Berg v. Nationwide Mutual Insurance Company

Introductory Statement

Our law firm has represented the Bergs since November 3, 1997, when a letter of representation was faxed to Nationwide reporting collision repair failures and requesting the collision claim file. After the $21 million insurance bad faith verdict was entered 17 years later, on June 23, 2014, numerous attorneys have requested documents and filings from the case. We always accommodate such requests because we understand, from this case, that success often depends upon outside help. We thus created this webpage to make the Opinions, Briefs, and Record Evidence more readily available. We also expect numerous additional requests after the Supreme Court of Pennsylvania files its highly anticipated decision.

See link to the Opinions, Briefs, and Evidence attached below.

Current Posture of Berg v. Nationwide

The $21 million judgment entered by the Honorable Jeffrey Sprecher of the Berks County Court of Common Pleas on June 23, 2014, is supported by 90 Findings of Fact and 19 Conclusions of Law detailing how Nationwide placed its own insureds at risk to suffer injury or death by: (1) unlawfully interfering in the original opinion of the assigned appraiser that the insured motor vehicle was a structural total loss due to a twisted frame; (2) secretly directing the vehicle be shipped to an undisclosed facility, without the required consent of the Bergs, to attempt structural repairs that Nationwide’s designated Blue Ribbon facility was unable to perform; and, (3) permitting the vehicle to be returned to its insureds in a dangerous condition while knowing the structural repair efforts it had required, failed. See Findings of Fact 1-48 and Conclusions of Law 7-11.

Judge Sprecher further determined that Nationwide compounded these harms by implementing a highly reprehensible corporate strategy to price us out of court in 1998 (Findings 50-80), and that Nationwide continued applying this strategy despite Nationwide having been instructed, by the Superior Court of Pennsylvania, to immediately discontinue the strategy in 2002 when it published Bonenberger v. Nationwide Mutual Ins. Co., 791 A.2d. 378 (Pa. Super. 2002). See Findings of Fact 81-85 and Conclusions of Law 13-14. Judge Sprecher found it particularly reprehensible that Nationwide never attempted to settle this lawsuit but instead chose to pay its own attorneys more than $3 million to defend and cover-up Nationwide’s early knowledge of the structural repair failures. See Conclusion of Law 14.

The $18 million punitive damage award represents 0.2% of Nationwide’s $9 billion in excess statutory surplus. This constitutes a six-to-one ratio to the compensatory damages awarded, namely the $3 million in legal fees. In other words, the $18 million punitive award represents two-tenths of a penny for each dollar of Nationwide’s excess statutory surplus. See Conclusions 15-18. The punitive award thus falls well within the Constitutional parameters identified by the U.S. Supreme Court which has repeatedly cautioned lower courts that punitive awards should rarely exceed a single-digit-multiplier to the potential and/or actual harm caused.

Judge Sprecher thus recognized the potential harm and high degree of reprehensibility attached to Nationwide’s conduct, as follows:

Nationwide has argued that no one was physically injured and thus a significant punitive damage award is not warranted. 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. 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. And although no one was killed, Nationwide has no one to blame but itself for its potential exposure in this case, which now exceeds $18 million. Nationwide chose to litigate this case rather than ever attempting to negotiate a reasonable settlement. In so doing, it spent well in excess of $2.5 million in a failed attempt to cover-up its knowledge of the failed repairs and to price the Bergs out of litigating their meritorious claim dispute.

See Conclusion of Law 14.

Nevertheless, on June 5, 2018, following a tortuous procedural path through the Superior Court, Judge Sprecher’s judgment was vacated by a divided 3-judge panel of the Superior Court. Judge Victor Stabile authored the Majority Opinion, joined by Judge Paula Ott, ruling that Nationwide’s duty under the insurance policy was limited to paying for repairs, and that despite Nationwide having ordered its direct repair facility to initiate repairs after the vehicle having been declared a structural total loss due to a twisted frame, Judge Stabile determined that Nationwide had no duty to inspect those repairs to ensure the vehicle was safe or serviceable. See Brief of Appellant Bergs – 2019-07-01 at 22.

Judge Stabile also asserted that there was “no evidence” to support the trial court’s finding that Nationwide must have been aware of the extensive structural repair failures before the vehicle was return to its insured. See Brief of Appellant Bergs - 2019-07-01 at 53. Judge Stabile reached this conclusion despite the undisputed evidence that Nationwide inspected the repairs numerous times throughout the protracted 4-month repair period, as is standard operating procedure under Nationwide’s Blue Ribbon Repair Program. Judge Stabile reached this conclusion despite Nationwide’s failure to produce the reinspection reports that correspond to the numerous reinspections Nationwide indisputably performed during the 4-month protracted repair period and which remain missing from the claim file today without explanation from Nationwide. See Blank BRRP Reinspection Report (form-document for BRRP reinspections missing without explanation). Judge Stabile reached this conclusion despite the undisputed fact that Nationwide concealed, through five years of litigation, the pre-suit inspection report of Nationwide’s own Blue Ribbon claim manager Stephen Potosnak documenting the extensive structural repair failures that rendered the vehicle unsafe to operate. See Nationwide’s Inspection Report of April 30, 1998 by PDS Potosnak (redacted for 5 years pursuant to bogus assertion of attorney-client privilege). See also Redacted Inspection Report of April 30, 1998.

Inexplicably, Judge Stabile also mischaracterized key witnesses, including Dean Jones, misidentified by Judge Stabile as our liability expert. In actuality Jones was a high-level Nationwide supervisor, responsible for state-wide performance of Nationwide’s Blue Ribbon Repair Program and was the direct supervisor to the field adjuster assigned to this collision loss claim file. We called Jones “as-on-cross,” not as our expert witness. Judge Stabile nevertheless brushed aside the material admissions of Jones because, according to Judge Stabile, Jones was merely “Plaintiffs’ claim consultant.” See Brief of Appellant Bergs - 2019-07-01 at page 52, footnote 16.

President Judge Emeritus Correale Stevens, a former Justice of the Supreme Court of Pennsylvania, filed a 10-page Dissent finding “ample evidence” supporting the “verdict and damage award,” noting that the $21 million judgment did not “shock this Court’s sense of justice.” See Berg v. Nationwide Mutual Ins. Co., Superior Court Dissenting Opinion, Judge Stevens 2018-06-05.

On March 29, 2019, the Supreme Court of Pennsylvania granted our Application to File an Appeal. Oral Argument was held November 21, 2019.

Anticipated Decision from The Supreme Court of Pennsylvania

Our filed Brief details objective evidence of Nationwide’s bad faith. We are thus confident the Supreme Court of Pennsylvania will reverse Judge Stabile’s Majority Opinion. The objective evidence of Nationwide’s bad faith is set forth, without any argument, in our Brief of Appellant Bergs 2019-07-01 at pages 9-18, “Factual History.” It objectively establishes Nationwide’s bad faith beyond any reasonable doubt.

See also Smoking Gun Evidence itemized below. A link is provided by clicking on the title of the document.

Smoking Gun Evidence


The following has been culled from the Record because it is deemed to constitute “smoking gun” evidence of Nationwide’s bad faith, providing a succinct roadmap to Nationwide’s highly reprehensible conduct that cannot reasonably be disputed.

  1. PENNRO Litigation Strategy 2167a (Nationwide’s corporate strategy to resist claims without a reasonable basis)
  2. Blank BRRP Reinspection Report 2155a (form-document used to document findings of routine repair inspections conducted by Nationwide pursuant to Nationwide’s Blue Ribbon Repair Program “missing” from the Berg claim file without explanation)
  3. Nationwide’s Inspection Report of April 30, 1998 by PDS Potosnak (entered into the claim file days before this lawsuit was filed but concealed by Nationwide in bad faith through five years of litigation pursuant to a false assertion of attorney-client privilege)
  4. Redacted Inspection Report of April 30, 1998 (as produced in discovery, deceitfully redacted in bad faith pursuant to a false assertion of attorney-client privilege)
  5. Nationwide Letter of May 19, 1998 (pretending it was unaware of any structural repair failures despite its knowledge of extensive structural repair failures detailed in the April 30, 1998 Potosnak Report)
  6. Nationwide Letter of September 16, 1998(pretending it was still unaware of any repair failures despite knowledge of extensive structural repair failures detailed in the Potosnak Report, and despite it having secured an additional inspection by its trial expert, William Anderton, flown in from Chicago to inspect the repairs on August 21, 1998)
  7. Nationwide Trial Testimony of Michael O’Leary 1543a (admitting he denied knowledge of any structural repair failures while under oath during his March 11, 2003, deposition as Nationwide’s corporate designee, that being five years after Nationwide confirmed extensive structural repair failures via PDS Potosnak’s inspection of April 30, 1998).
  8. Nationwide’s $901,000 Attorney Billing Record (2004-10-06) (entered by Nationwide’s trial counsel two months before the 2004 jury trial)
  9. Nationwide Testimony Admitting It Paid Its Attorneys $2.5 Million (and admitting the $901,000 Attorney Billing Record was not included in the $2.5 million estimate)

Opinions

  1. Berg v. Nationwide Mutual Ins. Co., 6 A.3d. 1002 (Pa. 2010)
  2. Berg v. Nationwide Mutual Ins. Co., 6 A.3d. 1002 (Pa. 2010) (Baer, J., dissenting)
  3. Berg v. Nationwide Mutual Ins. Co., 44 A.3d. 1164 (Pa. Super. 2012)
  4. Berg v. Nationwide Mutual Ins. Co., Trial Court Findings of Fact, Conclusions of Law & Verdict (2014-06-23)
  5. Berg v. Nationwide Mutual Ins. Co., Trial Court Opinion (2015-07-23)
  6. Berg v. Nationwide Mutual Ins. Co., Superior Court Majority Opinion, Judge Stabile (2018-06-05)
  7. Berg v. Nationwide Mutual Ins. Co., Superior Court Dissenting Opinion, Judge Stevens (2018-06-05)
  8. Berg v. Nationwide Mutual Ins. Co. (2020) Supreme Court of Pennsylvania (not yet available)
  9. Bonenberger v. Nationwide Mutual Ins. Co., 791 A.2d. 378 (Pa. Super. 2002)
  10. Rancosky v. Washington Nat’l Ins. Co., 170 A.3d 364 (Pa. 2017)
  11. Weintraub v. Nationwide Mutual Fire Ins. Co.,(1996-01-25)

Filed Briefs

A condensed single volume record (“Condensed Reproduced Record”) containing all the evidence cited in the Briefs of Appellant Bergs is provided below. It can be “word searched” (press Ctrl+F) but is a large PDF file. Please be patient for it to download.

  1. Brief of Appellant Bergs (2019-07-01)
  2. Reply Brief of Appellant Bergs (2019-10-04)
  3. Post-Argument Submission of Appellant Bergs (2019-12-02)
  4. Condensed Reproduced Record, Berg v. Nationwide Mutual Ins. Co.
  5. Nationwide’s Brief (2019-09-20)

Reproduced Record

These are large .pdf files. Please be patient while they download.
Table of Contents items are clickable to the specific page within the document.

  1.  Reproduced Record Volume I 1-699a (167MB)
  2.  Reproduced Record Volume II 700-1765a (2.49MB)
  3.  Reproduced Record Volume III 1766-2914a (40.4MB)
  4.  Reproduced Record Volume IV 2915-3903a (28.2MB)
  5.  Reproduced Record Volume V 3904-4849a (328MB)

 Miscellaneous Orders, Letters & Docket Entries

  1. Per curium Order of 2017-05-01
  2. Per curium Order of 2017-09-17
  3. Milan Mrkobrad Correspondence, Deputy Prothonotary of Superior Court (2011-03-28)
  4. Milan Mrkobrad Docket Entries, Berg v. Nationwide Mutual Ins. Co.
  5. Nationwide’s $15,000 Offer of Settlement via Attorney Craig Cohen (2004-08-11)
  6. The Legal Intelligencer on Nationwide Trial Counsel Craig Cohen Pleading Guilty to $3.4 Mail Fraud Scam
  7. Allan Turadian, Craig Cohen & Nationwide’s $901,000 Attorney Billing Entry
  8. Allan Turadian, Nationwide's Managing Counsel, LinkedIn Bio

Additional Helpful Documents

  1. Trial Brief, Berg v. Nationwide Mutual Ins. Co. (2013-12-09)
  2. Proposed Findings of Fact, Berg v. Nationwide Mutual Ins. Co. (2013-12-09)
  3. Proposed Findings of Fact Pertaining to Key Witnesses, Berg v. Nationwide Mutual Ins. Co. (2013-12-09)
  4. Proposed Conclusions of Law, Berg v. Nationwide Mutual Ins. Co. (2013-12-09)
  5. Fee Petition and Statement of Damages, Berg v. Nationwide Mutual Ins. Co. (2014-02-24)

Benjamin J. Mayerson, Esq.

Mayerson Injury Law
1 N. Sunnybrook Rd.
Pottstown, PA 19464
610-906-1966
www.MayersonInjuryLaw.com