After 18 years of litigation, on June 12, 2014, Judge Jeffrey Sprecher decided that Nationwide should pay $18 Million Dollars in Punitive Damages because it tried to avoid “totaling” it’s insured’s (the Bergs) 1996 Jeep Grand Cherokee. The Jeep was damaged in a wreck in 1996!
Nationwide hid an initial appraisal deeming the vehicle a total loss due to a bent frame. A second appraisal indicated the Jeep could be repaired. After four months of attempted repairs Nationwide was found to have knowingly returned the car to the Bergs with an unsound structural frame. Nationwide then failed to purchase and total the Jeep for 28 months after the accident. When Nationwide finally did purchase the Jeep, the Bergs had already paid off the lease.
The Court reasoned that Nationwide purchased it finally, not because it wanted to preserve the vehicle in defense of the ongoing property damage litigation as it argued, but because it knew the vehicle was structurally unsound and wanted to avoid the inevitable litigation should the next owner be injured in another wreck.
Judge Sprecher found that “Nationwide strong-armed its own policyholder rather than negotiating in good faith to compensate plaintiff for the loss suffered in the automobile collision.” The judge also found the fact that Nationwide spent $2.5 Million to defend itself in this claim that had a value of less than $25,000 was evidence that Nationwide was attempting to discourage the Bergs and other policyholders from disputing small claims.
Judge Sprecher noted the efficacy of Nationwide’s bad faith tactics by asking, “What plaintiff, and more importantly, what lawyer in his right mind, will compete with a conglomerate insurance company if the insurance company can drag out the case for 18 years and is willing to spend $3 Million in defense expenses to keep the policyholder from getting just compensation under the contract?”.
The punitive damage award was meant to punish Nationwide and act as a warning to other insurers against similar conduct.
At Baratta, Russell & Baratta, we fight for our clients against ALL insurance carriers, each of whom have warm and fuzzy slogans and slick advertising campaigns to make you feel protected so you fork over your premium dollars. But when you make a claim, make no mistake, you are the enemy. When you are in need of an aggressive advocate please call us at 215.914.2222 and we will be truly “on your side.”
