In M.O. vs GEICO General Ins. Co, No. WD 84722 (2022) Missouri’s system of justice – wherein insureds and claimants agree to go to private arbitration (where proceedings are not recorded) without notice to insurers and awards are confirmed by circuit court judges and affirmed by Appellate Courts – came into the world spotlight when the media caught wind of a $5,200,000.00 judgment entered against Geico. Evidence of this international attention can be seen by reviewing the N.Y. Daily Post, 6/9/22, The Guardian, 6/10/22, The Daily Mail.UK, 6/8/22, and many other media sites both here in the United States and abroad.
What led to the Missouri system’s elevation to the world stage? M.B. had a personal automobile policy with Geico. His former girlfriend, M.0. claimed she contracted a STD while having sex in the insured motor vehicle… Frivolous claims like these have never been found to be covered under insuring clauses that typically only provide coverage for injury “arising from the ownership, maintenance or use of the automobile.”
Courts have consistently and unequivocally denied coverage for claims where the vehicle is merely the “situs” or “locus” of the injury and require some involvement of the vehicle in causing the injury. The case of Walden v. Smith, 427 S.W. 2nd 269 (Mo. App. W.D. 2014), where the Court denied coverage for claim of a pedestrian that she was “bitten by the insured dog” while it was in the vehicle, sets out a comprehensive list of cases discussing what is and what is not covered under the standard insuring clause.
Determining there was no coverage for this claim Geico declined coverage. Although the insured disclaimed any responsibility for the transmission of the STD, he entered into a RSM0 §537.065 agreement with claimant M.O., agreed to have a secret arbitration at which an arbitrator found M.B. liable, found the STD arose out of the use of the insured automobile, and entered judgment for $5,200,000.00. M.O.’s counsel then filed an action in the Circuit Court seeking confirmation of the award.
Pursuant to §537.065(4), Geico moved to intervene before judgment was entered to protect its interest, as it had an unconditional right to do under the statute. However rather than ruling on Geico’s motion to intervene, the trial court entered judgment first, then ruled Geico could intervene. Both the trial court, and the Western District Court of Appeals, despite Missouri law that clearly holds such activity should not be considered as “use” of a vehicle as the word is utilized in liability policies, determined that since judgment was entered before intervention was granted, Geico had no further recourse to challenge the claim.
Geico requested that the W.D. Court of Appeals transfer this case to the Missouri Supreme Court. That request was denied on July 26, 2022. Geico then appealed to the Missouri Supreme Court directly, arguing among other things that the trial court’s delay in hearing its motion to intervene and entering judgment before intervention renders its unconditional right to intervene provided in §537.065(4) illusory. On October 4, 2022, the Missouri Supreme Court granted transfer of this case.
There remains hope that this injustice will be rectified. Stay tuned for further developments as the Missouri Supreme Court has taken transfer of this bizarre decision by the arbitrator and lower courts.