Judge rules on Allstate's million-dollar typo

Whoops, we put an extra six-figure sum in there

Judge rules on Allstate's million-dollar typo

Legal Insights

By Kenneth Araullo

Simple mistakes can be costly – though that was not the case this time for Allstate.

In federal court, a dispute that unfolded between a Bend, Oregon, couple and the giant insurer over a settlement offer that turned out to be a typographical error was found in favor of Allstate.

Debra and Kevin Kilroy initially believed they were to receive a $1.3 million settlement after Debra was injured by an off-leash Great Pyrenees dog in 2020. The injury occurred while she was walking on a local trail, leading to multiple fractures.

Upon receiving a settlement offer from Allstate typed as “$1300,000,” the Kilroys, through their lawyer, quickly accepted, assuming the sum to be $1.3 million. However, Allstate clarified that the actual offer was $300,000, the limit of the dog owner’s homeowner’s insurance policy, attributing the higher figure to a typographical error.

A report from Oregon Live notes that the dispute centered around whether an additional $1 million Allstate umbrella policy was available, which both parties later acknowledged did not exist.

US District Judge Michael J McShane ruled against the $1 million settlement, citing that “reasonable people would have known that the million-dollar figure represented a fanciful settlement offer at best.”

The Kilroys’ attorney, Emmanuel B Miller, had called Allstate for clarification after receiving the offer. Miller claimed Allstate confirmed the existence of a $1 million umbrella policy alongside the $300,000 homeowners’ policy, a claim Allstate disputed.

Shortly after, Miller informed the Kilroys of a supposed $1.3 million settlement offer and accepted it on their behalf, only for Allstate to fax a correction later.

Allstate off the hook – but the legal battle continues

Judge McShane noted several typographical errors in the offer letter, including the absence of a comma in the “1300,000” figure and misspellings like “advsied” and “liaiblity.” These errors led McShane to conclude that the offer was unclear, ruling that there was no valid contract for the $1 million settlement.

Despite the ruling, the Kilroys’ legal challenges continue as they have filed a negligence lawsuit against the dog owner, Harry Paik, in Deschutes County Circuit Court. The lawsuit, stemming from the 2020 incident, alleges Paik’s negligence led to Debra Kilroy’s injuries, including ankle and knee fractures and nerve damage.

The Kilroys are seeking over $1.5 million for non-economic damages, in addition to compensation for past and anticipated medical expenses, which were estimated at over $578,652.08.

Elsewhere for Allstate, it and fellow Illinois-based insurer State Farm were revealed to be raising their homeowners’ insurance rates in the state by double digits.

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