California Insureds Seeking Brandt Fees Waive Attorney-Client Privilege

A recent decision by California’s First Appellate District holds that a party seeking Brandt attorney fees thereby waives the attorney-client privilege regarding such fees, although attorney work product protection is not waived.

In Byers v. Superior Court (USAA), 1st App. Dist. Civ. No. A169321, the plaintiffs sued their homeowner’s insurer for bad faith relating to the installation of wood flooring. During discovery, the plaintiffs refused to produce evidence of their Brandt attorney fees in the form of fee agreements, invoices, fee statements, billing records, receipts and proof of payment. The trial court granted the insurer’s motion to compel this information on the ground that plaintiffs had waived the attorney-client privilege. However, the trial court stated that the plaintiffs’ attorney could redact protected work product (presumably because the attorney is the holder of that right). The plaintiffs filed a writ petition.

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The Court of Appeal granted writ review, noting that the issue was one of first impression and involved the attorney-client privilege. The court ultimately denied writ relief, stating that it is well-established a party cannot invoke the attorney-client privilege to avoid providing information essential to its claims. The court rejected plaintiffs’ argument that their production should be deferred until after liability for bad faith was established, stating that plaintiffs had not sought bifurcation. The court also dismissed plaintiffs’ argument they should not be required to provide evidence as to all attorney fees. As the court recognized, fees incurred in pursuing bad faith do not qualify as recoverable Brandt fees (which are limited to fees incurred in proving breach of contract when there has been a showing of bad faith). The Court agreed that the plaintiffs were not required to produce information regarding the fees incurred in pursuing bad faith. Rather, the court stated, the trial court order explicitly allowed redaction of the responsive documents (although it is unclear from the decision whether the trial court’s order allowed redaction of information other than attorney work product). The court’s decision left open the issue of whether a party suing for bad faith can, by retracting its claim for Brandt fees, restore the attorney-client privilege. 

This article originally on Freeman, Mathis & Gary LLP. 

About the author:

Rachel E. Hobbs is a partner at Freeman, Mathis & Gary LLP.