Reversed Insurance Bad Faith Judgment Before the California Supreme Court

Represented a manufacturer policyholder in a California Supreme Court appeal addressing the scope of Insurance Code § 790.03 and the availability of Brandt fees in commercial first-party bad faith litigation. The case presented an issue of statewide significance unresolved by prior California authority and produced a published reversal that clarified bad faith standards for commercial policyholders.

Issues Presented

The matter arose from a substantial first-party insurance dispute in which the trial court entered judgment for the manufacturer following a jury verdict on bad faith and statutory violations. The intermediate appellate court reversed, holding that § 790.03 standards developed in consumer contexts did not extend to commercial first-party disputes and that Brandt fees were unavailable on the record presented.

Appellate Strategy

The team petitioned the California Supreme Court for review, framing two questions: whether § 790.03 supports private causes of action by commercial policyholders against their insurers, and whether Brandt fees apply where the underlying coverage dispute involves commercial property. Briefing emphasized the doctrinal history of Brandt v. Superior Court, the legislative architecture of California's Unfair Insurance Practices Act, and the practical consequences for commercial insurance markets if commercial policyholders were excluded from statutory protections.

Decision and Precedent

The California Supreme Court reversed the Court of Appeal and reinstated the trial-court judgment. The decision held that commercial first-party policyholders may pursue bad faith claims under the standards developed in consumer contexts and that Brandt fees are recoverable on a showing of unreasonable claim handling. The opinion now serves as controlling authority for commercial bad faith litigation across California.