The Ninth Circuit Court of Appeals has affirmed the $14 million bad faith judgment returned against Allstate, finding there was sufficient evidence to conclude the insurer could and should have settled an underlying motorcycle collision case. A three-judge panel rejected Allstate’s appeal of a 2012 jury verdict that the insurer acted in bad faith when it rejected Carlos Madrigal’s offer to settle his claims against policyholders Anna and Richard Tang for policy limits.

In the underlying case, Madrigal had sued the Tangs after a July 2009 collision between his motorcycle and a car driven by Richard Tang left Madrigal a paraplegic. Madrigal made a settlement demand for the Tangs’ $100,000 policy limit. Allstate initially rejected the offer and made a counteroffer of approximately $34,000. Madrigal rejected this offer and a later $100,000 offer. The case went to trial in state court, and in October 2012, the jury awarded Madrigal $10 million.

Following the trial, the Tangs assigned their rights against Allstate to Madrigal, who sued the insurer in California federal court in April 2014 for bad faith failure to settle. In November 2015 the jury found bad faith and awarded Madrigal approximately $14 million. Allstate appealed, seeking a reversal of the trial court’s denial of a new trial or a judgment notwithstanding the verdict.

Madrigal and the Tangs are represented by Arash Homampour and Wendi O. Wagner of the Homampour Law Firm, Warren J. Binder of Binder & Associates, and Jeffrey I. Ehrlich of The Ehrlich Law Firm. The case is Madrigal et al. v. Allstate Indemnity Co., (case numbers 16-55839 and 16-55863) in the U.S. Court of Appeals for the Ninth Circuit.


We're here to help!

We live by our creed of “helping those who need it most” and have helped thousands of clients get the justice they desperately needed and deserved. If you feel you have a case or just have questions please contact us for a free consultation. There is no risk and no fees unless we win for you.

Fields marked * may be required for submission.

I never dreamed how much this would mean to me

I received another check today, much to my surprise. Thank you, thank you, thank you! I never dreamed how much this would mean to me in my golden years, as I have had hearing problems for years and needed to update my hearing aids, but with a limited income, found that was impossible. I now have the best hearing aids that I have ever had, thanks to you fighting so hard on my behalf.