Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_17-cv-00489/USCOURTS-cand-5_17-cv-00489-5/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Breach of Contract

---

Case No.: 5:17-cv-00489-EJD

ORDER DENYING DEFENDANT’S RENEWED MOTION FOR JUDGMENT AS A MATTER 

OF LAW, OR IN THE ALTERNATIVE, A LIMITED NEW TRIAL OR REMITTITUR

1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

YAHOO! INC.,

Plaintiff,

v.

NATIONAL UNION FIRE INSURANCE 

COMPANY OF PITTSBURGH, PA,

Defendant.

Case No. 5:17-cv-00489-EJD 

ORDER DENYING DEFENDANT’S 

RENEWED MOTION FOR 

JUDGMENT AS A MATTER OF LAW, 

OR IN THE ALTERNATIVE, A 

LIMITED NEW TRIAL OR 

REMITTITUR

Re: Dkt. No. 191

I. INTRODUCTION

Defendant National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) 

renews it motion for judgment as a matter of law on Plaintiff Yahoo! Inc.’s (“Yahoo”) bad faith

claim and on Yahoo’s claim for attorney fees under Brandt v. Superior Court, 37 Cal.3d 813, 817 

(1985). In the alternative, National Union requests a limited new trial on Brandt fees or remittitur 

of the jury’s $618,380.00 award. For the reasons set forth below, National Union’s motion will be 

denied.

II. STANDARDS

Federal Rule of Civil Procedure 50(b) authorizes any party to renew a Rule 50(a) motion 

after trial and include an alternative or joint request for a new trial under Rule 59. In ruling on a 

renewed motion, the court may: (1) allow the judgment on the verdict; (2) order a new trial; or 

(3) direct entry of judgment as a matter of law. Fed.R.Civ.P. 50(b). A motion under Rule 50(b) 

should be granted if the evidence permits only one reasonable conclusion and it is contrary to the 

Case 5:17-cv-00489-EJD Document 198 Filed 11/25/19 Page 1 of 4
Case No.: 5:17-cv-00489-EJD

ORDER DENYING DEFENDANT’S RENEWED MOTION FOR JUDGMENT AS A MATTER 

OF LAW, OR IN THE ALTERNATIVE, A LIMITED NEW TRIAL OR REMITTITUR

2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

jury’s verdict. Gilbrook v. City of Westminster, 177 F.3d 839, 864 (9th Cir. 1999). “A jury’s verdict 

must be upheld if it is supported by substantial evidence, which is evidence adequate to support the 

jury’s conclusion, even if it is also possible to draw a contrary conclusion.” Harper v. City of Los 

Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008) (quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 

2002)). “In making this determination, the court must not weigh the evidence, but should simply ask 

whether the plaintiff has presented sufficient evidence to support the jury’s conclusion. Id. (citing 

Johnson v. Paradise Valley Unified Sch. Dist., 251 F.3d 1222, 1227–28 (9th Cir. 2001)). 

On a motion for new trial, the Court has the power to determine that the verdict is “against the 

weight of the evidence” and the duty to grant a new trial if it so finds. S. Pac. Co. v. Guthrie, 186 F.2d 

926, 932-33 & nn.10-11 (9th Cir. 1951). The Court also has the power to grant a motion for new trial 

or remittitur if the damages are excessive. Fenner v. Dependable Trucking Co., 716 F.2d 598, 603 

(9th Cir. 1983). “When the court, after viewing the evidence concerning damages in a light most 

favorable to the prevailing party, determines that the damages award is excessive, it has two 

alternatives. It may grant defendant’s motion for a new trial or deny the motion conditional upon the 

prevailing party accepting a remittitur.” Id. 

III. DISCUSSION

A. Bad Faith

“To breach the implied obligation of good faith and fair dealing, an insurance company 

must unreasonably act or fail to act in a manner that deprives the insured of the benefits of the 

policy. To act unreasonably is not a mere failure to exercise reasonable care. It means that the 

insurer must act or fail to act without proper cause. However, it is not necessary for the insurer to 

intend to deprive the insured of the benefits of the policy.” CACI No. 2330.

In the context of National Union’s original motion for judgment as a matter of law, the 

Court reviewed the evidence and concluded there was a legally sufficient evidentiary basis for a 

jury to find that National Union acted in bad faith. National Union has not presented any new 

evidence or new argument since then. Instead, National Union continues to assert that its 

Case 5:17-cv-00489-EJD Document 198 Filed 11/25/19 Page 2 of 4
Case No.: 5:17-cv-00489-EJD

ORDER DENYING DEFENDANT’S RENEWED MOTION FOR JUDGMENT AS A MATTER 

OF LAW, OR IN THE ALTERNATIVE, A LIMITED NEW TRIAL OR REMITTITUR

3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

coverage decisions, if wrong, demonstrate nothing more than negligence or an honest mistake. It 

was well within the province of the jury to reject National Union’s explanation for its conduct. 

The Court explicitly instructed the jury in this case that “[a] finding of a breach of the covenant of 

good faith and fair dealing cannot be based upon an honest mistake or negligence.” Jury 

Instructions at 20:14-15. The jury thus considered but ultimately rejected the notion that National 

Union made an honest mistake or was negligent. There is substantial evidence in the record to 

support the jury’s verdict. 

B. Proof of Bad Faith Damages

National Union contends that Yahoo has failed to meet its burden to show the amount of 

fees it incurred to establish its right to the contract benefits it recovered through this litigation. 

National Union argues, as it did before, that Mr. Tepstein did not perform a Brandt fee allocation 

and lacked the knowledge, expertise or experience to do so. National Union also argues that Mr. 

Tepstein was unable to explain the redactions that were made to invoices. National Union further 

contends that some of the invoice entries (a) describe tasks that do not qualify for fees under 

Brandt or (b) are a mixture of tasks that are qualified and not qualified for fees under Brandt. 

National Union also contends that the jury’s award is excessive and that the maximum amount of 

Brandt fees Yahoo can recover is $9,500, the amount counsel charged Yahoo to write a letter 

requesting reconsideration of National Union’s denial of coverage.

The court finds that Yahoo presented a legally sufficient evidentiary basis for its claimed 

Brandt fees. Yahoo’s fee invoices, Exhibit 512, were admitted into evidence without objection. 

See May 1, 2019, Tr. at 301:18-19. Mr. Tepstein, Yahoo’s in-house attorney, testified that he was 

responsible for managing Yahoo’s litigation, both offensively and defensively. Id. at 228:8-10. 

He testified that he was familiar with the services that outside counsel provided and it was his 

understanding the invoices were for the Brandt fees Yahoo was claiming in the case. Id. at 

334:15-17, 404:23-405:1. He also testified that he had an understanding of the Brandt decision 

and what was recoverable as Brandt fees. Id. at 403:4-8. He testified that he understood that the 

Case 5:17-cv-00489-EJD Document 198 Filed 11/25/19 Page 3 of 4
Case No.: 5:17-cv-00489-EJD

ORDER DENYING DEFENDANT’S RENEWED MOTION FOR JUDGMENT AS A MATTER 

OF LAW, OR IN THE ALTERNATIVE, A LIMITED NEW TRIAL OR REMITTITUR

4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

redacted portions of the invoices were for amounts or activities that Yahoo did not think were 

appropriately subject to a damage claim. Id. at 299:20-22. Mr. Tepstein further confirmed that he 

paid the invoices Yahoo presented as evidence. Id. at 301:12-301:14. The evidence summarized 

above is largely uncontroverted. At trial, National Union chose not to cross-examine Mr. Tepstein 

about the reasonableness or accuracy of the figures in Exhibit 512. National Union did not 

challenge any invoice entries as unwarranted or excessive. National Union cannot now contend 

for the first time that Yahoo is entitled to only $9,500 because National Union did not assert this 

argument in its Rule 50(a) motion. E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th 

Cir. 2009) (“a proper post-verdict Rule 50(b) motion is limited to the grounds asserted in the predeliberation Rule 50(a) motion.”).

IV. CONCLUSION

For the reasons set forth above, Defendant’s motion is DENIED.

IT IS SO ORDERED.

Dated: November 25, 2019

______________________________________

EDWARD J. DAVILA

United States District Judge

Case 5:17-cv-00489-EJD Document 198 Filed 11/25/19 Page 4 of 4