Nickerson v. Stonebridge Life Insurance Co.

Filed 6/9/16

IN THE SUPREME COURT OF CALIFORNIA

THOMAS NICKERSON, )

)

Plaintiff and Appellant, )

) S213873

v. )

) Ct.App. 2/3 B234271

STONEBRIDGE LIFE INSURANCE )

COMPANY, )

) Los Angeles County

Defendant and Respondent. ) Super. Ct. No. BC405280

____________________________________)

The due process clause of the Fourteenth Amendment to the United States

Constitution prohibits states from imposing ― ‗grossly excessive‘ ‖ punitive

damages awards on tortfeasors. (BMW of North America, Inc. v. Gore (1996) 517

U.S. 559, 568 (Gore).) To determine whether a jury‘s award of punitive damages

is grossly excessive, reviewing courts must consider, among other factors, whether

the ―measure of punishment is both reasonable and proportionate to the amount of

harm to the plaintiff‖ by comparing the amount of compensatory damages to the

amount of punitive damages. (State Farm Mut. Automobile Ins. Co. v. Campbell

(2003) 538 U.S. 408, 426 (State Farm).) Absent special justification, ratios of

punitive damages to compensatory damages that greatly exceed 9 or 10 to 1 are

presumed to be excessive and therefore unconstitutional. (Simon v. San Paolo

U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1182 (Simon).)

The question in this case concerns the proper calculation of the punitive-

compensatory ratio when the parties have agreed to have the trial court determine

a component of the plaintiff‘s compensatory damages — here, the attorney fees

plaintiff was compelled to expend to obtain the insurance benefits to which he was

entitled (see Brandt v. Superior Court (1985) 37 Cal.3d 813, 817 (Brandt)) —

after, rather than before, the jury has rendered its punitive damages verdict. The

Court of Appeal in this case held that Brandt fees awarded in this manner must be

excluded from the calculation in determining whether, and to what extent, the

jury‘s punitive damages award exceeds constitutional limits.

We conclude that the Court of Appeal erred. 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 by the trial court after the verdict has been rendered. We

therefore reverse the judgment of the Court of Appeal.

I.

On February 11, 2008, plaintiff Thomas Nickerson, who is paralyzed from

the chest down, broke his leg when he fell from the wheelchair lift on his van. He

was taken to the Department of Veterans Affairs hospital in Long Beach, where,

as a veteran, he was entitled to medical care at no cost. After being treated in the

emergency room, Nickerson was admitted to the hospital and placed in a unit

equipped to treat paraplegics and quadriplegics. Doctors applied a full-leg splint,

having determined that Nickerson had suffered a comminuted displaced fracture of

his right tibia and fibula, meaning that the bones had broken into several pieces

that did not line up with one another. Nickerson thereafter experienced several

complications from the injury.

2

After spending several weeks confined to a hospital bed, Nickerson was

permitted to move to his wheelchair on March 24, 2008, but could tolerate sitting

in the wheelchair for only limited periods of time. On May 19, 2008, Nickerson‘s

treating physician determined that he was stable and would have been ready to

return home except that he was unable to maneuver through his home without a

particular part needed for his wheelchair. Nickerson was ultimately discharged

from the hospital on May 30, 2008, after obtaining the needed part. He had been

hospitalized for 109 days total.

Following his discharge from the hospital, Nickerson sought benefits from

defendant Stonebridge Life Insurance Company (Stonebridge) under an indemnity

benefit policy that promised, as relevant here, to pay him $350 per day for each

day he was confined in a hospital for the necessary care and treatment of a covered

injury. Some months later, Stonebridge notified Nickerson that it had completed

processing his request for benefits. Invoking the policy‘s definition of ―necessary

treatment,‖ Stonebridge determined, without consulting the views of Nickerson‘s

treating physicians, that his hospitalization was ―medically necessary‖ only from

February 11 to 29. Stonebridge sent Nickerson a check for $6,450, which

represented payment of $150 for one visit to the emergency room and $6,300 for

18 days of hospitalization at $350 per day.

Nickerson filed the present suit. He alleged that Stonebridge breached the

insurance contract by failing to pay him benefits for the full 109 days of his

hospital stay and that Stonebridge breached the implied covenant of good faith and

fair dealing by acting unreasonably and in bad faith in denying him his full policy

benefits. The parties stipulated before trial that if Nickerson succeeded on his

complaint, the trial court could determine the amount of attorney fees to which

Nickerson was entitled under Brandt, supra, 37 Cal.3d 813, as compensation for

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having to retain counsel to obtain the policy benefits. At trial, neither party

presented to the jury evidence concerning the claim for, or amount of, Brandt fees.

At the close of Nickerson‘s case, the trial court granted Nickerson‘s motion

for a directed verdict on the breach of contract cause of action and awarded him

$31,500 in unpaid policy benefits. With respect to the bad faith cause of action,

the jury returned a special verdict finding that Stonebridge‘s failure to pay policy

benefits was unreasonable and awarded Nickerson $35,000 in damages for

emotional distress. The jury also found Stonebridge had ―enagage[d] in the

conduct with fraud‖ and awarded $19 million in punitive damages. (See Civ.

Code, § 3294, subd. (a) [in a civil case not arising from the breach of a contractual

obligation, punitive damages may be awarded ―where it is proven by clear and

convincing evidence that the defendant has been guilty of oppression, fraud, or

malice‖].) After the jury rendered its verdict, the parties stipulated that the amount

of attorney fees to which Nickerson was entitled under Brandt was $12,500, and

the court awarded that amount.

Stonebridge moved for a new trial seeking a reduction in the punitive

damages award, which it argued was constitutionally excessive. The trial court

agreed and granted Stonebridge a new trial unless Nickerson consented to a

reduction of the punitive damages award to $350,000.1 The trial court cited State

1 Although neither party has raised the point, we note that the ―appropriate

order‖ under these circumstances ―is for an absolute reduction, rather than a

conditional reduction with the alternative of a new trial, i.e., a remittitur.‖ (Simon,

supra, 35 Cal.4th at p. 1187.) As we explained in Simon, ―[o]nce a maximum

constitutional award has been determined, . . . a new trial on punitive damages

would be futile. ‗Giving a plaintiff the option of a new trial rather than accepting

the constitutional maximum for this case would be of no value. If, on a new trial,

the plaintiff was awarded punitive damages less than the constitutional maximum,

he would have lost. If the plaintiff obtained more than the constitutional

(footnote continued on next page)

4

Farm, supra, 538 U.S. 408, for the proposition that a punitive-compensatory ratio

exceeding single digits will ordinarily exceed constitutional bounds. (See id. at

p. 425.) The trial court thus determined it was bound to reduce the punitive

damage award to a ratio of punitive to compensatory damages of 10 to 1. In

calculating the permissible amount of punitive damages, the court considered only

the $35,000 the jury had awarded in compensatory damages for emotional distress

for Stonebridge‘s tortious breach of the implied covenant of good faith and fair

dealing; it did not include the $12,500 in Brandt fees.

Nickerson rejected the reduction in punitive damages and appealed the

order granting a new trial. (See Code Civ. Proc., § 904.1, subd. (a)(4).) A divided

Court of Appeal affirmed. The Court of Appeal held that the trial court properly

reduced the jury‘s award to a 10-to-1 ratio of punitive to compensatory damages.

The court further held that the trial court had correctly calculated the amount of

compensatory damages for purposes of this analysis. In so doing, it rejected

Nickerson‘s argument that the trial court should have taken into account the

$12,500 in Brandt fees. The court acknowledged the Court of Appeal‘s holding in

Major v. Western Home Ins. Co. (2009) 169 Cal.App.4th 1197, 1224, that ―the

amount of the jury‘s award of Brandt fees . . . may be properly considered . . . in

determining if the ratio of punitive damages to the tort damages award is

excessive.‖ But the court distinguished Major on the ground that the jury in that

case had awarded Brandt fees as part of tort damages. When Brandt fees instead

(footnote continued from previous page)

maximum, the award could not be sustained. Thus, a new trial provides only a

―heads the defendant wins; tails the plaintiff loses‖ option.‘ [Citation.]‖ (Id. at

p. 1188.)

5

―are awarded by the trial court after the jury awards punitive damages,‖ the court

held, the fees are not properly included in the constitutional calculus. In support

of that proposition, the court cited Amerigraphics, Inc. v. Mercury Casualty Co.

(2010) 182 Cal.App.4th 1538, 1565, which stated, without further elaboration or

citation, that the trial court in that case had ―properly excluded the amount of

Brandt fees in determining the compensatory damages award, since the Brandt

fees were awarded by the court after the jury had already returned its verdict on

the punitive damages.‖

The dissenting opinion, by contrast, took the view that the award of

punitive damages did not satisfy the state law requirements for such an award.

(See Civ. Code, § 3294, subd. (a).) Because the dissent would have struck the

punitive damages award in its entirety, it did not address whether the court

correctly excluded the Brandt fees from the calculation of the maximum

permissible award.

We granted review, limited to the following question: ―Is an award of

attorney fees under Brandt v. Superior Court (1985) 37 Cal.3d 813, properly

included as compensatory damages where the fees are awarded by the jury, but

excluded from compensatory damages when they are awarded by the trial court

after the jury has rendered its verdict?‖

II.

A.

In our judicial system, ―[a]lthough compensatory damages and punitive

damages are typically awarded at the same time by the same decisionmaker, they

serve distinct purposes. The former are intended to redress the concrete loss that

the plaintiff has suffered by reason of the defendant‘s wrongful conduct.

[Citations.] The latter . . . operate as ‗private fines‘ intended to punish the

6

defendant and to deter future wrongdoing.‖ (Cooper Industries, Inc. v.

Leatherman Tool Group, Inc. (2001) 532 U.S. 424, 432 (Cooper Industries).)

― ‗Punitive damages have long been a part of traditional state tort law‘ ‖

(Pacific Mutual Life Insurance Co. v. Haslip (1991) 499 U.S. 1, 15 (Haslip)), and

the states have ―broad discretion‖ with respect to their imposition (Cooper

Industries, supra, 532 U.S. at p. 433). But because a state‘s system for awarding

punitive damages may ―deprive a defendant of ‗fair notice . . . of the severity of

the penalty that a State may impose‘ ‖ and ―threaten ‗arbitrary punishments,‘ ‖ the

United States Supreme Court ―has found that the Constitution imposes certain

limits, in respect both to procedures for awarding punitive damages and to

amounts forbidden as ‗grossly excessive.‘ ‖ (Philip Morris USA v. Williams

(2007) 549 U.S. 346, 352–353 (Williams).)

The court has concluded that the due process clause of the Fourteenth

Amendment requires states to, among other things, provide for judicial review of

the size of a punitive damages award. Such review, the court has explained, ―has

been a safeguard against excessive verdicts for as long as punitive damages have

been awarded,‖ reflecting the view that a decision to ―punish a tortfeasor by means

of an exaction of exemplary damages . . . should not be committed to the

unreviewable discretion of a jury.‖ (Honda Motor Co. v. Oberg (1994) 512 U.S.

415, 421, 434–435 (Oberg).)

In a series of cases culminating in Gore, supra, 517 U.S. 559, the court

developed a set of substantive guideposts that reviewing courts must consider in

evaluating the size of punitive damages awards: ―(1) the degree of

reprehensibility of the defendant‘s misconduct; (2) the disparity between the actual

or potential harm suffered by the plaintiff and the punitive damages award; and

(3) the difference between the punitive damages awarded by the jury and the civil

penalties authorized or imposed in comparable cases.‖ (State Farm, supra, 538

7

U.S. at p. 418, citing Gore, at p. 575.) A trial court conducts this inquiry in the

first instance; its application of the factors is subject to de novo review on appeal.

(State Farm, at p. 418.)

Primarily at issue in this case is the second of the Gore guideposts, the

disparity between the actual or potential harm suffered by the plaintiff and the

punitive damages award. As the United States Supreme Court has explained,

―[t]he principle that exemplary damages must bear a ‗reasonable relationship‘ to

compensatory damages has a long pedigree.‖ (Gore, supra, 517 U.S. at p. 580.)

The court cited ―a long legislative history, dating back over 700 years and going

forward to today, providing for sanctions of double, treble, or quadruple damages

to deter and punish.‖ (State Farm, supra, 538 U.S. at p. 425, citing Gore, supra,

517 U.S. at p. 581.) Although it has declined to ―impose a bright-line ratio which

a punitive damages award cannot exceed,‖ the court, guided by this history, has

concluded that ―in practice, few awards exceeding a single-digit ratio between

punitive and compensatory damages, to a significant degree, will satisfy due

process.‖ (Id. at p. 425.) Following the high court‘s guidance, we have explained

that ―ratios between the punitive damages award and the plaintiff‘s actual or

potential compensatory damages significantly greater than 9 or 10 to 1 are suspect

and, absent special justification . . . , cannot survive appellate scrutiny under the

due process clause.‖ (Simon, supra, 35 Cal.4th at p. 1182.)

B.

The controversy between the parties in this case stems from a trial court‘s

postverdict award of Brandt fees to the prevailing plaintiff. In Brandt, we held

that when an insurance company withholds policy benefits in bad faith, attorney

fees reasonably incurred to compel payment of the benefits are recoverable as an

element of the plaintiff‘s damages. (Brandt, supra, 37 Cal.3d at p. 815.) We

8

explained that when an insurer breaches the implied covenant of good faith and

fair dealing by failing to compensate the insured for a loss covered by the policy,

― ‗the insurer is ―liable for any damages which are the proximate result of that

breach.‖ [Citation.]‘ [Citation.]‖ (Id. at p. 817.) ―When an insurer‘s tortious

conduct reasonably compels the insured to retain an attorney to obtain the benefits

due under a policy, it follows that the insurer should be liable in a tort action for

that expense. The attorney‘s fees are an economic loss — damages —

proximately caused by the tort.‖ (Ibid.) We distinguished the recovery of these

fees ―from recovery of attorney‘s fees qua attorney‘s fees, such as those

attributable to the bringing of the bad faith action itself,‖ explaining that such fees

―are recoverable as damages resulting from a tort in the same way that medical

fees would be part of the damages in a personal injury action.‖ (Ibid.)

Because ―the attorney‘s fees are recoverable as damages, the determination

of the recoverable fees must be made by the trier of fact unless the parties stipulate

otherwise.‖ (Brandt, supra, 37 Cal.3d at p. 819, citing Dinkins v. American

National Ins. Co. (1979) 92 Cal.App.3d 222, 234.) But we noted that ―[a]

stipulation for a postjudgment allocation and award by the trial court would

normally be preferable since the determination then would be made after

completion of the legal services [citation], and proof that otherwise would have

been presented to the jury could be simplified because of the court‘s expertise in

evaluating legal services.‖ (Brandt, supra, 37 Cal.3d at pp. 819–820.) Consistent

with that suggestion, the trial court in this case accepted the parties‘ pretrial

stipulation that if Nickerson were to succeed on his bad faith claim against

Stonebridge, the court would determine the amount of attorney fees to which

Nickerson was entitled under Brandt. After trial, the parties stipulated that the

amount of attorney fees to which Nickerson was entitled was $12,500, and the

court awarded that amount. The question is whether this amount may be included

9

in the calculation of the ratio of punitive damages to compensatory damages for

the purpose of determining whether, and by what amount, the jury‘s $19 million

punitive damages award exceeds constitutional limits.

III.

Nickerson argues, and Stonebridge does not dispute, that Brandt fees

ordinarily qualify as compensatory damages for purposes of applying the second

Gore guidepost. We agree. That conclusion follows from Brandt itself, which

held that such fees are recoverable precisely because they ―are an economic loss

— damages — proximately caused by the tort . . . in the same way that medical

fees would be part of the damages in a personal injury action.‖ (Brandt, supra, 37

Cal.3d at p. 817; see Major v. Western Home Ins. Co., supra, 169 Cal.App.4th at

p. 1224 [―[T]he amount of the jury‘s award of Brandt fees . . . may be properly

considered . . . in determining if the ratio of punitive damages to the tort damages

award is excessive.‖].)

Stonebridge counters, however, that when a trial court determines Brandt

fees after the jury has already rendered its punitive damages verdict, the fees may

not be considered in calculating the punitive-compensatory ratio. Stonebridge

reasons that the purpose of the three-factor analysis set out in Gore is to permit

courts to identify punitive damages awards that are tainted by irrational or

arbitrary jury decisionmaking, and ―[o]nly evidence that was presented to the jury

properly has a role in that inquiry.‖ Thus, Stonebridge submits, ―review of an

award of punitive damages must be based only on the evidence that was presented

to the jury‖ and must exclude the Brandt fees determined after the jury rendered

its verdict in this case.

To the extent Stonebridge is concerned about the jury‘s ability to render a

rational punitive damages verdict without having heard evidence of the Brandt

10

fees, the rule Stonebridge urges us to adopt seems a rather roundabout way of

getting at the problem. But although Stonebridge does raise a more direct

argument that the jury‘s verdict was invalid from the moment it was rendered

because the jury was unaware of a substantial component of the harm that plaintiff

had suffered, Stonebridge gives this argument little more than a passing nod. That

is presumably because Stonebridge itself invited this state of affairs when it

stipulated to a postverdict determination of Brandt fees and raised no objection to

the jury returning a punitive damages verdict in the absence of evidence about the

fees. Having thus consented to, or at least acquiesced in, this procedure,

Stonebridge has forfeited any argument that the procedure itself was legally

impermissible. Stonebridge is now left in the position of arguing that the

procedure nevertheless caused the jury to act irrationally, and that it is the duty of

the reviewing courts to suss out that irrationality in applying the second Gore

guidepost.

Whatever the merits of the underlying premise of the argument, the

argument fails because it misconceives the nature of the Gore inquiry. As noted,

the due process clause imposes both procedural and substantive limitations to curb

arbitrary punitive damages awards. (Williams, supra, 549 U.S. at pp. 352–353.)

Relevant procedural limitations include certain constraints on the jury‘s

decisionmaking process. For example, the jury must be adequately informed of

the nature and purposes of punitive damages in order to ―reasonably

accommodate[]‖ the defendant‘s ―interest in rational decisionmaking.‖ (Haslip,

supra, 499 U.S. at p. 20.) Stonebridge relies heavily on these and other similar

references to rational jury decisionmaking in arguing that application of the

second Gore guidepost must be limited to facts that were before the jury when it

rendered its verdict. (See, e.g., Adams v. Murakami (1991) 54 Cal.3d 105, 109,

114 [holding, as a matter of state law, that evidence of a defendant‘s financial

11

condition is a prerequisite to an award of punitive damages, and that such evidence

must appear in the record on appellate review, because, among other things,

―absent financial evidence, a jury will be encouraged (indeed, required) to

speculate as to a defendant‘s net worth in seeking to return a verdict that will

appropriately punish the defendant‖].)

But Gore is a fundamentally different type of safeguard. Although the

Gore inquiry, too, serves to prevent arbitrary punitive damages awards, it does not

perform this function by regulating the jury‘s decisionmaking process. The Gore

guideposts are framed neither as rules of trial procedure nor as model jury

instructions. Rather, recognizing that postverdict judicial review is an essential

step in a state‘s ultimate determination of the amount of a punitive damages award

(see Oberg, supra, 512 U.S. at pp. 434–435), Gore prescribes a set of rules for

reviewing courts to apply in order to ensure that the state ultimately does not

impose an award whose size exceeds constitutional limits (Gore, supra, 517 U.S.

at pp. 574-575).

Although the Gore guideposts overlap to some extent with questions juries

are generally asked to consider in fixing punitive damages awards, the question for

courts applying the guideposts is not whether the jury‘s ―verdict is unreasonable

based on the facts.‖ (Gober v. Ralphs Grocery Co. (2006) 137 Cal.App.4th 204,

214.) Rather, as in other contexts in which courts review civil and criminal

sanctions for constitutional excessiveness, courts applying the Gore guideposts

make an independent determination whether the amount of the award exceeds the

state‘s power to punish. (Ibid.; see Cooper Industries, supra, 532 U.S. at pp. 433–

440, citing cases.) Should a reviewing court conclude that the jury‘s punitive

damages award is excessive, the remedy is not to set the award aside — as the

court would if it determined that the jury‘s decisionmaking process was tainted by

bias or prejudice (see, e.g., Weathers v. Kaiser Foundation Hospitals (1971) 5

12

Cal.3d 98, 110) or by confusion about the question to be answered (see, e.g.,

Pease v. Beech Aircraft Corp. (1974) 38 Cal.App.3d 450, 465) — but to reduce

the award to constitutional limits (Simon, supra, 35 Cal.4th at p. 1187).

Because the Gore guideposts are designed to govern postverdict judicial

review of the amount of a jury‘s award, not the adequacy of the jury‘s deliberative

process, there is no apparent reason why a court applying the second guidepost

may not consider a postverdict compensatory damages award in its constitutional

calculus. Indeed, in Gore itself, the United States Supreme Court‘s application of

the guideposts touched on matters of which the jury could not have been aware

when it rendered its punitive damages verdict. (See Gore, supra, 517 U.S. at

p. 579, fn. 31 [noting the defendant‘s postverdict conduct in evaluating the

reprehensibility of the defendant‘s actions under the first guidepost].) And as

Stonebridge itself conceded in its brief, the third guidepost, concerning available

sanctions for comparable misconduct, is by its nature a question aimed at

reviewing courts, rather than juries. (See Cooper Industries, supra, 532 U.S. at

p. 440 [the third guidepost ―calls for a broad legal comparison‖ suited to the

expertise of appellate courts]; cf. Gore, supra, 517 U.S. at pp. 583–584 [reviewing

the civil penalties available under the consumer protection laws of several states

before concluding that the punitive damages award at issue was ―substantially

greater than the statutory fines available in Alabama and elsewhere for similar

malfeasance‖].) That concession critically undermines the notion that Gore‘s

purpose is to suss out jury irrationality by limiting judicial review to matters

presented to, and considered by, the jury.

It is true, as Stonebridge notes, that the comparison between compensatory

and punitive damages requires evidence of those damages, whereas the legal

comparison required under the third guidepost is not ―an evidentiary matter.‖ It is

also true, as Stonebridge notes, that appellate courts applying the Gore guideposts

13

must defer to evidentiary findings made by the trier of fact. (See Cooper

Industries, supra, 532 U.S. at p. 440, fn. 14.) Indeed, appellate courts performing

any appellate function must defer to evidentiary findings made by the trier of fact;

such is the nature of appellate review. (See, e.g., People v. Cromer (2001) 24

Cal.4th 889, 893–894.) But it does not follow, as Stonebridge appears to reason,

that Gore limits an appellate court to considering facts considered by juries in

applying the second guidepost. Indeed, as Stonebridge acknowledges, our

decision in Simon, supra, 35 Cal.4th at page 1173, recognized that a reviewing

court applying the second Gore guidepost may consider not only the

compensatory damages actually awarded by the jury, but also the ―potential harm‖

suffered by the plaintiff, even though the jury was never asked to consider

potential harm in rendering its verdict. It may be true, as Stonebridge says, that a

reviewing court‘s consideration of potential harm will ordinarily be based on

evidence presented to the jury at trial. But it is not clear why judicial review

should be more constrained where, as here, the parties have agreed to submit an

element of the plaintiff‘s harm to the trial court for resolution. An appellate court

that takes the resulting trial court determination into account does not transgress

the normal appellate role; rather, it properly defers to findings made by the trier of

fact designated by the parties to resolve the issue.

We acknowledge Stonebridge‘s concerns about the effect of the jury‘s

ignorance of the Brandt fees on the course of the punitive damages proceedings.

Of course, had the jury heard evidence that Nickerson suffered even more harm

14

than it had previously thought, the jury might well have decided to punish

Stonebridge even more harshly. On the other hand, as Stonebridge says,

presentation of evidence concerning the Brandt fees could have enabled counsel to

argue that the Brandt fees, too, would have a deterrent effect on future

misconduct, and to make a pitch to reduce the punitive damages award

accordingly. In the end, this is the bargain Stonebridge made when it stipulated to

posttrial determination of the Brandt fees, then raised no objection to submitting

the punitive damages issue to the jury in the absence of evidence relating to the

fees. Stonebridge cannot now attempt to leverage that bargain into a truncated

application of the Gore guideposts.

In sum, we find no reason to exclude the amount of Brandt fees from the

constitutional calculus merely because they were determined, pursuant to the

parties‘ stipulation, by the trial court after the jury rendered its punitive damages

verdict. On the contrary, to exclude the fees from consideration would mean

overlooking a substantial and mutually acknowledged component of the insured‘s

harm. The effect would be to skew the proper calculation of the punitive-

compensatory ratio, and thus to impair reviewing courts‘ full consideration of

whether, and to what extent, the punitive damages award exceeds constitutional

bounds.2

2 The decision in Amerigraphics, Inc. v. Mercury Casualty Co. (2010) 182

Cal.App.4th 1538, is disapproved to the extent it is inconsistent with this holding.

15

IV.

The judgment of the Court of Appeal is reversed and the matter is

remanded to the Court of Appeal for further proceedings consistent with this

decision.

KRUGER, J.

WE CONCUR:

CANTIL-SAKAUYE, C. J.

WERDEGAR, J.

CHIN, J.

CORRIGAN, J.

LIU, J.

CUÉLLAR, J.

16

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Nickerson v. Stonebridge Life Insurance Company

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding

Review Granted XXX 219 Cal.App.4th 188

Rehearing Granted

__________________________________________________________________________________

Opinion No. S213873

Date Filed: June 9, 2016

__________________________________________________________________________________

Court: Superior

County: Los Angeles

Judge: Mary Ann Murphy

__________________________________________________________________________________

Counsel:

Shernoff Bidart Echeverria Bentley, William M. Shernoff, Howard S. Shernoff, Travis M. Corby; The

Ehrlich Law Firm and Jeffrey Isaac Ehrlich for Plaintiff and Appellant.

The Arkin Law Firm, Sharon J. Arkin; Amy Bach; Knapp & Roberts and David L. Abney for United

Policyholders as Amicus Curiae on behalf of Plaintiff and Appellant.

Baute Crochetiere & Wang, Lee Tran Liang & Wang, David P. Crochetiere, Henry C. Wang; Reed Smith,

Margaret M. Grignon and Zareh A. Jaltorossian for Defendant and Respondent.

Shook, Hardy & Bacon, Mark A. Behrens, Christopher E. Appel and Kevin Underhill for American Tort

Reform Association, National Association of Mutual Insurance Companies and Property Casualty Insurers

Association of America as Amici Curiae on behalf of Defendant and Respondent.

Mayer Brown and Donald M. Falk for The Chamber of Commerce of the United States of America as

Amicus Curiae on behalf of Defendant and Respondent.

Fred J. Hiestand for The Civil Justice Association of California as Amicus Curiae on behalf of Defendant

and Respondent.

Counsel who argued in Supreme Court (not intended for publication with opinion):

Jeffrey Isaac Ehrlich

The Ehrlich Law Firm

16130 Ventura Boulevard, Suite 610

Encino, CA 91436

(818) 905-3970

Margaret M. Grignon

Reed Smith

355 South Grand Avenue, Suite 2900

Los Angeles, CA 90071-1514

(213) 457-8000