How did you find out policy limits were $1mm for liability? That would be unusual, but Missouri may be radically different than Texas. Again, I doubt a homosexual hooker (speculation on my part) in Missouri with a 2014 Hyundai had $1mm.
It was mentioned in the court opinion. It would be unusual, but it's not out of the question. I had a $1M/$1M policy through USAA when I lived in Texas. People will carry a big policy for all sorts of reasons that don't necessarily have to do with the fanciness of the car. My car was fancy. I mainly just wanted a big UM/UIM policy and couldn't get that without a big liability policy. Maybe he has rich parents who assume if he screws up, they could be on the hook for something. Hard to say.
And the plaintiff is a chick, so I presume he doesn't hide the hose in the shed. But who the hell knows these days?
The insurance carrier did not lose the arbitration, the insured did.
Yes, but by the insurer's own choice. They decided to effectively leave him as a pro-se litigant, and that's very risky. It's not quite like telling a guy to perform surgery on himself, but you get the point. Good chance things are going to go badly for him. Furthermore, GEICO lost control of the defense and therefore took a big risk for themselves if they lose the coverage dispute.
What happened with the declaratory judgment?
I would assume that it's still pending. The case at hand was their attempt to intervene and vacate the arbitration award. In other words, they had an "oh ****" moment and tried to jump in and get another bite at the apple. It failed, and it should have failed.
But I could be wrong in the end. I don't know what the Missouri Supreme Court is like. They might step in and change the laws for them. The Texas Supreme Court definitely would (like they did for Bob Perry when for a brief moment they made an arbitration agreement easy to get out of). Nathan Hecht would call up a GEICO officer and say, "do you want to write them a big check and satisfy one judgment or do you want to write me and my friends a few checks for far less though still plenty and have the laws changed so this doesn't happen again next time one of your adjusters does something stupid?"
They might also win on the dec action. Their position isn't patently frivolous. They have an argument, and if I represented them, I'd surely make it. However, it's not an easy case for them. They're trying to narrow language that's inherently broad, and it's going to take a pretty sympathetic court willing to ignore that fact to win. You just don't refuse to defend when you need a sympathetic court to win. You refuse to defend when the insured's position is something more like, "I gave her the disease and was banging her in bed, but I was thinking about my car during the sex."
Is the insurance Carrier’s liability increased beyond policy limits via arbitration?
No. They obviously couldn't do anything like that. However, I would suspect that Missouri has something comparable to the Stowers Doctrine (which GEICO likely violated), and the insured almost surely has extracontractual claims (that will be assigned to the plaintiff) if necessary.
Without the totally idiotic arbiter decision in this case, common sense has gone out of the window. In part, that is the carrier’s fault, but the award is ludicrous.
If you think the award was excessive, I wouldn't argue that point. I wouldn't have given her that much (or frankly anywhere near that much). However, everybody accepts risk when they take a case to trial or arbitration, especially when they needlessly send their insured to trial or arbitration without a defense.
Hell, an arbitrator once gave my client $50K for a massive third degree burn (and clear liability) that took over a year to treat and left the entire back side of his body a massive burn scar. A jury would have given me far more. Did I get to vacate the award because I thought it was "too small?" No. That's how arbitration is supposed to work. You take the good with the bad. He could have zeroed me out, and we would have had to live with it. (The arbitration agreement was signed before the injury and before I was retained. I never would have advised him to agree to it had I been on the case.)
