Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA

Background

After a jury trial, National Union renewed its request for judgment as a matter of law on Yahoo’s insurance bad-faith claim and its claim for attorney fees under Brandt v. Superior Court. Judgment as a matter of law is a request for the court to override a jury’s verdict when the evidence could support only the opposite result. National Union alternatively requested a limited new trial on the Brandt fees or a reduction of the jury’s $618,380 award.

Bad-Faith Verdict

The court rejected National Union’s renewed challenge to the bad-faith verdict. The court had previously determined that the evidence provided a legally sufficient basis for a jury to find that National Union acted in bad faith. National Union presented no new evidence or argument. It continued to argue that its coverage decisions, even if wrong, showed only negligence or an honest mistake.

The court explained that the jury was entitled to reject that explanation. The jury had been instructed that a breach of the duty of good faith and fair dealing could not be based on an honest mistake or negligence. The court found substantial evidence supporting the jury’s conclusion that National Union’s conduct met the required standard.

Brandt-Fee Award

The court also found a legally sufficient evidentiary basis for Yahoo’s Brandt-fee claim. Brandt fees are attorney fees incurred to establish an insured’s right to contract benefits in an insurance dispute. Yahoo introduced its fee invoices into evidence without objection. Yahoo’s in-house attorney, Mr. Tepstein, testified that he managed Yahoo’s litigation, understood the services provided by outside counsel, understood which amounts Yahoo claimed as Brandt fees, and had paid the submitted invoices.

The court noted that National Union did not cross-examine Mr. Tepstein about the accuracy or reasonableness of the figures and did not challenge particular invoice entries at trial. The court also declined to consider National Union’s argument that the maximum recoverable amount was $9,500 because National Union had not included that argument in its earlier motion made before the case went to the jury. A renewed post-verdict motion generally may rely only on grounds raised in the earlier motion.

Disposition

The court denied National Union’s renewed motion for judgment as a matter of law, limited new trial, or remittitur. The order therefore did not disturb the jury’s bad-faith verdict or its $618,380 Brandt-fee award. Judge Edward Davila entered the order on November 25, 2019.