The Eleventh Circuit Court of Appeals has affirmed a more than $8.2 million judgment against Nationwide Insurance in a contentious and closely-watched traffic fatality case.
Defense attorneys had characterized the case as a prime example of "set-up" cases in which lawyers use time-limited demands to gin up bad faith claims against insurers. But the appeals court rejected that claim and left Nationwide on the hook for a jury award of more than $5.8 million plus interest that as of last August totaled more than $2.4 million.
The Georgia Chamber of Commerce last year filed an amicus brief on Nationwide's behalf terming the case an example of a "recent epidemic of bad-faith litigation in Georgia."
The case revolves around the use of so-called Holt demands, named for the 1992 Georgia Supreme Court decision in Southern General Ins. Co. v. Holt, 416 S.E. 2d 274. That opinion upheld a jury verdict that an insurer had demonstrated bad faith when it failed to timely respond to a policy limit request on behalf of a woman injured in a car wreck, even though medical records showed her bills far exceeded the policy limits.
Plaintiffs attorneys routinely file Holt demands as part of initial claims settlement negotiations.
The Nationwide case began with a 2005 accident in which Nationwide's insured, Seung Park, would plead guilty to vehicular homicide for the death of Stacey Camacho.
Decatur solo Charles McAleer, who represented the woman's widower, Jesus Camacho, sent Nationwide a time-limited, 10-day demand for Park's $100,000 policy limit. In exchange, they offered a limited liability release shielding Park from any personal liability for any other claims, with the exception of any other insurance coverage that might be available to Camacho's family.
Nationwide rejected the offer 13 days later, saying it would only pay if the family supplied a general release under which they would have to repay the insurer if any other claims were made related to medical liens.
No agreement was reached, and after a 2009 trial, a Fulton County jury awarded Camacho and his widow's estate $5.85 million. Park assigned to Camacho his right to sue Nationwide for negligence and bad faith for failing to settle the claims.
Camacho sued Nationwide in federal court in Georgia's Northern District and, following a trial in which a jury determined that the insurer had acted negligently and in bad faith, Judge Amy Totenberg ordered the insurer to pay more than $8.1 million in damages.
Totenberg also said she would award the plaintiff as-yet-undetermined attorney fees because Nationwide turned down a 2011 offer to settle the case for $4.5 million. Under Georgia's offer of judgment statute, a party that declines a settlement offer and then loses at trial by at least 25 percent more than the rejected offer can be ordered to pay the other party's attorney fees accrued from the date of the offer.