When your own insurance company denies a valid claim and you must hire counsel to force payment, you should not bear the cost of that litigation alone. California law recognizes this injustice. Under the doctrine established in Brandt v. Superior Court (1985) 37 Cal.3d 813, a policyholder who prevails on a breach of contract claim against an insurer may recover attorney fees if the insurer's conduct also constituted bad faith. This rule shifts the financial burden back to the party that wrongfully withheld benefits in the first place.
Brandt fees are attorney fees awarded to a policyholder who wins a breach of contract action against an insurer when the insurer's conduct also violated the implied covenant of good faith and fair dealing. The California Supreme Court held in Brandt v. Superior Court that such fees are recoverable as damages for the tort of bad faith, even if the policyholder did not file a separate tort cause of action. The rationale is straightforward: an insurer's unreasonable denial or delay forces the insured to hire an attorney to obtain benefits the policy already promised. Those legal fees are a direct and foreseeable consequence of the insurer's breach of the duty of good faith. Because bad faith is a tort in California, and damages for a tort include all economic losses proximately caused by the wrongful act, Brandt fees fall within the measure of damages for the bad faith itself. This allows the policyholder to be made whole without absorbing thousands of dollars in legal costs that should never have been necessary.
The key requirement is that the insurer's conduct must meet the standard for bad faith, which means the denial or delay was unreasonable and without proper cause. It is not enough to show a simple contract breach. You must demonstrate that the insurer knew or should have known its denial was unfounded, or that it failed to conduct an adequate investigation, or that it placed its own financial interests above the policyholder's legitimate claim. When those elements are present and you prevail on the contract claim, Brandt fees become recoverable as consequential damages flowing from the insurer's tortious conduct. Our firm routinely pursues insurance bad faith claims and includes Brandt fees in the damages calculation to ensure clients are fully compensated.
California courts apply a two-part test to determine whether Brandt fees are appropriate. First, the policyholder must prove the insurer breached the insurance contract by failing to pay benefits that were due. This requires establishing coverage under the policy and showing that the insurer wrongfully withheld or delayed payment. Second, the policyholder must prove the insurer breached the implied covenant of good faith and fair dealing, meaning the insurer acted unreasonably in denying or delaying the claim. The bad faith element is critical because Brandt fees are not awarded for every contract breach, only for those breaches accompanied by conduct that rises to the level of bad faith.
Bad faith can be shown through various types of evidence: inadequate investigation of the claim, denial without a reasonable basis, failure to communicate with the insured, misrepresentation of policy terms, lowball settlement offers, or delay tactics designed to pressure the insured into accepting less than owed. In many cases, the insurer's own claim file reveals the bad faith. Emails, underwriting notes, and adjuster communications often show that the carrier knew the claim had merit but denied it anyway to save money or meet internal metrics. Once both prongs of the Brandt test are satisfied, the policyholder is entitled to recover reasonable attorney fees incurred in prosecuting the breach of contract claim. The amount awarded is determined by the court based on the lodestar method: the number of hours reasonably expended multiplied by a reasonable hourly rate for the attorney's skill and experience.
It is important to distinguish Brandt fees from other remedies available in bad faith cases. Civil Code section 3287 allows a prevailing plaintiff to recover prejudgment interest on any sum certain or capable of being made certain by calculation. This interest compensates the plaintiff for the loss of use of money wrongfully withheld. Prejudgment interest under section 3287(a) is calculated at the legal rate of ten percent per annum from the date the sum became due. Brandt fees, by contrast, are not interest but rather the actual legal costs incurred to recover the benefits. Both remedies can be awarded in the same case, and they serve complementary purposes: interest compensates for the time value of money, while Brandt fees reimburse the cost of enforcement.
Another distinct remedy is punitive damages under Civil Code section 3294, which may be awarded if the insurer's conduct was malicious, oppressive, or fraudulent. Punitive damages are designed to punish the wrongdoer and deter similar conduct, not to compensate for legal fees. A successful bad faith plaintiff can potentially recover all three: the policy benefits, Brandt fees for the cost of obtaining those benefits, prejudgment interest for the delay, and punitive damages if the insurer's conduct was egregious. Each remedy has its own legal standard and proof requirements, and an experienced attorney will pursue all available avenues to maximize recovery. If you are facing a denial or lowball offer from your insurer, our catastrophic injury and bad faith practice can help you navigate these overlapping remedies and build a comprehensive damages case.
Yes, if the settlement includes payment of policy benefits and the insurer's conduct met the bad faith standard, Brandt fees can be included in the settlement or litigated separately. Courts have held that Brandt fees are a form of damages, not a contractual fee-shifting provision, so they survive even if the case settles. Many carriers will agree to pay reasonable attorney fees as part of a global resolution to avoid further litigation over the fee amount.
Brandt fees are still recoverable. The California Supreme Court in Brandt specifically held that a policyholder need not plead a separate tort cause of action to recover attorney fees as damages for bad faith. As long as you can prove both the breach of contract and the breach of the duty of good faith, the fees are compensable as consequential damages flowing from the bad faith conduct, even if you did not label it as a tort claim.
Brandt fees are calculated using the lodestar method: the number of hours reasonably expended by counsel, multiplied by a reasonable hourly rate. The attorney must submit contemporaneous time records and a declaration detailing the work performed. The court then reviews these records for reasonableness and may adjust the award if certain hours were unnecessary or duplicative. In some cases, the court applies a multiplier to the lodestar if the case was particularly complex or the results obtained were exceptional.
Brandt fees apply to first-party insurance claims where the insured is seeking benefits under their own policy. This includes auto, homeowners, disability, health, and life insurance. The doctrine does not apply to third-party liability claims where the claimant is not the policyholder. For example, if you are injured in a car accident and sue the at-fault driver's insurer, Brandt fees are not available because you are not the insured under that policy.
Brandt fees require a finding of both breach of contract and bad faith. If you prevail on bad faith but not on the contract claim, you cannot recover Brandt fees under the classic formulation. However, you may still recover tort damages for the emotional distress and economic harm caused by the bad faith conduct, and in some cases, punitive damages. The key is that Brandt fees are tied to the necessity of litigating the contract claim itself due to the insurer's unreasonable conduct.
Insurers routinely contest Brandt fee awards by arguing that their denial was reasonable even if ultimately incorrect. A genuine dispute over coverage or the amount of benefits owed can defeat a claim for Brandt fees. California courts recognize that insurers have the right to contest claims in good faith, and mere disagreement over policy interpretation does not constitute bad faith. The insurer will often point to conflicting evidence, ambiguous policy language, or differing expert opinions as justification for the denial. The burden is on the policyholder to show that no reasonable insurer would have denied the claim under the circumstances, or that the insurer failed to conduct a thorough and objective investigation before denying benefits.
Evidence of bad faith includes the insurer's failure to request additional information from the insured, ignoring medical reports or expert opinions that support coverage, applying policy exclusions in a strained or unreasonable manner, or denying the claim without articulating a coherent reason. Internal communications showing that the insurer prioritized cost savings over fair claim handling are particularly damaging. Depositions of claims adjusters, underwriters, and corporate representatives can reveal whether the insurer followed its own procedures and industry standards. If the insurer's investigation was cursory or its denial was based on cherry-picked facts, the bad faith element is easier to establish. Once bad faith is proven, the insurer's defenses to Brandt fees collapse, and the court will award fees commensurate with the reasonable cost of litigation. Our wrongful death and serious injury cases often involve high-value insurance policies and aggressive carrier tactics, making Brandt fees a critical component of full recovery.
The decision to pursue Brandt fees should be made early in the litigation, ideally at the outset of the case. From the first client consultation, counsel should maintain detailed contemporaneous time records, noting each task performed, the time expended, and the purpose of the work. These records will form the foundation of the Brandt fee motion or claim at trial. It is also essential to preserve all correspondence with the insurer, claim file materials, and evidence of the insurer's investigative efforts or lack thereof. The stronger the bad faith case, the more likely the insurer will agree to pay Brandt fees to avoid a jury trial on punitive damages and to limit exposure to an adverse judgment that includes interest and costs.
In many cases, the threat of a Brandt fee claim incentivizes early settlement. Insurers understand that if they lose at trial, they will pay not only the policy benefits and prejudgment interest but also the policyholder's attorney fees, which can exceed the underlying claim in a protracted litigation. This dynamic gives the policyholder significant leverage. However, counsel must be prepared to prove every element of the Brandt fee claim with admissible evidence, including expert testimony on the reasonableness of the denial and the standard of care for claims handling. A poorly documented fee claim can be reduced or denied by the court, so meticulous record-keeping and strategic presentation are essential. If your insurer has denied or delayed a valid claim and you are facing mounting legal bills, Nazaryan Law, APC can evaluate your case and pursue full recovery, including Brandt fees, to ensure you are not penalized for enforcing your rights.
If your insurance company has forced you into litigation over a claim that should have been paid, you deserve to recover the cost of that fight. Brandt fees California bad faith law ensures that wrongful denials carry a real consequence for the insurer. Contact Nazaryan Law, APC at (818) 900-1888 for a free consultation. We represent policyholders throughout Los Angeles County, the San Fernando Valley, and across California in breach of contract and bad faith insurance cases. Let us help you recover not only your benefits but also the attorney fees you should never have had to pay.
Nazaryan Law Car Accident & Injury Lawyers
601 S Brand Blvd, Suite 301, San Fernando, CA 91340
Phone: (818) 900-1888
Artin has a strong track record of securing substantial compensation for clients in motor vehicle accidents, catastrophic injuries, and complex homeowner insurance claims.
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