Albert H. Wohlers & Co. v. Bartgis

In 1990 Debra Bartgis (plaintiff) received a letter from her employer, Albert H. Wohlers & Co. (Wohlers) (defendant). The letter informed Bartgis that Wohlers had negotiated a new insurance policy for its employees with Allianz Life Insurance Company of North America (Allianz) (defendant). Wohlers explained that the policy negotiated with Allianz was comparable to the previous insurance policy Wohlers had offered its employees. Wohlers did not mention that the new policy had an ancillary-charge-limitation provision. Under this provision, expenses beyond the basic room cost of an in-patient hospital stay were not covered by the policy. In 1991 Bartgis underwent a hysterectomy after precancerous cells were found in her reproductive organs. The cost of the procedure was over $10,000. Following the procedure, Allianz informed Bartgis that pursuant to the ancillary-charge-limitation provision, she was responsible for covering the cost of the operating room, recovery room, sutures and staples, heart monitor, anesthesia, and other items, which totaled $9,000. After Bartgis was unsuccessful in enrolling into a new health-insurance policy due to her preexisting medical conditions, she filed an action in a Nevada trial court against Wohlers and Allianz. Bartgis argued that Wohlers and Allianz had acted in bad faith and violated the state’s Unfair Claims Practices Act. The claim proceeded to a jury trial. The jury found that Wohlers and Allianz had acted in bad faith. The jury awarded Bartgis contract damages and noneconomic compensatory damages. The jury also awarded Bartgis $8 million in punitive damages. Wohlers and Allianz appealed.