Fourth District, Division Two, Concludes that Insurance Company Acted Reasonably, So Judgment and Brandt Fee Award Go Poof!
Certain of our appellate justices write in their own distinctive and inimitable styles. Justice Sills is the author of the following 3-0 opinion that begins, “At first we did not know what to make of this case. There was a $10 million judgment obtained by a nationwide groundwater pumping and control company, against its liability insurer. . . . What foul deeds had the insurer committed, we wondered, that merited such punishment?” Though the opinion is 51 pages long, the short answer is: none. Griffin Dewatering Corporation v. Northern Insurance Company of New York, Case No. G036896 (4th Dist., Div. 3, July 31, 2009) (certified for publication). Because this lengthy opinion includes paragraphs on the subject of Brandt fees, a subject we have written about in the past, we dutifully report about it.
Justice Sills concluded that the insurance company had not committed a tort, because even if it had acted incorrectly, it had not acted unreasonably. With the collapse of the tort judgment, the insured’s claim to Brandt fees went poof:
“[W]hat about the fees — $8,921.40 — that the insured had incurred in its bad faith case against the insurer up to the time of settlement of the underlying suit and payment of all of its defense costs? Can we at least uphold the judgment to this extent?
No. As explained . . . tort damages against an insurance company are premised on the unreasonable denial of a [sic] policy benefits. When an insurance company acts reasonably, though incorrectly, only contract damages are available. And Brandt fees are clearly tort damages. (See Cassim v. Allstate Insurance Company . . . 33 Cal.4th at p. 806 [explaining that when an “insurer fails to act fairly and in good faith . . . such breach may result in tort liability for proximately caused damages” including Brandt fees]; Essex Insurance Company v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, 1257-1258 [explaining that Brandt fees are damages as a result of an insurance company’s tortious conduct].) Thus, in Cassim, the court observed: “Of course, without a tort judgment, there could be no Brandt fees.” (Cassim, . . . 33 Cal.4th at p. 808.) And in this case, there is no tort judgment.”