On October 14, 1998, Diana Weller and Cynthia Farris were involved in an automobile accident in which Weller sustained personal injuries. Farris had an automobile policy issued by Erie Insurance Company. Later Weller filed suit to recover damages alleging that Farris had negligently failed to yield the right-of-way. A police officer had witnessed the collision and filed an accident report.

The policy issued by Erie to Farris required her cooperation with Erie and assistance during its investigation. Farris completed the "statement of accident" form sent by Erie and returned it to the claims department, together with a diagram of the accident scene. Later, the claims department sent the file to attorney Jeffrey Hazlet and asked him to represent Farris. He sent her several letters but did not hear from her. She was sent a set of interrogatories submitted by Weller's attorney. Finally, on May 18, 1995, Hazlet sent another letter and asked for her telephone number. In that letter he told her that unless he heard from her he would withdraw his appearance in the Weller action. On May 23 and again on June 27, 1995, he wrote her notifying her that he intended to withdraw his appearance.

Due to the attorney's unsuccessful attempts to talk with Farris, Doug Fox, Erie's claim supervisor, hired investigator Jerry Hart to locate her. Hart informed Hazlet on August 17, 1995, of her current address, and the attorney sent another letter, enclosing the interrogatories and requesting a narrative of the accident. These materials were returned to him marked "no such street in city directory."

Hazlet filed a motion to withdraw his appearance on August 30, 1995, and the motion was granted by the court on October 2, 1995. Hazlet mailed Farris another letter on October 13 notifying her of his withdrawal and informing her she would have 30 days from October 2 to secure other counsel or to contact the court. In the meantime, Fox had sent her a letter, mailing copies to the two addresses they had for her, notifying her that Erie had terminated defense coverage because of her failure to cooperate.

On January 16, 1996, Erie filed a motion to intervene in the Weller action and asked for a declaratory judgment that it had no duty to defend Farris because Farris had breached her contractual duty under the policy to cooperate in Erie's investigation and defense of Weller's claim.

The trial court entered summary judgment on Erie's motion on September 24, 1996. Weller appealed on the grounds that Erie did not show prejudice from Farris' failure to cooperate.

The higher court decided that the entry of summary judgment was erroneous, and the trial court should have taken testimony from the police officer who witnessed the accident and the claims adjuster for Erie before deciding that Erie had indeed suffered prejudice. The court concluded that the lower court should have denied Erie's motion for summary judgment, and the judgment was reversed and the action was remanded for further proceedings.

Weller, Appellant, v. Farris and Erie Insurance Company--No. 16487--Court of Appeals of Ohio, Second District, Montgomery County--January 9, 1998--708 North Eastern Reporter 2d 271.