by Richard W. Millar, Jr.

Insurance policies are wonderful things. They give us peace of mind knowing that we are protected from crisis. We sleep well.

Then a crisis hits and we have to parse language more than former President Clinton parsed “is.” Was there an insured event? Was there one event or more (think the twin towers)? Who is the insured? Was an otherwise insured event an exception to the policy? What seemed clear becomes opaque.

The drafters of these policies are faced with a tension to create something that, on the one hand, is saleable, and, on the other hand, protects the company from excessive payouts. The resulting policies are camels, if you define a camel as a horse designed by a committee. And, they have spawned an entire industry of keen-eyed coverage counsel.

But this is not a screed against the insurance industry or the policies they create, for they spawn lawsuits without which I would have nothing to write about.

Such as the one between M.O. and M.B. involving a perhaps insured 2014 Hyundai Genesis. (Perhaps the phrase “perhaps insured” is a misnomer as the vehicle was insured but perhaps not for the event for which coverage was sought. But, perhaps, I digress.)

About all we know about M.O. is that she is a woman and perhaps those are her initials. She apparently resides in Missouri.

About all we know about M.B. is that he is a man who owns the Genesis in question and resides in Kansas. The car is insured by Geico, which resides almost everywhere, but which issued the car insurance policy in Kansas.

Neither M.O. nor M.B. want to use their real names. This is a concern in federal court which does not allow fictitious parties.

Ms. M.O. and Mr. M.B. entered into an agreement under Missouri law which allows an insured to settle a personal injury action by agreeing that the plaintiff may only collect from the insurer. In February of this year, Ms. M.O. sent that to Geico with a demand that Geico pay her $1,000,000.

Three months later, unbeknownst to Geico, Ms. M.O. and Mr. M.B. submitted her claim to arbitration. “[T]he next day, the arbitrator awarded M.O. a $5.2 million arbitration award” that “M.O. can collect, if at all, only from Geico.” Decry arbitration if you want, but that has to be one of the quickest awards ever rendered.

Geico sniffed collusion and moved to intervene. The Jackson County Circuit Court granted the motion to intervene then confirmed the award and entered judgment for $5.2 million, which reminds me, and probably Geico, of the lyrics of Gordon Lightfoot’s “Sundown”: “I feel like I’m winning when I’m losing again.”

Geico then filed a declaratory relief action in the United States District Court for the District of Kansas where its insured lived and where the car was licensed, titled, and garaged. Mr. M.B. filed an answer and, as you knew he would, a counterclaim for bad faith failure to pay the award. Ms. M.O. moved to dismiss for lack of jurisdiction as at the time of the “events” at issue, both she and the Genesis were in Missouri. The court took a “who are these people?” approach and issued an OSC as to why Geico should not be required to file an amended complaint showing their true names. At this point, this would make a pretty good bar exam question, but I want to circle back to the original issue—coverage.

The underlying claim is that M.O. and M.B. were “having unprotected sex in M.B.’s 2014 Hyundai Genesis” and that resulted, at least according to M.O., in her contracting a sexually transmitted virus.

I am guessing that they were in the back seat, but for all I know, they were in the trunk. Wherever, I cannot for the life of me see how it is the car’s fault.

However this case ultimately turns out, it corroborates what I have long suspected: Sex is the genesis of many a lawsuit.

Richard W. Millar, Jr. is Of Counsel with the firm of FSG Lawyers PC in Irvine. He can be reached at rmillar@fsglawyers.com.