Kentucky Attorney Seeking $1.45 Billion in Damages Against Allstate Insurance Co.

11/17/2008 | Unfair Insurance Practices/Bad Faith

In a bad faith insurance trial scheduled to begin in Fayette Circuit Court in Lexington, Kentucky, attorney Dale Gordon is seeking $1.45 billion dollars in damages against Allstate Insurance company on behalf of Geneva Hager of Richmond, Kentucky.

Insurance Bad Faith is when an insurance company unreasonably refuses to pay a claim, or delays paying the claim and forces the case into litigation. In Kentucky, in addition to common law first-party bad faith, we have the Kentucky Unfair Claims Settlement Practices Act.  This statute obligates insurance companies to deal fairly with their own insureds (first-party) as well as third parties that may have been injured by the insurance company's insured. 

According to the Lexington Herald Leader, "the trial appears to be only the third time internal company documents that Allstate has fought to keep secret will be shown to the public. (The first was when Hager asked for class certification, which was ultimately denied, in a hearing in May 2005.) The documents, known as the McKinsey documents, were created by an international consulting firm and outline how the insurance giant transformed its claims handling in the 1990s."  "The most famous document, which became the title of a book, plays off the company's slogan. It states that claimants who accept Allstate's offers are in "good hands" while those who object get the "boxing gloves." Trial lawyers call the McKinsey documents a blueprint for fraud"

The case arises out of Allstate's refusal to settle a car accident case. Hager suffered neck and back injuries in 1997 after the truck in which she was a passenger was rear-ended. It took two years for her to resolve her pain-and-suffering claim, which was settled for the $25,000 policy limits four days after it was scheduled for trial, her attorneys have said.

Orginally, attorney Golden was seeking $800 million in damages, but has now doubled that figure, a mistake according to New Mexico trial lawyer David Berardinelli. "That's the worst thing they could do, that is a typical mistake a lot of these guys make, because then it looks like greed. It's like, 'So we want to make you a billionaire for why? This person here? Over a $25,000 car accident?' People have a hard time with that."

Dale Golden has achieved has a very good reputation and has had several large plaintiff's verdicts in the past.  I hope he gets another big one here.