In a win for insurance consumers, a Spokane County judge and jury leveled more than $103 million in judgments against Nationwide Insurance, holding the insurance company accountable for egregious misconduct and mishandling of claims against its own customer.
After finding that the insurer mistreated the plaintiff, a grieving mother whose three children died in a tragic car accident, the jury rendered a $27 million verdict for her damages – and also imposed $47 million in punitive damages to punish Nationwide and deter others from engaging in similar misconduct. On top of the jury’s verdicts, the trial judge of more than 20 years increased the jury’s award of damages under Washington’s Insurance Fair Conduct Act (IFCA). To date, total judgments exceed $102 million.
Because the court found that Nationwide violated insurance bad-faith and consumer protection laws, the company cannot leverage the payments to increase insurance rates – an additional measure that protects consumers and deters bad-faith practices.
“In this case, we were essentially serving our client and the consumers of Washington state,” said David Beninger of Luvera Law Firm, who represented the plaintiff in this case, along with George Ahrend and Patricia Anderson of the firm. “The verdicts put Nationwide and other insurers on notice: keep your promises to handle claims properly because unfair and bad faith practices aren’t profitable – they’re costly.”
The plaintiff’s family’s ordeal began in 2017 when she and her husband took their three children on a road trip to visit family in Saskatchewan, Canada. In a tragic turn of events, she missed a stop sign and they were hit by a truck. The plaintiff suffered a broken back, her husband broke his neck, and their three children died at the scene. It was every parent’s worst nightmare.
Insurance exists for times like these. But even though the family had faithfully paid their premiums to Nationwide, the company was not by their side when it mattered. Nationwide did not pay their hospital bills or the other no-fault benefits they were owed, forcing family and friends to start a crowdsourcing campaign to help transport the children’s bodies home for burial. Their hospital bills were sent to collection.
Then, instead of investigating and promptly resolving the claim as required by state laws and Nationwide’s own policies, it delayed the claims process for two years, and forced the plaintiff’s husband to file suit against her to obtain the insurance policy benefits before the statute of limitations expired. Nationwide used the family’s grief to pit them against each other and gambled on the fact that a husband would not sue his wife to avoid paying the policy benefits owed.
“People think their insurance company will be there to protect and provide peace of mind when a catastrophe happens – that’s what they advertise and people pay for,” Beninger said. “But instead of honoring their responsibilities, Nationwide dragged this family through years of litigation in a cruel attempt to keep, rather than pay, the insurance benefits it owed them. They forced a grieving father to publicly blame his guilt-ridden wife for their children’s deaths. Nationwide might claim to be ‘on your side’, but it put this family through hell.”
“Nationwide wouldn’t provide its own customer a single attorney for two years – and then when her husband was forced to take legal action, the company hired 29 attorneys and four law firms to attack her and flood the court with paperwork,” Beninger said. “Our client had one law firm with three lawyers and a super paralegal to fight this Goliath.”
While Nationwide’s behavior impacted the family directly, the company’s repeated pattern of bad conduct revealed a larger threat to Washington consumers. Superior Court Judge Annette S. Plese enhanced the jury verdict by $20 million specifically to underline the egregious nature of Nationwide’s actions.
In its defense, Nationwide claimed that its conduct was proper, or at worst simply minor mistakes and isolated oversights. Throughout its handling of the claim, lawsuit, trial and now in post-trial proceedings, Nationwide continues to deny accountability.
Fortunately, Washington’s insurance and consumer laws and regulations protect community members from this type of conduct. They also prevent Nationwide from trying to pass these costs to its customers. The jury and judicial findings that Nationwide violated IFCA and the Consumer Protection Act (CPA) now require the company to identify these legal costs as bad-faith statutory expenses. It may not legally characterize the judgments as operational claims or package these costs to justify raising insurance rates for Washington policyholders.
“Thanks to thoughtful, diligent jury members and the experienced judge in this case, Nationwide won’t be allowed to sweep this case under the rug or pass costs onto policyholders,” Ahrend said. “We hope they’ll learn lessons and make changes to protect consumers. The punitive damages and penalties in particular should catch the attention of stakeholders and regulators who are in a position to ensure that Nationwide does not put another family through the same thing.”
Moving forward, the money from this case will help support the educational foundation that the family originally established just after the children’s passing, which they funded with money they would have spent on the children’s educations and activities.