How far would an insurer go to deny its own policyholder the money he deserves? So far that the company would spend twice the amount it owes just to prove a point. That’s what auto insurance carrier New Jersey Manufacturers (NJM) did to Augustine Badiali. Don’t worry, though – we’re on our way to the Supreme Court to make sure this policyholder can finally get what he truly deserves and hold the insurance company responsible for its behavior. NJM’s bad faith actions won’t keep us from fighting for our client.
In less than a month, we’re taking our client’s case to the highest court in the state – the New Jersey Supreme Court. Photo Credit: Corbis Images.
A Car Accident Claim Gone Wrong
It all started with a 2006 car accident in Maple Shade, New Jersey. In the accident, our client sustained serious injuries, like numerous herniated discs in his spine and worsening of degenerative spinal diseases. The driver who rear-ended Mr. Badiali didn’t have insurance. Fortunately, other parties did – including Mr. Badiali, who had made the wise decision to purchase uninsured motorist (UM) coverage.
In the course of recovering compensation on our client’s behalf, we took the case to arbitration, where an impartial arbitrator decided that NJM should pay $14,574 in compensation to its policyholder. The arbitrator also decided that an additional defendant in the case should pay approximately $15,000, making the total award over $29,000.
New Jersey state laws specify that arbitration awards of less than $15,000 are legally binding. Since NJM was responsible for less than $15,000, the company should have just paid up the money it owed. Instead, NJM tried to argue that it shouldn’t have to pay at all because the total arbitration award was more than $15,000, even though it was responsible for about $14,000. Further, NJM spent about $30,000 in legal costs defending this argument.
For an insurance company like NJM, which brings in millions of dollars in revenue each year, that $14,000 would have barely made an impact on the company’s bottom line – as evidenced by NJM’s willingness to shell out twice that amount of money to attempt to prove a point. For an accident victim with medical expenses or lost income, that $14,000 can make a difference between being able to afford a surgery and having to halt the journey to recovery. That money could determine whether a family can stay afloat financially in the face of lost income, or whether it will become unable to pay the bills. Insurers know this. They’re aware that people purchase insurance to protect themselves – and forcing their own policyholders through long, drawn-out litigation to get the money they deserve (and have already paid for in premiums) just isn’t fair.
Taking the Case to a Higher Court
It was obvious to us that NJM’s stance on this issue was wrong. We took the case all the way to the New Jersey Appellate Court, which officially ruled in 2011 what we had been saying all along: that an insurer (like NJM) can’t put a plaintiff through unnecessary, prolonged litigation after arbitration if it is responsible for paying less than $15,000, no matter what the total award is. We saw this as a clear victory for consumers and insurance policyholders across New Jersey. The ruling establishes case law, a legal precedent that can help future accident victims receive their arbitration awards without going through the lengthy litigation process that Mr. Badiali was forced to endure.
However big a win this was for consumers, it didn’t change the fact that our client in this particular case had to wait years to finally get the money he deserved. During those years, he personally faced significant expenses and understandable aggravation. To hold NJM responsible for their bad faith behavior, consumer fraud, and breach of contract, we filed a complaint on Mr. Badiali’s behalf with the state Supreme Court, which agreed in March 2013 to hear the case. The court date is set for September 9, 2014. We’re looking forward to the opportunity to finally get our client the justice he deserves from the insurer that turned its back on him.