The Missouri Court of Appeals has ordered insurance magnate GEICO, famous for its smooth-talking lizard, to pay $5.2 million to a woman who contracted a sexually transmitted disease while engaging in sex in the back of a 2014 Hyundai Genesis.
The incident occurred in 2017, when the plaintiff, identified in court documents as “M.O.,” and her ex-boyfriend, “M.B.,” participated in unprotected sex in the defendant’s sedan. GEICO insured the vehicle. The plaintiff was infected with Human Papillomavirus (HPV) during that encounter.
HPV is a disease that is easily transmitted through sexual contact and can lead to warts growing on and around the genitals. The disease is also known to cause various types of cancer, including cancer of the throat and cervical cancer.
M.O. asserted that M.B. was negligent because he knew he was infected with HPV; he’d earlier been diagnosed with a cancerous tumor in his throat that tested positive for the virus. M.B. failed to inform her of his condition before they became intimate.
M.O. furthermore maintained that because GEICO insured the defendant’s vehicle, the company was responsible for compensating her for medical expenses along with M.O.’s pain and suffering.
Personal Injury Insurance Covers Injuries Suffered by the Driver and Passengers
Your vehicle’s insurance policy will generally include coverage for personal injuries. This insurance covers yourself, the passengers in your car, and the passengers in another vehicle — should you be involved in an accident that results in injury or death. Personal injury insurance also typically covers injuries suffered by pedestrians or cyclists involved in a collision with the insured vehicle.
Generally, when we think of personal injury insurance, we think about injuries involved from the negligent operation of a vehicle. However, M.O. claims the insurance giant is on the hook because her injuries were sustained due to the defendant’s “negligence in actions involving his automobile.”
Plaintiff and Defendant Enter Into Arbitration
In 2021, M.O. and M.B. signed an arbitration agreement. Arbitration is supposed to be a neutral process wherein the plaintiff and defendant hire an arbitrator or panel of arbitrators to decide the outcome of their dispute without going to court. The arbitrator or panel of arbitrators are agreed upon by both parties. An arbitrator can be someone with a background in conflict resolution or a specialist in a given field related to the case.
The final determination of the arbitrator has strong legal standing and is generally enforceable.
In the case of M.O. and M.B., the arbitrator determined that the plaintiff was entitled to $5.2 million for her current and future medical expenses and her physical and mental pain and suffering.
M.O. took the ruling to the Missouri Circuit Court and sued GEICO to enforce the arbitration award. The court ruled in her favor.
GEICO Appeals the Ruling
In response to the circuit court’s ruling, GEICO appealed to the Missouri Appeals Court for relief, claiming it had not had an adequate opportunity to defend itself. However, the court determined that GEICO had been given a chance to defend itself but instead chose to deny the claim outright. In fact, court documents reveal the insurance mogul had been presented first with a claim that they rejected. Then in February of 2021, the plaintiff presented GEICO with a copy of the lawsuit she was about to file against M.B., along with a settlement offer of $1 million. GEICO rejected the settlement offer.
Following the insurance company’s denial, M.O. and M.B. entered into arbitration, where the $5.2 million determination was awarded and presented to GEICO for payment.
GEICO argued that they should have been allowed to participate in the arbitration, but the court determined that the law affords no such right. GEICO had a 30-day window to intervene after the arbitration commenced and before the final award was issued. The law, the court pointed out, does not allow for an unlimited opportunity to relitigate. Because GEICO had been allowed to defend itself but elected not to, the Missouri Appellate Court upheld the arbitration award.
What Happens Now?
At this time, GEICO is suing both M.O. and M.B. in federal court because the injuries suffered by the plaintiff were not sustained during the “normal operation of a vehicle.” The company asserts that they are not the ones responsible for the woman contracting HPV and that they have no obligation to cover the damages. Additionally, GEICO contests the notion that they should cover damages because the plaintiff engaged in various improprieties, including “fraud, collusion, illegality, laches, and unclean hands.”
The federal case is scheduled to be held in October of this year. The court’s determination could have far-reaching implications for the automobile insurance industry.