Insurer Reported to Pay $20 Million to Settle Bad Faith Claim in Pa.

July 2, 2007

An insurer has agreed to pay $20 million in what is believed to be the state’s richest settlement of a bad faith claim.

According to the plaintiff’s attorney, Robert Mongeluzzi of Saltz Mongeluzzi Barrett & Bendesk, Princeton Insurance Co. has agreed to the $20 million in mediation of a bad faith claim filed in Philadelphia Court of Common Pleas.

Princeton did not admit liability in the settlement, Mongeluzzi said.

The case involved a road worker who was paralyzed after being struck by a drunk driver who left a tavern that Princeton insured.

The $20 million is in addition to the $1 million Princeton was previously required to pay under the limits on the tavern’s $1 million insurance policy after it lost its appeals on the dram shop case.

Joseph Tuski was left a quadriplegic when a car driven by Michael Petaccio struck him as he directed traffic on Jan. 17, 2001, in Warminster. Petaccio had just left the Ivyland Cafe.

A jury awarded Tuski, who was 31 at the time of the crash, $75 million, an award that a judge later cut in half. But that large award was never paid because the tavern had only $1 million in insurance.

The tavern assigned its rights to Tuski, who sued Princeton Insurance Co. for bad faith, charging that the insurer failed to negotiate a settlement within the policy’s $1 million limits after the verdict.

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