Insurance Law

GEICO can’t relitigate $5.2M award for car-sex STD after refusing to defend car owner, appeals court rules

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GEICO had no right to relitigate a $5.2 million arbitration award to a woman who contracted a sexually transmitted disease in a car insured by the company, a Missouri appeals court has ruled.

The Missouri Court of Appeals’ Western District ruled against GEICO in a June 7 opinion.

GEICO had denied coverage and refused to defend its insured—the woman’s sexual partner.

The woman, identified as M.O. in the litigation, said she was infected with human papillomavirus in November 2017 and early December 2017 during car sex in Jackson County, Missouri. The woman’s sexual partner had been told that his throat cancer tumor was HPV positive, but he did not disclose the diagnosis before sexual activity, according to findings by the arbitrator who awarded $5.2 million.

M.O. had told GEICO before the May 2021 arbitration that she would settle her claim against its insured for $1 million—the applicable policy limit. GEICO said its policy did not provide coverage because the damages claimed didn’t arise from the normal use of the vehicle, a Hyundai Genesis.

After obtaining the arbitration award, M.O. provided notice to GEICO and then filed a petition to affirm the damages in the trial court. M.O. and the insured agreed that they would not appeal. GEICO learned of the petition by monitoring (Missouri state courts’ automated case management system) and filed a motion to intervene.

A trial judge granted GEICO’s motion to intervene and, on the same day, entered judgment in favor of M.O. for $5.2 million. GEICO sought to vacate the award and to obtain a new trial, but the trial judge denied the motion.

The appeals court affirmed.

One of GEICO’s arguments was that confirmation of the award violated its due process rights under the Missouri and federal constitutions because it was denied the right to litigate its interests.

“But GEICO did have the opportunity to participate and defend its interests—including the ability to challenge liability and damages—by entering a defense of insured,” the appeals court said. “GEICO did not take advantage of this opportunity and instead denied coverage and refused to defend insured.”

The court also noted that GEICO has filed a lawsuit in federal court seeking a declaratory judgment that its policy does not cover M.O.’s injuries from contracting HPV. The case, originally filed in Kansas, has been transferred to the U.S. District Court for the Western District of Missouri, where it is still pending.

Hat tip to CNN, NPR and Law360, which had coverage of the decision.

The case is M.O. v. GEICO General Insurance Co.

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