Drivers Sue Insurer, Claim Fraud
An auto insurance company secretly collected money from an uninsured woman while refusing to pay the insured man she hit, a lawsuit filed in King County Superior Court alleges.
The company allegedly told the woman, who was living “paycheck to paycheck,” that if she didn’t make monthly payments, her license would be taken away.
Both the woman, Lisa Hall, 29, of Tacoma and the man, Jeff Barreca, 47, a Seattle accountant, are suing Nationwide Insurance.
Nationwide’s handling of Barreca’s accident claim was both shocking and illegal, said Denis Stearns, Barreca’s attorney.
Stearns hopes to have the lawsuit certified as a class action, which would allow him to sue on behalf of others around the country who have been treated the same way.
A spokesman at Nationwide headquarters in Columbus, Ohio, declined comment, as did the Washington Insurance Commissioner’s Office.
According to court documents, in October 1996, Hall ran a red light and plowed into Barreca’s truck at the intersection of Fifth Avenue and Union Street in Seattle. His truck was destroyed, and he suffered neck and back injuries. In subsequent months, Barreca was treated by his own doctor, a chiropractor and a physical therapist.
Barreca was insured by Nationwide, and the lawsuit says Nationwide paid him $1,723 for his truck after subtracting his $100 deductible. The company also paid $5,139 directly to his doctors.
But when Barreca asked the company for other compensation to which he was entitled, such as lost wages, pain and suffering and out-of-pocket costs, the company dragged its feet, the suit said.
In the meantime, Nationwide told Hall that her insurance company had paid Barreca $1,823 and that unless she agreed to reimburse Nationwide, her license would be taken away, the suit said. The company later told her it had paid Barreca’s doctors and that she owed them for that as well.
Hall was told her license would not be suspended as long as she continued to make $50 monthly payments to Nationwide, the suit said.
Seven months after the accident, Barreca sued Hall as a way to force Nationwide’s hand, Stearns said. Hall did not respond to that suit, and the court awarded a default judgement to Barreca. Stearns said Hall did not respond because she thought she had settled the suit by making payments to Nationwide. Judge Donald Haley ruled Barreca’s damages came to $100,000, noting that after the accident, he “continues to be unable to do all his normal activities and job duties” and that his personal relationships also have suffered.
Once the judgment was entered, it was noted on Hall’s credit record and, as required by law, notice was sent to the state Department of Licensing, which then told Hall her license would be suspended if she did not pay off the $100,000 judgment.
Stearns said Hall called him in tears not long after, “asking me, over and over, again, why she was about to lose her driver’s license when she’d been sending Nationwide $50 every month just as she’d promised.”
That was the first Barreca and Stearns knew of Hall’s payments to Nationwide.
The suit contends Nationwide was guilty of fraud and violated the Consumer Protection Act when it falsely told Hall the company had paid Barreca $1,823 and when it told her her license wouldn’t be taken away as long as she made payments.
The suit says the company, under the language of its own policy as well as under state insurance regulations, was obligated to settle Barreca’s claim fully before taking any money from Hall.