ARIZONA – In a significant ruling, the Ninth Circuit panel, reaffirmed a $5.7 million award against a Farmers Insurance subsidiary, citing their glaring lack of thorough investigation regarding the injuries of Barbara Stein, the plaintiff, for five critical months following her harrowing auto accident in 2018. The full details of this unfolding drama can be traced back to a life-changing incident and the insurance company’s questionable practices thereafter.
Barbara Stein, a New Mexico resident, suffered severe injuries following an auto crash in 2018 while she was en route to Denver for a gem show. The calamity, triggered when the Steins’ car was rear-ended by an uninsured Texan, saw their vehicle travel a harrowing 160 feet before violently rolling onto its side. Notably, despite immediate claims and medical record authorizations, it took Farmers Insurance nearly two years to conduct an independent medical examination (IME) to gauge the extent of Stein’s injuries.
Highlighting this delay, Samuel Lopez, a seasoned investigative paralegal reporter with two decades of experience in the legal industry, says, “This is an emblematic case of the insurance industry’s notorious reputation for bad faith practices. It’s disconcerting that policyholders, in their most vulnerable moments, face such uphill battles for rightful compensation.”
While Farmers Insurance did make an initial payment towards the Steins’ car value and medical bills, their subsequent offers and responses to the couple’s growing medical needs were seen as tepid at best. Stein’s follow-up in April 2019 — a detailed 28-page letter outlining the psychological and physical trauma she underwent, including post-traumatic stress disorder and traumatic brain injury — didn’t prompt the urgency one would expect. In a worrying revelation, even a 27-year veteran claims adjuster from Farmers admitted to routinely starting settlements at the lower end and, in some cases, withholding payments for a staggering 10-15 years.
The court was particularly critical of Farmers’ stance that tried to tie Stein’s claimed injuries to her “prior medical history.” In this respect, the court sided with Stein, referencing New Mexico’s “‘eggshell’ plaintiff rule”, which underscores that insurers are responsible for any aggravation of prior medical conditions resulting from a new incident.
This tussle culminated in a jury trial where Stein, defying Farmers’ settlement offer of an added $95,000, won a resounding victory. Further, testimonies during the trial, including those from Farmers’ own staff, painted a damning picture of the company’s claims practices.
In its concluding statement, the Ninth Circuit panel remarked, “Based on the evidence, the jury could’ve deduced that FICA’s customary practice, even when liability is transparent, is more about waiting out the policyholders for a release, rather than striving for a swift and fair settlement.” This was deemed as a violation of the Unfair Insurance Practices Act (UIPA).
The ruling has resonated widely, shedding light on the insurance industry’s opaque practices and the indomitable spirit of policyholders seeking justice.
This case is in the Ninth Circuit U.S. Court of Appeals, the lawsuit is filed under “Barbara Stein and Co. vs. Farmers Insurance Company of Arizona, et al.” with the case number 22-55356.
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