NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 15 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANTONIO PURECO, a California No. 19-55061
individual; DAVID CARRILLO, by and
through his Conservator, Felipe Carrillo, D.C. No.
2:18-cv-02079-SVW-FFM
Plaintiffs-Appellants,
v. MEMORANDUM*
ALLSTATE INDEMNITY COMPANY, an
Illinois Corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Submitted April 1, 2020**
Pasadena, California
Before: PAEZ, CALLAHAN, and VANDYKE, Circuit Judges.
When Antonio Pureco made an un-signaled U-turn, he was struck by a car
driven by David Carrillo and sustained severe injuries. His attorney made a
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
policy-limits demand on Allstate Indemnity Company (Allstate), because Felipe
Carrillo, David’s father, had a $100,000 policy with Allstate. However, the
attorney failed to provide Allstate with information concerning Pureco’s injury that
Allstate thought it needed to assess the demand until shortly before the demand
expired. After reviewing such information, Allstate proffered the policy limit
within a day of the demand’s expiration, but it was rejected. Pureco sued the
Carrillos and received a $5,000,000 judgment. Pureco and the Carrillos then
entered into an agreement whereby the Carrillos assigned Pureco their right to
pursue claims against Allstate and Pureco agreed never to execute on the judgment.
Pureco sued Allstate for tortious breach of the implied covenant of good faith and
fair dealing. The district court granted summary judgment for Allstate, concluding
that although Allstate may have made a mistake or been negligent, it did not act in
a deliberate manner that would support a finding of bad faith. Pureco appealed, we
have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.1
On an appeal from a grant of summary judgment, we view the evidence in
the light most favorable to the nonmoving party. Nat’l Ass’n for the Advancement
of Multijurisdiction Practice v. Berch, 773 F.3d 1037, 1044 (9th Cir. 2014).
1
Because the parties are familiar with the facts of this case, we do not discuss
them further here.
2
Under California law, to prevail on a claim for bad faith refusal to settle, a
plaintiff must first show that “the third party made a reasonable offer to settle the
claims against the insured for an amount within the policy limits.” Graciano v.
Mercury Gen. Corp., 179 Cal. Rptr. 3d 717, 726 (Ct. App. 2014). Second, such a
claim “requires proof the insurer unreasonably failed to accept an otherwise
reasonable offer within the time specified by the third party for acceptance.” Id.
In Chateau Chamberay Homeowners Ass’n v. Associated Intern. Insurance
Co., the state appellate court explained:
allegations which assert such a claim must show that the conduct of
the defendant, whether or not it also constitutes a breach of a
consensual contract term, demonstrates a failure or refusal to
discharge contractual responsibilities, prompted not by an honest
mistake, bad judgment or negligence but rather by a conscious and
deliberate act, which unfairly frustrates the agreed common purposes
and disappoints the reasonable expectations of the other party thereby
depriving that party of the benefits of the agreement.
108 Cal. Rptr. 2d 776, 783 (Ct. App. 2001) (Chateau Chamberay) (quoting Careau
& Co. v. Sec. Pac. Bus. Credit, Inc., 272 Cal. Rptr. 387, 399-400 (Ct. App. 1990),
as modified on denial of reh’g (Oct. 31, 2001)).
Courts can decide bad faith claims as a matter of law where the facts are not
disputed. Chateau Chamberay, 108 Cal. Rptr. 2d at 784 (“While the
reasonableness of an insurer’s claims-handling conduct is ordinarily a question of
fact, it becomes a question of law where the evidence is undisputed and only one
reasonable inference can be drawn from the evidence.”).
3
The relevant facts concerning the policy-limits demand and Allstate’s late
acceptance of the demand are, as the district court noted, undisputed. The district
court’s grant of summary judgment was based on two determinations: (1) “no
reasonable jury could conclude that there was a substantial likelihood of an excess
judgment when the settlement demand expired”; and (2) “no reasonable jury could
find that Defendant acted in bad faith.”
We affirm the grant of summary judgment based on the district court’s
second determination. To prevail, Pureco must show that Allstate’s failure to
accept the policy-limits demand was “a conscious and deliberate act,” rather than
“an honest mistake, bad judgment or negligence.” Chateau Chamberay, 108 Cal.
Rptr. 2d at 783. Even viewing the facts in the light most favorable to Pureco, there
is nothing to suggest that Allstate’s delayed acceptance was anything more than
“an honest mistake, bad judgment or negligence.” See id. From the moment
Allstate received the policy-limits demand, it asked Andrew Zeytuntsyan, who
represented Pureco, for more information about Pureco’s injuries, but he failed to
provide it until late on the Friday afternoon preceding the Monday deadline. There
is evidence that suggests that Zeytuntsyan knew the Allstate agent was not in the
office at that time and would not be in the office on Monday. Even if Zeytuntsyan
did not know that the agent would be out, Allstate’s failure to evaluate the
additional material until Tuesday morning was at most negligence, not “a
4
conscious and deliberate act, which unfairly frustrates the agreed common
purposes and disappoints the reasonable expectations of the other party.” 2 Id.
Finally, our affirmance of the district court’s determination that Allstate
made a mistake or was negligent precludes a determination of oppression, fraud or
malice that is necessary to succeed on a claim for punitive damages. See In re
First All. Mortg. Co., 471 F.3d 977, 998 (9th Cir. 2006) (holding that California
law requires clear and convincing evidence of fraud, oppression, or malice).
The district court’s grant of summary judgment for Allstate is AFFIRMED.
2
Although the district court determined that the demand’s failure to
specifically cover both David and Felipe Carrillo and failure to account for the
Medi-Cal claim did not render the demand unreasonable as a matter of law these
concerns nonetheless support Allstate’s reluctance to initially accept the demand.
5