Court rules in favor of Allstate in defamation lawsuit but still demands $4 million compensation

Defamation lawsuit - gavel - dollar sign

Despite the fact that the insurer was in its rights to fire a broker last year, it must still pay punitive damages.

A California appellate court ruled that Allstate Insurance Co was within its rights to terminate Michael A. Tilkey’s employment as a broker in 2019, in a defamation lawsuit.

Tilkey pleaded guilty to disorderly conduct and was let go from his $200,000 per year job.

That said, despite the fact that the court ruled in favor of the insurance company in this defamation lawsuit, the insurer was still required to pay $4,247,287.50 in punitive and compensatory damages. The reason is that Tilkey had been terminated relating to “domestic violence” reasons, which amounted to defamation, said the 4th District Court of Appeal panel.

Had the judges not ruled in favor of Allstate in two of the six grounds identified by the carrier in its appeal of a San Diego County jury verdict, the outcome could have been substantially more severe for the insurer. In the most recent ruling, the jury’s finding that Tilkey was wrongfully terminated was overturned. This substantially reduced the jury’s award, which had been $18,641,959.

Tilkey had been employed by Allstate for 30 years when he was terminated, said the defamation lawsuit record.

Tilkey’s termination had to do with an event which occurred when he was out with his girlfriend on August 16, 2014. The couple had a few drinks before heading to her house, where they started arguing. Tilkey chose to leave and went outside to an enclosed patio to get a cooler he’d brought with him to her house. While he was out there, his girlfriend locked the door.

Tilkey proceeded to bang on the glass patio door, demanding that she unlock the door so he could collect the rest of the belongings before leaving. At that point, his girlfriend called the police.

Records from responding officers included mention that the door frame’s interior trim was broken. They found marijuana and a pipe in Tilkey’s travel bag when it was searched. He was arrested on a charge of “criminal damage deface”, possession of drug paraphernalia, and “disorderly conduct-disruptive behavior”. The last misdemeanor charge included a domestic violence label, said the appellate panel’s opinion in the defamation case.

Tilkey’s girlfriend emailed his supervisors at Allstate and the company flagged them for review. When a human resources specialist investigated, the specialist reported Defamation lawsuit - gavel - dollar signit to her superiors and, after a series of events that took the case straight into part of 2015, Tilkey was fired.

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