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Allstate Settles Bad Faith Case for a Quarter Million Dollars Over Its Insured's Policy Limits


On August 12, 2003, a Palos Heights woman agreed to a $350,000 settlement in her bad faith lawsuit against Allstate Insurance. The lawsuit stemmed from a jury verdict in which the plaintiff, Mary Beth Kwain, was awarded 295, 609.91 for her permanent soft tissue neck and shoulder injuries caused by a 1992 automobile collision. Despite an unwavering policy demand by Kwain and her attorneys, Allstate inexplicably withdrew its only offer before trial. Up to that point, Allstate had never offered more than $15,000 of its insured's $100,000 policy.

The settlement comes less than three weeks after the First District denied Allstate's appeal in the underlying tort action, affirming both the jury's verdict and evidentiary rulings made at trial by Judge Leonard Levin.

Attorneys Daniel S. Kirschner and Kenneth T. Lumb of Corboy & Demetrio represented Kwain trial, on appeal, and in the bad faith action.

According to Kirschner:

Hopefully, the verdict, the appellate decision, and now this bad faith settlement will force a change in the insurance industry's crass position with respect to the handling of so-called 'soft-tissue' cases. For years, Allstate had every opportunity to both protect its insured and fairly compensate Mary Beth, and it failed miserably on both accounts to act as a reasonable insurer should.

Attorney Ken Lumb, who is currently serving our country on active duty as a Major in the Army JAG corps, added:

This case is an unfortunate testament to the mentality of insurance companies, and in particular Allstate, that Mary Beth had to fight for over ten years to finally be compensated her injuries. In the end, Allstate paid far more than it would have if it had just done the right thing and accepted responsibility from the beginning.

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