A Washington State appeals court has removed about $47 million in punitive and additional statutory damages awarded against Nationwide Affinity Insurance Company. However, it upheld key findings that the insurer acted in bad faith when handling a tragic car crash in 2017. The decision by Division III of the Washington Court of Appeals, published on 10 November 2026, is the latest development in a long-running legal case. The case began after a crash that killed three young children and seriously injured their parents. The case involved Meseret Shiferaw, whose vehicle was hit by a semi-truck during a trip to Alberta, Canada, in 2017. All three of her children died in the crash. Shiferaw suffered a broken back, while her husband, Solomon Agere, broke his neck.
Tragic crash and legal complications
After the crash, the family faced complicated legal and insurance disputes over their coverage. Shiferaw had a personal car insurance policy with Nationwide. Under the rules for accidents outside the state, the policy provided up to $200,000 in liability coverage. Nationwide initially refused to pay the full policy limit directly to Agere unless he agreed to a complete release of all possible third-party claims. These included potential claims against the truck driver involved in the crash. Because the insurer did not agree to settle the claims between family members immediately, Agere took legal action against his wife. He wanted to establish her legal responsibility and secure payment from the insurance policy. In early 2020, the Spokane County Superior Court ordered Nationwide to pay Agere the full $200,000 liability limit. Agere and Shiferaw later went through arbitration. The process found that Agere’s third-party damages were worth more than $17 million. Shiferaw then filed her own claims against Nationwide. She argued that the insurer had acted in bad faith, failed in its duty to handle the claims properly, and broken Washington State insurance rules.
Trial court awards tens of millions
During the trial at Spokane County Superior Court, a jury reached a large verdict against Nationwide. It found that the insurer had acted in bad faith and had been negligent when handling the claims. The trial court awarded Shiferaw $27.136 million in compensation. This included $136,000 for financial losses and $27 million for emotional and other non-financial harm. The trial court also used legal rules about which state’s laws should apply. It decided that Ohio law could be used to award punitive damages because Nationwide is based in that state. This resulted in an additional punitive damages award. The court also applied a legal multiplier under Washington’s Insurance Fair Conduct Act (IFCA). This increased the total amount Nationwide was ordered to pay to more than $74 million. Nationwide appealed the decision. The company challenged the IFCA claim, the use of Ohio law to award punitive damages for a case outside the state, and the overall amount of damages.
Appeals court strikes down punitive damages
Writing on behalf of the three-judge appeals panel, Judge Murphy upheld some parts of the lower court’s decision but overturned others. The Court of Appeals found that the trial court was wrong to use Ohio common law to award punitive damages. Under Washington State law, punitive damages are generally not allowed unless a specific law clearly permits them. The appeals panel decided that Washington law applied to the legal claims in this case. As a result, the multi-million-dollar punitive damages award was removed. The appeals court also overturned the finding that Nationwide was liable under the Insurance Fair Conduct Act. The judges explained that IFCA covers first-party insurance claims, such as personal injury protection or uninsured motorist benefits. It does not cover disputes involving third-party liability insurance. Removing the IFCA claim also removed the additional amount calculated under the law’s statutory multiplier. This wiped out another major part of the original judgment.
Primary bad faith ruling upheld
Although the appeals court removed the punitive damages and statutory increases, it kept the jury’s main finding that Nationwide acted in bad faith and was negligent under common law. The court also upheld the main compensation awarded to Shiferaw for the insurer’s bad faith and negligence. This means the family will still receive millions of dollars in compensation. Lawyers representing Shiferaw, including the Luvera Law Firm, had previously said that money recovered through the case would help support an educational foundation. The family created the foundation in memory of their three children. The appeals court’s decision reduces the judgment to the main compensation amount while rejecting Shiferaw’s separate appeal for an injunction under the Consumer Protection Act. Neither side has publicly confirmed whether it plans to ask the Washington Supreme Court to review the decision.
