Jackpot justice: $20M for $25,000 insurance claim

by Ted Frank on October 7, 2006

Ted Fields was injured in an auto accident with Jimmy Woodley; Woodley’s insurer went bankrupt, so Fields, on January 30, 1997, asked Allstate to pay $25,000 in medical bills and lost wages. Allstate sent Fields forms to fill out, and he did so three weeks later; when Allstate didn’t pay instantaneously, he sued them in March 1997 for bad faith. Fields turned the discovery process into a far-reaching investigation of all of Allstate’s claim procedures; the judge refused to constrain irrelevant deposition questioning, at which point in 1999 Allstate offered Fields the full amount of his $50,000 policy limit rather than waste hundreds of thousands in trial. Fields refused; his attorneys filed several separate motions of default rather than litigate the underlying issues after the trial court denied a summary judgment motion. An appellate court found that Allstate was entitled to summary judgment because of the lack of any evidence of bad-faith in responding to Fields’s claims; the Indiana Supreme Court overturned that ruling on a procedural technicality that the appeal was premature.

The trial court ruled that Allstate was not allowed to present evidence that it was not liable for actual or punitive damages or that it acted “with anything other than dishonest purpose, moral obliquity, furtive design, and/or ill will.” A jury, hearing this one-sided sham of a trial, awarded $20 million in damages, though one would hope the Court of Appeals, hearing a timely appeal, makes the same decision it made before. Press coverage fails to mention that Allstate wasn’t allowed to defend itself at trial; the plaintiff told the jury that the dispute caused high blood pressure, heart problems, and a stroke, though then the question becomes why he isn’t suing his attorney. (Ken Kosky, “Valpo man wins $20 million verdict v. Allstate”, Northwest Indiana Times, Oct. 6).

{ 3 comments }

1 Ima Fish 10.09.06 at 12:53 pm

“procedural technicality”

You complain when plaintiff’s attorneys play loose with the law and now you’re complaining when it’s strictly enforced. Basically, you think that whenever a Plaintiff wins the system is failing.

[TF: No, sir: You misread me. The Indiana Supreme Court decision is, as best I can tell, legally correct. I use the neutral phrase "procedural technicality" to distinguish the Court's actual decision that no appellate jurisdiction existed from a ruling that the plaintiff's claim had any merit. See, for example, the Washington Post story "Supreme Court Dismisses Pledge Case on Technicality." My complaint is entirely with the trial court and the disingenuousness of the plaintiff and his attorney.]

2 Phil 10.11.06 at 5:05 pm

I disagree with your labeling of “far-reaching investigation of all of Allstate’s claim procedures” as “irrelivant.”

It may be true that this particular judge gave this particular plaintiff too much lattitude, and there may not in fact be a bad faith claim in this particular case.

That said, Allstate is a well-oiled machine set up for the sole purpose of depriving injured parties of as much compensation as possible, in order to retain as many premiums for itself as it can. There’s no way to truly try a bad-faith claim against Allstate to a jury without letting the jury know the context in which all of this stuff occurs.

Allstate, State Farm and the other insurance companies that deal with injured people not as individuals but as numbers need to be held accountable by juries for this action. Nobody hears about this conduct until they’re hurt and discover they have no one to turn to; until then all they hear is how low the premiums are.

3 Ted 10.13.06 at 9:10 am

Phil’s proposal is the very definition of “irrelevant.” P has a claim against D insurer if D failed to grant P’s claim in bad faith. Whether D did something right or wrong with Q, R, S, T, U, or V is irrelevant with respect to P. Any other result turns every $25,000 dispute into a $20 million dispute, and guarantees that insurers will be deterred only from taking steps to prevent fraud.

Comments on this entry are closed.