An Orange County jury has ruled that GEICO must pay nearly $23 million in damages to a Newport Beach, Calif., man who sued the insurance company for breach of contract after it delayed payment of a $400,000 claim.
In October 2009, GEICO policyholder Omar Dauod was involved in a collision with a motorist who ran a stop sign, according to an article in the Orange County Register. The other driver’s insurance coverage had a maximum payout of $100,000.
In April 2012, Dauod filed an underinsured-motorist claim with GEICO for his policy limit of $400,000, and he provided documentation showing that he had incurred $125,000 in medical bills and more than $600,000 in lost wages since the accident, according to Dauod’s lawsuit.
“His medical treatment included medical, surgical and rehabilitative care for a dastardly injury, thoracic outlet syndrome, related to the accident by all treating medical professionals,” the lawsuit asserts.
Eighteen months after Dauod filed his claim with GEICO, the insurance company paid him the $400,000, but only after an arbitrator ruled in Dauod’s favor.
From the time that Dauod filed an underinsured-motorist claim in April 2012, his lawsuit alleges that GEICO engaged in a series of stall tactics and legal games.
For example, for the first five months, the insurer “did not subpoena or request records, did not contact treating doctors, did not contact accident witnesses, did not interview any witnesses to the wage-loss claim or request a statement [from Dauod or his wife, Gina] in accordance with the policy [and] did not request a medical examination authorized under the policy,” according to the complaint.
After the first five months, GEICO requested “spurious and irrelevant documents,” such as paperwork that Dauod’s lawyers already had provided, the lawsuit alleges.
On Aug. 23, 2012, Dauod demanded arbitration.
“Once arbitration was demanded, defendant GEICO embarked upon an extended and frivolous round of litigation, designed to frustrate and delay resolution of the case to keep the money with GEICO and not allow plaintiffs the benefit of their bargain,” the lawsuit alleges.
In December 2014, Omar and Gina Dauod filed a lawsuit against GEICO in the Superior Court of California for Orange County. Gina Dauod later withdrew her claim.
Earlier this month, an Orange County jury determined that GEICO unreasonably delayed payment of Omar Dauod’s policy benefits.
The jury awarded Dauod $9.96 million for past economic and non-economic damages, including the loss of two homes and his loss of business as a real estate developer, in addition to mental suffering and emotional distress. On top of that, the jury awarded him $13 million in punitive damages.
GEICO’s attorneys indicated that they would appeal the verdict, the Orange County Register reported.