Allstate Bad Faith

Allstate Insurance Company is known by plaintiff’s attorneys for engaging in bad faith tactics. Last week, the Missouri Court of Appeals upheld a jury verdict that hit Allstate with more than $16 million in damages for bad faith tactics.
On March 24, 2000, Wayne Davis Jr., while drunk, drove his truck across the center line of a roadway and hit a compact car head-on. The force of the collision pushed the car back more than 100 feet. The driver and the passenger survived but suffered life-threatening injuries, and incurred combined hospital bills totaling $320,000.
The injured parties offered to settle with Davis for his insurance policy limits of $50,000. But, his carrier, Allstate, did not respond until six months later. That was after a statutory 60-day limit for accepting had expired.
After Allstate failed to settle, a lawsuit was filed and a consent judgment was entered in the injured parties’ favor for more than $5 million. The injured parties then agreed to forego execution of the judgment against Davis for assignment of his claims against Allstae for failure to settle his case.
Allstate claimed it lost the letter proposing the offer and responded late because it did not receive the parties’ medical record. The jury did not believe these claims and on Nov. 8, 2006, found that Allstate had acted in bad faith and awarded compensatory damages of $5.8 million plus 9 percent interest since the date of the judgment, as well as $10.5 million in punitive damages.
Allstate appealed, and on Tuesday a three-judge panel of the Missouri Court of Appeals held that the evidence was sufficient to justify the verdict.
Incredibly, Allstate argued that it was unsure the crash had caused the injured parties’ injuries. This was in spite of testimony that they had to be cut out of the wreckage, were flown by helicopter to the hospital and received intensive care.