Appellate Court Found Insurer Not In Bad Faith.

A Cadillac involved in an accident, which resulted in severe injuries to a plaintiff, was insured under two different policies and under two different named insureds. When plaintiff’s lawyer made a demand, it was against a person who was not in the car and under the wrong policy, a policy which had been canceled six months earlier. As a result of a series of mistakes by all involved, the insurance company had assigned two different claim numbers to the same claim. Thus, at first there appeared to be a “coverage problem” with the policy under which plaintiff’s lawyer made a demand, and which the insurance company denied. Shortly after the insurance company discovered one of its insureds was driving the car that hit plaintiff and that there was coverage under another policy, which was only three weeks after the collision, the insurance company extended a policy limits offer of $50,000 to settle the case, which offer plaintiff declined. Plaintiff pursued an action against the insured and obtained a judgment of $2 million, along with an assignment of the insured to pursue his rights against the insurance company. Plaintiff then pursued the present action, one for bad faith against the insurance company. A jury found in favor of plaintiff. The appellate court reversed, concluding there was no substantial evidence the insurance company unreasonably rejected plaintiff’s offer to settle. (Graciano v. Mercury General Corp. (Cal. App. Fourth Dist., Div. 1; November 12, 2014) 231 Cal.App.4th 414 [179 Cal.Rptr.3d 717].)