The Illinois Appellate Court has ruled against a plaintiff who was blinded in one eye when a bar patron threw a bottle at him. The plaintiff was seeking to collect $1 million over the insurance policy limit of $1 million.
In this case, the trial court had ruled that Orlando Valdez did not sufficiently allege that the insurance company had a duty to settle the underlying action, that it acted in bad faith, and that his settlement demand created a conflict of interest between the insurer and its client.
In September 2012, Valdez was injured at Aquarius Club and Restaurant in Chicago. He sued the club owner, the unidentified assailant, and others in the Circuit Court of Cook County.
The individual defendant owner, Roman Rojas, was represented by Illinois Casualty Co. with an insurance policy limit of $1 million.
In March 2016, Valdez made a settlement demand of $1 million, which Illinois Casualty rejected once the trial began the following month. The jury returned a verdict of $2 million in Valdez’s favor.
In November 2016, Valdez and Rojas executed a post-judgment agreement in which Valdez agreed not to enforce the remaining judgment ($1 million) against Rojas in exchange for Rojas assigning to Valdez any claims that he had against Illinois Casualty as a result of the judgment.
Illinois Casualty paid Valdez the $1 million policy limit, but did not tender the remainder of the judgment, costs, or interest.
In December 2016, Valdez sued Illinois Casualty. In his fourth amended complaint, Valdez alleged that Illinois Casualty breached its duty of good faith and fair dealing toward its insured by rejecting the settlement demand and that Illinois Casualty waived the policy limits by choosing not to send Rojas a reservation of rights letter after Valdez made his settlement demand.
In January 2020, Illinois Casualty moved to dismiss Valdez’s fourth amended complaint, which was granted with prejudice.
Valdez appealed, arguing that the trial judge erred in finding he did not allege sufficient facts to establish that Illinois Casualty had a duty to settle the underlying action and in dismissing his claim for damages under an Illinois insurance provision that allows the policyholder to recover attorney fees, costs, and statutory damages from an insurer whose conduct with respect to a claim is “vexatious or unreasonable.”
Valdez also argued that his settlement demand created a conflict of interest between Illinois Casualty and Rojas that required Illinois Casualty to warn Rojas of the possibility of an excess verdict and provide the option of an independent counsel.
In the appellate court’s non-precedential Rule 23 order, the appellate court found that Valdez alleged sufficient facts to show a reasonable probability that Rojas would be found liable in the underlying lawsuit, as he alleged that his assailant had a history of violent acts at the club, of which Rojas was aware, among other arguments. However, the appellate court reasoned that the plaintiff did not sufficiently allege a reasonable probability of an excess judgment. In the appellate court opinion, it was stated that Valdez alleged that he incurred less than $50,000 in medical expenses, and that Illinois Casualty had made settlement offers of $100,000 and $200,000.
“As the trial court aptly stated, ‘There’s no factual allegations to explain why these offers were a mis-evaluation of the plaintiff’s claims.’”
In addition, the appellate court’s decision noted that Valdez did not allege facts that would show Illinois Casualty rejected his settlement demand in bad faith. There was no allegation by the plaintiff that Illinois Casualty refused to negotiate and made no allegations regarding the adequacy of Illinois Casualty’s investigation and defense or the advice of Illinois Casualty’s adjusters and counsel.
“Thus, the trial court properly dismissed his claim for breach of the duty of good faith and fair dealing,” the appellate court stated citing Olympia Fields Country Club v. Bankers Indemnity Insurance Co., 325 Ill.App. 649, 673 (1945).
Furthermore, the appellate court wrote that Illinois Casualty did not have a duty to notify Rojas of the ongoing settlement negotiations with Valdez, and it did not waive the policy limits by choosing not to issue a reservation of rights letter.
Valdez v. Illinois Casualty Co., 2022 IL App (1st) 201121-U.
Kreisman Law Offices has been handling wrongful death lawsuits, motorcycle accident cases, bicycle accident lawsuits and truck accident lawsuits for individuals, families and loved ones who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 45 years in and around Chicago, Cook County and its surrounding areas, including Hillside, Berwyn, North Riverside, Stickney, Bridgeview, Hickory Hills, Western Springs, Itasca, Morton Grove, Northfield, Lincolnshire, Chicago (Rogers Park, Albany Park, Sauganash, Norwood Park East, Belmont Cragin, Palmer Square, West Town, River North, Garfield Park, Homan Square, Little Village), Berwyn, Cicero, Waukegan and Park Ridge, Ill.
Robert D. Kreisman has been an active member of the Illinois and Missouri bars since 1976.
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