In the complex world of insurance claims and legal disputes, sometimes a story emerges that captures the essence of justice, ethics, and the struggles faced by individuals seeking compensation for their losses from insurance companies. Many law-abiding citizens like our clients in this case, pay significant sums of money into a legally binding contract with insurance companies to protect and compensate them from harm/loss. A recent case with Gauthier & Maier Law Firm versus State Farm is one such story. This article will delve into the facts, issues, and questions surrounding this legal battle that has left a four-year-old boy scarred both physically and emotionally, and has raised significant doubts about the integrity of an insurance giant.
On September 2, 2017, a catastrophic head-on collision on Highway 47 in Valencia County changed the lives of a 4-year-old boy and his Aunt, Andrea Lovato, forever. The four-year-old boy was seated in the back of Andrea Lovato's vehicle when the collision occurred. Sadly, Andrea Lovato was put into an impossible choice with a vehicle in her lane heading straight for her at 70 mph in an advisory 35 mph zone. Andrea could go right and head off the road down a slope or into signs, stay in her lane and hope the other driver moves out of the lane, or go left into an open field. Sadly, both cars' actions mirrored each other causing a head-on collision.
The above simulation was prepared by Dennis O'Brien and used in the case showing the incident based on black box data. Please know the terrain is not accurate as there was a slope, signs, and telephone poles to the right and an open field and a larger shoulder to the left.
Tragically, Andrea Lovato lost her life in the accident, her body shielded her young nephew from the impact and he was trapped in the car until rescue arrived. The collision resulted in severe physical and emotional injuries to the four-year-old boy, necessitating emergency abdominal surgery due to internal bleeding.
Five days before the collision, Andrea Lovato, recognizing the need for additional protection after a recent insurance claim along with her family's long history with State Farm around 30 years and multiple vehicles, reached out to her State Farm agent to reinstate her coverage. Her car had been stolen and damaged, and Andrea Lovato was temporarily driving a rental vehicle while her car was being repaired. For an additional $30~ per month, State Farm offered to upgrade her coverage from a previous $25,000 to an impressive $1,000,000.
Andrea Lovato witnessing the benefits of higher coverage and considering her recent experience with a stolen vehicle, made the prudent decision to purchase the million-dollar coverage. Little did she know that this choice would later become a point of contention.
Upon Andrea Lovato's tragic passing, State Farm's actions took a perplexing turn. Instead of honoring the $1 million in coverage that Andrea Lovato had purchased, they inexplicably reduced the insurance policy to $25,000 policy limits, without any knowledge, consent, or approval from the remaining policyholder. Again to State Farm, the only person who knew of the $1,000,000 in coverage outside the company had passed away in the accident.
Remarkably, Andrea Lovato's mother later discovered the $1,000,000 declaration page from the State Farm policy that was mailed to the house, proving that Andrea Lovato had indeed purchased additional coverage. The family rightfully demanded that State Farm fulfill its obligation. However, State Farm refused to acknowledge its commitment. Had Andrea Lovato's mother not found these documents State Farm would have gotten away with their unethical practices to save money.
State Farm admitted the existence of the $1 million policy and its issuance, but it continues to deny the claims by the 4-year-old boy and Andrea Lovato's estate and refuses to provide the $1,000,000 in coverage. State Farm alleged immediately after changing the policy that Andrea Lovato was fully at fault for the accident and disregarded all evidence contrary to this assertion. They maintain that the policy was issued by mistake and they were authorized to change the policy after the accident.
On October 31, 2023, a Santa Fe jury decided that Andrea Lovato was not fully at fault for the accident and that State Farm had breached the $1,000,000 contract, committed bad faith, and violated the Unfair Trade Practices Act and Unfair Insurance Practices Act. The Jury awarded the family $12,000,000 in damages for the auto accident and another $24,000,000 in bad faith and breach of contract damages with $20,000,000 of that as punitive penalty damages to State Farm. The $36,000,000 verdict gave the family confirmation and validation that Andrea Lovato was not 100% at fault for the accident as State Farm always claimed her to be and that their conduct was cruel and malicious to the family.
The Gauthier and Maier Law Firm, P.C. is proud to have represented the 4-year-old boy and the Lovato family in this lawsuit with Attorneys Lauren Law Barela and Shane Maier leading the trial along with separate counsel Kedar Bhasker and Arturo Nieto representing the Wrongful Death Estate. We pride ourselves in seeking justice for Gauthier & Maier Law Firm clients and are always willing to take on and hold accountable the biggest insurance carriers and corporations. If you are injured in an auto accident or have an insurance carrier handling your claim in bad faith, contact us at 505-226-3205 or through our contact form.
Please know that State Farm has commented that they plan to appeal this award and trial verdict.