Vaughan v. ACCC Insurance Co.
314 Ga. App. 741
| Ga. Ct. App. | 2012Background
- Vaughans sued ACCC for bad faith in failing to pay a judgment obtained against ACCC's insured Watson.
- ACCC withdrew coverage after Watson failed to cooperate in defense and investigation of the underlying claim.
- Trial court denied cross-motions for summary judgment and the case went to trial.
- Jury returned a defense verdict in favor of ACCC.
- Appeal argues the trial court erred in denying summary judgment and that evidence was insufficient.
- Underlying collision occurred June 25, 2006 involving Watson driving grandfather's car; ACCC insured the grandfather's car and investigated the incident; Watson failed to appear in magistrate court leading to default judgment against her; ACCC eventually withdrew coverage after multiple communication efforts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ACCC could be prejudiced by non-cooperation | Vaughan argues Watson's de novo superior court appeal makes prejudice irrelevant. | ACCC contends withdrawal based on non-cooperation prejudiced its defense. | Yes, prejudice supported by prior non-cooperation; burden shifts to Watson. |
| Sufficiency of evidence linking withdrawal to defense prejudice | Vaughans contend evidence failed to show prejudice. | ACCC shows cooperation request, failure to cooperate, and prejudice. | Evidence supports withdrawal and prejudice; sufficient to sustain verdict. |
| Admission/ exclusion of underlying collision evidence and jury instructions | Vaughans challenge evidentiary rulings and requested charge. | ACCC argues balanced admission to prove prejudice; no error. | No reversible error in evidentiary rulings or in the denial of the requested charge. |
Key Cases Cited
- Deal v. Chemical Constr. Co., 99 Ga. App. 413 (1959) (third-party rights tied to contract terms; insurer may defend for withdrawal if justified by cooperation failure)
- Liberty Mut. Ins. Co. v. Coburn, 129 Ga.App. 520 (1973) (insurer must show cooperation requirement and prejudice for withdrawal)
- H.Y. Akers & Sons v. St. Louis Fire, etc., Ins. Co., 120 Ga.App. 800 (1969) (insurer must prove cooperation and prejudice)