Brandt Fees California Law

In Brandt v. Superior Court (1985) 37 Cal.3d 813, the California Supreme Court held a plaintiff in an insurance bad faith action may recover attorney fees incurred to obtain an award of contractual benefits: " 'When the insurer's conduct is unreasonable, a plaintiff is allowed to recover for all detriment proximately resulting from the insurer's bad faith, which detriment . . . includes those attorney's fees that were incurred to obtain the policy benefits and that would not have been incurred but for the insurer's tortious conduct.' Austero v. Washington National Ins. Co. (1982) 132 Cal. App. 3d 408. The fees recoverable, however, may not exceed the amount attributable to the attorney's efforts to obtain the rejected payment due on the insurance contract. Fees attributable to obtaining any portion of the plaintiff's award which exceeds the amount due under the policy are not recoverable." (Brandt, supra, 37 Cal.3d at p. 819.) Brandt concluded: "When an insurer tortiously withholds benefits, . . . attorney's fees, reasonably incurred to compel payment of the policy benefits, are recoverable as an element of damages resulting from such tortious conduct." (Brandt, supra, at p. 815.) In Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, issued after the trial court's award of attorney fees in this case, the Supreme Court, in a contingency fee case, provided further guidelines for awards of attorney fees under Brandt: "The proper method of calculating Brandt fees (Brandt v. Superior Court (1985) 37 Cal.3d 813) requires the trier of fact to determine the percentage of the legal fees paid to the attorney that reflects the work attributable to obtaining the contract recovery. Some outer limits are immediately discernible. First, no portion of legal fees attributable to the punitive damage award can be recovered as Brandt fees. Brandt's focus was solely on ensuring that attorney fees for contract recovery did not diminish a plaintiff's compensatory damages award, and did not concern diminution of the punitive damages award, which is essentially a windfall for plaintiffs that the law permits for public policy reasons. Second, the Brandt fees can never exceed the legal fees for the combined tort and contract recovery; in most cases the amount will be far less. "To determine the percentage of the legal fees attributable to the contract recovery, the trial court should determine the total number of hours an attorney spent on the case and then determine how many hours were spent working exclusively on the contract recovery. Hours spent working on issues jointly related to both the tort and contract should be apportioned, with some hours assigned to the contract and some to the tort. This latter figure, added to the hours spent on the contract alone, when divided by the total number of hours worked, should provide the appropriate percentage." (Cassim v. Allstate Ins. Co., supra, at pp. 811-812, italics added.) Cassim further stated: "Defendants are protected from excessive Brandt fees in two ways. First, as in any tort 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 defendant's tortious acts or omissions. Accordingly, . . . plaintiffs will bear the burden of demonstrating how the fees for legal work attributable to both the contract and the tort recoveries should be apportioned. " (Cassim v. Allstate Ins. Co., supra, at p. 813.)