A bad-faith suit against Allstate Insurance Co. stemming from an auto-accident case that produced a $19.1 million verdict in Philadelphia has been settled for $22 million.
According to Legal sibling publication PaLaw, which tracks the largest verdicts and settlements in the state of Pennsylvania, the $22 million settlement in Hennessy v. Allstate Insurance is the largest reported bad-faith settlement in the state’s history.
Allstate and its agents—Kevin Broadhead, Paul Fraver, John Russell and Henry Ricci III—were the defendants in Hennessy. The plaintiff, Patrick Hennessy, sued Allstate for its refusal to pay for the judgment entered against its insured, Ryan Caruso, who was partially responsible for the accident that resulted in the amputation of Hennessy’s right leg.
The case dates back to July 2009, when Hennessy was a passenger in a car being driven by Caruso. Caruso rear-ended another car being driven by Bruce Reikow (dismissed from the case), which resulted in Caruso’s car stalling in the middle of the road. As Hennessy was pushing Caruso’s car off to the side of the road, another car being driven by Shawn Robertson Jr. rear-ended the Reikow vehicle, spun to the side and crushed Hennessy.
Hennessy’s attorney, Matthew Casey of Ross Feller Casey in Philadelphia, said the underlying case that produced the $19.1 million verdict stemmed from Allstate’s failing to pay the $250,000 in coverage that Caruso’s policy afforded. As a result of being exposed to the multimillion-dollar verdict, Caruso assigned his rights against Allstate to Hennessy, allowing the plaintiff to sue the insurer, Casey said.
The $22 million settlement encompasses the $19.1 million verdict and subsequent delay damages plus interest.
“It was a protracted but ultimately successful battle between a young man with a catastrophic injury and the largest insurance company in America,” Casey said. “It is a testament to what one individual can accomplish through our civil laws when an injustice occurs.”
For more information regarding New Jersey insurance law, bad faith and the refusal to settle, read “Rova Farms: Bad Faith Settlement Offer” on the Gill and Chamas blog.