New lawsuit seeks more than $2 billion in damages
CHICAGO, Ill. (March 31, 2026) – Salvi, Schostok & Pritchard P.C. has filed an insurance bad faith lawsuit seeking more than $2 billion in compensatory and punitive damages against Travelers Property Casualty Company of America, alleging Travelers violated its duty of good faith and abandoned its insured, Prairie Farms Dairy, Inc., as Prairie Farms faced catastrophic exposure arising from a tragic wrongful death case in Madison County, Ill. The lawsuit was filed on Tuesday, March 31, 2026 in the United States District Court for the Southern District of Illinois.
The bad faith action follows a $241 million jury verdict awarded in Madison County, Ill. for the family of Eric Johnson, a beloved 64-year-old courier and family man, who died on August 5, 2016 after being exposed to a high concentration of carbon dioxide while transporting dry ice as part of his job. Mr. Johnson left behind a wife and two disabled children who relied on him for daily support, along with three adult children.
Under Illinois law, an insured’s claim for the wrongful failure to settle a case can be assigned to a third-party claimant who has obtained an excess judgment against the insured in a wrongful death lawsuit. That third-party claimant may then acquire and prosecute the insured’s claim as if they were the actual defendant who was harmed by the insurance company’s failure to settle the original case. Here, Paula Johnson as the prevailing plaintiff who has been assigned the claims of Prairie Farms, now stands in the shoes of Prairie Farms to prosecute the bad faith claim against Travelers directly.
The bad faith lawsuit filed Tuesday alleges Travelers repeatedly gambled with the financial interests of Prairie Farms and failed to act to protect it from devastating financial harm. According to the complaint, Travelers had multiple opportunities over a stretch of nearly 10 years to resolve the underlying wrongful death claim within available insurance limits, but refused, despite the fact that Prairie Farms was demanding that the case be settled before trial. Because Travelers refused to tender its policy limits, other excess insurance carriers were sidelined and Prairie Farms – a farmer-owned dairy cooperative established in 1938 – was hit with a nearly quarter-billion-dollar judgment.
“This is a case that never would have gone to trial but for the reckless behavior of an insurance company that abandoned its duty of good faith to Prairie Farms and delayed recovery for Paula Johnson and her family by refusing to settle for a reasonable amount before trial,” said Patrick A. Salvi II, who served as lead trial attorney for the Johnson family. “The gamble that Travelers took with the finances of a company that employs thousands of people in multiple states resulted in a verdict of nearly a quarter billion dollars.”
“What Travelers knew, what Travelers ignored, was that a tragedy of this magnitude represented an existential threat to its insured,” said plaintiff’s attorney Lance D. Northcutt of Salvi, Schostok & Pritchard, P.C. “The degree of Travelers’ recklessness toward a company that tried to do the right thing by encouraging a fair settlement will now be the subject of a federal lawsuit in which we will seek compensatory and punitive damages that will exceed $2 billion.”
In addition to Salvi, Schostok & Pritchard P.C., Chicago attorneys John F. Kennedy of Taft Law and Steven D. Pearson of Smith, Gambrell & Russell, LLP will join in the prosecution team in the civil claims against Travelers.
The attorneys held a press conference on Wednesday, April 1, 2026, to discuss the lawsuit in more detail, as well as bombshell new allegations that led to the $241M verdict and forms the basis of this new lawsuit. A recording of the press conference can be found here.
For more information, please contact Marcie Mangan at (312) 372-1227 or mmangan@salvilaw.com.
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Case No.: 3:26 CV 00384 [PAULA JOHNSON, on behalf of herself and children of Eric Johnson, deceased, as Administrator of the Estate of Eric Johnson, and as Assignee of Prairie Farms Dairy, Inc. and PFD Supply Corporation, Plaintiff, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, a Connecticut sock insuring corporation, Defendant.]
