"Cooperation" and Failure to Appear at Arbitration
United Automobile Insurance Company (United)www.unitedautoinsurance.com insured Rodney Buckley whose car collided with Hal Haywood’s car. Haywood filed a personal injury suit. After Buckley did not appear at an arbitration hearing, an award was entered in Haywood’s favor. The decision stated that Buckley “did not participate in good faith.” United filed a notice to reject the award arguing that Buckley’s failure to appear was inadvertent. Ultimately, Buckley was barred from rejecting the arbitration award against him for failure to appear at the arbitration hearing.
To collect his judgment, Haywood brought garnishment proceedings against United. United filed a declaratory judgment arguing that Buckley was not covered under the policy because he breached the assistance and cooperation policy provision by failing to appear at the arbitration hearing. Haywood then counter-argued that Buckley’s failure to appear was inadvertent and that Buckley cooperated. The court found that Buckley had not breached his contractual duty to cooperate. United appealed.The appellate court affirmed. United Automobile Insurance Company v. Buckley, et al. 2011 IL App (1st) 103666. To show breach of a cooperation clause, the general rule is that the insurer must show that it exercised a reasonable degree of diligence in seeking the insured’s participation. The insurer will not be relieved unless it proves its defense was substantially prejudiced by the insured actions or conduct.
The Appellate Court looked at the record which showed that Buckley participated in the court proceedings, assisted in the discovery process, and regularly commnunicated with counsel. And thus the trial court's decision that Mr. Buckley did not wilfully refuse to cooperate was not against the weight of the evidence. More so, United was not substantially prejudiced because Buckley’s absence did not prevent United from challenging damages evidence or from cross-examining Haywood.
