Insured’s Noncooperation Put The Insurer At a Material Disadvantage

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In Farm Bureau  v. David Sparks; and Melissa Lunsford, individually and on behalf of R.L., Case No. 1:20-cv-00044-JNP-JCB, United States District Court For The District Of Utah (January 29, 2021) the defendant insureds waited seven months to advise the insurer of the loss and failed or refused to cooperate in the investigation. Farm Bureau sued for a declaration that the delay and failure to cooperate defeated a claim for defense or indemnity.

ZALMA OPINION

One can only wonder why, after the court found that Farm Bureau adequately stated a noncooperation claim it did not, specifically, order that Farm Bureau has no obligation to defend or indemnify the insured and close out the declaratory relief action. Farm Bureau had multiple defenses to the claim, any one of which, would be sufficient to refuse to defend and indemnify the defendants in the underlying action. Farm Bureau’s motion for summary judgment, if supported with evidence establishing the allegations, should be granted.