Allstate Pays $16 Million Due to Bad Faith
Allstate Insurance Co. has lost its appeal of a nearly $16 million prior judgment against it for not settling a claim for the $50,000 limit on an auto insurance policy. The Missouri Court of Appeals “upheld an award of more than $5.8 million in compensatory damages and $10.5 million in punitive damages against Allstate.”
In March 2000, Allstate’s client, Wayne Davis, drove across the center of a Camden County highway and crashed head on into the car of Edward and Virginia Johnson. Though the Johnson’s suffered serious injuries that required extensive hospital treatment, Allstate claimed that, “there was some doubt whether the Johnson’s injuries were caused by the crash.”
Then an unexpected twist happened. The couple agreed not to collect any of the $5 million dollar judgment from Wayne Davis and, instead, they teamed up with him and went after Allstate. They jointly sued Allstate for “bad faith, refusal to settle a claim and for equitable garnishment.” In 2006, a jury found Allstate had acted in bad faith and awarded compensatory damages plus interest. .
Allstate appealed it claiming they “did not make a submissible case.” However, on July 29th a three-judge panel of Missouri Court of Appeals affirmed the lower court’s judgment, holding Allstate to the settlement of around $16 million.
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