Betts

In an earlier (underlying) lawsuit for damages arising out of an automobile intersection accident (Gallucci v. Betts), Anne E. Gallucci obtained a jury verdict-judgment against Debra Betts for damages of $450,000, $350,000 in excess of Betts’ automobile insurance policy issued by Allstate Insurance Company (Allstate). Allstate assumed the Betts defense, furnished the law firm of Ruston and Nance (Ruston) to represent Betts in the underlying lawsuit, but flatly denied liability and adamantly refused during the entire course of litigation and up to and including the motion for new trial to accept Gallucci’s offer to accept its policy limits in settlement.

In the present action Betts sued Allstate, alleging breach of covenant to deal fairly and in good faith. She charges a “bad faith” refusal to accept a settlement offer within the policy limits. Betts alleges Ruston was negligent in conducting the defense of her lawsuit. A jury returned special verdicts awarding (1) compensatory damages against Allstate of $500,000 (to which the trial court added prejudgment interest and costs) and (2) punitive damages of $3 million. The jury found Ruston was also negligent and awarded…