O'Neill v. Gallant Insurance Co.

Christine Narvaez had automobile-liability coverage with Gallant Insurance Company (Gallant) (defendant). Narvaez parked her car and got out, leaving the motor running and her two-year-old grandchild in a booster seat. The child slipped the car into gear. Narvaez’s car hit two cars and two pedestrians. Marguerite O’Neill (plaintiff) was severely injured. O’Neill’s lawyer demanded the policy limits of $20,000 to settle the claim and offered to release Narvaez from liability. Gallant ignored the offer. John Moss, the executive vice president of Gallant’s parent company, rejected the opinions of his claims-department employees and Narvaez’s lawyers that liability was clear and the policy limits should be tendered. Narvaez’s lawyers told Moss the verdict potential was 15 to 30 times the amount of coverage. Narvaez was not told O’Neill was willing to settle for the policy limits until after the offer expired. Narvaez’s lawyers failed to diligently investigate the case. O’Neill rejected the $20,000 settlement offer Moss authorized on the eve of trial. A jury awarded O’Neill more than $730,000 in damages. Narvaez’s claim against Gallant for failure to settle was assigned to O’Neill. O’Neill presented evidence of 44 cases in which Gallant’s customers suffered $10,000,000 in excess judgments after Gallant declined to settle within policy limits. The jury awarded actual damages of what Narvaez owed O’Neill and $2.3 million in punitive damages. Gallant appealed.