that thecourt determine the parties’ respective rights under the two policies and declare either that State
FarmwasliableunderitspolicyorthatAllstatewasliableforuninsured motorist bene its under its policy.
State Farm then iled its own complaint for declaratory judgment, in which it averred that Kirby had a
meritorious defense to Gregorie’s action and likely wouldhave prevailed had she cooperated and that, as
a result of her failure to cooperate, shehad breached the obligations of the policy. It asked for a judgment
declaring that State Farm therefore had no duty to defend the claim or indemnify Kirby. Allstate answered
both complaints and asserted that (1) State Farm was not prejudiced by Kirby’s lack of cooperation, and
(2) it failed to use proper care to obtain and assure her cooperation. Allstate also filed a cross-claim
againstKirbyforindemni ication. Thetwodeclaratoryjudgmentactionswereconsolidatedwitheachother
and with the underlying tort action.
Attrial in thedeclaratory judgment case, State Farm produced evidence of the many efforts it had
made — 84 within a six-month period — to contact Kirby and obtain her cooperation, includingan offer
to pay her travel, lodging, and foodexpenses to come to Maryland for the trial. On the issue of prejudice,
it introduced the transcript of the May 29 trial on liability and the evidence that it would have produced at
that trial but for the preclusion order. Thatevidence consisted of police and weather reports, photographs
of Kirby’s vehicle showing the extensive damage to the rear, and Kirby’s and Weiner’s recorded
statements. ItalsoproducedthelivetestimonyofWeinerwho, as in her deposition, said that the Gregorie
vehiclewastravelingat55-60milesperhourandthat,evenfromherpositionbehindthat vehicle, she could
see Kirby’s car and that it had hazard lights flashing.
The court, sitting without a jury, determined as a fact that State Farm had made ample effort to
obtain Kirby’s cooperation, that Kirby had failed to cooperate and thus breached her contractual obligation