After $241M verdict vs Prairie Farms, Travelers sued for $2B for ‘bad faith’

By Jonathan Bilyk | Legal Newsline
The Center Square

Acknowledging the $241 million wrongful death verdict they obtained against Prairie Farms Dairy could endanger the ability of large and popular dairy cooperative to survive, a prominent Chicago personal injury law firm has now asked the courts to order Travelers Insurance to pay $2 billion for allegedly wrongly leaving Prairie Farms to face the lawsuit alone.

On March 31, attorneys from the firm of Salvi Schostok & Pritchard filed suit in Southern Illinois federal court against Travelers in pursuit of the potentially massive payout.

In the action, the Salvi lawyers are representing plaintiff Paula Johnson. She is a widow who secured a $241 million jury verdict in the lawsuit she and the Salvi firm filed against Prairie Farms over the death of her husband, a Missouri delivery driver who allegedly died from carbon dioxide exposure while transporting strawberries packed with dry ice.

According to the new insurance lawsuit, Johnson and her attorneys claim Travelers allegedly acted in bad faith against Prairie Farms for years, refusing to settle the case and essentially abandoning their insured at trial.

In a statement announcing the new lawsuit against Travelers, Patrick A. Salvi II, lead trial attorney for the Johnson family, said: “This is a case that never would have gone to trial but for the reckless behavior of an insurance company that abandoned its duty of good faith to Prairie Farms and delayed recovery for Paula Johnson and her family by refusing to settle for a reasonable amount before trial.

“The gamble that Travelers took with the finances of a company that employs thousands of people in multiple states resulted in a verdict of nearly a quarter billion dollars.”

The Johnson family has been in court against Prairie Farms since they first filed suit in 2017. That lawsuit came about a year after Paula Johnson’s husband, Eric Johnson, died after being found unresponsive in a parking lot in Missouri.

According to court documents, Prairie Farms contracted with Johnson, then 64 years old, of Missouri, through courier company CJS Express on Aug. 5, 2016, to “pick up several crates of strawberries and deliver them to a location in Arkansas.”

According to the company, Prairie Farms affiliate PFD Supply directed Johnson to pick up the strawberries packed in dry ice at its facility in St. Charles, Missouri, in suburban St. Louis.

Dry ice is frozen carbon dioxide.

According to court documents, Johnson loaded the crates into his car, a 2016 Honda Fit, and departed on his journey.

However, about 90 minutes after departing from the PFD facility, Johnson was reportedly found unresponsive in his vehicle, with the engine still running, in a parking lot, still in St. Charles, Missouri.

According to court documents, responding emergency medical services transported him to a nearby hospital, where he died three days later.

According to court documents, responding emergency services officers indicated the interior of the car gave off a “strong, sharp smell,” similar large amounts of carbon dioxide.

According to court documents, when he left the PFD facility, a rear window of Johnson’s vehicle was down, as is required for transporting goods including dry ice. However, when he was later found in the parking lot, all of the windows to his car were up.

According to court documents, no one involved in the case denied at any point in proceedings surrounding the case that one window left open would have provided enough ventilation to potentially avoid harm from carbon dioxide exposure from dry ice sublimation.

However, the case was allowed to proceed to trial, where a Madison County jury at the end of February ordered Prairie Farms to pay $241 million to the Johnson family.

In the lawsuit, Johnson and the Salvi attorneys assert Prairie Farms wished to settle the case for 10 years, but allegedly were prevented from doing so by Travelers.

The Salvi firm said they are suing Travelers under assignment of claim from Prairie Farms to Paula Johnson, to pursue the insurance company for the money to fund the verdict, and potentially hundreds of millions of dollars more.

They said they are seeking compensatory and punitive damages estimated at more than $2 billion.

In the lawsuit, the Salvi attorneys noted the verdict represented an “existential” threat to Prairie Farms, a farmer-owned cooperative.

In the lawsuit, the plaintiffs assert they seek “full redress and punitive damages” for Travelers’ alleged “willful refusal … to prevent the cascading set of harms that first befell Johnson and then Prairie Farms Dairy … when Travelers chose to place its own financial interests ahead of any consideration of the existential risks to its insured.”

In the complaint, the plaintiffs noted the “devastation” Prairie Farms is facing following the verdict, saying they face “the prospect of being unable to pay employees or procure supplies that their continuing existence as businesses depended upon.”

The complaint includes excerpts allegedly from a March 7 email from Prairie Farms’ general counsel reportedly to Travelers, who noted that since the verdict, “Prairie Farms’ bank accounts have been frozen, and Prairie Farms has been judicially restrained from conducting ordinary financial operations,” while “… Prairie Farms’ customers have been ordered by citation not to remit payment of any amounts owed.”

“Prairie Farms cannot survive more than a limited number of additional business days under these conditions,” the email said.

The email reportedly said the $241 million verdict “will exceed $380 million” under Illinois’ prejudgment interest rules, and “an appeal bond” of $570 million is needed and “may be unattainable.”

“This is not rhetoric. It is the practical reality created by the judgment and exacerbated by your (Travelers) coverage positions,” the email said.

According to the complaint, Travelers has allegedly refused to post the needed bond.

According to court documents, Travelers includes more than 500 farmer members and employs about 9,000 workers.

According to the complaint, Prairie Farms “entered into a post-verdict settlement” with the Johnson family, which included an assignment of rights to Johnson to sue Travelers in pursuit of payment.