) Internal. J. Police Sci. & Mgmt. 3–18.) And, even then, there is no requirement that the interrogators themselves must be video recorded. (See Pen. Code, § 859.5; Welf. & Inst. Code, § 626.8.)
As noted, Senate Bill 658 originally used the following language: "[T]he insured may tape-record the examination and be represented by counsel." (Sen. Bill No. 658 (2001–2002 Reg. Sess.) as introduced Feb. 23, 2001, § 5, pp. 8–9.) Section 2071.1(a)(4) as enacted reads, in part, that an insured subject to an EUO "may record the examination proceedings in their entirety" (Italics added.) Plaintiff argues the italicized language supports an expansive view of insureds’ rights, which necessarily includes the ability to video record the insurance company’s attorneys and other participants. Not so.
The two key differences between the original language and section 2071.1(a)(4) as enacted are: (1) "may tape-record" became the more general "may record"; and (2) "the examination" became "the examination proceedings in their entirety." To be sure, the law as enacted expanded an insured’s methods of recording an EUO by removing the outdated reference to "tape-record." Similarly, changing "examination" to "examination proceedings in their entirety" expanded the scope of what an insured is able to record. However, this rewording does not establish an insured has a right to video record all participants at an EUO. Rather, a more reasonable interpretation is that insureds are permitted to record not just the examination (i.e.—the questions and answers), but everything that occurs during the whole proceeding (from start to finish)—thereby guarding against any off-the-record discussions or remarks that could potentially implicate untoward conduct on the part of an insurer.
The legislative history reflects section 2071.1 was designed as a means to level the playing field for insureds during EUOs, by educating insureds about their rights; placing limits on the scope of acceptable questions; allowing insureds to assert objections to questions; and requiring insurers to conduct EUOs in a reasonable manner in terms of notice, location, and duration. (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 658, supra, pp. 1–3.) These procedural safeguards are consistent with the fundamental hallmarks of due process, as they provide an insured with notice and a meaningful opportunity to be heard. (U.S. Const., 5th & 14th Amends.; Cal. Const., art. I, §§ 7 & 15; see People v. Silva (2021) 72 Cal.App.5th 505, 523, 287 Cal.Rptr.3d 376.)
Nothing in the legislative history supports the position that the ability to video record all participants at an EUO is a "right", or a determinative factor of whether due process is being afforded. The trial court found as much in denying plaintiffs request for private attorney general fees. As the trial court explained, "the Legislature targeted a perceived problem by enacting [section 2071.1] to curb abuses by insurance companies during the claims process, [and] the ability to record operates as a tool in promoting the efficiency of the proceedings …. " (Italics added.) This interpretation—which is consistent with the statutory language and legislative history—is contrary to the judgment finding Nationwide "violated" the law when it conditioned payment of policy benefits by requiring plaintiff "to forgo exercising [his] rights under [section] 2071.1(a)(4)."
Case law has long confirmed an insurer may contractually require, as a condition of coverage, that an insured submit to an EUO. (See, e.g., Globe Indemnity Co. v. Superior Court, supra, 6 Cal.App.4th at pp. 730–731, 8 Cal.Rptr.2d 251; Robinson v. National Automobile & Casualty Co. (1955) 132 Cal.App.2d 709, 716, 282 P.2d 930; West v. State Farm Fire and Cas. Co. (9th Cir.1989) 868 F.2d 348, 351.)
Hickman v. London Assurance Corp. (1920) 184 Cal. 524, 195 P. 45 illustrates this principle. There, an insured was criminally charged with arson. (Id. at p. 526, 195 P. 45.) While the charges were pending, the insured appeared for an EUO but refused to answer questions and produce documents on the advice of counsel that his answers could be used against him at his criminal trial. (Id. at pp. 527–528, 195 P. 45.) He asserted his constitutional right against self-incrimination. (Id. at pp. 531–532, 195 P. 45.) He offered to submit to an examination after the conclusion of the criminal prosecution. (Id. at p. 528, 195 P. 45.) The California Supreme Court concluded the insured’s refusal to submit to examination and to produce his books and papers on the ground of his constitutional immunity was not justified, as the constitutional privilege did not apply and his production of documents and examination was a "condition precedent" to his right to benefits under the policies. (Id. at pp. 532, 534, 195 P. 45.) The court stated: " ‘If the insured cannot bring himself within the terms and conditions of the policy he cannot recover. The terms of the policy constitute the measure of the insurer’s liability. If it appears that the contract has been violated, and thus terminated by the assured, he cannot recover. He seeks to recover by reason of a contract, and he must show that he has complied with such contract on his part.’ " (Id. at p. 534, 195 P. 45.)
While these cases predate the enactment of section 2071.1, "they reflect a strong insistence on an insured’s performance of the contractual conditions required for coverage, even when the insured might have a legitimate legal basis for not wanting to comply." (Abdelhamid v. Fire Ins. Exchange (2010) 182 Cal.App.4th 990, 1003–1004, 106 Cal.Rptr.3d 26 (Abdelhamid)
Subsequent cases have refused to excuse an insured from complying with the statutorily mandated and contractually required precondition of submitting to an EUO. For example, in Abdelhamid an insured appeared for an EUO but refused to answer questions about her business or personal finances on the advice of counsel. (Abdelhamid, supra, 182 Cal.App.4th at p. 996, 106 Cal.Rptr.3d 26.) The insurance company denied her claim in part on the grounds that her failure to answer questions during the examination breached a condition precedent to her recovery under the policy. (Ibid.) The trial court granted summary adjudication on the insured’s breach of contract claim. (Id. at p. 998, 106 Cal. Rptr.3d 26.) In affirming summary adjudi- cation in favor of the insurer, the reviewing court found it "significant" that the terms of the standard fire insurance policy in California, which have been "prescribed by the California Legislature," required an insured to submit to an EUO. (Abdelhamid, at p. 1004, 106 Cal.Rptr.3d 26; §§ 2070, 2071.) Turning to subdivision (a)(6) of section 2071.1, the court acknowledged the Legislature had "specifically recognized an insured’s right to withhold information on the basis of privilege or other legal objection. But, it has also recognized such information may be necessary to the insurer’s investigation of the claim and, where the failure prevents the insurer from being able to determine the validity of the claim or extent of loss, the Legislature has acknowledged the insured’s rights under the contract may be affected. The Legislature has placed that risk on the insured." (Abdelhamid, at p. 1004, 106 Cal.Rptr.3d 26.) The court refused "to … adopt a rale that excuses insureds from complying with the statutorily mandated and contractually required preconditions for coverage after a loss because they assert a privilege or an objection relying on the advice of counsel," as this "would undermine this statutory scheme." (Id. at pp. 1004–1005, 106 Cal. Rptr.3d 26.)
Section 2071.1, subdivision (a)(6), provides: "In an examination under oath, an insured may assert any objection that can be made in a deposition under state or federal law. However, if as a result of asserting an objection, an insured fails to provide an answer to a material question, and that failure prevents the insurer from being able to determine the extent of loss and validity of the claim, the rights of the insured under the contract may be affected."
As the insured did in Abdelhamid, plaintiff urges an interpretation that is antithetical to established precepts of law. The Legislature has recognized an insured’s right to "record the examination proceedings in their entirety." (§ 2071.1, subd. (a)(4).) But, it has not authorized a rale excusing insureds from the statutorily mandated and contractually required preconditions for coverage—that they submit to EUOs—because they are unable to video record the insurer’s participants and representatives.
Similarly instructive is Brizuela v. CalFarm Ins. Co. (2004) 116 Cal.App.4th 578, 10 Cal.Rptr.3d 661, which involved an insured’s attempt to trade an agreement to submit to an EUO in exchange for copies of his prior recorded statements. (Id. at p. 583, 10 Cal.Rptr.3d 661.) There, the insured repeatedly failed to provide a date for the EUO and conditioned any examination on the insurance company’s providing him with copies of his previous statements. (Ibid.) The insurance company refused to accede to the insured’s request and denied the claim. (Id. at p. 585, 10 Cal.Rptr.3d 661.) Finding no legal obligation to provide an insured with a copy of the insured’s previously recorded statements, the court upheld summary judgment for the insurance company on the grounds that its actions were reasonable as a matter of law. (Id. at pp. 585–586, 588–589, 10 Cal. Rptr.3d 661.) The court found the insured was not permitted to condition his EUO on a requirement that the insurer provide him with copies of his previous statements. (Id. at pp. 589–590, 10 Cal.Rptr.3d 661.) Brizuela recognized that "[e]ven if there might be circumstances when it might be unfair or unreasonable for an insurer to demand an examination under oath without complying with an insured’s request for an earlier recorded statement," there the insured gave no reason why the insurer’s refusal to provide the statement was unfair or unreasonable. (Ibid.)
So too here, there is no authority for the position that an insured is entitled to video record an insurance company’s employees and representatives during an EUO. And, given the absence of any evidence suggesting Nationwide has conducted itself in an intimidating, abusive, or harassing manner in its handling of plaintiff’s claim, nothing suggests Nationwide’s refusal to allow the video recording of anyone other than plaintiff was unfair or unreasonable.
From review of the plain language of section 2071.1 and its legislative history, together with the applicable case law and statutory scheme, the conclusion is that section 2071.1(a)(4) does not give an insured an unqualified right to video record an insurance company’s participants in every instance and/or a concomitant right to refuse to participate in an EUO unless this specific method of recording is permitted.