Manu v. GEICO Casualty Co., 798 S.E.2d 598

Manu was injured as a passenger in a multi-vehicle accident; he had $25,000 UM coverage with GEICO; Boateng (driver) had $25,000 liability coverage; medical bills exceeded GEICO’s UM limit.
Manu sued Boateng and an unknown John Doe; discovery implicated John Doe as the cause; GEICO elected to defend John Doe in the liability action.
Manu settled with Boateng for $25,000, went to trial against John Doe, obtained a jury verdict and judgment of $68,528.24 against John Doe; GEICO paid its $25,000 UM limit after judgment.
Manu sued GEICO under Va. Code § 8.01-66.1(D)(1), alleging GEICO acted in bad faith by refusing to settle his UM demand for the policy limit before judgment and sought extra-contractual remedies (double interest, attorney’s fees).
The circuit court initially overruled GEICO’s demurrer but later granted reconsideration, sustained the demurrer with prejudice, and dismissed Manu’s complaint; this appeal followed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Va. Code § 8.01-66.1(D)(1) creates a pre-judgment duty on UM carriers to evaluate/settle an insured’s UM demand	Manu: § 8.01-66.1 imposes a duty of good faith to adjust/settle UM claims before insured obtains judgment	GEICO: No pre-judgment duty; a UM carrier’s obligation to pay is governed by § 38.2-2206 and arises only after insured obtains judgment against the uninsured tortfeasor	Held: No. § 8.01-66.1 provides a remedy for bad faith only where insurer has a present contractual obligation to pay; for UM policies, that obligation arises only after judgment, so no statutory duty to settle pre-judgment
Whether § 8.01-66.1 applies to UM policies (i.e., is it limited to first-party claims?)	Manu: § 8.01-66.1 applies to UM claims and creates a good-faith obligation pre-judgment	GEICO: The statutory protection is for first-party claims and does not create a pre-judgment UM duty	Held: § 8.01-66.1 applies to UM policies insofar as it provides a remedy for bad faith, but a UM “claim” is not ripe until judgment is obtained; the statute does not independently create a pre-judgment duty

Willard v. Aetna Cas. & Sur. Co., 213 Va. 481 (holding UM insurer not liable on endorsement until judgment against unknown defendant)
Midwest Mut. Ins. Co. v. Aetna Cas. & Sur. Co., 216 Va. 926 (interpreting “legally entitled to recover” requires judgment to determine entitlement)
Aetna Cas. & Sur. Co. v. Dodson, 235 Va. 346 (discussing scope of UM coverage and threshold enforceability issues)
Colonial Ins. Co. v. Rainey, 237 Va. 270 (addressing coverage scope; discussions on entitlement treated as dicta)
State Farm Mut. Auto. Ins. Co. v. Kelly, 238 Va. 192 (reaffirming judgment as the event determining legal entitlement to recover under UM statute)
Nationwide Mut. Ins. Co. v. Hylton, 260 Va. 56 (UM carrier’s right to participate in liability trial does not make it a party or create payment obligations)
United States Auto. Ass’n v. Nationwide Mut. Ins. Co., 218 Va. 861 (distinguishing liability carriers’ duty to settle from UM carriers’ lack of such a duty)

Outcome: Judgment affirmed; no cognizable § 8.01-66.1 bad-faith claim for pre-judgment failure to settle UM demand.