Skip to main content

Early in 2023, the Supreme Court of Missouri vacated a circuit court’s judgment confirming a $5.2 million arbitration award in favor of a plaintiff who contracted human papillomavirus (HPV) in a vehicle insured by GEICO. Initially, the plaintiff, “M.O.” sent a demand letter to GEICO asking for GEICO to pay the applicable limits of the insured’s (“M.B.”) insurance policy for the bodily injury she allegedly suffered after contracting HPV from M.B. in his GEICO-insured vehicle. GEICO denied coverage of the claim. Without informing GEICO, M.O. and M.B. entered into an agreement pursuant to RSMo § 537.065, which provided that the claims against M.B. would be submitted to arbitration, but that plaintiff would seek recovery of any judgment of those claims only from GEICO.

The parties proceeded to arbitration and the arbitrator ultimately awarded M.O. $5.2 million. M.O. thereafter informed GEICO of the agreement, but not that the parties had already arbitrated the claims or that she received an award. M.O. then sued M.B. in the circuit court, again without informing GEICO. Once GEICO discovered the lawsuit, GEICO filed a motion to intervene pursuant to Missouri Rule 52.12(a)(1) and §537.065. M.O. filed an application for the circuit court to confirm the arbitration award and while GEICO’s motion to intervene was pending, the court entered judgment confirming the arbitration award. After confirming the award, the circuit court then sustained GEICO’s motion to intervene, acknowledging GEICO’s statutory right to intervene in the matter.

Thereafter, GEICO filed several motions with the circuit court, including a motion to vacate the arbitration award—all of which the court overruled. GEICO appealed and the court of appeals affirmed. In its case before the Court of Appeals, GEICO alleged it was denied the ability to participate in discovery, submit motions, or litigate before the trial court prior to the court’s decision to sustain the award. The Court of Appeals held that while an insurer had the right to receive written notice and an opportunity to intervene, it is not entitled to develop facts and arguments pre-judgment. The appellate court further determined that at the time GEICO intervened, liability and damages had already been determined by an arbitrator and confirmed by the trial court and GEICO simply had no right to relitigate the issues. The appellate court further surmised that because GEICO denied coverage, GEICO was not a party when M.O. applied for confirmation of the award or at any time prior to the entry of judgment confirming the award. Therefore, the trial court was not required to allow GEICO to intervene prior to entering its judgment confirming the award.

Finally, in response to GEICO’s argument that it was denied its right to defend its interests in accordance with the state and federal constitutions, the appellate court ruled that GEICO conceded its rights by denying coverage and refusing to defend the insureds, and, essentially, if GEICO wanted the opportunity to defend its interests, it could have entered a defense of its insured (which it declined to do). 

The Supreme Court of Missouri granted transfer, vacated the judgment, and remanded the case. In vacating the judgment, the Supreme Court simply held that GEICO had a right to intervene before the circuit court confirmed M.O.’s arbitration award, relying on the plain language of §537.065.2—which confers a statutory right to an insurer to intervene within 30 days after notice of a §537.065 agreement is entered into between a claimant and an insured (1). In this matter, GEICO filed its Motion to Intervene 25 days after learning of the agreement between M.O. and M.B. and the circuit court did not rule on its motion prior to entry of judgment on the arbitration award. 

1. Section 537.065.2 of the Missouri Revised Statutes states: “Before a judgment may be entered against any tortfeasor after such tort-feasor has entered into a contract under this section, the insurer or insurers shall be provided with written notice of the execution of the contract and shall have thirty days after receipt of such notice to intervene as a matter of right in any pending lawsuit involving the claim for damages.”

Although the Supreme Court ultimately vacated the award, this matter reinforces the importance of monitoring claims and potential lawsuits to comply with the 30-day deadline for filing a motion to intervene, but also carefully reviewing those claims before declining coverage. At this time, the coverage dispute in M.O.’s claim remain pending as GEICO has filed a declaratory judgment action in federal court seeking a declaration regarding coverage of M.B.’s insurance policy.

Learn More About Our Practice AreasContact Us