State Farm Mutual Automobile Insurance Company v. Davies
Supreme Court of Virginia
310 S.E.2d 167 (1983)
After Turner, insured by State Farm (defendant), collided with Davies (plaintiff), Turner reported her version of events to State Farm but then disappeared before trial, depriving State Farm of the chance to present her testimony and a viable defense against Davies's conflicting account; a $10,725 default-like judgment was entered against Turner, which went unpaid, prompting Davies to bring a declaratory action against both State Farm and her own uninsured-motorist insurer, GEICO (defendant), to determine coverage. State Farm argued Turner's failure to cooperate and appear breached the policy's cooperation clause, but the trial court found State Farm wasn't actually prejudiced by this breach and entered judgment against State Farm; State Farm appealed.
Whether the breach of an automobile-liability insurance policy's cooperation clause prejudices the insurer in its defense of an action for damages against the insured.