noting that North Carolina case law generally holds “that some kind of affirmative action by the insured is required before a court can conclude, as a matter of law, that the insured failed to cooperate”
How later courts described this case
- noting that North Carolina case law generally holds “that some kind of affirmative action by the insured is required before a court can conclude, as a matter of law, that the insured failed to cooperate”
- discussing failure to cooperate under an insurance policy as an affirmative defense
- “[North Carolina] courts do not follow ‘the strict contractual approach when construing cooperation clauses . . . .’” (quoting Great American I)
Written by the judges who cited it.
The opinion
STEPHENS, Judge,
dissenting.
I respectfully dissent. As noted by the majority, summary judgment is appropriate where there is no genuine issue of material fact. Builders Mut. Ins. Co. v. N. Main Constr., Ltd., 361 N.C. 85, 88 , 637 S.E.2d 528, 530 (2006). I also agree with the majority’s summary of our State’s case law on cooperation clauses in insurance policies and emphasize in particular the following language:
The provisions are to be given a reasonable interpretation to accomplish the purpose intended, that is, to put insurer on notice and afford it an opportunity to make such investigation as it may deem necessary to properly defend or settle claims which may be asserted, and to cooperate fairly and honestly with insurer in the defense of any action which may be brought against [the] insured, and upon compliance with these provisions to protect and indemnify within the policy limits the insured from the result of his negligent acts. An insurer will not be relieved of its obligation because of an immaterial or mere technical failure to comply with the policy provisions. The failure must be material and prejudicial.
Henderson v. Rochester Am. Ins. Co., 254 N.C. 329, 332 , 887 118 S.E.2d 885, 887 (1961). Thus, I believe resolution of this appeal requires consideration of three questions: (1) was McKinnon an insured; (2) if McKinnon was an insured, did he fail to cooperate with Penn National; and (3) if McKinnon did fail to cooperate, was that failure material and prejudicial to Penn National’s ability to defend or settle the claim brought by Plaintiff, rather than a mere technical failure? Because I believe Penn National produced uncontradicted evidence that the answer to each of these questions is “yes,” I would affirm the trial court’s grant of summary judgment to Penn National.
First, in an answer dated 7 October 2008, filed in the underlying tort action brought by Plaintiff against McKinnon, Hanson, and CHE, CHE admitted that McKinnon was using the trailer with the permission of CHE, the named insured and holder of the Penn National policy. 1 The policy defines an “insured” to include anyone who borrows *400 an insured vehicle with the permission of the named insured. Thus, there is no issue that McKinnon is an insured under the policy.
Second, Penn National has shown that it obtained current contact information for McKinnon and attempted to contact him numerous times, to no avail. In an affidavit dated 10 September 2010, Janet Fusaiotti, a senior claims representative with Penn National, stated that Penn National had attempted to contact McKinnon “on numerous occasions” starting on 14 September 2006, but that “all messages . . . went unreturned” and McKinnon “refused to respond in any way to the communications sent [] by Penn National.” No evidence in the record indicates that McKinnon cooperated whatsoever with Penn National in this matter, nor does the record contain even an allegation by Plaintiff or any other party of cooperation by McKinnon. Thus, there is no issue that McKinnon has failed to cooperate with Penn National in its attempts to investigate, defend, and/or settle Plaintiff’s claim.
The majority asserts that our case law establishes that “some kind of affirmative action by the insured is required before a court can conclude as a matter of law that the insured failed to cooperate.” While I agree that failure to cooperate may be shown by an affirmative action, such as lying, nothing in the cases cited by the majority suggests that an affirmative action is the only way to establish failure to cooperate. Indeed, refusing to communicate with or respond to an insurance company seems to me the very definition of a “failure to cooperate.”
In particular, I reject the majority’s claim that MacClure v. Accident & Cas. Ins. Co., 229 N.C. 305 , 49 S.E.2d 742 (1948), is “instructive.” Not only did the result in MacClure turn on proper placement of the burden of proof, rather than the evidence presented on the motion for nonsuit, Id. at 310 , 49 S.E.2d at 746 , but the Supreme Court explicitly cautioned against making any type of inference about the evidence presented at trial:
It is the practice of this Court to refrain, as far as it may without destroying the clarity of opinion, from comment on the evidence when the case is sent back for a new trial — a rule that cannot always be strictly observed when the question involved is a nonsuit upon demurrer. We believe, however, that the case under review calls for an observance of the rule. We have refrained from passing upon the objections to the evidence because the same situation may not recur, but the want of specific discussion has no other significance.
*401 Id. at 312-13 , 49 S.E.2d at 748 (emphasis added).
As to the third and final question, Fusaiotti’s 10 September 2010 affidavit states that Penn National was prejudiced by McKinnon’s failure to cooperate, because the company “has been unable to perform a meaningful investigation of the [a]ccident[.]” Further, in her deposition, Fusaiotti testified that Penn National was not able to learn “how [McKinnon and his passenger] were using the trailer, where they were going with the trailer, [or] who hooked up the trailer[.]” She also stated that Penn National had been unable to obtain this information from any other source.
Here, where the accident occurred as the result of the trailer becoming detached from the pick-up truck hauling it, I agree with Penn National that obtaining information about who attached the trailer to the truck, how it was attached, how the truck was being driven just prior to the detachment, and other related information was highly relevant — indeed, essential — to Penn National’s ability to investigate, defend, and/or settle Plaintiff’s claim. Thus, I would hold that Penn National has established prejudice by McKinnon’s failure to cooperate. Accordingly, I would affirm the trial court’s grant of summary judgment in favor of Penn National.
. CHE is bound by this admission. “[J]udicial estoppel forbids a party from asserting a legal position inconsistent with one taken earlier in the same or related litigation.” Price v. Price, 169 N.C. App. 187, 191 , 609 S.E.2d 450, 452 (2005) (citation and quotation marks omitted).