Press Conference: Salvi Law Files $2B Bad Faith Action Against Travelers Property Casualty

[00:00:02.07] - Lance Northcutt
Good morning. My name is Lance Northcutt, N-O-R-T-H-C-U-T-T, with Salvi, Schostok & Pritchard.

[00:00:08.29] - Patrick Salvi Jr.
Patrick Salvi Jr. with Salvi, Schostak & Pritchard. And you want—

[00:00:16.21] - Steve Pearson
yeah. Steve Pearson from Smith, Gambrell Russell.

[00:00:21.03] - John F. Kennedy
Good morning. My name is John F. Kennedy from the law firm of Taft, Stettinius & Hollister.

[00:00:26.09] - Patrick Salvi Jr.
So we're here today because this story, the story of the Johnson family, tragically back in August of 2016, involved their father and husband Eric's untimely death. And he died due to the negligence and indeed the willful wanton conduct of of Prairie Farms and its subsidiary PFD Supply. Uh, over the course of the next 10 years though, uh, what has now become plainly evident, uh, is that Prairie Farms, uh, as it were, uh, had a desire to resolve this case, uh, for an amount, uh, that, uh, the Johnson family would have accepted. Uh, however, uh, in a very unfortunate turn of events, Their insurance company, namely Travelers, refused to do so and engaged in bad faith litigation. The result of that bad faith— or I should say bad faith insurance— the result of that bad faith was both the prolonging of the Johnsons' suffering as a result of the tragic death of Eric and them being put through nearly 10 years of litigation and a trial., and then ultimately a verdict and a judgment, uh, that caused substantial, uh, business harm, uh, to Prairie Farms.

[00:01:57.08] - Patrick Salvi Jr.
Uh, what we have now, uh, is an assignment whereby, uh, Paula Johnson, Eric's widow and the administrator of his estate, has been assigned the bad faith claims that Prairie Farms has against Travelers, uh, so that Travelers may be pursued, by Paula Johnson, uh, as, as the assignee of Prairie Farms' bad faith claim, uh, for their bad faith insurance throughout the pendency of this, uh, underlying litigation. Uh, and so very recently our law firms, uh, filed that bad faith case. Uh, and to speak more about that bad faith case, I'd like to turn it over to my partner at Salvi, Shaskin, Pritchard, Lance Northcutt.

[00:02:40.29] - Lance Northcutt
So there's an underbelly to the insurance industry that you don't see in the funny commercials on TV. And that is, as you might imagine, insurance companies do not make money by paying out claims. And what's occurred in this case is, in the collective more than a century of experience of the lawyers at this table, the most egregious example of bad faith of an insurer that we have ever seen. This was a situation where anyone with a working understanding of how civil cases work would look at the facts, would look at the liability profile, and understand instinctively, reflexively, that this was a high exposure case that if it was tried before a jury would reach a verdict into the 9 figures. We predicted that outcome. We told the insurance company that outcome would happen. And when the parties were forced to go to trial in Madison County over the wrongful death of Eric Johnson, a 12-person jury came back with a verdict of $241 million. That verdict represented the quantum of harm that, that jury assigned to this case. This was not a mystery to anyone involved. And when we were prosecuting the civil case on behalf of the family of Eric Johnson, of course we didn't know what was going on behind the scenes on the other side.

[00:04:21.05] - Lance Northcutt
What we have now learned is that it was not Prairie Farms that refused to settle. It was the insurance company, Travelers Property Casualty Company of America. They, as one of the underlying insurers, essentially controlled the spigot of funds that would be provided for a settlement if they had the disposition to offer reasonable value in order to settle the claims. And what they did from top to bottom was abandon their duty to the insured, Prairie Farms Dairy. So Prairie Farms was forced to go to trial. The Johnson family was forced to go to trial. And the outcome that we had predicted, the outcome that they had been warned about, not just by us but by Prairie Farms, happened. And so in the aftermath of that verdict, as you can imagine, it was disastrous financially in terms of reputational harm for Prairie Farms. And so what occurs in cases like this where an insurance company abandons its duty to its insured because it wants to save money and not pay out on a claim that they know they should pay It becomes the election of us as the judgment creditor representing the estate of Eric Johnson to then have that claim that Prairie Farms would otherwise prosecute assigned to us.

[00:05:59.26] - Lance Northcutt
And in this case, pursuant to a settlement, that occurred. And so now, as of yesterday, in the filing of this complaint in federal court, Paula Johnson and the estate of Eric Johnson steps into the shoes of Prairie Farms. The wrong that happened to Prairie Farms is a result of the failure of Travelers Insurance Company to do what common sense and the law required, to settle within a reasonable range. We are now going to prosecute those claims. And I want to emphasize that the enormity of this judgment and the staggering failure of Travelers to do what was required under their own insurance contract means that this is not just a case of, well, what was the verdict value? This is a case where we believe an award of punitive damages should be entered by a federal jury. And so on behalf of Paula Johnson, as the assignee of Prairie Farms' claims, we are going to ask a jury for an amount that will likely exceed $3.5 billion. We'll take any questions.

[00:07:26.28] - Lance Northcutt
Anything else?

[00:07:31.19] - Patrick Salvi Jr.
Nothing else.

[00:07:32.12] - Lance Northcutt
Okay.

[00:07:32.24] - Patrick Salvi Jr.
All right. Thank you.