Case Has An Interesting Discussion, Under A Choice Of Law Analysis, Whether A Fee Claim Is Procedural Or Substantive, And It Was Procedural In The Case Before It.
Wing Inflatables v. Certain Underwriters of Lloyd’s, Case No. A172050 (1st Dist., Div. 1 Oct. 23, 2026) (unpublished) was a situation where an insured won major jury verdicts–$3.1 million in compensatory damages and $15 million in punitive damages—against an insurer under an M&A representation and warranties insurance policy. On appeal, the $15 million punitive verdict was scaled back to $10 million, but otherwise the merits judgment was affirmed. However, there was a fee wrinkle. Insured argued that, under a Delaware choice of law clause in the insurance policy, that it should have been granted over $8 million in fees and costs under Delaware’s substantive law “bad faith litigation” exception. Although agreeing that the issue was substantive in nature, the lower court denied the fees/costs requests.
That fees/costs determination was affirmed on appeal, but under a different analytical framework. Because Delaware versus California was involved, the appellate court did some independent research and determined that the fee issue was procedural in nature after analyzing lots of cases and distilling that contractual fee claims were likely substantive in nature but that bad faith litigation/misconduct claims were likely procedural in nature. The procedural classification ended the substantive inquiry, but insurer was not quite through yet. Insured argued that there should be a remand to allow the lower court to award Brandt fees; however, there were two problems with that argument: (1) Brandt fees were not allowed because this is a substantive issue in California; and (2) the insured never raised the argument that Brandt fees under California law preempted Delaware law (because the procedural classification was fatal). Take you all back to Law School Jurisdiction or Conflict of Law classes?