Plaintiff claimant appealed a summary judgment from the Superior Court of Los Angeles County (California), which ruled that defendant insurer had no liability for bad faith failure to settle.

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Overview

The insured failed to stop at a red light and collided with the claimant’s car, injuring the claimant and others. The insurer indicated that it would accept liability but did not disclose the policy limits when first asked. The insurer requested the claimant’s medical records. The claimant filed suit against the insured before providing the medical records and without making a settlement demand. The insurer offered its policy limits three months after it received the medical records. The claimant refused the offer, obtained a judgment in excess of the policy limits, and filed a bad faith suit as the insured’s assignee. The court held that the insurer was not liable for bad faith failure to settle because there was no settlement offer from the claimant and no evidence that the insurer knew or should have known the claimant was interested in settlement. The insurer did not have a duty under either Ins. Code, § 790.03, or the case law to initiate settlement discussions or offer its policy limits as soon as the insured’s liability in excess of policy limits had become clear. A bare request for policy limit information was not an opportunity to settle.

Outcome

The court affirmed the judgment.