Policy Benefits

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In Brandt v. Superior Court, 37 Cal.3d 813, 817 (1985), the California Supreme Court recognized an insured’s right to seek recovery of attorneys’ fees incurred to compel the payment of policy benefits unreasonably withheld by the insurer. As the Court explained, the recovery of Brandt fees is predicated on proof of two elements: (1) the insurer’s tortious or unreasonable withholding of policy benefits owed to the insured; and (2) reasonable attorneys’ fees incurred by the insured to compel the payment of the benefits due under the insurance policy.Continue Reading Published Decision Rejects Brandt Fee Claim In “Bad Faith” Suit Seeking Payment of Judgment in Excess of Policy Limits

50 Exchange Terrace LLC suffered losses from frozen burst pipes that caused water damage to its property and tendered a claim to its insurer, Mount Vernon Specialty Insurance Company. The parties disputed the cost of repairs (i.e., the amount of the loss) and Mount Vernon demanded appraisal to resolve the dispute. Rather than proceeding with appraisal, 50 Exchange filed suit in California state court, asserting that Mount Vernon had wrongfully withheld policy benefits pending the appraisal. Mount Vernon removed the case to federal court based on diversity jurisdiction. The federal district court then dismissed the suit for lack of ripeness and Article III standing.Continue Reading Appraisal of Amount of Loss is a Predicate to Article III, Injury-In-Fact Standing for a Suit Alleging Wrongful Withholding of Policy Benefits