Travelers Hit With $2 Billion Bad-Faith Lawsuit After $241 Million Wrongful-Death Verdict

CHICAGO - An Illinois law firm filed a federal insurance bad faith lawsuit Tuesday seeking more than $2 billion in damages against Travelers Property Casualty Company of America, alleging the insurer violated its duty of good faith and failed to protect its insured, Prairie Farms Dairy Inc., from catastrophic financial exposure tied to a Madison County wrongful death case.

Salvi, Schostok & Pritchard P.C. said the lawsuit was filed March 31, 2026, in the U.S. District Court for the Southern District of Illinois. The complaint follows a $241 million jury verdict in Madison County awarded to the family of Eric Johnson, a 64-year-old courier who died Aug. 5, 2016, after being exposed to a high concentration of carbon dioxide while transporting dry ice as part of his job.

The firm alleges Travelers “abandoned its insured” as Prairie Farms faced exposure from the wrongful death case. The complaint alleges Travelers “repeatedly gambled with the financial interests of Prairie Farms and failed to act to protect it from devastating financial harm.”

According to the complaint, Travelers had “multiple opportunities over a stretch of nearly 10 years” to resolve the wrongful death claim within available insurance limits but refused, despite Prairie Farms demanding the case be settled before trial. The complaint also alleges that because Travelers refused to tender its policy limits, other excess insurance carriers were sidelined and Prairie Farms, described as “a farmer-owned dairy cooperative established in 1938,” was hit with a nearly quarter-billion-dollar judgment.

“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,” said Patrick A. Salvi II, who served as lead trial attorney for the Johnson family. “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.”

“What Travelers knew, what Travelers ignored, was that a tragedy of this magnitude represented an existential threat to its insured,” said plaintiff’s attorney Lance D. Northcutt of Salvi, Schostok & Pritchard. “The degree of Travelers’ recklessness toward a company that tried to do the right thing by encouraging a fair settlement will now be the subject of a federal lawsuit in which we will seek compensatory and punitive damages that will exceed $2 billion.”

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Under Illinois law, the firm said, an insured’s claim for the wrongful failure to settle can be assigned to a third-party claimant who has obtained an excess judgment against the insured in a wrongful death lawsuit. The firm said Paula Johnson, as the prevailing plaintiff who has been assigned the claims of Prairie Farms, is bringing the bad faith claim against Travelers.

Attorneys said they will hold a press conference at 10 a.m. Wednesday, April 1, 2026, at the Law Offices of Salvi, Schostok & Pritchard P.C. in Chicago to discuss the lawsuit and “bombshell new allegations that led to this verdict and forms the basis of this new lawsuit.” The press conference is scheduled to be streamed live at https://us06web.zoom.us/j/81925563350.

In addition to Salvi, Schostok & Pritchard, attorneys John F. Kennedy of Taft Law and Steven D. Pearson of Smith, Gambrell & Russell LLP are listed as joining the prosecution team.

The case is No. 3:26 CV 00384, captioned: “Paula Johnson, on behalf of herself and children of Eric Johnson, deceased, as Administrator of the Estate of Eric Johnson, and as Assignee of Prairie Farms Dairy, Inc. and PFD Supply Corporation, Plaintiff, v. Travelers Property Casualty Company of America, a Connecticut sock insuring corporation, Defendant.”

Case No.: 3:26 CV 00384 [PAULA JOHNSON, on behalf of herself and children of Eric Johnson, deceased, as Administrator of the Estate of Eric Johnson, and as Assignee of Prairie Farms Dairy, Inc. and PFD Supply Corporation, Plaintiff, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, a Connecticut sock insuring corporation, Defendant.]

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