$300,000 Settlement of Bad Faith Claim Against Allstate Insurance

Allstate Insurance Company agreed to pay $300,000 to settle a bad faith claim based on their previous refusal to pay their policy limits of $100,000 in a timely manner.

The case involved an auto accident where Plaintiff Christine Diamond was injured. She was riding in the rear, passenger‑side seat of a taxicab traveling west on California Street in San Francisco.  The taxi was a Yellow Cab.  At the intersection of California Street and Cherry Street, the cab made a U-turn in order to proceed east on California Street.  An eyewitness to the accident stated the cab made an illegal turn from the right side of California Street across two westbound lanes.  During the cab’s U-turn, a car driven by defendant Serge Reshko (“Reshko”), who was also traveling west on California Street, “T-boned” the taxi on its driver’s side. The same eyewitness said Reshko was speeding and ran a red light just prior to the accident. The speed limit was 25 miles per hour. Expert testimony indicated Reshko was going approximately 45 miles per hour at impact.

Ms. Diamond’s injuries included a fractured transverse process at T-1, two compression fractures at T-3/T-4, and fractured ribs.  She was knocked unconscious and suffered retrograde and post‑grade amnesia.  Her medical bills total approximately $45,000.  She was unable to work at all for several months, and then only returned to work gradually.  Her income loss is at least $180,000.  She was also unable to care for her newborn son, who was born ten weeks prematurely less than two months before the accident.

Yellow Cab had an insurance policy limit of $1,000,000.  Reshko had $100.000 of coverage through Allstate Ins. Co.  Plaintiff demanded Allstate’s policy limits of $100,000, which Allstate refused to pay in a timely manner.  A settlement was reached with Yellow Cab for $400,000 based on a covenant not to execute, so that Yellow Cab’s counsel would remain in the case.  The settlement was approved in a good faith hearing, and the case went to trial against Allstate’s insured in March of 2013.

The jury returned a verdict in the amount of $745,778 and assessed liability at 60% Reshko, and 40% Yellow Cab.  Reshko’s apportioned share after accounting for the Yellow Cab settlement was $406,798. Reshko appealed the verdict based on the argument the jury was not told of the settlement by Yellow Cab.  The Court of Appeal reversed the judgment and sent it back for retrial.After returning to the trial court, Allstate agreed to pay $300,000 to settle the claim, including the bad faith claim.

After returning to the trial court, Allstate agreed to pay $300,000 to settle the claim, including the bad faith claim.