In an insurance bad faith complaint, Foremost Insurance Company of Grand Rapids, Michigan is being challenged by plaintiffs Kimberly Wietsma, Renee Bradford, and Cindy Nugent. The complaint was filed in the Third Appellate District Court of California on May 30, 2024.
The case revolves around a claim for $84,000 filed by the plaintiffs under an insurance policy they purchased from Foremost to cover losses at their rental property. The claim was based on damages caused by unauthorized tenant alterations. While Foremost paid an undisputed amount, it denied the rest of the claim. This led the plaintiffs to hire legal counsel and execute a fee agreement in May 2017. Under this agreement, counsel would be compensated only if recovery was obtained, with fees set at either 40% or 50% of the gross recovery depending on whether the case settled before or after a jury was sworn.
In December 2017, the plaintiffs filed a lawsuit against Foremost for insurance bad faith, seeking various damages including attorney fees required to recover policy benefits. Over time, several motions were filed and denied by both parties. In September 2021, just before trial, the plaintiffs executed a new fee agreement with their counsel that added provisions for hourly rates if a jury panel was sworn.
After a bench trial and subsequent jury trial in March 2022 ruled in favor of the plaintiffs, awarding them $131,201.92 in damages (including $55,223.64 for policy benefits that Foremost had unreasonably failed to pay), they moved to recover attorney fees and costs under Brandt v. Superior Court (1985). They claimed over $916,250 in total fees but sought $606,278 under Brandt. Foremost opposed this motion on grounds that included allegations of fee manipulation and unconscionability of the new fee agreement.
The trial court rejected Foremost’s arguments and awarded $384,825 in Brandt fees to the plaintiffs. Despite acknowledging some concerns about the timing and terms of the new fee agreement, it concluded that Foremost lacked standing to challenge its conscionability and found no evidence suggesting it was drafted to negatively impact Foremost or manipulate Brandt fees improperly.
Foremost has since appealed this decision on multiple grounds including speculative damages and failure to mitigate damages among others. However, these contentions were dismissed as either not properly raised during trial or lacking merit based on existing legal standards.
The case continues with Kimberly Wietsma et al., represented by their attorneys whose names are not disclosed in this document. The appeal will be heard by judges Mesiwala J., Duarte Acting P.J., and Wiseman J., with Case ID C097885.