believe that the proper focus should be on whether the insured’s wilful conduct has, or may reasonably
have, precluded the insurer from establishing a legitimate jury issue of the insured’s liability, either liability
vel non or for the damages awarded. We think that standard represents the most appropriate balance.
It does not require that the insurer meet what the Applemans regard as the “almost insurmountable burden
of proving that the verdict was the result of the lack of cooperation.” 8 JOHN AND JEAN APPLEMAN,
INSURANCE LAW AND PRACTICE, § 4773 at 228 (1981). It does require, however, that the insurer
show that the failure of cooperation has, in a signi icant way, precluded or hampered it from presenting a
credible defense to the claim.
The Prejudice Here
The prejudice here, of course, goes beyond merely the loss of Kirby’s testimony. By reason of
her wilful failure to cooperate in providing discovery — her refusal to attend her twice-scheduled deposition
or cooperate in a further rescheduling of it, her refusal to assist in responding to properly filed
interrogatories and demands for documents — and her refusal to attend trial, State Farm was precluded
from offering any evidence in defense of the claim. It is not a question, then, of whether, with or without
her intransigent conduct, State Farm may have been able to develop some other helpful evidence; even if
it had been able to do so, State Farm would havebeen unable to present it. Indeed, helpful evidence, in
the form of Ms. Weiner’s testimony, did exist, but, due to Kirby’s conduct, it was unusable.
Unquestionably, under a Davies-type standard, there was actual prejudice.
We come, then, to the nub of the case — the nature and extent of the prejudice. The trial court
adopted the Harleysville standard, requiring the insurer to establish a substantial likelihood that, if the