Posted on 13 Jun 2013 by Neilson
A Connecticut judge has ordered Hartford Fire Insurance Co. to pay $20 million in punitive damages to automobile body shops in a class-action lawsuit that alleged unfair trade practices against the insurer.
A jury had previously awarded $14.76 million in compensatory damages, Judge Trial Referee Alfred J. Jennings of the Connecticut Superior Court said in court papers. The jury rendered its verdict on Nov. 17, 2009. It found the plaintiffs had proved by a preponderance of the evidence that Hartford's practices regarding hourly labor rates to be paid to the plaintiffs for auto body repairs was an unfair trade practice.
According to the decision, Hartford is alleged to have wrongfully steered its insureds and other insurance claimants to auto body repair shops favored by Hartford and that were part of Hartford's customer repair service program. Hartford through positive and negative employee incentives forced its independent appraisers to establish an artificially low standard of hourly labor rates for auto body repair work in Connecticut. The conduct "caused damage in the form of lost revenues to the plaintiff shops," the judge wrote.
The case was a class action brought on behalf of a class made up of more than 1,000 Connecticut auto body shops, against Hartford Fire. The Auto Body Association of Connecticut was among the plaintiffs. The Connecticut Superior Court had granted class action status, which was affirmed on appeal.
Later, Hartford asked that the verdict for the plaintiffs be set aside. The insurer also argued that the plaintiffs did not prove that an offense to the public policy of the Appraiser's Code of Ethics caused an ascertainable loss to the class.
The plaintiffs had moved post-trial for an award of punitive damages, according to the decision.