When Sheryl and Daniel Berg reached out to their insurer after a collision, they trusted the system meant to protect them. “Nationwide is on your side, all of that. I trusted it as well as my parents did,” said Sheryl. What they encountered instead was an insurer willing to dismiss their safety and hide critical facts, turning a simple claim into a battle that lasted years.
A Claim That Should Have Been Routine
On September 4, 1996, a car struck the Bergs’ 1996 Jeep Grand Cherokee with enough force to spin it four times. The damage was significant. The manager of the repair facility – one of Nationwide’s designated “Blue Ribbon” facilities - assessed the vehicle as a structural total loss due to a twisted frame. He concluded the vehicle could not be restored to a safe operating condition.
Nationwide Insurance rejected that assessment. A second estimate was obtained, this one calling for repairs rather than replacement. Repairing the Jeep would cost roughly half of what a total-loss payment would require. Over the next several months, the vehicle underwent extensive repair efforts before being returned to the Bergs.
Once back in their driveway, the problems became clear. The tires wore down rapidly. The hood gaps were uneven. Steering produced a loud knocking sound. A former mechanic from the shop later contacted the Bergs to warn them about significant structural repair failures, prompting them to seek legal representation and request a closer look at how the repairs had been handled.
Early Signs That Something Was Wrong
As part of that inquiry, an independent consultant inspected the Jeep and found unresolved structural damage. Welds were incomplete. Components designed to be bolted together were instead welded together because bolt holes no longer aligned. The engine’s fan shroud – a component surrounding the engine’s fan - was cut off to silence the banging of the fan blades striking the shroud. The entire front end was out of the manufacturer's specification. The structural integrity of the vehicle remained compromised, resulting in key safety features of the vehicle’s design being malpositioned; crash crumple zones and the timing of airbag deployment would no longer operate as designed.
Evidence later entered into trial showed that Nationwide conducted its own inspection in 1998, weeks before the suit was filed. The Nationwide inspector documented the misaligned frame, misaligned wheels, unrepaired frame damage, and additional structural concerns. Nationwide concealed this report through five years of litigation pursuant to a bogus assertion that it was a confidential communication to counsel. It was not.
Meanwhile, the Bergs were forced to continue driving the Jeep because they were stuck in the first year of a 3-year lease when the collision occurred, and had no immediate alternative because Nationwide was denying their allegations of structural repair failures. It was not until after the Bergs paid their final lease payment in December of 1998 that the insurer declared the vehicle a total loss and purchased it from the leasing bank. The court later concluded that this timing reduced the amount Nationwide would have owed if the vehicle had been totaled immediately after the accident.
How a Repair Dispute Became a Nineteen-Year Case
Questions soon shifted from the condition of the Jeep to the decision that allowed it back on the road. If the frame could not be safely repaired and was not safely repaired, why did Nationwide place the public at risk by permitting the vehicle to be returned to its policyholders for continued operation on public roads?
The internal inspection from 1998 became a turning point. The consultant’s review showed that major structural deficiencies remained. Yet the Bergs were not told of this report, with Nationwide falsely asserting that it did not have to be shared due to attorney-client privilege. The findings were held back for years until we forced disclosure.
The court also noted issues with Nationwide’s discovery responses, such as missing photographs that should have documented the Jeep’s true condition. It was proven that Nationwide conducted routine inspections of all repairs under its “Blue Ribbon” repair program and thus Nationwide must have known of the failed structural repairs prior to the vehicle being released. Indeed, the former mechanic at the repair facility testified that he witnessed Nationwide personnel inspecting the Jeep before its release, and confirmed that the inspector was visibly angry during the inspection. Further, the findings of the routine inspections done of the Berg repairs in 1996 were required, by Nationwide internal standards, to be entered on forms specific to Nationwide’s Blue Ribbon program. These inspection reports of the Bergs' repairs completed before the vehicle was released to the Bergs were never produced by Nationwide.
The court also found that the insurer had not fully reported its expert fees and litigation expenses. When the records surfaced during a subsequent trial after the first appeal, the documents revealed just how much Nationwide spent to fight the claim.
A Company Document Urging Tough Tactics on Claims
During the trial, an internal company document from the mid-1990s was admitted. Among its language was the directive to reinforce the image of Nationwide being a “defense-minded carrier” against policyholders who bring claims against the company. It instructed this tactic be employed particularly in cases of lesser value, “$25,000 or less.” The goal was to price attorneys out of court since the fee for most attorneys representing policyholders on a contingency fee basis is 1/3 of the recovery. But the overarching goal of the strategy was to develop a reputation within the legal community intended to deter lawyers from litigating claims by making the litigation too expensive. Nationwide wanted lawyers to recommend lowball settlements to their clients.
The court viewed this instruction as meaningful. The key issue was not that such a document existed. It was how it reflected what the Bergs encountered. Nationwide devoted years of resources to resisting the claim, ultimately spending more than $3 million in legal fees to defend a dispute that began with a collision loss claim valued at approximately $25,000 in 1996.
The Weight of Time
By the time the Berks County trial court issued its verdict in 2014, after a lengthy appeal that took the case to the Pennsylvania Supreme Court, the case had spanned well over a decade and a half. Transcripts, depositions, expert reports, and competing interpretations of the facts had accumulated to thousands of pages. Few cases last this long. Fewer still involve such a wide gap between the value of the underlying claim and the volume of litigation that follows.
For the court, the duration was not an incidental detail. The findings described the lengthy process as part of the problem, another obstacle that made it difficult for the Bergs to obtain a clear resolution of their claim.
A Decision That Set a New Standard for Accountability
When the verdict was issued, the court concluded that Nationwide had acted in bad faith under Pennsylvania law. The findings noted that the insurer knowingly returned an unsafe vehicle to its policyholders for operation on public roads after it confirmed that the structural repairs had failed, and that it later concealed evidence about its knowledge to force the Bergs into years of litigation.
The Berks County trial judge imposed $18 million dollars in punitive damages along with interest, court costs, and attorneys’ fees. The court described the award as necessary to address the seriousness of the conduct, placing the public and its insureds at risk of suffering serious injury or death due to the vehicle’s bald tires and compromised crash safety features. The punitive damage award represented a multiple of six times the attorney fee award, which is a multiple that satisfied due process under federal law. The total verdict of $21 million dollars was the highest Pennsylvania insurance bad faith verdict ever, when entered in 2014. The appeal that followed lasted an additional six years and resulted in a divided Supreme Court Opinion. The Opinion of Correale Stevens, former Justice of the Supreme Court and current President Judge Emeritus of the Superior Court, is available here: link. The Opinion of Supreme Court Justice Wecht is available here: link.
What This Case Means for Policyholders
Most insurance claims will never resemble the Berg case. Payments are made, and policyholders continue on with their lives. But when an insurer downplays safety concerns or hides critical information, people can find themselves navigating a process that feels adversarial rather than protective. These situations are exactly why people turn to attorneys: to challenge tactics that are designed to discourage, delay, or outspend them.
The trial judge’s verdict and judgment also show the power of Pennsylvania’s bad faith statute. The law gives policyholders a way to fight back when an insurer does not meet its legal obligations, especially in cases involving safety risks. The Berg verdict stands as a reminder that insurers are not the final word, and that courts will intervene when the evidence shows that policyholders were not treated fairly. Despite the outcome of this case in the appellate courts, or because of the outcome in the appellate courts, it is important to retain experienced legal counsel as early as possible so that the issues can be properly investigated and properly framed for the trial court.
Why Mayerson Injury Law, P.C. Stayed the Course
The Berg case required patience, determination, and a consistent focus on uncovering the complete record. Over nearly two decades, Attorneys Hy Mayerson, Benjamin J. Mayerson, and Margaret Connors worked through technical disputes and repeated instances of the insurer withholding critical information. Their role was clear: build the record, follow the facts, and make sure the Bergs’ concerns were given the full attention they deserved.
At Mayerson Injury Law, P.C., we remain committed to standing with policyholders when the process becomes unfair. If you were seriously injured due to the carelessness of another person or company, we can help. We have been helping people in this community since 1963.