Brandt Damages (Cassim V. Allstate Insurance Company)
In Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, the California Supreme Court addressed the proper method of calculating Brandt damages in a contingent fee case where a plaintiff pursues both a breach of contract and other claims in the same action and recovers on multiple claims. (Cassim, supra, 33 Cal.4th at p. 811.)
In this type of case, the plaintiff bears the burden of proving by a preponderance of the evidence both the existence and the amount of damages proximately caused by the insurer's tortious breach, including the burden of demonstrating how the fees for legal work attributable to both contract and tort claims should be apportioned. (Id. at p. 813.)
The Cassim court noted that "Brandt fees can never exceed the legal fees for the combined tort and contract recovery; in most cases the amount will be far less." (Cassim, supra, 33 Cal.4th at p. 812.)
It then described an appropriate method of apportionment when the insured's attorney was working on a contingency, which included determining the percentage of the legal fees attributable to the contract recovery and multiplying that percentage by the total legal fee for the compensatory award as determined by the contingent fee agreement between the client and her attorney. (Ibid.)
The court also provided a sample calculation. (Ibid.)
The Cassim court noted, however, that "trial courts retain discretion to disregard fee agreements that appear designed to manipulate the calculation of Brandt fees to the plaintiff's benefit.
For example, a client who enters a fee agreement in an insurance bad faith case in which an attorney will take 40 percent of the entire compensatory damage award as his fee for working to obtain the contract recovery, and agrees to work on the tort recovery pro bono, cannot expect to receive Brandt fees of 40 percent of the entire compensatory award." (Cassim, supra, 33 Cal.4th at p. 813.)