Nickerson v. Stonebridge Life Ins. Co.

After Plaintiff was injured, he sought benefits from Defendant-insurer under an indemnity benefit policy. Plaintiff subsequently filed suit alleging that Defendant breached the insurance contract and the implied covenant of good faith and fair dealing. The jury awarded Plaintiff $31,500 in unpaid policy benefits, $35,000 in damages for emotional distress, and $19 million in punitive damages. The parties stipulated that the amount of attorney fees to which Plaintiff was entitled under Brandt v. Superior Court was $12,500, and the court awarded that amount. Defendant moved for a new trial seeking a reduction in the punitive damages award on the grounds that it was unconstitutionally excessive. The trial court granted the motion and reduced the jury’s award to a 10-to-1 ratio of punitive to compensatory damages. In so doing, the court considered only the $35,000 damages award but did not include the $12,500 in Brandt fees. The court of appeal affirmed. The Supreme Court reversed, holding that, in determining whether a punitive damages award is unconstitutionally excessive, Brandt fees may be included in the calculation of the ratio of punitive to compensatory damages, regardless of whether the fees are awarded by the trier of fact as part of its verdict or are determined after the verdict has been rendered. Remanded. View "Nickerson v. Stonebridge Life Ins. Co." on Justia Law