California Supreme Court Allows Insured’s Assignee To Recover Brandt Fees In Bad Faith Litigation
In Essex Insurance Co. v. Five Star Dye House, Inc. 2006 Cal. LEXIS 8229 (Cal. July 6, 2006), the California Supreme Court unanimously disapproved prior case law and held that an insured’s assignee can recover attorneys’ fees under the Brandt decision in an action for tortious breach of the implied covenant of good faith and fair dealing. Under the Brandt decision (Brandt v. Superior Court, 37 Cal. 3d 813 (1985)), an insured may recover as damages those attorneys’ fees that are incurred in a bad faith action against the insurance company and which are attributable to the attorney’s efforts to recover policy benefits that the insurer has wrongfully withheld.