Geico Indemnity Company vs. Whiteside
In a recent case, the Georgia Supreme Court held that Geico Indemnity Company was on the hook for a $2.9 million judgment against a driver that was insured by a Geico policy. In this case, Bonnie Winslett had been using someone else’s car with their permission, and because of this was insured under a policy issued to the car’s owner. She struck a bicyclist and injured him. GEICO sent her a letter stating that it was handling the claim directly with the attorney for the bicyclist. It did not tell her to forward a copy of the complaint if she was sued or tell her about any responsibility to do so. She did not have a copy of the policy.
The policy was a $30,000 policy. The attorney for the bicyclist made a demand for the policy limits. However, GEICO only offered to settle the case for $12,000 even though at that point it knew the bicyclist’s medical expenses were close to $15,000. The bicyclist sued Winslett, who did not respond, and a default judgment was entered against her for $2.9 million. She was forced into bankruptcy because of this judgment. After the judgment was entered, GEICO found out about it and tried to have it set aside, but it was too late.
The bankruptcy trustee sued to recover the amount of the $2.9 million judgment from GEICO claim that GEICO negligently and in bad faith failed to settle the case within policy limits. GEICO claimed that it was not liable because it did not receive notice of the personal injury lawsuit. The Georgia Supreme Court rejected this argument finding that GEICO itself gave Winslet the impression that it was defending her case in that GEICO never told her of any need to forward any complaint or anything else to it. The court also observed that she was unsophisticated. The court held that GEICO was responsible for the amount of the judgment.
Contact us if you have any questions about an insurance company’s bad faith failure to settle your claim.