The Missouri Woman With A $5.2 Million STD Case Against Geico
Every now and again, we see stories that are so outrageous, that we all fall into the clickbait trap. Well, most of you may have seen this headline recently:
This leaves many wondering, does she actually have a case? The answer is....maybe. What is unusual here is that the plaintiff does not allege that her injury came from an auto accident, but from consensual relations inside an automobile. The actual facts of this case are private. The plaintiff is making this case anonymously, meaning we are left to speculate as to many of the specifics. One of those unknowns are the actual policy language. I will do my best to speculate as to how the plaintiff made this claim. The insuring agreement in the liability coverage part of an insurance policy is where one looks to find out when an insured (and therefore the insurance company) become legally responsible because of an auto accident. Not all insurance policies contain the same language. I believe this plaintiff took advantage of an insurance policy that did not directly phrase "auto accident" in the insuring agreement. A search of insurance company filings in Missouri shows the type of policy that Geico may have sold it's insured. It defines bodily injury as "injury to a person, including resulting sickness, disease, or death." Under Section I, it promises to pay for damages which an insured becomes legally obligated to pay because of 1.) bodily injury sustained by a person, or; 2.) Damage to or destruction of property arising out of the ownership, maintenance, or use of the owned auto or a non-owned auto. The key missing words from the above policy are "auto accident." This means that the woman may be successful if she can prove she sustained a bodily injury that legally arose out of the use of an auto owned by the insured and that the insured is legally liable for those damages. This is some creative lawyering. They are claiming that the insured knowingly spread the HPV virus to the plaintiff through consensual activities that occurred in a vehicle insured by Geico.
The headline fails to properly describe how Geico is alleged to be on the hook for the $5.2 million to begin with. The plaintiff sued Geico's insured. I believe Geico then denied coverage and refused to defend the insured. The plaintiff then went to an "arbitration" with Geico's insured where the insured agreed to pay $5.2 million in exchange for a release of personal liability. These arbitration agreements are common where an insurance company has not yet had notice of a claim or when coverage is disputed or denied. The plaintiff came to an agreement with the insured for $5.2 million. The insured was ok with this as it released them from liability and got them out of the case. The plaintiff was happy to do this as it the insured likely does not have money to pay this type of judgment. Both parties win to Geico's chagrin. It is now on her attorney's to try to collect on this agreement from Geico. It remains to be seen if Geico will actually be on the hook or not. Geico is claiming, among other things, that it was a "collusive and non-adversarial arbitration proceeding" that Geico was not a party to and did not have notice of. Insurance companies are given 30 days after becoming aware of these agreements to defend against them. I do not know the specifics of when Geico became aware this arbitration agreement. The court ruling that grabbed the headlines seems to suggest that they had ample notice and failed to intervene. The court ruled at "the time of Geico's intervention, liability and damages had been determined by an arbitrator and confirmed by the trial court. GEICO had no right to relitigate those issues." The could also found that Geico could have defended its interests by entering a defense of the insured individual. "GEICO did not take advantage of this opportunity, and instead denied coverage and refused to defend their nsured." - Per this CNN article. Recent changes in the law, specifically to RSMO 435.415 make these "arbitration agreements by ambush" likely less enforceable than they used to be. In those cases now, the new law states arbitration awards “shall not be binding on any insurer,” and further “shall not be admissible in evidence in any lawsuit against any insurer for any party to an arbitration award, and shall not provide the basis for any judgment or decree, including any garnishment, against any insurer, unless the insurer has agreed in writing to the arbitration proceeding.” Here Geico clearly did not agree to this arbitration in writing. Further, most policies have a condition that require the insured to assist the insurance company in making settlements. Geico could argue that coverage was voided by their insured's failure to do this when deliberately going behind their back to reach an arbitration award with the plaintiff. No matter the outcome, I will be watching this case with great interest as each side litigates these issues until final resolution.