Olmstead

We granted review in this case to address whether Code of Civil Procedure section 128.5, as amended in 1994, authorizes trial courts to award sanctions, including attorney fees, for bad faith litigation actions or tactics that arise from a claim initiated after December 31, 1994. We conclude that the statutory language of section 128.5 and related statutes, and other indicia of legislative intent, establish that section 128.5 does not apply to conduct arising from a claim initiated after December 31, 1994. To the extent the Court of Appeal reached a contrary result, its judgment must be reversed.

FACTS AND PROCEDURAL HISTORY

As the result of a September 1999 auto accident, plaintiffs—Carleen Olmstead and Cheri Rose—sued defendants—Arthur J. Gallagher & Company (Gallagher), an insurance broker, and Vicki Sundgren, a Gallagher representative—to recover underinsured motorist benefits allegedly due under an insurance policy. Following a trial, the jury returned a defense verdict on all claims. After entry of the judgment, defendants moved, under sections 128.5 and 128.7, to recover attorney fees and expenses they allegedly incurred as a result of misconduct by plaintiffs…