Penn. Family Awarded $18M in Bad Faith Suit Against Nationwide

July 14, 2014

An insurance company that was tongue-lashed in a decision last month by a Pennsylvania judge is contesting his ruling that it pay $18 million in punitive damages after a long court battle over faulty repairs to a family’s vehicle in 1996.

Nationwide Mutual Insurance Co. last Friday asked Berks County Judge Jeffrey K. Sprecher to reconsider a decision believed to be the largest punitive award ever handed down in Pennsylvania in a lawsuit accusing an insurer of bad faith, the Philadelphia Inquirer reported Sunday.

Sprecher ruled in June that he agreed with Daniel and Sherri Berg that Nationwide had concealed evidence about faulty repairs to their Jeep Grand Cherokee, tried to cover up the conduct of its employees and relied on a strategy to discourage policyholder challenges in court by artificially inflating the cost of suing the company.

In his ruling, Sprecher said Nationwide spent more than $3 million to defend its actions in a claim over the Bergs’ Jeep that it should have replaced for $25,000.

Nationwide risked harm to the Bergs and the public by allowing a structurally unsound vehicle on public roads and erected tremendous obstacles that forced the Bergs to endure years of litigation to achieve justice, Sprecher wrote.

“Fortunately, no one was killed or injured; but Nationwide knew there could be a subsequent accident when it permitted the vehicle to be returned with hidden structural repair failures,” Sprecher wrote. “This, by definition, is a reckless indifference to its insured. Nationwide was willing to risk the Bergs’ lives to save itself money on a collision claim.”

Nationwide insists the company did not act in bad faith and that no one at the firm ever believed the Bergs’ vehicle was unsafe after it was repaired.

In the Sept. 4, 1996, accident, Sherri Berg was driving the Jeep when she was hit by a Chevrolet Suburban not far from the Bergs’ home in suburban Reading.

The manager of the designated repair garage declared the car totaled because “the whole body was twisted,” according to court documents. Without telling the Bergs, Nationwide insisted on a second appraisal from the manager that called for the Jeep to be repaired at half the cost.

But the car never seemed right again, and in October 1997, a former employee of the repair shop called the Bergs to warn them of structural repair failures. The Bergs hired lawyers and an inspection on their behalf the next month found that the Jeep’s crashworthiness was compromised.

In 1998, the Bergs sued. Their lawsuit was thrown out of court by a different Berks County judge before the appellate Superior Court ordered it reinstated in 2012. Sherri Berg died of cancer in April at 62.

In Nationwide’s court filing last Friday, its lawyers blamed the Bergs’ lawyers for delays in the case, saying they had filed unnecessary motions and wasted time in a failed effort to win a class-action designation.

Sprecher also awarded $3 million in lawyers’ fees to the Bergs’ attorneys.

 

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Latest Comments

  • July 23, 2014 at 9:32 pm
    stephen platt says:
    Who is the attorney who handled the suit. I could use his help. Like to find one of those fair and qualified body shops. Guess the question is do they exist.
  • July 21, 2014 at 4:01 pm
    Agent says:
    My advice to you is to move your coverage to a good Independent when it renews. Nationwide is definitely not on your side.
  • July 21, 2014 at 8:42 am
    Libby says:
    Agent, once again your 4th grade resding comprehension totally makes you look like a fool. That is indeed what you said no matter how hard you try to backpedal now.
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