Clients often ask if it’s possible to recover attorney fees when they sue their own insurance company in California.  The short answer is yes.  After we have that out of the way I let them know it is possible to recover attorney fees, if bad faith is at issue and we can produce proof.

In California, the most important case that allows for attorney fees and litigation costs is Brandt v. Superior Court (Standard Ins. Co.), (1985) 37 Cal//.3d 813, 817.  In the Brandt case, the California Supreme Court established an exception to the general contract rule that each party bears its own attorney fees. Brandt allows recovery of attorney fees incurred in obtaining contract benefits when the insurer’s withholding of those benefits was in bad faith.  In other words, the damaged party does not have to come out of pocket after proving damages.

To recover attorney fees, a policyholder must prove:

  1. Benefits were withheld in bad faith; and
  2. The fees incurred by the policyholder to recover those benefits. The fees incurred to prove the bad faith are NOT recoverable; only fees incurred to prove coverage are recoverable. (Cassim v. Allstate Ins. Co., (2004) 33 Cal.4th 780, 811)

In White v. Western Title Ins. Co., (1985)// 40 Cal.3d 870, the Supreme Court extended its analysis in Brandt to recovery of litigation costs, including expert fees, incurred in proving coverage. Since coverage experts can be very expensive, this additional economic damage should not be overlooked. Attorney fee and litigation costs are normally a jury issue, but, as the Brandt court recommended, they are usually best determined by the court after the verdict.

If you have reason to believe that you have been the victim of Insurance Company Bad Faith don’t hesitate to call the Law Office of Guenard & Bozarth at 888-809-1075 or visit us online at www.gblegal.com for a free case analysis.

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