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Journal North: Home | Sports | Opinion | Obits | Entertainment
Tuesday, November 17, 2009
Judge Rules Against Allstate
By Vic Vela
Journal Staff Writer
A Santa Fe judge has ruled that Allstate Insurance Co. engaged in “malicious abuse” of the judicial process and that she intends to award punitive damages to four plaintiffs in an amount meant to “deter” the insurance giant from future wrongful conduct.
State District Judge Barbara Vigil ruled on Friday that Allstate violated the state's Unfair Claims Practices Act based on “a preponderance of the evidence” that she heard during a civil trial that spanned three weeks.
The plaintiffs — Roxanne Martinez, Charlie Jimenez, Adan Carriaga and Christa Okon — sued Allstate over alleged wrongdoing that occurred during automobile accident claims processes.
Each of the plaintiffs was a policyholder with Allstate and each was involved in an accident with a fellow policyholder. The plaintiffs had taken their claims to court and won awards from jurors that were significantly more than what Allstate had offered.
Santa Fe attorney David Berardinelli — who has gained national attention for his yearslong crusade against Allstate, including a book he wrote about the company — argued at the start of the trial that Allstate made it a practice to pay only a fraction of what his clients claimed they were owed after accidents.
The attorney said the insurance company engaged in “predatory litigation tactics” that forced claimants to go to the trouble, time and expense of a trial to dispute what Allstate offered.
Vigil agreed with Berardinelli, saying in her ruling that Allstate violated the Unfair Claims Practices Act by “not attempting to effectuate a prompt, fair and equitable settlement of their claims in which liability had become reasonably clear.”
The judge said that the company would compel the plaintiffs to litigate over claim disputes in “an attempt to delay or extort each of the plaintiffs into accepting less than the full value of their benefits under their policy ...”
Vigil ruled that the plaintiffs are entitled to actual, compensatory and punitive damages.
“And that award of punitive damages will be to deter Allstate from the commission of this practice in New Mexico with others,” the judge said, according to a court transcript.
An Allstate spokesman on Monday said the company disagrees with the judge's ruling.
“Allstate fairly settles claims based on a thorough investigation and evaluation of each claim,” said Mike Siemienas. “We believe we properly protected our customers' interests and handled these third-party claims in good faith.”
Siemienas said that “there were legitimate differences concerning liability and/or the extent of damages” involving each of the plaintiffs. The company is reviewing its options on how to proceed in the Santa Fe case, Siemienas said.
Judge Vigil said she will assess damage amounts later. Until then, all parties “are always encouraged ... to reach a compromise, if you can, before a final decision is entered.”
Vigil made her ruling about 5 p.m. Friday, not long after both sides completed closing arguments during the bench trial.
“She clearly had her mind made up that she was convinced,” Berardinelli told the Journal. “It's not normal a judge comes out in 10 minutes and says, 'Here's my findings.' ”
Berardinelli, one of a group of lawyers representing plaintiffs in the case, said he was pleased that Vigil “was so confident and so certain of her findings.”
Berardinelli — who wrote a book in 2006 called “From Good Hands to Boxing Gloves” attacking Allstate — argued during trial that the company would boost profits by keeping claims payments low. He said the company would offer “take it or leave it” payment offers and use “boxing gloves” to fight the policyholders in contrast to the company's “famous good hands” slogan.
Berardinelli has cited PowerPoint slides from a consulting company brought in the redesign of Allstate's claims system in the 1990s that he says advocated promoting the interest of Allstate executives and stockholders at the expense of policyholders. Allstate has called his allegations unfounded and unproven.
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