Jury — continued from Previous Page
holder for an economic loss – the cost of hiring an attorney to recover policy bene- fits – they cannot include the cost of obtaining any portion of the award that exceeds the amount due under the policy. Hence, the amount of fees incurred to
obtain an award of compensatory dam- ages for bad faith, or punitive damages, cannot typically be included in an attor- ney’s fee award. One practical tip to keep in mind is to seek to bifurcate the issue of attorney’s
fees to be handled in post-trial motions for the court to determine. Indeed, this was the recommended approach offered by the California Supreme Court in Brandt. The rationale is that attorney’s fees are only recoverable if the jury returns with a finding of bad faith and, if they do not, the issue is moot. Moreover, in most cases, the calculation of attorney’s fees is simply an arithmetic calculation of the contingency fee percentage to the contractual damages found. As a practical matter, in a non-contingency fee case, the court is probably in the better position to determine the amount of reasonable attorney’s fees to award in any event. Ultimately, bifurcating the issue of attor- ney’s fees to be dealt with in post-trial motions promotes judicial economy since it simplifies the case and is the most effi- cient method to having the issue decided. It should be noted, however, one
appellate opinion has held (incorrectly in the author’s view), that unless the issue of attorney’s fees is decided by the jury, the amount of Brandt fees awarded cannot count toward the “multiplier” between com- pensatory and punitive damages when the award is evaluated under the due-process clause. (Amerigraphics, Inc. v. Mercury Cas. Co. (2010) 182 Cal.App.4th 1538, 1565 [107 Cal.Rptr.3d 307, 329].) In a case with rela- tively low damages, the use of the Brandt fees to increase the damages awarded, and hence provide support for a larger punitive- damages award, may make it worthwhile to try the Brandt fee issue to the jury.
Conclusion Hopefully, the tips set forth in this
article will help you in trying your next insurance bad-faith case. Ricardo Echeverria is a partner with the law
firm of Shernoff Bidart Echeverria LLP spe- cializing in liability, property, and HMO cases within the firm’s HMO Litigation & Property/ Casualty department. Ricardo Echeverria was the 2010 Consumer Attorneys of Los Angeles Trial Lawyer of the Year and was nominated for the award in 2006, 2007, 2008 and 2009. He was also a finalist for the Consumer Attorney of California’s Consumer Lawyer of the Year in 2007 and 2009. He also serves as the current Vice Chair of CAALA’s Education Committee.
26— The Advocate Magazine JUNE 2011
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