On Halloween Day, Christine Narvaez drove her automobile onto the parking lot of a busy supermarket. Narvaez had her two- year- old grandchild with her. The youngster was riding, unconstrained, in a booster seat. Narvaez saw a friend and decided to stop for a brief chat. She parked the car and exited the car, leaving the keys in the ignition and the motor running. The youngster crawled behind the wheel, slipped the car into gear, and set it in motion. The car struck Marguerite O’Neill, a woman in her 80s; pinned her between the Narvaez car and another car; and slowly crushed the woman’s trapped body.
O’Neill suffered a crushed hip, a broken arm, and four cracked ribs, and she lost more than 40 percent of her blood supply as a result of internal bleeding. She spent one month in a hospital’s intensive care unit and had to be placed in a nursing home and was deprived of the ability to live independently.
Narvaez carried the $ 20,000 minimum amount of liability insurance allowed by law. She was insured by Gallant Insurance Company. O’Neill’s medical bills totaled $ 105,000. O’Neill sued Narvaez and her insurance company, Gallant. O’Neill’s attorney demanded the policy limit of $ 20,000 from Gallant in settlement of O’Neill’s claim and offered a complete release from liability for Narvaez. Three Gallant insurance adjusters, its claims manager, and the lawyer of the law firm representing Gallant for the case all stated to John Moss, Gallant’s executive vice president, that Gallant should accept the settlement offer. Moss rejected their advice and refused to settle the case.
One year later, on the eve of trial, Moss offered to settle for the $ 20,000 tosettleforthe$20,000 policy limit, but O’Neill then refused. The case went to trial, and the jury returned a verdict against Narvaez of $ 731,063. Gallant paid $ 20,000 of this amount, closed its file, and left Narvaez liable for the $ 711,063 excess judgment. To settle her debt to O’Neill, Narvaez assigned her claims against Gallant to O’Neill. O’Neill then sued Gallant for a bad faith tort for breaching the implied covenant of good faith and fair dealing that Gallant owed to Narvaez to settle the case. Is Gallant Insurance Company liable for a bad faith tort? Did Gallant act unethically? O’Neill v. Gallant Insurance Company, 769 N. E. 2d 100, 2002 Ill. App. Lexis 311 (Appellate Court of Illinois, 2002)