St. Louis Record

Monday, October 14, 2019

Federal court dismisses insurance coverage case against Geico over drunk-driver collision


By Shanice Harris | Apr 16, 2019

KANSAS CITY – The U.S. District Court for the Western District of Missouri declined to exercise its jurisdiction in a case against an insurance company over a vehicle collision and a $35 million arbitration award and dismissed the case.

U.S. District Judge Greg Kays ruled March 28 that the state court is better suited for the case between plaintiff Geico Casualty Co. and defendants Patricia Hollandsworth and Richard Aguilar. 

“The state court is better positioned to settle the issues and, accordingly, this court declines to exercise its jurisdiction," Kays wrote. "A stay rather than dismissal is typically the preferred mode of abstention. But dismissal is appropriate where there is 'no reason for the case to return to federal court.’”

In July 2013, the ruling states Daniel and Deborah Clymens and Hollandsworth rented a U-Haul truck to move Hollandsworth into a new building. The U-Haul owner would not rent to Hollandsworth because she did not have a valid driver’s license and was visibly intoxicated, the ruling states. The Cylmens signed the rental agreement while Hollandsworth paid for it. 

The very next day, the ruling states the still-intoxicated Hollandsworth drove the U-Haul into Aguilar, who was on his motorcycle. He was severely injured in the collision.

Aguilar sued Hollandsworth in 2017 and Hollandsworth sought coverage from Geico under Clymens’ policy, which it denied but offered to defend her subject to a reservation of rights.

After the case made its way through the courts, the defendants entered into an agreement to submit the dispute to arbitration, and the arbitrator awarded Aguilar $35 million in damages. The state court affirmed the award, and Geico appealed the decision. Aguilar also filed another agreement regarding garnishment action against Geico over allegations it breached its duty and acted in bad faith.

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