Case Teaches You to Be Careful on Your Stipulations in this Area, But Offers Guidance on How to Obtain Post-Verdict Brandt Fees.
This next case is an interesting one, teaching that winning insureds’ attorneys seeking Brandt fees need to be very careful on what stipulations they make with the opposition. Courts, as the judge did here, will hold winners to the terms of their stipulations as far as post-trial fee recovery is concerned.
In Essex Ins. Co. v. Professional Building Contractors, Inc., Case No. B215005 (2d Dist., Div. 2 Apr. 6, 2010) (unpublished), insured won a jury verdict consisting of compensatory damages of $682,264.22 in an insurance policy breach/bad faith action ($325,999.25 of which were Brandt fees) and punitive damages of $2.5 million. The trial court granted a conditional new trial unless insured remitted down to $682,264.22 in punitive damages, which it did not. Everyone appealed earlier, but the appellate court affirmed the trial court’s punitive damages reduction. However, that did not end the matter, because insured sought somewhere between $127,000-250,000 in fees incurred primarily for trial and post-trial work. The lower court denied the fee request altogether, because insured did not comply with the terms of a stipulation its attorneys made with the opposition—namely, that insured would only be seeking 1% of the entire batch of Brandt fees in the post-trial proceeding (something that did not happen because the $250,000 initial request was 78% of the attorney’s fees previously awarded by the jury). The lower court also denied some costs because insured did not apportion them between true routine costs versus Brandt-related costs.
The Second District, Division 2, in a 3-0 decision authored by Acting Presiding Justice Doi Todd, affirmed the fee and costs determinations made by the lower court.
The appellate court held the insured to his trial stipulation, because Brandt holds that fees in this area are damages that are tried to the trier of fact (normally, a jury) unless the parties stipulate otherwise. The parties did stipulate to a different procedure, but insured’s failure to abide by the stipulation meant the lower court was correct to deny the fees. (The reviewing court has a nice discussion on the effect of and interpretation to be accorded to stipulations reached between parties.)
However, Justice Doi Todd, in dicta, did confront an interesting issue: how does an insured present not-yet-incurred trial or post-trial Brandt fee requests to the trier of fact? Although finding no published decision on the subject, the Essex Ins. panel did make an interesting observation: “We see no reason why a party seeking recovery of Brandt fees could not . . . offer evidence not only of attorney fees already incurred but also those reasonably anticipated to be incurred through completion of the action. The determination of any recoverable amount would remain with the jury as the trier of fact ‘to apply its collective experience, common sense, and diverse backgrounds.’” (Slip Opn., p. 13.)
As far as denying costs, the appellate court saw no abuse of discretion. The failure to make the allocation requested by the lower court properly supported its denial of the cost aspect of the motion.
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