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December 30, 1986


The opinion of the court was delivered by: NEWCOMER

 Newcomer, J.

 I have before me in this action a motion by plaintiff for summary judgment. The motion was submitted on a stipulated set of facts. The summary judgment motion and the case essentially raise one issue: whether defendant properly disclaimed coverage for a permissive driver under a policy of insurance based on the driver's refusal to cooperate in the preparation of the defense and the arbitration of the case against him. For the reasons discussed below, plaintiff's motion will be denied. Because there are no factual issues which remain to be decided, I will enter judgment in favor of the defendant.


 This case was submitted to the Court on a stipulated factual record, and the facts are as follows. On May 29, 1982, an automobile accident occurred in the City of Philadelphia between Theodore Perry and George Blatch. Blatch was driving a car owned by Mr. Barnabas McNeill. At the time of the accident, Mr. McNeill did not reside with his ex-wife, Mrs. Marcia McNeill or his daughter, Toi McNeill. Mr. McNeill had given Mrs. McNeill permission to use the car; Mrs. McNeill had given permission to Toi McNeill, who in turn gave permission to Blatch. Mr. McNeill never directly gave permission to Toi McNeill or to Blatch to operate the car.

 At the time of the accident, Mr. McNeill was the named insured on a policy of automobile insurance issued to him by the defendant, Erie Insurance Co. ("Erie"). Erie made personal contact with Blatch, who gave to Erie a written statement concerning the accident. Blatch then refused to sign the statement. Blatch's statement indicated that Perry caused the accident when he made a quick turn in front of the car operated by Blatch. Perry's version of the accident, not surprisingly, contradicts that of Blatch.

 On August 25, 1983, Perry filed a lawsuit against Mr. McNeill and Blatch, but the Sheriff for Philadelphia County did not successfully serve Blatch. The complaint was reinstated on September 23, 1983 and again on November 2, 1983. On December 9, 1983, Joseph P. Connor, III, Esquire, of the law firm Connor & Weber, entered his appearance on behalf of both Mr. McNeill and Blatch. Two days earlier, Blatch had been notified that Erie had retained Mr. Connor to defend him in the action filed by Perry. Erie requested at that time that Blatch cooperate with defense counsel retained on his behalf.

 On January 24, 1984, the Court of Common Pleas directed that Blatch could be served by regular mail. His counsel then sent him a copy of the proposed Answer, and requested that he sign a verification of the proposed Answer. Blatch never contacted counsel to respond to the letters transmitted or the pleadings served or received. On February 10, 1984 and again on February 23, 1984, defense counsel wrote to Blatch indicating that it was imperative that Blatch contact counsel and cooperate in the defense of his case. Blatch never responded to defense counsel's repeated telephone calls and letters requesting cooperation in the preparation and signing of the Answer and in discovery. On February 27, 1984, Connor filed an unverified Answer on behalf of Blatch. After continuing unsuccessfully to secure Blatch's cooperation, Connor advised Erie that while Mr. McNeill had cooperated in defending the action, Blatch had not as of that time.

 Shortly thereafter, an arbitration hearing in Perry v. McNeill was scheduled for May 3, 1984 at 9:30 am. While making continued efforts to secure Blatch's cooperation, Connor advised Blatch that it was necessary for him to attend the May 3, 1984 arbitration. Blatch then contacted Connor's office and informed Connor that he would attend the arbitration. On May 3, 1984, Blatch failed to appear for the arbitration. Defense counsel obtained a continuance, and the arbitration was rescheduled for May 16, 1984. Connor then wrote to Blatch, informing him of the new arbitration date and requesting that Blatch contact his counsel immediately. Counsel then reached Blatch by telephone and advised him that it was necessary that Blatch appear for the arbitration. Blatch acknowledged that he had received the letters sent to him by counsel, apologized for not cooperating in the past and promised to appear.

 On May 7, 1984, Connor wrote to Blatch, advising him that the arbitration had been continued from May 16, 1984 until May 22, 1984 at 9:30 am, and requesting his attendance. Blatch never contacted Connor as requested in the letters informing him of the arbitration dates, and did not appear for the arbitration either on May 16, 1984 or May 22, 1984. Blatch did, however, take that day off from work. At the arbitration on May 22, 1984, defense counsel again requested a continuance, but this second request was denied. On May 23, 1984, the panel of arbitrators found in favor of Perry and against Blatch in the amount of $8,062.50.

 Connor advised Erie's litigation supervisor, Robert T. Giannone, on June 1, 1984 what occurred at the arbitration. On June 6, 1984, Erie wrote to Blatch informing him that they were disclaiming coverage for lack of cooperation, and instructed Connor & Weber to withdraw their appearance for Blatch in the suit. In order to protect Blatch's rights in the litigation, an appeal of the arbitrator's decision was filed on Blatch's behalf, and Blatch was so informed.

 On August 9, 1984, defense counsel filed with the Court of Common Pleas a notice and petition to withdraw as counsel for Blatch, and served copies on Blatch and on Prudential Property and Casualty Insurance Co., Perry's uninsured motorist insurance carrier. The notice advised that the return date on the motion was August 26, 1984, and that a hearing on the motion was set for September 6, 1984. Prudential then filed a motion for leave to intervene in the underlying action, but did not oppose the withdrawal. Blatch did not oppose the petition to withdraw or appear for the hearing. The petition for leave to withdraw as counsel for Blatch was then approved, and the motion for leave to intervene by Prudential was denied as moot. Connor & Weber withdrew as counsel for Blatch. Neither Prudential nor Blatch filed a motion for reconsideration of either decision.

 Shortly thereafter, counsel for Perry made a claim for uninsured motorist benefits against his carrier, Prudential. Prudential paid to Perry $10,299.56 in settlement of the uninsured motorist claim on January 10, 1985. On September 13, 1985, counsel for Perry and McNeill in the underlying action stipulated that the action had been settled, and the case was discontinued as to McNeill only. On March 27, 1986, the Court of Common Pleas dismissed Blatch's appeal from the arbitration for lack of ...

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