Leeper-Johnson v. Prudential Ins. Co. of America

Full title: DARLA LEEPER-JOHNSON, Plaintiff and Respondent, v. THE PRUDENTIAL…

Court: California Court of Appeals, Fourth District, First Division

Date published: May 13, 2009

No. D051166 (Cal. Ct. App. May. 13, 2009)

Opinion

DARLA LEEPER-JOHNSON, Plaintiff and Respondent, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant and Appellant, D051166 California Court of Appeal, Fourth District, First Division May 13, 2009

NOT TO BE PUBLISHED

APPEAL from a judgment and orders of the Superior Court of San Diego County No. GIE18815, Eddie C. Sturgeon, Judge.

McINTYRE, J.

The Prudential Insurance Company of America (Prudential) appeals from a judgment of more than $15 million and orders denying its motions for new trial and for judgment notwithstanding the verdict (JNOV) after a jury found in favor of Darla Leeper-Johnson (Darla) on her action against it for breach of contract and insurance bad faith. Prudential contends there is insufficient evidence to support the breach of contract and bad faith verdicts and the awards for noneconomic, past economic and punitive damages. Prudential also contends that the noneconomic and punitive damages awards were excessive, that Darla was not entitled to any damages after she refused to attend an independent medical examination (IME) and that the trial court erred in excluding certain evidence and instructing the jury. Finally, it contends the trial court abused its discretion in awarding Darla her attorney fees.

We conclude no evidence supports the award for past economic damages and reverse that part of the judgment. We also conclude that the trial court abused its discretion in awarding Darla her attorney fees and reverse that order. We reject Prudential's remaining challenges, affirm the balance of the judgment and remand the matter for further proceedings in accordance with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Policy Terms

Darla enrolled in a group disability insurance policy (the policy) issued by Prudential through her employer, the University of California in San Francisco (the University). The policy stated that coverage existed for the first year of disability when the insured was not working, under continuous doctor's care and "completely unable to perform any and every duty pertaining to [her] current occupation." When filing a claim, the policy specified that it was the covered employee's "responsibility to give Prudential the required objective medical evidenceto verify [her] continuous total disability" and "provide vocational and other information necessary for the evaluation of [her] claim for disability benefits." (Italics added.) The policy further specified that the employee "cannot receive benefits without providing this information."

The policy paid 70 percent of an insured's predisability income during the first year of benefits and 50 percent of an insured's predisability income thereafter. After the first year of benefits, an insured could continue receiving benefits if she was not working, under continuous doctor's care and "completely unable to perform the material and substantial duties of any occupation for which [she was] reasonably fittedby [her] education, training or experience." The policy limited benefits to 24 months if the total disability was "caused at least in part by a mental, psychoneurotic or personality disorder or substance abuse" (the mental condition limitation); otherwise, benefits were payable until the age of 65 or until the claimant "fail[ed] to meet any requirement for benefits."

B. Evidence Regarding Darla

Darla obtained a Bachelor of Science degree in business and management in the late 1980's. In 1989, she married Greg Johnson and managed the architectural division at Loma Linda University until 1991. Until Darla became pregnant with her daughter Paige, she jogged three or four miles in the morning, started work around 7:00 a.m. and returned home around 7:00 p.m.

In 1992, Darla accepted a job as a project manager at the University managing large remodeling projects. Her duties included going to and conducting meetings, reviewing and revising budgets, reviewing change orders and bid documents and hiring architects and engineers. She did job site walks, drove or shuttled to different campuses, met with individuals in their offices and traveled to Sacramento. Although every day was different, Darla typically started her day at 7:00 a.m. by sitting at her desk to make telephone calls and get organized. She would then attend scheduled meetings and deal with any emergencies, including rushing to job sites. She spent two to three hours a day in front of her computer, although it was unusual for her to spend more than one hour uninterrupted there.

After about a year, the University promoted Darla to lead project manager for her department. In addition to her prior job duties, she attended more meetings and provided assistance to the other project managers. Her salary increased to $75,000 per year and she worked from about 6:30 a.m. to 8:00 p.m. Although her days were long and stressful, she "loved" her job and often did not want to quit at the end of the day.

In 1991, Darla started experiencing pain, extreme fatigue and sensitive skin and had some gastrointestinal problems. Her work required her to do a lot of walking and her feet were extremely painful, her hips hurt sitting in meetings and getting in and out of vehicles, her neck and shoulders would seize and her hands cramped easily. She began cancelling meetings, and "just completely los[t] track of what [she] was trying to do and los[t] the ability to just clearly process what had been so simple before." She could not focus, her brain would "blank out" despite written agendas and she felt so fatigued that she would not answer the telephone because she lacked the energy to answer or deal with the caller. Despite the medications she took, her condition fluctuated and her co-workers confronted her in spring of 1995 about her illness. Ultimately, her boss, Tim Mahaney, told her that she needed to take disability leave. Darla has never gotten her focus back.

Shortly after Mahaney told her to do so, Darla went out on disability and in May 1995, she submitted a claim to Prudential for disability benefits under the policy. Darla listed her illness as lupus because her primary care physician at the time, Dr. Aileen Dillon, believed Darla was suffering from a lupus flare-up. Lupus is an illness of unknown origin where the body's immune system attacks itself. Dr. Dillon listed tender joints and muscles under "objective findings" and stated it was too early to say when Darla could return to work. At the time, Darla took a number of medications and saw Dr. Dillon every six to eight weeks. In July 1995, Prudential approved Darla's claim for benefits and indicated that she was entitled to 70 percent of her predisability income under the terms of the policy.

Dr. Suzanne Rizkalla, an internal medicine specialist with no training in rheumatology, started treating Darla in 1997. In June 2001, Darla started treating with Dr. Keith Colburn, a rheumatologist.

C. Evidence Regarding Darla's Illnesses and Functioning

Dr. Colburn knew Darla when she worked at Loma Linda and did not recall her being ill or unable to perform her job functions. He testified that in 2001, Darla was actively suffering with fibromyalgia, chronic fatigue syndrome and coxodynia – an osteoarthritis problem in the tailbone causing pain when sitting.

Fibromyalgia is a condition characterized by whole body pain lasting longer than three months and sensitivity to a defined amount of pressure in at least 11 of 18 identified "tender points." Darla's average score for a tender point examination was in the "teens." Fibromyalgia patients, including Darla, typically have good and bad days that are unpredictable. Depression, mental fogginess or some memory problems are typically associated with the illnesses that Darla suffered. As of January 2001, Dr. Colburn opined that Darla, as with most fibromyalgia patients, would have the disease "indefinitely."

Dr. Colburn defined chronic fatigue syndrome as a condition that causes a person to feel incapacitating fatigue for more than six months and while some patients never get over the disease, the average patient has it for 6-12 years. He explained there were no tests to diagnose chronic fatigue syndrome and that it was diagnosed based on the patient's history, such as problems doing and remembering things. Patients with chronic fatigue syndrome in addition to fibromyalgia experience even more difficulty doing the activities of daily living and suffer from a type of pain that gets worse over time and is difficult to treat.

In June 2000, before Darla was involved in or contemplating litigation, Dr. Colburn had her answer an "HAQ score" test asking about what activities she could perform. Dr. Colburn wrote an article on using the HAQ score in comparison to blood tests on patients with rheumatoid arthritis and found that the HAQ score was as reliable, if not better, than a blood test as an indicator of that condition. He considered the HAQ score to be relatively objective because most patients have no conflict in stating how they feel as they are not looking to end up in court. Dr. Colburn also reviewed the consistency of patient reports and noted that during the last six months of 2000, Darla's symptoms of fibromyalgia included total body pain, tender points, lack of deep sleep, waking frequently, mild memory deficits and an inability to do the activities of daily living, including cleaning house or shopping.

Mahaney testified that Darla was an "exceptional employee" and that it "appear[ed] she liked her job" and "enjoy[ed] the challenges on a day-to-day basis." He recommended that Darla take disability leave because it was obvious to him that she was fatigued, in significant pain and distracted by the discomfort. Deborah Jo Whitaker, one of Darla's best friends who worked with Darla at Loma Linda University when Darla had a secretarial job there, indicated that she went on all-day shopping trips with Darla and described Darla as having more energy than she did. Whitaker interacted with Darla after Darla became ill, stated that Darla's fatigue was completely out of character and that she never got the sense that Darla was faking or exaggerating her fatigue. Whitaker has worked as a secretary for 30 years and did not believe Darla could work as a secretary because of Darla's current lack of energy.

Greg testified that in January 2001, he would get Paige up in the morning and that Darla would still be in bed when he left with Paige. If Darla had a medical appointment, Greg would call home as often as five times until Darla finally picked up the telephone to make sure she made the appointment. Greg testified that if the family went on a trip, Darla paid a price for overextending herself. In most cases she would not get out of bed the following day and was too tired to cook. He stated that Darla would have about one good day a week, but on a typical day she could undertake some activity such as reading, paying bills or weeding for about three hours, but would then need to lay down. Paige confirmed that Darla would be sleeping when she left for school and would sometimes still be in bed when she returned from school.

D. Evidence Regarding Interpretation of the Policy

The policy specified that Darla was required to give Prudential "objective medical evidence"to verify her continuous total disability, including vocational and other information necessary to evaluate her claim and stated that she could not receive benefits without providing this information. Although the policy did not define the term "objective medical evidence," Michael Dalessio, a Prudential claims handler, testified that the term meant medical evidence, including X-rays, blood tests, MRIs, physical exam findings and direct and indirect observations. He stated that, in some cases, a physician statement would be sufficient to support a claim. Dalessio clarified that the language in the policy requiring objective medical evidence was not an exclusion, that the policy did not exclude claims based on self-reported symptoms and that nothing in the policy definition of total disability specifically prohibited claims with self-reported symptoms. Rather, it was the claimant's responsibility to provide objective medical evidence and Prudential would then look at all of the evidence -- subjective and objective -- to determine if everything was consistent with the diagnosis.

John Barilla, the head of Prudential's disability claims operations when Prudential terminated Darla's benefits, similarly testified that the term "objective medical evidence" included: any tests that were done such as X-rays or blood tests; what treating physicians documented or observed; how often a claimant visited a physician; the type of physician visited; and the medications taken. Barilla stated that, to his knowledge, a claimant did not have "to have objective medical evidence in order to be considered disabled" and that Prudential "always factored in" any information given about the claim, such as discussions with the claimant or employer, to determine whether claimants could function in their job requirements. He stated that it would be contrary to Prudential policy if Prudential claim managers or disability consultants denied disability claims based solely on the lack of objective medical evidence. Barilla was not familiar with any cases or claims that Prudential denied for lack of objective medical evidence. Dr. MacBride defined "impairment" as the medical loss of function and stated that it is challenging to evaluate impairment where the "primary presentation is a symptom-based report of either fatigue or of generalized achiness or both." He also stated that when evaluating disability claims, there might not be clear medical evidence and a claims handler might need to look for "surrogates of impairment," such as the activity level of the claimant, what kinds of activity the claimant can perform, the claimant's lifestyle and how the claimant is able to conduct other activities of daily living, as well as reports by doctors, friends, family and others.

E. Procedural Background

After Prudential initially approved Darla's claim, she periodically provided additional information about her condition to Prudential as requested. These updates included comprehensive claimant statements from her and attending physician statements from her treating physician at the time. In early 2000, Prudential transferred Darla's claim to its New Jersey office, obtained a comprehensive claimant statement from her and referred her records to Dr. Gwen Brachman for review. Prudential's disability consultant noticed that Darla had listed horseback riding as one of her activities; specifically, Darla stated that she rode occasionally with a trainer to strengthen her muscles and lessen joint pain. Prudential's claims handler at the time noted that horseback riding appeared inconsistent with Darla's reported limitations and could indicate an ability to perform sedentary work.

Based on the medical documentation that Darla provided and an IME performed by Dr. Jonathan Greenberger, an occupational medicine physician, Prudential concluded that Darla could perform a sedentary job with reasonable accommodations and that she did not suffer from an impairment that would prevent her from returning to her previous occupation. Prudential terminated Darla's coverage effective June 2001, informed her of the right to appeal the decision and told her that her appeal could include additional evidence.

About 18 months later, Darla, through an attorney, filed an internal appeal of Prudential's decision and submitted copies of her medical records, a detailed declaration, a letter from Dr. Rizkalla and a report from Dr. Colburn. Prudential denied the appeal in October 2002, stating that Darla was not impaired from performing her job and, in any event, she had exhausted her benefits under the mental condition limitation. Darla filed a second internal appeal in April 2003. Thereafter, Prudential scheduled an IME with a rheumatologist, Dr. Jeff Sarkozi, but Darla refused to attend the IME. Dr. Sarkozi later reviewed Darla's medical records and concluded there was no objective evidence of a physical disability that prevented her from working. Prudential again noted that Darla had exhausted her benefits under the mental condition limitation and denied her appeal.

Darla filed this action alleging breach of contract and insurance bad faith and the trial court later bifurcated the trial against Prudential on the punitive damages issue. At the end of the first phase, the jury rendered a verdict in Darla's favor on both causes of action and awarded her $267,082 in unpaid disability benefits, $400,000 for the future value of her policy, $315,000 for "past economic loss" and $500,000 for past emotional distress. The jury also concluded that Prudential acted with "malice, oppression or fraud" and during the second phase awarded Darla $14 million in punitive damages. The trial court denied Prudential's motion for JNOV and motion for new trial based on alleged insufficiency of the evidence, irregularities in the proceedings, juror misconduct and excessive compensatory damages. The court, however, conditionally granted a new trial as to punitive damages unless Darla accepted a punitive damages award of $4 million. After Darla declined to accept a remittitur of the punitive damages award, the trial court ordered a new trial on punitive damages. Thereafter, it awarded Darla her costs and $548,408.84 in attorney fees. Prudential timely appealed from the judgment and the posttrial orders.

DISCUSSION

I. Exclusion of Evidence Regarding Mental Condition Limitation

A. Facts

The trial court conducted an Evidence Code section 402 admissibility hearing (the 402 hearing) to determine whether Dr. Sarkozi, a specialist in internal medicine and rheumatology, was qualified to opine that Darla's depression caused her physical symptoms. Dr. Sarkozi was not a psychiatrist or a psychologist and had no advanced training or experience in these fields; however, he had clinical experience and could help patients with psychiatric issues or refer them to appropriate psychologists or psychiatrists.

At the hearing, Dr. Sarkozi, testified that Prudential retained him to review Darla's medical records and analyze her condition throughout the time frame of the records. His review of the medical records revealed that Darla was diagnosed with depression, that she was prescribed antidepressants and received counseling and that the symptoms she presented (such as fatigue, cognitive impairment, sleep disturbances) were typical for a person suffering from depression. He also testified that it was important to assess in people diagnosed with fibromyalgia or chronic fatigue syndrome for a psychological disorder such as depression because the symptoms for these conditions overlap.

Based on this testimony, the trial court ruled that Dr. Sarkozi could testify that Darla suffered from depression, as he stated in his report, but could not opine that the depression caused her restrictions or limitations. After Darla's counsel argued that Dr. Sarkozi's written report contained that conclusion, the trial court ordered that the report be redacted as appropriate.

Thereafter, Dr. Sarkozi testified, among other things, that widespread pain and tenderness does not mean a person has fibromyalgia and that although Darla reported fatigue, there was no objective way to determine whether there was a psychological correlation to her fatigue. He noted that there was no reference to any testing or mental status exams in Darla's medical records evaluating her cognitive impairment and there was no testing of Darla's muscular strength. He concluded that Darla did not have fibromyalgia because there was insufficient evidence in the record to make that diagnosis and, in any event, fibromyalgia was not disabling.

B. Analysis

Individuals are qualified to testify as experts if they have "special knowledge, skill, experience, training, or education" sufficient to qualify as an expert on the subject to which their testimony relates. (Evid. Code, § 720, subd. (a).) A witness need not have a professional degree, formal education or training, or experience in a particular field to qualify as an expert, as long as she has special knowledge or skill sufficient to render an opinion that would assist the trier of fact. (Mann v. Cracchiolo (1985) 38 Cal.3d 18, 37-38; see Evid. Code, §§ 720, subd. (a), 801, subd. (a).) An expert's opinion, however, must be accompanied by a reasoned explanation connecting the factual predicates to the ultimate conclusion because "'an expert opinion is worth no more than the reasons upon which it rests.' [Citation.]" (Jennings v. Palomar Pomerado Health Systems, Inc. (2003) 114 Cal.App.4th 1108, 1117 (Jennings).) A trial court has discretion to exclude expert testimony in whole or in part if there is an insufficient factual foundation for the expert's opinion (Evid. Code, § 803) and "[a]bsent a manifest abuse, the court's determination will not be disturbed on appeal" (People v. Ramos (1997) 15 Cal.4th 1133, 1175).

Prudential contends the trial court erred by precluding evidence from Dr. Sarkozi that any functional limitations Darla may have been experiencing were caused, at least in part, by a mental or psychoneurotic condition. We find no abuse of discretion.

The testimony elicited at the 402 hearing does not provide a foundation for Dr. Sarkozi's conclusion that Darla's total disability was caused in part by a mental disorder. Dr. Sarkozi had no specialized knowledge, training or experience in how depression causes disability. Dr. Sarkozi never treated Darla, failed to explain what facts he relied upon to reach this conclusion and cited no studies or other materials of a type that reasonably might be relied upon by a medical expert to reach such a conclusion. Dr. Sarkozi provided no reasoned explanation as to how he used his superior knowledge and training to reach his opinion; thus, there was no way for the lay jury to understand or evaluate the reasoning behind Dr. Sarkozi's opinion that Darla's depression caused her functional limitations. Under these circumstances, we find no abuse of discretion in the court's exclusion of his testimony on this topic because it lacked foundation.

Accordingly, the trial court did not abuse its discretion when it excluded those portions of Dr. Sarkozi's written report concluding that Darla's mental condition partially caused her functional limitations.

II. Alleged Instructional Error

A. Legal Principles and Standard of Review

A party is entitled, upon request, to have the court give nonargumentative, correct instructions on every theory of the case that is supported by substantial evidence. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 572 (Soule).) "Instructions should state rules of law in general terms and should not be calculated to amount to an argument to the jury in the guise of a statement of law. [Citations.] Moreover, it is error to give, and proper to refuse, instructions that unduly overemphasize issues, theories or defenses either by repetition or singling them out or making them unduly prominent although the instruction may be a [correct] legal proposition. [Citations.]" (Fibreboard Paper Products Corp. v. East Bay Union of Machinists (1964) 227 Cal.App.2d 675, 718.)

Instructional error in a civil case is not grounds for reversal unless it is probable the error prejudicially affected the verdict such that a result more favorable to the appealing party would have resulted. (Cal. Const., art. VI, § 13; Soule, supra, 8 Cal.4th at p. 580.)

We assess whether actual prejudice occurred in the context of the individual trial record, evaluating "(1) the state of the evidence, (2) the effect of other instructions, (3) the effect of counsel's arguments, and (4) any indications by the jury itself that it was misled." (Soule, supra, at pp. 580-581, fn. omitted.)

B. Objective Medical Evidence Requirement and Mental Condition Limitation

1. Facts

Prudential asked the trial court to instruct the jury that Darla was required to provide Prudential with objective medical evidence to prove her continued total disability and include a question on the verdict form asking the jury to determine whether Darla "provide[d] Prudential with objective medical evidence to verify her continued 'total disability'" as a condition to any finding that Prudential breached the contract. Prudential also asked the trial court to instruct the jury that the policy provided that benefits shall only be paid for 24 months for a total disability that "was caused at least in part by a mental, psychoneurotic or personality disorder" and to include a question on the verdict form asking the jury to determine this issue and to stop and sign the form if it answered "yes." The trial court refused to either instruct the jury or include a verdict question on these topics and instead told counsel to argue the matters to the jury.

During closing argument, Prudential argued there was no objective medical evidence upon which it could continue to pay benefits beyond June 2001, emphasizing the testimony of Darla's treating physicians. Darla cited Barilla's testimony that the lack of objective evidence would not be sufficient to terminate her claim and argued that the evidence showed she was disabled. Both counsel also argued the mental condition limitation, with Prudential noting that it mentioned the limitation in its termination letters, that the limitation applied and nothing more was due under the policy. Darla argued that Prudential failed to prove that the limitation applied and her medical records supported the conclusion that her depression was one of the symptoms of fibromyalgia.

Thereafter, the trial court generally instructed the jury that Darla "must prove that she was totally disabled at the time her benefits were terminated" and that, if Darla did not prove she was totally disabled at the time her benefits were terminated, then Prudential "was not required to continue paying benefits." (CACI No. 322.) The trial court also instructed the jury on the "essential factual elements" Darla needed to prove to establish her breach of contract claim, including that she was totally disabled on January 26, 2001, when Prudential terminated her benefits by a loss covered under Prudential's policy and that Prudential was notified of the loss. (CACI No. 2300.)

2. Analysis

Prudential contends the trial court committed reversible error by refusing to instruct the jury on the objective medical evidence requirement and the mental condition limitation and by failing to include these topics in the breach of contract verdict form. We conclude that the trial court did not err in refusing the proffered instructions or verdict form questions.

First, Prudential failed to demonstrate that the evidence admitted at trial actually supported the instruction regarding the mental health limitation. As noted above, the trial court properly refused to allow Dr. Sarkozi's testimony that Darla's depression caused her functional impairments and redacted this conclusion from Dr. Sarkozi's report. (See part I.A, supra.) The trial court also sustained defense counsel's lack of foundation objections to questions posed to Drs. Colburn and Rizkalla regarding whether the illnesses Darla suffered or limitations caused by fibromyalgia affect a patient's ability to work. Accordingly, the trial court properly refused the instruction on the mental health limitation since there was no evidence to support it. (Soule, supra, 8 Cal.4th at p. 572.)

As to the objective medical evidence requirement, Prudential's proposed jury instruction suggested that such evidence was a condition for payment of benefits under the policy and the proposed verdict form question would have made the lack of such evidence a complete defense by having the jury sign and date the form if it found that Darla failed to provide objective medical evidence to verify her continued disability. However, there was a direct conflict in the evidence on whether such evidence was a prerequisite to the payment of policy benefits. Prudential presented evidence supporting its factual contention that Darla's subjective complaints to her treating physicians did not satisfy the objective medical evidence requirement in the policy, but Darla elicited evidence from Prudential representatives that the lack of such evidence was not dispositive. Thus, the trial court could legitimately conclude that the proposed instruction and verdict form question would have misled the jury and that the more general instructions given to the jury corresponded more closely to the evidence as a whole. Accordingly, the trial court did not err when it refused the more factually detailed instruction.

III. Substantial Evidence Issues

A. Standard of Review

Prudential's challenges to the jury's factual findings and conclusions, express or implied, are reviewed under the substantial evidence standard of review. (SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 462.) Under this standard we review the entire record to determine whether there is substantial evidence supporting the jury's factual determinations (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874), viewing the evidence and resolving all evidentiary conflicts in favor of the prevailing party and indulging all reasonable inferences to uphold the judgment (Jordan v. City of Santa Barbara (1996) 46 Cal.App.4th 1245, 1254-1255). The issue is not whether there is evidence in the record to support a different finding, but whether there is some evidence that, if believed, would support the findings of the trier of fact. (Rupf v. Yan (2000) 85 Cal.App.4th 411, 429-430, fn. 5.) Credibility is an issue of fact for the trier of fact to resolve (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 622) and the testimony of a single witness, even a party, is sufficient to provide substantial evidence to support a factual finding (In re Marriage of Mix (1975) 14 Cal.3d 604, 614).

In accordance with the applicable standard of review, we will not describe the variations in the evidence in great detail and shall recite the facts as established by the record viewed in the light most favorable to the judgment, giving Darla the benefit of every reasonable inference and resolving any conflicts in the evidence in support of the judgment.

B. Breach of Contract Verdict

Prudential contends the evidence was insufficient to support the jury's finding that it breached its insurance contract with Darla when it discontinued her benefits because Darla failed to present objective medical evidence showing that she suffered from functional limitations so severe as to render her totally disabled as required by the policy. We reject its contention.

In arguing that the record is devoid of such evidence, Prudential focuses on the testimony of Darla's treating physicians, Drs. Rizkalla and Colburn, that they did no tests and made no independent observations to verify Darla's self-reports regarding her functional limitations. It also notes that the three physicians it retained to review Darla's claim, Drs. Brachman, Greenberger and Sarkozi, generally concluded that aside from Darla's subjective complaints, there was no objective evidence that her diagnosed illnesses created any functional limitations that hampered her ability to work.

Prudential, however, ignores other evidence in the record from which the jury could reasonably conclude that Darla was totally disabled when Prudential terminated her benefits. Notably, the jury heard evidence from Prudential representatives that although it was Darla's responsibility to provide objective medical evidence, Prudential would look at all of the evidence and it would be contrary to Prudential policy to deny disability claims based solely on the lack of objective medical evidence. From this evidence, the jury could reasonably conclude that it, like Prudential, could evaluate all the evidence presented to determine whether Darla was totally disabled.

Prudential cites federal authority for the proposition that an insurer is entitled to judgment if it's insured fails to produce objective medical evidence of her functional limitations, even when the policy at issue does not explicitly require such proof. (Pralutsky v. Metropolitan Life Ins. Co. (8th Cir. 2006) 435 F.3d 833, 839-840; Boardman v. Prudential Ins. Co. of America (1st Cir. 2003) 337 F.3d 9, 16-17 (Boardman); Bratton v. Metropolitan Life Ins. Co. (C.D. Cal. 2006) 439 F.Supp.2d 1039, 1052; Brucks v. Coca-Cola Co. (N.D.Ga. 2005) 391 F.Supp.2d 1193, 1205.) These cases are inapposite, however, because even though the policy required Darla to produce objective medical evidence, Barilla, the head of Prudential's disability claims operations, indicated that the lack of such evidence did not justify denying a claim. Accordingly, the absence of objective medical evidence to support Darla's subjective complaints was just one factor the jury could consider in evaluating the credibility of the testimony and deciding whether Prudential breached its contract.

Darla was entitled to benefits under the policy if she was "totally disabled," meaning that she was not working, under continuous doctor's care and "completely unable to perform the material and substantial duties of any occupation for which [she was] reasonably fittedby [her] education, training or experience." California courts have interpreted total disability clauses such as the one at issue as covering a disability that prevents insureds from working with reasonable continuity in their customary occupations or in any other occupations. (Erreca v. Western States Life Ins. Co. (1942) 19 Cal.2d 388, 394-395 (Erreca); Moore v. American United Life Ins. Co. (1984) 150 Cal.App.3d 610, 626-627 [adopting same definition].) Total disability "does not signify an absolute state of helplessness but means such a disability as renders the insured unable to perform the substantial and material acts necessary to the prosecution of a business or occupation in the usual or customary way. Recovery is not precluded... because the insured is able to perform sporadic tasks, or give attention to simple or inconsequential details incident to the conduct of the business [citations]." (Erreca, supra, 19 Cal.2d at p. 396.)

The jury's determination of whether Darla was totally disabled necessarily started with an evaluation of the material and substantial duties of her occupation. Darla presented evidence that her occupation as a project manager and lead project manager for large construction projects included, among other things: preparing, reviewing and revising budgets; reviewing change orders and bid documents; hiring individuals; evaluating project sites; obtaining estimates; and going to and conducting meetings to refine the projects. To perform these duties, Darla stated that she: worked 9-12 hours a day, only an hour of which was spent uninterrupted at her computer; traveled extensively; walked construction sites, which often required a lot of stair climbing; stood for long periods of time to review blueprints or make presentations; and carried rolls of heavy blueprints, books or models. The jury could also reasonably infer from this evidence that Darla required a certain level of cognitive function and stamina to perform her job duties.

Dr. Roger A. Thrush, a vocational rehabilitation counselor, performed a vocational evaluation to determine Darla's employability and wage-earning capacity in the local labor market. He testified that "reasonable continuity" means being able to return to work day after day and function throughout the day at a pace expected by the employer. Based on the opinions of Drs. Colburn, Rizkalla and Lee, Dr. Thrush stated that Darla could not be expected to be able to show up for five days in a work week, or work for more than a couple hours a day on a good day, and that she lacked the continuity for returning to work. He opined that as of January 2001, there was no occupation that Darla could perform in a reliable manner similar to what she was doing in 1995. Dr. Thrush noted there were a number of tests he could have performed on Darla, but he did not perform the tests because she was barely able to get through the hour and a half assessment and the tests would not have changed his opinions.

In summary, the question of Darla's total disability was hotly contested and it was for the trier of fact to reconcile the differing opinions and determine the credibility of each witness and the weight to give the evidence. Here, the record contained probative evidence by third parties regarding Darla's functional limitations when Prudential terminated her benefits and Darla's subjective complaints of pain, fatigue and cognitive difficulties were consistent with the record as a whole. The jury could have reasonably inferred that Darla lacked the functional ability to work with any reasonable continuity and that Prudential breached the contract when it terminated her benefits. Accordingly, we decline to reweigh the evidence and overturn the jury's verdict.

C. Bad Faith Verdict

1. Facts

Between 1995 and 1999, Prudential handled Darla's claim out of California and relied on doctors' reports, Darla's written statements and telephone calls to Darla to confirm her continuing eligibility for benefits. Darla's insurance expert, David Peterson, testified that after Prudential transferred her case to New Jersey, "the method of handling the claim changed" and that Prudential "[got] into a mindset... of getting the file ready to deny the claim." Peterson testified, among other things, that an insurer has a duty to investigate claims and after reviewing the claim file, deposition testimony and other materials, he concluded that Prudential acted below insurance industry standards in this area.

Peterson admitted that Darla's report of horseback riding was a "red flag" and that Prudential acted reasonably and within insurance industry standards by asking for Darla's medical records, having those reviewed and setting up an IME. Nonetheless, Peterson concluded that Prudential acted below the standard of care because it failed to conducted a full and complete investigation such as contacting Darla and her trainer to get all the facts surrounding the horseback riding and contacting Darla's treating doctor to see whether this was a recommended exercise. Peterson stated that an insurer has a duty to conduct a thorough investigation and look at all sides of the equation to be fair in evaluating whether it would continue to pay benefits that it had been paying for many years.

Peterson noted that Prudential relied on attending physician statements to pay Darla benefits from 1995 to 2000, but that Prudential stopped asking for these statements in February 2000. He criticized Prudential for focusing only on objective evidence to conclude there was no basis for disability and ignoring Darla's long history of pain and suffering, the mental aspect of depression and her inability to concentrate. He also stated it was common and within the insurance industry standards to conduct surveillance on a claimant and if Prudential had conducted surveillance, this could have confirmed whether Darla was disabled. Peterson concluded that Darla's file was one of the worst he had seen in his 40 years of experience in the insurance industry because Prudential failed to search for evidence supporting coverage.

2. Analysis

The law implies in every insurance contract a covenant of good faith and fair dealing that "requires each contracting party to refrain from doing anything to injure the right of the other to receive the agreement's benefits. To fulfill its implied obligation, an insurer must give at least as much consideration to the interests of the insured as it gives to its own interests." (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 720 (Wilson).) "[T]he insurer's duty [of good faith and fair dealing] is unconditional and independent of the performance of plaintiff's contractual obligations." (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 578, fn. omitted.)

"To establish a bad faith claim, the insured must show that (1) benefits due under the policy were withheld and (2) the reason for withholding the benefits was unreasonable or without proper cause. [Citations.]" (Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, 949.) A bad faith claim involves something more than a breach of the contract or mistaken judgment. (Congleton v. National Union Fire Ins. Co. (1987) 189 Cal.App.3d 51, 59.) "To protect its insured's contractual interest in security and peace of mind, 'it is essential that an insurer fully inquire into possible bases that might support the insured's claim' before denying it. [Citation.]" (Wilson, supra, 42 Cal.4th at p. 721.) In fact, one of the "most critical factors bearing on [an] insurer's good faith is the adequacy of its investigation of the claim." (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 879-880 (Shade Foods).) A bad faith failure to investigate may exist "when an insurer fails to consider, or seek to discover, evidence relevant to the issues of liability and damages." (Id. at p. 880.)

An insurer can negate an insured's claim that it acted unreasonably or without proper cause by demonstrating the existence of a "genuine dispute" regarding coverage. (Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1072.) "A genuine dispute exists only where the insurer's position is maintained in good faith and on reasonable grounds. [Citations.]" (Wilson, supra, 42 Cal.4th at p. 723, italics in original.) Although a genuine dispute may exist where an insurer denies a claim based on the opinions of experts (Fraley v. Allstate Ins. Co. (2000) 81 Cal.App.4th 1282, 1292), reliance on an expert "will not automatically insulate an insurer from a bad faith claim based on a biased investigation" (Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co. (2001) 90 Cal.App.4th 335, 348 (Chateau Chamberay), italics added).

A biased investigation may be shown where: (1) the insurer was guilty of misrepresenting the nature of the investigatory proceedings; (2) its employees lie during deposition or to the insured; (3) it dishonestly selected its experts; (4) its experts were unreasonable; or (5) it failed to conduct a thorough investigation. (See Chateau Chamberay, supra, 90 Cal.App.4th at pp. 348-349.) The reasonableness of an insurer's claims-handling conduct is ordinarily a question of fact and becomes a question of law where the evidence is undisputed and only one reasonable inference can be drawn from the evidence. (Id. at p. 346.)

Prudential contends it is entitled to judgment in its favor on the bad faith cause of action as a matter of law because a genuine dispute existed regarding Darla's entitlement to benefits. It also asserts, at most, that the record shows an error in coverage and mistakes in handling Darla's claim. Applying the above principles to a review of the record as a whole, we find ample evidence to support the jury's verdict that Prudential breached the implied covenant of good faith and fair dealing.

Prudential terminated Darla's benefits and denied her appeals because she failed to present objective medical evidence to support her claim. The jury, however, could have concluded that Prudential acted unreasonably when it insisted that Darla supply such evidence based on the testimony of Prudential's representatives that the lack of such evidence did not justify denying a claim. Moreover, the evidence Darla provided, namely her statements and the statements of her physicians, was the same evidence that Prudential had previously relied on to pay her benefits for five years. While Prudential had the absolute right to review Darla's continued entitlement to benefits, it essentially changed what weight it gave her statements and the statements of her physicians and never told Darla what information it would have considered to assist it in evaluating her continued entitlement to benefits.

The evidence showed that Prudential had a duty to conduct a thorough investigation, including searching for evidence to support Darla's claim, but that it failed to do so. Darla testified that Prudential never contacted her friends, family or coworkers to get any information about her condition or daily activities. Darla assumed Prudential would ask for third party statements if it needed them, but it never did and she would have "gladly" supplied statements had she known Prudential would have considered them. Notably, Dr. Brachman confirmed that pain and fatigue could affect a person's stamina or functional capacity and testified that when doing file review she would consider letters from friends and coworkers in determining a person's ability to function.

Prudential's rehabilitation expert, Dr. Edward L. Workman, testified that he looked at physicians' opinions and Darla's medical records to assess her ability to work. He concluded that Darla was not disabled as that term is defined in California, noting that Darla did not undergo any mental status tests and that her physicians never performed a functional capacity evaluation to test her ability to engage in any physical activity, such as walking on a treadmill or lifting items. Prudential, however, presented no evidence showing it asked Darla to undergo such testing. Although Prudential complains it was never able to perform an assessment to determine Darla's functional limitations because she refused to attend the IME with Dr. Sarkozi, this argument rings hollow because Dr. Sarkozi testified that he had no tests planned. Prudential also failed to conduct surveillance, which could have verified Darla's statements regarding her daily activities.

Although Darla's statement that she rode horses prompted Prudential to scrutinize her continuing entitlement to benefits, it never sought any additional information from Darla about the nature of the activity, nor did it seek information from her treating physicians regarding the propriety of the activity. Had it sought such information it would have learned from Dr. Rizkalla that patients with fibromyalgia could undertake "low-grade exercise" such as walking or swimming. Similarly, Dr. Colburn would have informed Prudential that he wanted Darla to exercise on a daily basis.

It would have also learned that Darla's hip pain disappeared while she was on the horse, that she rode for 20 to 30 minutes on the flat with a trainer and although she tried to go faster than walking, she could not because she got exhausted after only a couple of minutes. Paige confirmed that Darla walked most of the time and Greg testified that Darla walked when he watched her ride. Eventually, Darla quit riding because she had trouble remembering what to do, did not feel safe and was too tired.

The trial court properly instructed the jury that Prudential had a duty to "diligently search for and consider evidence that support[ed]" Darla's claim and that Darla needed to show, among other things, that Prudential "unreasonably failed to properly investigate the loss" to prove her allegation that Prudential acted in bad faith by failing to properly investigate her claim. (CACI No. 2332.) The evidence cited above supported the jury's implied conclusion that Prudential acted in bad faith by failing to properly investigate Darla's claim. Prudential never addresses this evidence; instead it attacks Peterson's testimony, arguing that portions of his testimony were demonstrably false. However, it was for the jury to evaluate the credibility of the witnesses and Prudential had the opportunity to address any inaccuracies in Peterson's testimony during cross-examination.

Weaknesses, conflicts, and inconsistencies in the evidence were for the jury to evaluate and our task on appeal is to determine whether any reasonable trier of fact could have reached the same conclusion as the jury did. Prudential's citation to evidence from which a jury could have drawn a different conclusion is nothing more than an invitation to reweigh the evidence, something we cannot do in assessing the sufficiency of evidence.

Notwithstanding the jury's finding on the bad faith claim and the conflicting evidence regarding the propriety of its investigation, Prudential argues that a "genuine dispute" as to the existence of coverage precludes a finding of bad faith as a matter of law. As discussed above, the evidence presented at trial was sufficient to support the jury's implied finding that Prudential failed to thoroughly and fairly investigate Darla's right to continuing benefits under the policy. The trial court properly presented the question of whether Prudential acted in bad faith to the jury and we reject Prudential's argument that there was a genuine dispute regarding coverage sufficient to insulate it from a bad faith claim based on its faulty investigation. (Wilson, supra, 42 Cal.4th at p. 723 & fn. 7.)

D. Damages Awarded for Benefits After Darla Refused to Attend a Further IME

1. Facts

In her second appeal, Darla complained that Dr. Greenberger, the physician who had conducted her initial IME, was not qualified to assess her claim because he was an occupational physician, not a rheumatologist. Thereafter, Prudential scheduled an IME in Santa Ana at 9:30 a.m. with Dr. Sarkozi, a rheumatologist. The IME was scheduled to last six to eight hours, about two hours for the physical exam and the rest to get Darla's history. Dr. Sarkozi did not plan to do any tests.

Through her counsel, Darla sent Prudential a letter stating that she would not attend the IME because, among other things, it was too far away and would take too long and that she would not attend any further IMEs until Prudential reinstated her claim and paid all back benefits and attorney fees. A Prudential representative called Darla's counsel to address his concerns regarding the IME, such as arranging transportation or hotel accommodation, but counsel got angry and the conversation never got that far. Darla considered the IME request to be unreasonable, explaining it would take at least an hour to drive to the examination and that the length of the examination would have been "very difficult" for her. The jury ultimately awarded disability benefits to Darla accruing beyond June 2003.

2. Analysis

Relying on Erreca, Prudential contends it is entitled to judgment with respect to all benefits awarded for the time period after Darla refused to attend the IME. (Erreca, supra, 19 Cal.2d 388.) We reject its contention.

California law establishes that disability insurers can request medical exams as often as reasonably required (Ins. Code, § 10350.10) and the policy restated this requirement. Erreca stands for proposition that "the right of the insurer [to request an IME] survives its denial of liability regardless of the basis thereof" and that when an insured refuses to attend an IME that has been requested "in accordance with the provisions of the policy," she is "not entitled to judgment in [an] action for disability benefits subsequent to [the date of her refusal]." (Erreca, supra, 19 Cal.2d at pp. 401, 404.)

Here, the trial court properly instructed the jury that Prudential had a right to examine Darla "when and so often as it may reasonably require" and if it found that Darla "unreasonably refused to attend the examination by Dr. Sarkozi in June of 2003, [it] may not award her any disability benefits beyond June, 2003." By awarding disability benefits beyond June 2003, the jury impliedly concluded that Darla's refusal to attend the IME was not unreasonable. Stated differently, the jury found that Prudential asked Darla to attend an IME that had not been requested "in accordance with the provisions of [its] policy." (Erreca, supra, 19 Cal.2d at p. 404.)

Substantial evidence supported the jury's implied conclusion. The jury could have rationally relied on Darla's testimony regarding the reasonableness of the IME request, despite other evidence in the record suggesting Darla might have been able to withstand a six to eight hour office visit. The jury could have also concluded that the four to six hours Dr. Sarkozi planned to spend obtaining Darla's history was unreasonable because Darla's medical history was well documented and Prudential could have supplied this information to Dr. Sarkozi before the scheduled examination. In fact, Prudential ultimately supplied Darla's medical records to Dr. Sarkozi and he based his written report on them. The jury could have also reasonably rejected Prudential's evidence that it was willing to arrange transportation or accommodations for Darla since there is nothing in the record showing it actually communicated these offers to her.

Although Prudential presented evidence suggesting that Darla thereafter refused to attend any IME and that the demands of Darla's counsel in response to the IME request were unreasonable, the jury could have reasonably rejected this evidence as irrelevant. We may not reweigh the evidence or substitute our judgment for that of the jury and reject Prudential's argument that the evidence was insufficient to support damages that accrued after June 2003.

E. Propriety of the Noneconomic Damages Award

1. Facts

Darla and her family decided to buy a house in September 2000 and to prove their income to the mortgage company, they obtained a letter from Prudential stating that Darla's disability benefits would continue. Darla and her family relied on this representation to purchase the house. Four months later, without any warning, Darla received Prudential's letter terminating her benefits. She described feeling "shocked," "scared," "helpless," and "extremely vulnerable" because they had just bought a home and she knew her family would not be financially secure. Darla stated that she was "emotionally devastated" and felt as if she "had just been hit in the stomach." She described how she felt after she got the letter and after Prudential denied her first appeal:

"When I was terminated, it just was so completely unexpected. It was a shock, and it just — I just totally — I don't know. I just felt extremely vulnerable. I was very stressed. My symptoms of pain, fatigue went up. My ability to grasp mentally what was going on was just as hard, if not harder, than ever.

"And when the appeal was denied, it was kind of more of [the] same, because it was just one more layer of continuing to build their decision on the basis of false information."

As the appeal process continued, Darla felt "more and more buried, more and more unfree, more and more unable to work on [her] health and more distracted and more frustrated and saddened and disappointed in [her]self." Darla claimed that she was still dealing with these types of emotions. Darla also took her career, reputation, and credibility seriously and had never had her credibility questioned before. When asked how she felt when Prudential essentially told her that it did not believe she was disabled, she stated:

"There are two things that really come to mind. Specifically,... one is that I just thought that, 'I'm already down. I'm already sick, and they are kicking me while I'm down.'

"And the other thing was that I had never been in a position where my credibility was not trusted. I hadn't been in a position where I could tell the truth of my story, my life, and I could have people substantiate that — medical people, and I would not be believed. It's a horrible feeling to be considered not credible. It's horrible."

Greg testified that Darla had "lots of bad days" and would sometimes go five or six days without leaving the house. The loss of benefits also forced Darla and her family to refinance their home twice in the last five years, sell her car and purchase a less expensive car, stay at home more than they did before and make other financial cuts. Darla testified that the "pressures have never stopped. We continue to try to dig out from under [them]."

2. Analysis

Prudential asserts that the $500,000 emotional distress damages award was excessive and resulted from passion or prejudice because any distress Darla suffered was temporary. It also contends the jury may have found it difficult to distinguish between the detrimental emotional and psychological symptoms that Darla suffered as part of her medical condition and the alleged effects of the denial of her claim. We disagree.

A plaintiff must offer competent proof she suffered emotional distress (Austero v. Washington National Ins. Co. (1982) 132 Cal.App.3d 408, 417, disapproved on another ground in Brandt v. Superior Court (1985) 37 Cal.3d 813, 816-817 (Brandt)) and the testimony of a single person, including the plaintiff, is sufficient to support an award of emotional distress damages (Tan Jay Internat., Ltd. v. Canadian Indemnity Co. (1988) 198 Cal.App.3d 695, 708). To be compensable, the emotional injury must be substantial or enduring, not "trivial or transitory." (Ibid.) The amount fixed by the jury as damages for mental anguish or emotional distress will be disturbed on appeal "only when the sum awarded is so large that the verdict shocks the moral sense and raises a presumption that it must have resulted from passion or prejudice." (Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376, 409.)

Here, the trial court properly instructed the jury that Darla sought noneconomic damages for "[p]ast... physical pain, mental suffering, loss of enjoyment of life, inconvenience, grief, anxiety, humiliation and emotional distress." (CACI No. 3905.) It further instructed the jury that if Darla proved her bad faith claim against Prudential it could award her damages for "[p]ast... mental suffering; anxiety; humiliation; and, emotional distress," that it must use its judgment to decide a reasonable amount based on the evidence and common sense because no fixed standard existed for deciding these damages. (CACI No. 2350.)

The record contains substantial evidence showing Darla suffered emotional distress due to Prudential's actions, consisting of mental suffering, loss of enjoyment of life, inconvenience, anxiety and humiliation that was substantial and enduring. The jury could reasonably infer that Darla's emotional distress persisted from the time Prudential terminated her benefits in 2000 through the time of trial in 2007.

As Prudential pointed out below and on appeal, the award is significantly larger than other substantial awards upheld on appeal against excessiveness challenges in insurance bad-faith litigation. (See generally, Croskey, et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2008), ¶¶ 13:112-116.) However, in denying Prudential's posttrial motions, the trial court stated that it reviewed the evidence and concluded that the award did not "shock the conscience of the court." "At bottom, the determination of damages is essentially a factual matter on which inevitable differences of opinion do not warrant intervention by the appellate courts." (Heiner v. Kmart Corp. (2000) 84 Cal.App.4th 335, 347.) Prudential has not cited anything in the record calculated to raise passion or prejudice and we may not reweigh the evidence or substitute our views for that of the jury. Based on the record, we cannot say the award was excessive as a matter of law.

Finally, we reject Prudential's argument that the jury may have improperly awarded damages for the detrimental emotional and psychological symptoms that Darla suffered as part of her medical condition, rather than the alleged effects of the denial of her claim. Whether Prudential caused the detrimental emotional and psychological symptoms that Darla suffered was one of fact for the jury. (See Fletcher v. Western Nat'l Life Ins. Co., supra, 10 Cal.App.3d at p. 398.) Here, the trial court instructed the jury that if Darla proved her bad faith claim, it could award her damages for harm "caused" by Prudential (CACI No. 2350) and we presume the jury followed this instruction absent evidence to the contrary. (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 803-804 (Cassim).)

F. Propriety of Damages Awarded for Past Economic Loss

1. Facts

Vickie Marie Wolf, Darla's damages expert, calculated the total past disability payments unpaid to Darla with interest and future payments on the same policy to age 65 to net present value and determined that Darla was entitled to $254,562 for past unpaid benefits and $410,902 for the present value of future benefits. Prudential did not challenge Wolf's calculations.

The verdict form contained a blank for Darla's lost benefits based on Prudential's breach of contract. Under the bad faith cause of action, the verdict form contained four blanks for past and future economic and noneconomic losses. After the jury asked the court for "clarification on what is meant by 'Past Economic Loss,'" the trial court instructed the jury that past economic loss was "the same as the covered loss through today, if any, [for breach of contract]. If you award the Plaintiff policy benefits [for breach of contract], then you may not award those same past policy benefits under [the bad faith claim] as it would be duplicative."

The jury later awarded Darla breach of contract damages of $267,082 and $400,000 for future benefits, essentially adopting Wolf's figures. The jury, however, also awarded Darla $315,000 for "past economic loss." Prudential challenged the award in its motions for JNOV and new trial, but the trial court found substantial evidence supported the verdict and denied both motions.

2. Analysis

Prudential contends the award for past economic loss should be reversed because there is no evidence that Darla suffered a $315,000 economic loss over and above the past benefits that the jury awarded. It also contends this part of the verdict resulted from juror misconduct. We agree with the former point and do not discuss the latter. Viewing the record in a light most favorable to Darla, there is no evidence from which a jury could reasonably infer that Prudential underpaid Darla $315,000 in past policy benefits.

The parties' briefs impliedly agree that the trial court properly instructed the jury regarding the meaning of "past economic loss" in response to its question. Accordingly, the issue presented is whether there is any evidence in the record showing that Prudential owed Darla $315,000 in past policy benefits in addition to the $267,082 in past policy benefits that the jury awarded.

Darla points out that Prudential elicited testimony from her about the amount of policy benefits she received and asserts the jury could have inferred that Prudential knowingly underpaid her for years. Review of this evidence reveals that it does not support Darla's contention.

Under the policy, Darla was entitled to 70 percent of her predisability income for her first year of disability and 50 percent of her predisability income thereafter. Darla's predisability income was $75,000; thus, she was entitled to 70 percent of that amount during the first year of her claim ($4,375 per month) and 50 percent thereafter ($3,125 per month). A Prudential representative confirmed that Darla received $4,375 per month during her first year of disability. Darla did not assert during closing argument that Prudential underpaid her before it terminated her benefits and she presented no evidence to support this theory. Rather, she asserts the jury could have reasonably inferred that Prudential had underpaid her based on questions asked by Prudential.

Albeit somewhat unartfully, Prudential asked Darla a series of questions about the policy benefits she received from Prudential and another insurer. Darla confirmed that she received $2,550 in monthly disability payments from another insurer, but could not confirm that she received 70 percent of her salary from Prudential ($4,375 per month) during her first year of disability because she did not have a calculator. Counsel then asked whether, during her first year of disability, she received a total of $6,925 a month from Prudential and the other insurer ($2,550 + $4,375 = $6,925). Darla, however, could not confirm the calculation, stating she did not have any check stubs from Prudential for over $3,130 and she had given the stubs to Prudential.

Although Darla was unable to confirm Prudential's numbers, she never disputed them or argued to the jury that Prudential had underpaid her benefits. Moreover, she conceded that one could only speculate as to how the jury came up with $315,000 for past economic loss. Beyond speculation, however, no reasonable interpretation of the record supports the past economic damages award and it must be reversed.

Finally, Darla asserts the jury may have gotten confused by the questions Prudential's counsel posed to her and we should treat the matter as invited error and affirm the award. Darla, however, cited no authority to support the invocation of the invited error doctrine to validate a damage award that is unsupported by the evidence and we have found none. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403 [the doctrine of invited error rests on the principle of estoppel, which prevents a party from misleading the trial court and then profiting therefrom in the appellate court].)

G. Propriety of the Punitive Damages Award

1. Legal Principles and Standard of Review

Punitive damages are proper in an insurance bad faith action and serve to deter socially unacceptable acts and thus discourage the perpetuation of objectionable corporate policies. (Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 819-820 (Egan).) A bad faith finding, however, does not automatically lead to punitive damages; rather, "to establish that an insurer's conduct has gone sufficiently beyond mere bad faith to warrant a punitive [damages] award, it must be shown by clear and convincing evidence that the insurer has acted maliciously, oppressively or fraudulently." (Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal.App.4th 306, 328 (Mock); Civ. Code, § 3294, subd. (a).) "Clear and convincing" evidence requires a finding of high probability that the facts occurred. (Mock, supra, 4 Cal.App.4th at p. 332.) "Malice" means "conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others." (Civ. Code, § 3294, subd. (c)(1).) "Oppression" is defined as "despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights." (Civ. Code, § 3294, subd. (c)(2).)

The decision to award punitive damages rests in the sound discretion of the trier of fact. (Egan, supra, 24 Cal.3d at p. 821.) On appeal, a jury award of punitive damages must be upheld if it is supported by substantial evidence (Patrick v. Maryland Casualty Co. (1990) 217 Cal.App.3d 1566, 1576 (Patrick)); however, a split of authority exists as to whether our review of this issue should be based on a clear and convincing standard of proof. (See, e.g., Patrick, supra, at p. 1576 [substantial evidence sufficient]; contra, Shade Foods, supra, 78 Cal.App.4th at pp. 891-892 [heightened appellate review required].) Our Supreme Court has held that burdens of proof are for the guidance of the trier of fact and do not affect the nature of appellate review of the sufficiency of the evidence. (In re Marriage of Saslow (1985) 40 Cal.3d 848, 863; Crail v. Blakely (1973) 8 Cal.3d 744, 750.) Accordingly, we apply the normal substantial evidence rule and must affirm the verdict if there is any substantial evidence supporting it.

2. Analysis

Prudential argues that punitive damages are not warranted because Darla produced no evidence showing that any inadequacy in its handling of her claim was part of a broader pattern of bad faith claims handling. While we agree that presentation of such evidence would have created a stronger case for a punitive damages award, the lack of such evidence was merely one factor the jury could consider in assessing Prudential's culpability and the reprehensibility of its conduct. (Johnson v. Ford Motor Co. (2005) 35 Cal.4th 1191, 1204.)

Our review of the record does not reveal any evidence to support an implied finding that Prudential was guilty of fraud; accordingly, we review the record for evidence showing that Prudential was guilty of malice or oppression. To establish either malice or oppression, despicable conduct must be shown. (Civ. Code, § 3294, subd. (c).) The trial court properly instructed the jury that "despicable conduct" was "conduct that is so vile, base, or contemptible that it would be looked down on and despised by reasonable people." (CACI No. 3946.)

The record demonstrated that Prudential looked at all of the evidence when evaluating claims and it would be contrary to Prudential policy to deny claims based solely on the lack of objective medical evidence. In seeming accordance with this policy, Prudential paid Darla's claim for over five years based on her statements and the statements of her attending physicians and never asked Darla to undergo any tests or provide objective medical evidence of her functional limitations.

As of April 2000, however, Peterson noted that Prudential started to handle Darla's claim differently, focusing only on objective evidence and ignoring other evidence that supported continuing Darla's benefits. Prudential's conduct suggested to Peterson that its plan was directed toward terminating benefits. Prudential failed to conduct surveillance to confirm Darla's disability and never asked her treating physicians to perform any particular tests to assess her ability to function in the workplace. Peterson concluded that Prudential did not satisfy its duty to search for evidence supporting coverage and that the file was one of the worst he has seen.

The jury could reasonably infer from this evidence that Prudential properly paid Darla's claim and that it acted not merely mistakenly, unreasonably or negligently when it terminated her benefits, but willfully, contemptibly and despicably because it ignored its own procedure requiring it to consider all of the evidence, suddenly insisted that Darla provide objective medical evidence and failed to search for evidence supporting continued coverage. Viewing the evidence in the light most favorable to Darla, a properly instructed jury could reasonably infer from all of the evidence that the statutory threshold of despicable conduct had been reached.

Darla testified as to the hardships she suffered based on Prudential's termination of her benefits and Peterson testified that Prudential should have known that Darla and her family were depending on the benefits. A reasonable jury could have thus concluded that Prudential's conduct was willful and in conscious disregard of Darla's rights or that it subjected Darla to cruel and unjust hardship in conscious disregard of her rights. (Civ. Code, § 3294, subd. (c)(1) & (2).) Accordingly, we cannot conclude that the evidence, viewed in the light most favorable to Darla, was not sufficient to establish malice or oppression.

Finally, Prudential contends that even the remitted punitive damage award of $4 million is constitutionally excessive and we should reduce the punitive award to the largest amount permitted by the Constitution, suggesting an award equal to her compensatory damage recovery is appropriate. (Gober v. Ralphs Grocery Co. (2006) 137 Cal.App.4th 204, 210-211 (Gober) [a trial court may strike the portion of a punitive damages award that is constitutionally excessive when ruling on a JNOV motion].) The trial court, however, considered this argument and declined to grant Prudential's motion for JNOV. We reject Prudential's argument because Gober is distinguishable.

In Gober, the parties faced a third trial on punitive damages after participating in two lengthy trials that resulted in excessive punitive damages awards and the defendant represented its willingness to forgo its right to a new trial and consented to a judgment awarding punitive damages in an amount less than ten times the compensatory damages awards. (Gober, supra, 137 Cal.App.4th at pp. 210, 215.) Here, Prudential has not represented its willingness to forgo its right to a new trial, nor has it consented to a judgment against it should we determine the constitutional maximum is more than its suggested award of punitive damages equal to Darla's compensatory damages recovery.

Additionally, the trial court here remitted the punitive damages award to $4 million, about two times Darla's compensatory damages award, taking into account our reversal of the award for past economic damages and including the attorney fees award:

$ 267,082.00	unpaid disability benefits
$ 400,000.00	future value of policy
$ 500,000.00	past emotional distress
$ 548,408.84	attorney fees as damages
$1,715,490.84	total

Thus, the ratio of total compensatory damages to punitive damages following the remittitur is approximately 2 to 1, a ratio that is not presumptively constitutionally excessive. (State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 425 ["[F]ew awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process"].) Even if the attorney fee award is eliminated (see part IV.B, infra), the ratio remains a presumptively constitutional ratio of about 3 to 1. In contrast, the ratio of total compensatory damages to punitive damages following the remittitur in Gober was 15 to 1. (Gober, supra, 137 Cal.App.4th at p. 209.) Accordingly, we decline Prudential's invitation to set the constitutional maximum and order that a judgment be entered in Darla's favor in that amount. We express no opinion on what the actual constitutional maximum might be in this case.

IV. Attorney Fees

A. Facts

Darla's attorneys filed a motion seeking $783,138 for attorney fees incurred in recovering policy benefits. At the hearing on the motion, the trial court asked counsel to provide a further "breakdown" of the fees incurred for the breach of contract and the bad faith portions of the matter to comply with Brandt, supra, 37 Ca1.3d 813. Darla's attorneys provided the trial court with supplemental briefing and additional copies of their fee statements that highlighted the fees they believed were attributable to the tort and contract claims. They claimed that the majority of the trial was devoted to proving the contract claim, and provided a breakdown of all fees they believed were attributable either to the contract claim alone (834.80 hours, or $357,572.75 in time value), or jointly to both the contract claim and the bad faith claim (889.45 hours, or $406,034.25 in time value).

Although defense counsel requested that Darla's counsel file authenticated copies of any fee agreements, counsel instead submitted a declaration asserting that Darla had signed two attorney retainer agreements. The first covered Prudential's internal appeal process and was on an hourly fee basis at the firm's customary attorney fee rates. The second, signed in August 2003 in anticipation of litigation, pertained to the bad faith claims and was on a contingent fee basis. At the subsequent hearing on the motion, Darla's attorney indicated his belief that any fee agreements were covered by the attorney-client privilege, but nonetheless stated he would provide the agreements if the court wanted them.

The trial court took the matter under submission, adopted the allocations presented by Darla's counsel regarding the fees attributable to the contract claim alone or jointly to both the contract and bad faith claims and ultimately ruled that Darla was entitled to all of the fees allocated to her contract claim and 47 percent of the fees allocated to counsel's joint efforts on her contract and tort claims, for a total fee award of $584,408.84.

B. Analysis

Attorney fees reasonably incurred to compel payment of policy benefits are recoverable as an element of the damages in a bad faith case. (Brandt, supra, 37 Cal.3d at p. 815.) Fees incurred to recover tort damages, including bad faith or punitive damages are not recoverable. (Id. at p. 819.) In Cassim, our high court addressed the proper method of calculating Brandt damages in a contingent fee case where a plaintiff pursues both a breach of contract and other claims in the same action and recovers on multiple claims. (Cassim, supra, 33 Cal.4th at p. 811.) In this type of case, the plaintiff bears the burden of proving by a preponderance of the evidence both the existence and the amount of damages proximately caused by the insurer's tortious breach, including the burden of demonstrating how the fees for legal work attributable to both contract and tort claims should be apportioned. (Id. at p. 813.)

The Cassim court noted that "Brandt fees can never exceed the legal fees for the combined tort and contract recovery; in most cases the amount will be far less." (Cassim, supra, 33 Cal.4th at p. 812.) It then described an appropriate method of apportionment when the insured's attorney was working on a contingency, which included determining the percentage of the legal fees attributable to the contract recovery and multiplying that percentage by the total legal fee for the compensatory award as determined by the contingent fee agreement between the client and her attorney. (Ibid.) The court also provided a sample calculation. (Ibid.)

The Cassim court noted, however, that "trial courts retain discretion to disregard fee agreements that appear designed to manipulate the calculation of Brandt fees to the plaintiff's benefit. For example, a client who enters a fee agreement in an insurance bad faith case in which an attorney will take 40 percent of the entire compensatory damage award as his fee for working to obtain the contract recovery, and agrees to work on the tort recovery pro bono, cannot expect to receive Brandt fees of 40 percent of the entire compensatory award." (Cassim, supra, 33 Cal.4th at p. 813.)

A request for an award of attorney fees is largely entrusted to the discretion of the trial court, whose ruling "will not be overturned in the absence of a manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence. [Citations.]" (Yield Dynamics, Inc. v. Tea Systems Corp. (2007) 154 Cal.App.4th 547, 577.)

Prudential argues that Darla failed to carry her burden of proof on the motion because she refused to disclose her fee arrangements with counsel. Darla contends the Cassim case is ambiguous and that our high court based its hypothetical on the contingent fee agreement that plaintiffs had agreed to because plaintiffs' counsel did not keep contemporaneous time records. We agree with Prudential.

The Cassim formula requires the contingent fee percentage that the plaintiff agreed to pay counsel. (Cassim, supra, 33 Cal.4th at p. 812.) Here, Darla's counsel indicated he would provide the fee agreements if the court wanted them and thus waive any attorney-client privilege, but the court never requested the agreements. (Evid. Code, § 912, subd. (a).) Additionally, by claiming Brandt fees as part of her compensatory damages award Darla placed the fee agreements at issue and fundamental fairness requires their disclosure. (Steiny & Co., Inc. v. California Electric Supply Co. (2000) 79 Cal.App.4th 285, 292 ["Where privileged information goes to the heart of the claim, fundamental fairness requires that it be disclosed for the litigation to proceed"]; see also Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 128.) The Cassim court did not need to address this issue because plaintiffs therein voluntarily disclosed that they had agreed to pay their attorney a 40 percent contingency fee and that the fee agreement did not differentiate between recovery on the contract or tort claims. (Cassim, supra, 33 Cal.4th at p. 807.)

Here, Darla's counsel disclosed that she had signed two retainer agreements, the first was on an hourly basis before litigation began and the second was on a contingent fee basis signed in anticipation of litigation in August 2003. The trial court abused its discretion when it awarded attorney fees because it did not have before it all the information needed to follow the Cassim formula. On remand, the trial court is directed to follow Cassim.

Prudential also complains that the trial court "uncritically accepted" Darla's allocation of her attorneys' time without reapportioning a single time entry despite its showing that certain time entries should have been allocated to the tort claims alone. We need not determine whether the trial court abused its discretion in this regard because it will have another opportunity to examine the allocation of time and reapportion any time entries on remand. (Cassim, supra, 33 Cal.4th at p. 813 [plaintiff bears the burden of demonstrating how the fees for legal work attributable to both contract and tort claims should be apportioned].)

Notably, the apportionment protocol described in Cassim will not be relevant to the portion of the attorney fees incurred by Darla while counsel worked to obtain benefits under the policy during Prudential's internal appeals process. During this time period Darla's counsel was working on an hourly fee basis at its customary attorney fee rates and apportionment is a matter of properly allocating the billings for designated legal work. (Jordan v. Allstate Ins. Co., supra, 148 Cal.App.4th at p. 1080, fn. 13.) With that said, some of the contract issues addressed during this time period may also be relevant to the tort claims. Accordingly, the trial court should be sensitive to this issue when reviewing the time allocations for work performed after August 2003.

DISPOSITION

The award of past economic damages is reversed. In all other respects the judgment is affirmed, as are the orders granting a new trial on the amount of punitive damages and denying Prudential's motion for JNOV. The order awarding Darla her attorney fees is reversed and the matter is remanded for further proceedings in accordance with this opinion. Darla is entitled to her costs on appeal.

WE CONCUR: McCONNELL, P.J., NARES, J.