Marin v. Interinsurance Exchange etc. CA2/5

Filed 7/9/21 Marin v. Interinsurance Exchange etc. CA2/5

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE
MICHELLE PAOLA MARIN et al., B294361

Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC599460)
v.

INTERINSURANCE EXCHANGE
OF THE AUTO CLUB,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los
Angeles County, Mel Recana, Judge. Affirmed.
The Yarnall Firm and Delores A. Yarnall; Algorri Firm,
Mark S. Algorri, Bruce Palumbo and Samuel Ogbogu for
Plaintiffs and Appellants.
Sheppard, Mullin, Richter & Hampton, John T. Brooks,
Karin Dougan Vogel, Thomas R. Proctor and Matthew G.
Halgren for Defendant and Respondent.
Shernoff Bidart Echeverria, Ricardo Echeverria, Steven
Schuetze and Kristin Hobbs for Amicus Curiae of the Consumer
Attorneys of California.
__________________________
 In this bad faith action arising out of a horrific automobile
accident, the insured’s liability was clear, and the claimant was
injured so severely that a conservator was appointed to represent
her interests. The insurer offered a policy limits settlement. The
claim failed to settle not because of any issues regarding the
settlement amount, but because the conservator required a
declaration from the insured sufficient to convince the Probate
Court there were no other sources of recovery. Ultimately, the
injured party’s counsel sent a demand letter, the interpretation of
which was a key issue of dispute at trial. The claimant took the
position that, after months of no progress in obtaining the
declaration, her demand letter required production of the
declaration by a date certain – a deadline the insurer failed to
meet. The insurer took the position that the demand letter
sought only a promise to provide the declaration – a requirement
with which the insurer eagerly agreed, as, in fact, the declaration
was in progress and nearly complete. The jury sided with the
insurer, and the claimant appeals.
On appeal, although the claimant challenges a number of
the jury instructions given, both parties also argue they are
entitled to judgment as a matter of law on the basis that their
interpretation of the demand letter is necessarily correct. We
conclude that the insurer’s interpretation of the letter is correct
as a matter of law – the letter did not require the submission of
the declaration by a specified date in order to manifest assent to
the settlement agreement. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Although resolution of the appeal turns on the
interpretation of a single letter, the history of the claims-
handling process leading up to the letter gives context to our
analysis.

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 The Relevant Facts
1. The Accident
The case arose from an automobile accident on
November 27, 2011, involving Maryann Ganuelas and Michelle
Marin.
Marin was seriously injured. She was rendered comatose
as a result of the accident and ultimately remained in a
vegetative state.
Ganuelas, who was 18 years old at the time of the accident,
was an additional insured on her father’s policy with defendant
and respondent Interinsurance Exchange of the Automobile Club
(AAA). The policy had a bodily injury limit of $100,000 per
person.
Attorney Ademola Okusanya is Ganuelas’s uncle. The day
after the accident, he wrote AAA, advising AAA that he had been
retained “to represent [her] interests in the settlement” of the
claim. He requested that all inquiries regarding the claim be
directed to his office.
2. AAA Begins Adjusting the Claim
Once Attorney Okusanya made contact, AAA sought to take
Ganuelas’s statement. Attorney Okusanya promised to make her
available once she completed her school exams.
Ganuelas provided a statement to AAA adjuster Justin
Velasco on January 6, 2012, approximately six weeks after the
accident. AAA determined Ganuelas was 80 percent at fault.
Neither Velasco nor his supervisor had authority to offer
the policy limits of $100,000, so a request was sent up the chain
of command. On January 23, 2012, Velasco was granted
approval to offer $100,000 in exchange for a release of Ganuelas
and her father. Along with the authority came a directive to

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“[c]oordinate any declarations, excess insurance, or asset requests
with the insured’s atty.”
3. In January, Marin Was Not Yet Prepared to Accept
the Offer
AAA had been speaking with Marin’s father. On
December 29, 2011, he identified the firm of Aspell and Lopez
(“A&L firm”) as Marin’s counsel on the claim.1
On January 23, 2012, within a half hour of receiving
approval to settle the claim for $100,000, Velasco telephoned the
A&L firm to discuss settlement and left a message. On
January 25, 2012, Patrick Aspell of the A&L firm returned his
call and advised that the $100,000 policy limit offer “will most
likely be accepted, but [the firm] will have to petition the court
since [Marin] can’t give consent.” (Capitalization omitted.) The
following week, the A&L firm informed AAA that it was trying to
establish a conservatorship for Marin.
Over the next few months, Velasco continued to contact the
A&L firm regarding the status of the conservatorship. On
July 25, 2012, the A&L firm informed Velasco that the
conservatorship was granted and they were now working on the
settlement. Alejandra Romero, Marin’s sister, had been
appointed conservator.
Attorney John Streeter worked in the same building as the
A&L firm, but did not work for the firm. After her appointment

1 At various time in the course of the claim, Marin would be
represented by three separate sets of attorneys: (1) two
attorneys at the Aspell and Lopez firm; (2) Attorney John
Streeter, who was subsequently associated by Aspell and Lopez;
and (3) Attorney Maryam Parman, who replaced all prior
attorneys. We refer to Aspell and Lopez and its attorneys (but
not Streeter) collectively as the “A&L firm.”

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as conservator, Romero signed a letter formally designating both
the A&L firm and Attorney Streeter to handle the claim. From
that point forward, Attorney Streeter took over the claim
negotiation for Marin.
4. AAA Reaffirms Its Offer and Sends a Draft Release
On July 26, 2012, Attorney Streeter wrote Velasco at AAA,
forwarding the Letters of Conservatorship and a copy of the
conservator’s designation of counsel. His cover letter also
requested information he believed necessary for court approval of
the settlement.
There is some dispute in the record as to whether the cover
letter was actually sent; Velasco and his supervisor testified that
the attachments were received with no cover letter. We need not
resolve whether the cover letter was omitted. Velasco said he did
not receive it and that would explain Velasco’s response, which
we discuss next before we consider the specific information
Attorney Streeter’s letter requested.
Velasco had offered AAA’s policy limits of $100,000 as early
as January; he had been told it would likely be accepted, but the
case was in a holding pattern until a conservatorship could be
established. On August 1, 2012, once he received the letters of
conservatorship, Velasco sent Attorney Streeter a letter stating,
“Pursuant to our settlement agreement, enclosed is our release in
the amount of $100,000.00 in full settlement of the claim. [¶]
Please have your client sign where indicated and return the
release to us. Upon receipt of the properly executed release, we
will forward our settlement check.” A one-page release was
included.

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5. In Late July, Marin, Through Attorney Streeter,
Requests Information
Attorney Streeter apparently was not quite ready to effect
the settlement. Streeter’s cover letter of July 26 – the one that
Velasco said he had not received – requested information Streeter
believed necessary to complete the settlement. The letter was
phrased only as a request for information; it made no explicit
reference to AAA’s offer, nor did it indicate that settlement was
conditioned on the nature of the information provided.
The letter stated: “Now that the formalities have been
satisfied, I would like to inquire as to your, and your client’s
willingness to provide certain items that will be required, at a
minimum, at the ultimate hearing seeking approval of any
settlement. [¶] I anticipate needing a certified copy of the
declarations page of the policy, as well as the entirety of the
policy itself, and a declaration, under penalty of perjury, relative
to no additional insurance, excess or otherwise. Additionally, we
would require, also by way of a declaration, a financial statement,
and information that at the time of the incident, that your
insured was not in the course and scope of her employment, or
performing a task or errand for another. [¶] To satisfy an
inquiry relative to negligent entrustment, we would need
information relative to how the vehicle was obtained by her, as
well as any pre-acquisition driving issues. [¶] I can appreciate
that these are of course, not typical requests, but since we are
dealing with an individual in a permanent vegetative state, it is a
necessity. [¶] If you have any initial questions, just send me an
email to to [sic] expedite the process.”
AAA has a standard form declaration which it can use to
have its insureds confirm, via checkbox, that they were not acting
in the course of their employment and did not have excess

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insurance. The information Attorney Streeter sought was
substantially more detailed. Velasco’s supervisor testified he had
never before been asked to provide some of the information
Attorney Streeter had requested for an insured’s declaration.
Although this request was unusual, AAA did not claim that
it was unreasonable. AAA did not immediately comply, however,
because it had no record of having received the cover letter.
6. In August, Marin, Through Attorney Streeter,
Repeats the Request
Having not received any of the requested information, on
August 29, 2012, Attorney Streeter sent a second, stronger letter.
At trial, he described the second effort as a “polite demand
letter.”
The letter stated: “There seems to be some confusion in the
scope of our demand to settle this case. [¶] . . . [¶] From your
insured, we require a Declaration, under penalty of perjury: that
there is no other available insurance; that she was not in the
course and scope of employment or engaged in any errand or
performing a task for another; a financial statement; and,
information on the manner in which she acquired her vehicle. [¶]
I expect to be provided with this information within 30 days.”
7. Through September and October, AAA and Ganuelas
Provide the Information for the Declaration
Upon receiving Attorney Streeter’s August 29 letter,
Velasco called him to discuss the details of what he needed.
Velasco had some of the information from when he had taken
Ganuelas’s statement in January 2012. He gave Attorney
Streeter that information immediately on the phone.
Then, Velasco contacted Attorney Okusanya’s office, as
Attorney Okusanya was representing Ganuelas. There, he spoke
with Jessica Wasef, a paralegal. Velasco explained to Wasef the

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detailed declaration Attorney Streeter needed from Ganuelas.
Wasef said she would coordinate the declaration with Attorney
Streeter.
What followed was a cooperative effort among Velasco (for
AAA), Attorney Okusanya and paralegal Wasef (for Ganuelas),
and Attorney Streeter (for Marin) to obtain the necessary
declaration from Ganuelas. On September 10, Attorney Streeter
sent Velasco a draft declaration with spaces to be filled in.2 His
letter explained, “I would appreciate it if you could discuss it with
your insured and make the necessary corrections and additions
where indicated. I will then finalize it and return to you for her
execution.” Upon receipt, Velasco forwarded the draft (and cover
letter) to Wasef.
On September 24, Wasef emailed the draft declaration to
Ganuelas, so that she could provide the necessary information.3
On October 5, Wasef called Ganuelas and left a voice mail,
checking “on the status of her completing her declaration.” On
October 24, Attorney Okusanya faxed (and mailed) to Attorney
Streeter Ganuelas’s answers for insertion into the final

2 For example, item 3 of the declaration stated, “I (purchased
the vehicle in _____ with my own funds.) [¶] I (was given the
vehicle by____). At the time the vehicle was given to me, I had
(number of moving violations and automobile accidents.)”

3 The record shows a two-week delay between the date
Attorney Streeter sent his letter to Velasco (September 10) and
the date Wasef e-mailed it to Ganuelas (September 24). Some of
the delay is attributable to transit time for the letter to be mailed
from Attorney Streeter to Velasco and onward to Wasef; the rest
is unexplained.

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declaration.4 Okusanya’s letter explained, “Kindly send our office
a finalized copy of the amended declaration for our client to
review and endorse.”5
8. Attorney Parman Replaces Attorney Streeter and the
A&L Firm
While Velasco, Attorney Okusanya, and Attorney Streeter
were cooperating on obtaining the declaration from Ganuelas,
Marin’s conservator decided to replace Attorney Streeter with
new counsel, Attorney Parman.

4 Attorney Okusanya wrote a letter, not a draft declaration.
For example, as to item 3, quoted in footnote 2 above, he wrote,
“This inquiry is vague and ambiguous. However, client responds
as follows: ‘I was given the vehicle by Roy Ganuelas. At the time
the vehicle was given to me, I did not have any moving violations.
I was involved in one no fault accident caused by another driver.”

5 Attorney Streeter’s August 29 letter had stated that he
“expect[ed] to be provided with this information within 30 days.”
Velasco had conveyed that “expectation” to paralegal Wasef.
Wasef’s notes confirm that Velasco told her that Attorney
Streeter “need[ed] to know” the information “within 30 days.”
Wasef interpreted that to mean “he needed the information as
opposed to . . . a hard and fast deadline.” The 30-day time period
was not met. Velasco testified that, at one point, Attorney
Streeter told him that he was fine with how smoothly things were
going, so the 30-day limit was no longer necessary. Attorney
Streeter testified he never agreed to waive the 30 days and
Velasco had never asked him to do so. Whether AAA blew the
deadline by not better impressing Wasef and Ganuelas with the
urgency of the matter is not at issue. Attorney Parman’s
replacement of Attorney Streeter would render moot Attorney
Streeter’s deadline, as Parman presented a new demand with a
new date.

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 There was some disagreement as to exactly when Attorney
Parman took over from Attorney Streeter. On September 17,
2012, Attorney Parman sent Velasco a form letter indicating that
she had been retained by Marin and would contact Velasco when
her investigation was complete. Velasco immediately phoned
Attorney Parman and indicated his understanding that Attorney
Streeter was representing Marin. According to Velasco, his
perception was that Attorney Parman had not known there was
already an attorney on the case. Velasco believed Attorney
Parman would either work together with Attorney Streeter or the
two attorneys would figure out which one would handle the
representation.
On September 24, Velasco spoke with Attorney Streeter,
who, according to Velasco, “was adamant that he was the
attorney” of record for the conservatorship, and this could not be
changed without his consent. He told Velasco he would
coordinate with Attorney Parman. In the meantime, Attorney
Streeter continued to work with Attorney Okusanya’s office to
gather the information for Ganuelas’s declaration. On the same
day Velasco spoke to Streeter, Wasef emailed the initial draft
declaration to Ganuelas for her to complete her answers.
As earlier mentioned, Attorney Streeter was associated as
counsel for Marin by the A&L firm, and worked in the same
building. But he was not a member or associate of A&L. On
September 27, Patrick Aspell of the A&L firm wrote AAA,
advising that the firm was no longer on the case. Although
Attorney Streeter testified that he drafted the letter for Aspell’s
signature, the letter did not state that Attorney Streeter himself
was off the case. Attorney Streeter believed that he was not
replaced as counsel until October 9, 2012, when he was
substituted out of the conservatorship action. According to

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Velasco, Attorney Streeter did not inform Velasco that he was no
longer attorney of record until mid-November.
When Attorney Okusanya faxed the information for
Ganuelas’s declaration to Attorney Streeter on October 24,
Okusanya did not know that Attorney Streeter was no longer
representing the conservator.
Attorney Streeter transmitted his file to Attorney Parman
around October 29, 2012. Attorney Parman’s firm uploaded the
information into their system on that date, and Attorney Parman
reviewed the uploaded file. The materials Attorney Parman
received included the October 24 fax from Attorney Okusanya
containing the information for Ganuelas’s declaration. Attorney
Parman believed the letter contained the information Attorney
Streeter had sought, but admitted “I didn’t read it that carefully,
but I did read the first couple of paragraphs.”
9. Attorney Parman Sends the October 31 Letter
After three months of back-and-forth letters and emails,
the participation of a troupe of insurance representatives,
lawyers and other interested parties, and a month past the 30
days by which Streeter wrote he “expect[ed]” the information he
had requested, we finally come to what is the critical document in
this case – Attorney Parman’s letter of October 31. In its
entirety, the letter reads:
“As you are aware the above referenced incident caused Ms.
Marin serious injuries, as a result she remains in a fully
comatose state. We firmly believe you’ve had plenty of time to
properly evaluate this claim. We are therefore, requesting
settlement in the amount of your insured’s policy limits and
disclosure of your insured’s policy limits. This settlement offer is
conditional upon:

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 “1. Your furnishing us with a certified copy of the complete
insurance policy, including declarations.
“2. A prompt exchange of the settlement draft upon
approval of the Petition to Approve Compromise of Disputed
Claim for a Person with Disability for a fully executed release
and settlement documents releasing your insured, driver,
company and their respective agents, assigns, successors,
affiliates, associates, heirs, executors, administrators and no
other persons and parties.
“3. Settlement draft is to be issued according to the court
approved Settlement of a Person with Disability.
“4. A declaration signed by your insured regarding
additional insurance coverage and agency.
“We are certain that you are aware that if a judgment in
excess of your insured’s policy limit is entered against him in Ms.
Marin’s lawsuit, when you have had the opportunity to settle this
matter within your policy limits, your company may be held
responsible for the difference and/or for bad faith. Silberg v.
California Life Ins. Co., 11Cal.3d 452, 113 CR 711 (1974). We
anticipate your evaluation of our client’s settlement demand in
light of this factor.
“We have enclosed herewith or have already supplied you
with copies of billing statements and information necessary for
evaluating this claim. We, therefore, believe that you are in a
position to act promptly upon this demand. Accordingly, this
offer shall remain open until 5:00 p.m. on November 8, 2012.”
“Your prompt attention to this matter will be appreciated.
If you have any questions, please feel free to contact our office.”
Attorney Parman admitted at trial that the letter was
partly from a template and partly specific to this case. She did

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not personally sign the letter, nor did she mail it – someone else
in her office did so.
10. Velasco Makes Efforts to Accept
Although dated October 31, AAA did not receive the letter
until November 6, 2012, leaving Velasco only two days to
respond. Velasco immediately mailed Attorney Parman a letter
disclosing the $100,000 policy limits and confirming that AAA
was tendering it.6 He also called and “left a message to say we’re
accepting your demand, we’re tendering our policy limits of
$100,000, and we’re fine with everything. We just wanted to
clarify some of the administrative steps, the bullet points.”
Specifically, Velasco believed that Attorney Parman already had
a declaration sheet and certified copy of the policy, as he had sent
them to Attorney Streeter. He also thought she might have “the
declaration form ready,” and wanted to clarify if Attorney
Parman was satisfied with the declaration in the form he and
Attorney Okusanya had been finalizing with Attorney Streeter or
if there was something different she needed. Velasco had ordered
another certified copy of the policy, and, in the message to
Attorney Parman, he stated the copy would be sent soon.
Attorney Parman did not return Velasco’s call. Attorney
Parman sometimes saves voice mail messages, but did not save
any messages from Velasco on this date. However, Attorney
Parman did not deny that Velasco left a message on that date;
she testified that she had no recollection one way or the other.

6 The letter stated, “This is to confirm we are offering our
policy limit of $100,000 to resolve your client’s claim.”

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11. Attorney Parman Takes the Position the Offer Had
Expired or was Rejected and Declines to Negotiate
Further
On November 12, 2012, Velasco called again and left
another voice mail message. He stated that AAA had just sent a
certified copy of the policy and requested a callback “with regards
to some of the other items listed on your letter.” Attorney
Parman received this voice mail but did not respond.
On November 15, 2012, Attorney Parman faxed a letter to
Velasco, asserting that her “policy limit demand expired on
November 8, 2012” and claiming that AAA “failed to
unconditionally and timely tender the policy to protect your
insured against excess judgment.”7 Attorney Parman classified
this as bad faith. She said she would no longer accept the policy
limit in settlement, and “instructed” Velasco to notify Ganuelas
“that you have failed to timely and unconditionally tender the
policy limit to resolve a substantial injury claim placing her in
great peril.” Attorney Parman’s letter added, “So that there are
no misunderstandings, we would like to remind you of the facts
and circumstances surrounding this claim. Our office forwarded
a policy limit demand on behalf of Michelle Marin on October 31,
2012 with an expiration date of November 8, 2012. Since it has
been almost one year since the loss, you should have been well
aware of the seriousness of this accident my client’s injuries and
in a position to respond quickly to our demand. Our letter
demanded settlement for policy limit with four simple conditions.

7 This language is curious. Velasco’s letter of November 6
had, in fact, “unconditionally and timely tender[ed] the policy.”
Attorney Parman would later claim that the issue was not that
AAA failed to unconditionally tender the policy, but that the
tender purportedly failed to comply with her conditions.

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[AAA] failed to timely address the demand and our conditions. In
fact, to date you have not met any of the conditions in our policy
limit demand.”
12. Velasco Obtains a Finalized Declaration; Attorney
Parman Refuses Further Entreaties
Upon receiving Attorney Parman’s November 15 fax,
Velasco called Attorney Parman, explaining that everything had
been tendered. He asked if she wanted the declaration they had
been working on with Attorney Streeter or something else.
Attorney Parman was not interested in receiving anything; she
was unwilling to resolve the claim at this time. She claimed that
all four conditions in her letter had to have been completed by
November 8 in order for AAA to have effectively accepted.
Velasco asked to set a reasonable schedule to complete the
settlement; Attorney Parman refused.
The same day, Velasco called Wasef, the paralegal in the
office of Attorney Okusanya. (We observe again that Okusanya
was Ganuelas’s uncle.) Wasef called back on November 19. On
the phone, Velasco told Wasef that Attorney Parman was
claiming bad faith. Nonetheless, Velasco continued to complete
the declaration. Wasef faxed Velasco a copy of the October 24
letter Attorney Okusanya had sent to Attorney Streeter with the
information for Ganuelas’s declaration. Velasco immediately
forwarded it to Attorney Parman, who did not respond. On
November 21, Velasco called Attorney Okusanya’s office and
asked if Ganuelas could sign a draft containing the language
from the October 24 letter and send it to Attorney Parman as

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soon as possible. Ganuelas’s declaration was signed and sent
within two days.8 Attorney Parman did not accept it.
Marin and Ganuelas’s Bad Faith Lawsuit
1. The Underlying Action and Partial Assignment
On March 25, 2013, Marin, through her conservator,
brought suit against Ganuelas. AAA defended the action. It
resulted in a judgment in favor of Marin which, inclusive of costs
and postjudgment interest, exceeded $23 million.
Ganuelas then partially assigned her bad faith claim to
Marin in exchange for a stay of execution and joint prosecution
agreement. She retained the portion of her bad faith claim for
any emotional distress damages she may have incurred.
2. The Complaint in the Present Action
On October 29, 2015, Marin (through her conservator) and
Ganuelas (collectively, plaintiffs) brought suit against AAA for
insurance bad faith. They alleged liability based on AAA’s failure
to settle the case at policy limits when it had an opportunity to do
so. They specifically alleged that Attorney Parman’s October 31,
2012 demand letter required that AAA “at the time of acceptance,
provide a declaration signed by Ganuelas regarding additional
insurance and agency.” Plaintiffs’ complaint continued: “Despite
months of requests for receipt of the necessary documentation,
which AAA never denied was necessary to effectuate settlement
at applicable policy limits, AAA failed to meet the reasonable and
essential conditions necessary to effectuate settlement by
continuing to fail to provide the necessary documentation. Thus,

8 Ganuelas dated her signature on the declaration
November 22. Attorney Okusanya’s letter transmitting it is
dated November 21. Wasef testified that her notes showed it was
e-mailed on November 23.

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AAA failed and refused to meet Parman’s reasonable settlement
demand of applicable policy limits on behalf of Marin.”
3. Trial
The trial proceeded before a jury. Plaintiffs’ theory of the
case was that Marin had made “three demands for policy limits.
Not one was accepted per the terms.” The jury was asked to
determine whether the three letters – Attorney Streeter’s July 26
and August 29 letters, and Attorney Parman’s October 31 letter –
constituted reasonable settlement demands and whether AAA
failed to accept them. The sole basis for plaintiffs’ argument that
AAA did not timely accept the settlement offer was AAA’s failure
to timely provide Ganuelas’s declaration. Marin’s counsel argued
to the jury: “This case was clearly about [AAA]’s inability to
secure a simple piece of paper, a simple signed declaration for
over ten months, a simple signed piece of paper that would have
saved the day.” Ganuelas’s counsel agreed, arguing, “I have one
question: Why did it take so long to get a simple declaration that
everybody knew from Day One would be needed to get this case
settled and to protect my client, Maryann Ganuelas?” He added,
“The only thing that stopped this case from settling was Maryann
Ganuelas’ declaration, . . . .” 9

9 On appeal, plaintiffs argue that, in addition to AAA’s
failure to comply with Attorney Parman’s demand by failing to
timely transmit Ganuelas’s declaration, AAA failed to comply
with Attorney Parman’s letter with respect to a release, because
the release AAA had previously sent Attorney Streeter was
overbroad. This argument was not pursued at trial; the sole
theory at trial was that AAA failed to meet Attorney Parman’s
deadline regarding a declaration. As plaintiffs did not argue that
AAA’s acceptance was invalid in any other way at trial, the
“release” argument is waived on appeal. (Steele v. Totah (1986)
180 Cal.App.3d 545, 551-552.)

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 AAA took the position that its performance, under all the
circumstances, was reasonable. Specifically, as to Attorney
Parman’s October 31 letter, the parties agreed that it was for the
jury to decide whether the letter required that AAA provide
Ganuelas’s declaration by November 8, or if, in the alternative,
the demand could be accepted simply by words of acceptance.
Witnesses gave opposing opinions on the issue. There was never
any question as to AAA’s intent; indeed, plaintiffs’ expert
conceded that the AAA “professionals handling this claim wanted
and were trying to get the claim settled.” Plaintiffs argued that
AAA simply failed to get it done.
The jury found by special verdict neither of Attorney
Streeter’s letters constituted a reasonable settlement demand,
but Attorney Parman’s October 31 letter did. The verdict also
reflected the jury’s finding that AAA did not “fail to accept”
Attorney Parman’s October 31 letter.
Judgment was entered in favor of AAA. Plaintiffs’ motions
for new trial and judgment notwithstanding the verdict were
denied. Plaintiffs filed a timely notice of appeal.
DISCUSSION
On appeal, plaintiffs raise a number of challenges to the
jury instructions given by the trial court. Plaintiffs also argue
that, as a matter of law, they are entitled to partial judgment in
their favor on the issue of liability. Specifically, although they
had previously argued that it was for the jury to decide whether
Attorney Parman’s October 31 letter required presentation of
Ganuelas’s declaration by November 8, they take the position on
appeal that, as a matter of law, the letter required that AAA
provide the declaration by November 8. Plaintiffs argue, for
example, “Parman’s 10/31/2012 demand, read in context, where
AAA knew that Marin had long requested AAA to deliver

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documents, could only be interpreted to be a unilateral offer,
requiring AAA to act in order to ‘accept’.” As the jury found the
letter to be a reasonable settlement demand, plaintiffs argue the
jury must have also found that the November 8 declaration-
deadline was reasonable, entitling plaintiffs to judgment on
liability. Plaintiffs’ argument on this point continues: “Bad faith
is shown here as a matter of law.” They contend “no properly
instructed jury could have found AAA timely ‘accepted’ Marin’s
conditional demand for delivery of documents. [¶] JNOV lies on
liability. [¶] Thus, this Court should order a partial new trial on
Ganuelas’s emotional distress and punitive damages only.
[Citations.] Marin’s damages, (the underlying PI judgment, plus
interest as accrued), are set as a matter of law. [Citation.]”
Legally, AAA agrees with plaintiffs that the interpretation
of the October 31, 2012 demand is a question of law. Not
surprisingly, AAA takes the opposite interpretive position,
arguing that “no reasonable jury could have concluded that [AAA]
did not accept the October 31 demand, . . . because the demand
did not require the requested declaration to be delivered by
November 8.”
We agree that the interpretation of the October 31 letter is
a question for the court. Because we also agree with AAA that as
a matter of law Attorney Parman’s October 31 letter did not
require delivery of Ganuelas’s declaration by November 8, we
affirm the judgment for AAA, without addressing the other issues
raised by the parties.
1. Overview of Bad Faith Law
“From the covenant of good faith and fair dealing implied
by law in all contracts, and from the liability insurer’s duty to
defend and indemnify covered claims, California courts have
derived an implied duty on the part of the insurer to accept

19
reasonable settlement demands on such claims within the policy
limits. [Citation.] ‘[A]n insurer is required to act in good faith in
dealing with its insured. Thus, in deciding whether or not to
settle a claim, the insurer must take into account the interests of
the insured, and when there is a great risk of recovery beyond the
policy limits, a good faith consideration of the insured’s interests
may require the insurer to settle the claim within the policy
limits. An unreasonable refusal to settle may subject the insurer
to liability for the entire amount of the judgment rendered
against the insured, including any portion in excess of the policy
limits. [Citation.]’ [Citation.]” (Hamilton v. Maryland Casualty
Co. (2002) 27 Cal.4th 718, 724-725.)
In early cases holding the insurer liable for bad faith, the
insurer had made a conscious decision to reject the reasonable
settlement offer. (E.g., Comunale v. Traders & General Ins. Co.
(1958) 50 Cal.2d 654, 658 [insurer refused the settlement offer
within policy limits because it believed the accident was not
covered]; Davy v. Public Nat’l Ins. Co. (1960) 181 Cal.App.2d 387,
399 [insurer refused the settlement offer within policy limits
because it believed the case was defensible on contributory
negligence]; Brown v. Guarantee Ins. Co. (1957) 155 Cal.App.2d
679, 681-682 [insurer rejected policy limits offer on the basis that
unless it could save some money on the settlement, it had no
reason to settle].)
Later cases established that bad faith could be established
with something less than a conscious rejection of a reasonable
settlement offer. In fact, there need not be an offer at all. For
example, in Boicourt v. Amex Assurance Co. (2000)
78 Cal.App.4th 1390, 1392, the insurer had a practice of refusing
to contact its insureds to obtain permission to disclose policy
limits, which had the effect of discouraging claimants from

20
making offers. The appellate court found that this practice alone
could constitute bad faith, when the failure to disclose policy
limits prevented the claimant from even making an offer. (Id. at
p. 1399.)
Other cases have held that an insurer can commit bad faith
if it rejects reasonable terms of a settlement demand, even when
it agrees to the settlement amount. In Barickman v. Mercury
Casualty Co. (2016) 2 Cal.App.5th 508 (Barickman), the insurer
agreed to a policy limits settlement arising out of a drunk-driving
accident. However, when the injured claimant sought to modify
the insurer’s standard release to confirm that it would not release
the convicted insured’s obligation to pay court-ordered
restitution, the insurer balked, ultimately scuttling the
settlement. (Id. at pp. 512-514.) This was sufficient to establish
bad faith. Regardless of the insurer’s good faith in agreeing to
settle for policy limits, it nonetheless acted unreasonably by
refusing the reasonable modification to its proffered release.10
(Id. at pp. 521-522.)

10 On appeal, plaintiffs cite to Barickman for the proposition
that an insurer “has a duty reasonably [to] do ‘all within [its]
power’ to effect settlement.” The complete quote from Barickman
is that, although the insurer had initially acted in good faith by
offering policy limits “there were disputed facts, including
significant issues of credibility, as to whether [the insurer] did all
within its power to effect a settlement once [the victims] accepted
the offer but proposed a slightly modified version of the
accompanying release.” (Barickman, supra, 2 Cal.App.5th at
pp. 520-521.) Barickman did not impose a blanket duty on an
insurer to generally do all within its power to effect settlement.
It held only that, even when an insurer has acted in good faith by
offering policy limits, the insurer’s duty was not fully discharged
and it continued to have a responsibility to make reasonable

21
 The ultimate issue for bad faith liability is whether the
insurer’s conduct was unreasonable under all of the circumstances.
(Barickman, supra, 2 Cal.App.5th at p. 520.) “The standard of
good faith and fairness examines the reasonableness of the
insurer’s conduct, and [a] mere error[] by an insurer in discharging
its obligations to its insured ‘ “does not necessarily make the
insurer liable in tort for violating the covenant of good faith and
fair dealing; to be liable in tort, the insurer’s conduct must also
have been unreasonable. [Citations.]” ’ [Citations.]” (Graciano v.
Mercury General Corp. (2014) 231 Cal.App.4th 414, 425.) Although
some cases have used the language of failing to accept a reasonable
offer as akin to affirmatively rejecting the offer (e.g. Reid v.
Mercury Ins. Co. (2013) 220 Cal.App.4th 262, 272-273), one recent
appellate decision held that failure to accept a reasonable
settlement offer is not per se unreasonable, as a failure to accept
could be without fault. (Pinto v. Farmers Insurance Exchange
(2021) 61 Cal.App.5th 676, 688, review denied June 23, 2021
(S268253).)11 To be liable for bad faith, the insurer must act or fail
to act without proper cause. (Ibid.)

efforts actually to settle the claim against its insured, when the
claimant proposed a modification to its release. (Id. at p. 521.)

11 On appeal, plaintiffs argue that Pinto was wrongly decided.
While this appeal was pending, the Supreme Court denied review
in Pinto. Plaintiffs also asked us to take judicial notice of the
petition for rehearing in Pinto (which the Court of Appeal denied)
and some excerpts from the trial court record in Pinto supporting
the petition for rehearing. We find Pinto has no particular
relevance to the issues as we have framed them, and see no
reason to review the merits of the denial of the petition for
rehearing. Accordingly, we deny the request for judicial notice.

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2. There Was No Bad Faith as a Matter of Law
A. In Some Instances Lack of Bad Faith May Be
Determined as a Matter of Law
While bad faith is usually a question of fact, it can be one of
law when facts are undisputed. (Walbrook Ins. Co. v. Liberty
Mut. Ins. Co. (1992) 5 Cal.App.4th 1445, 1457.)
For example, lack of bad faith was resolved as a matter of
law in Reid v. Mercury Ins. Co., supra, 220 Cal.App.4th 262.
There, although the injured claimant contacted the insurer, the
claimant never actually made a settlement demand or offer.
Once the claimant retained counsel, counsel sent a letter, on
July 28, 2007, confirming representation, stating that the
claimant had been horribly injured, and seeking disclosure of the
whereabouts of the insured’s vehicle, the policy limits, and
whether the insured was covered by an umbrella policy. Further
letters were exchanged, but no settlement demand was made.
The claimant then sued the insured. While that action was
pending, the insurer offered a policy limits settlement, which the
claimant rejected. When the claimant sued the insurer on an
assigned bad faith claim, the insurer obtained summary
judgment on the basis that it had no duty to initiate settlement
negotiations because it was undisputed that there had been no
settlement demand. (Id. at pp. 265-269.) On appeal, our
colleagues in Division Eight of this court affirmed, concluding
there was no bad faith as a matter of law, because there is no
duty to initiate settlement discussions absent any indication from
the injured claimant that he or she is inclined to settle within
policy limits. (Id. at p. 273.) Of particular significance to the
issue before us, the court interpreted the claimant’s letters as a
matter of law, stating, “[Claimant’s son] asked for disclosure of
policy limits, and defendant disclosed those limits four weeks

23
later, after it obtained the necessary permission from the insured
to do so. We will not construe a bare request to know the policy
limit as an opportunity to settle. Nor could any reasonable juror
construe [claimant’s counsel’s] July 28, 2007 letter as ‘an
initiation of settlement’ or a settlement opportunity.” (Id. at
pp. 277-278.)
Graciano v. Mercury General Corp., supra, 231 Cal.App.4th
at page 418 resolved lack of bad faith as a matter of law,
following a jury verdict in favor of the claimant. There, the
insurer had offered the injured claimant a policy limits
settlement within the time demanded by the claimant; the
claimant nonetheless asserted the insurer committed bad faith by
failing to discover the facts and make its policy limits offer
sooner. The case proceeded to trial and resulted in a verdict in
favor of the claimant on the insured’s assigned bad faith claim.
On appeal, the insurer argued there was insufficient evidence to
support the verdict, and Division One of the Fourth Appellate
District agreed, concluding there was no bad faith. The insurer
had made a policy limits offer before the claimant’s deadline
expired, thereby establishing good faith as a matter of law. (Id.
at pp. 422, 434-435.)
B. The Record Establishes There Was No Bad
Faith As A Matter of Law
Here, whether plaintiffs could pursue a bad faith claim
turns on whether Attorney Parman’s October 31, 2012 letter
could be accepted with words only, or if instead it required
delivery of Ganuelas’s declaration by November 8 in order to be
properly accepted.
We turn to the language of the letter. (Aljabban v. Fontana
Indoor Swap Meet, Inc. (2020) 54 Cal.App.5th 482, 499-500 [when
parol evidence is not conflicting, construction of an instrument is

24
a question of law and the appellate court will independently
construe the writing].) We repeat the relevant language,
italicizing the critical terms:
“We are therefore, requesting settlement in the amount of
your insured’s policy limits and disclosure of your insured’s policy
limits. This settlement offer is conditional upon:
“1. Your furnishing us with a certified copy of the complete
insurance policy, including declarations.
“2. A prompt exchange of the settlement draft upon
approval of the Petition to Approve Compromise of Disputed
Claim for a Person with Disability for a fully executed release
and settlement documents releasing your insured, driver,
company and their respective agents, assigns, successors,
affiliates, associates, heirs, executors, administrators and no
other persons and parties.
“3. Settlement draft is to be issued according to the court
approved Settlement of a Person with Disability.
“4. A declaration signed by your insured regarding
additional insurance coverage and agency.
“...
“We have enclosed herewith or have already supplied you
with copies of billing statements and information necessary for
evaluating this claim. We, therefore, believe that you are in a
position to act promptly upon this demand. Accordingly, this offer
shall remain open until 5:00 p.m. on November 8, 2012.”
The offer clearly states that it is “conditional upon” four
items, including the paragraph about the declaration. Requiring
performance of each item by November 8, 2012 was not humanly
possible. It was undisputed that two of the conditions could not
have been accomplished prior to November 8. Attorney Parman
agreed that it would not have been possible to obtain court

25
approval of the settlement by November 8. She conceded that,
based on her knowledge of the probate court’s calendar, it would
take 30 to 60 days after the petition was filed to have the matter
heard. Two of the conditions required court approval –
exchanging a settlement draft approved by the probate court for a
release, and issuing the draft in accordance with the court-
approved settlement. Neither could be performed prior to
November 8.12
Plaintiffs nonetheless believe that AAA was required to
comply with the fourth condition, alone, by November 8 in order
for acceptance to be effective. Preliminarily, we observe that
while the first condition speaks of a certified copy of the policy
being “furnished,” the second condition of the settlement draft
being “prompt[ly] exchange[d],” and the third condition of the
settlement draft being “issued,” the fourth condition required
only that the declaration be “signed.” It contains no words of
delivery.
Perhaps more fundamentally, when the letter speaks in
terms of the deadline, and explains why Attorney Parman
believed that AAA was “in a position to act promptly upon this
demand,” the letter mentions only the previous provision of
“billing statements and information necessary for evaluating this
claim.” The letter stated that, having already provided that
information, “[w]e, therefore, believe that you are in a position to

12 The first condition, furnishing a certified copy of the policy,
had already been performed. Attorney Parman conceded that
Velasco had previously sent a certified copy of the policy to
Attorney Streeter, but she asked for it again because she likes to
do her “own due diligence.” Her due diligence notwithstanding,
the fact remained that the first condition had already been
satisfied.

26
act promptly upon this demand.” The “therefore” relates to the
provision of information “necessary for evaluating the claim.”
There is no suggestion in the letter that Attorney Parman also
believed that AAA was in a position to promptly supply the
declaration.13 The only reasonable interpretation of the deadline
is that by November 8, 2012, AAA must formally agree to the
policy limits settlement and agree that it will perform the
remaining conditions within a reasonable time period.
We sum up: the letter offers a policy limits settlement with
a very short deadline for acceptance and “conditioned” on four
things; at least two of the conditions could not be performed by
the deadline; the key, fourth, condition does not expressly require
delivery of the document; and the letter represents its deadline is
reasonable for reasons unrelated to compliance with any of the
conditions. The language cannot reasonably be interpreted as
requiring delivery of the declaration by November 8 for
acceptance to be effective. We conclude as a matter of law that
Velasco’s written and oral communications of November 6, 2012,
constituted timely acceptance of the offer.14

13 Attorney Parman could have easily included in her letter
that, due to the history of the claims process and in light of
Attorney Streeter’s prior requests, she required receipt of
Ganuelas’s executed declaration by November 8 or any other date
certain. She did not do so.

14 On appeal, plaintiffs suggest Velasco’s letter was not
sufficient acceptance as it was an unconditional policy limits offer
which did not specifically mention agreement with Attorney
Parman’s conditions. But Velasco testified that his voice mail
message accepted all the conditions, and Attorney Parman – who
could not recall whether she had or had not received such a voice
mail – could not disagree.

27
 In their briefs, plaintiffs suggest that Attorney Parman’s
letter must be interpreted in the context of the claims-handling
process to that point. We do not believe the history of the claims-
handling process can affect the clear meaning of this
unambiguous demand letter. Nonetheless, we observe that
plaintiffs’ view of the claims-handling process is contradicted by
the undisputed evidence. Plaintiffs argue that AAA had been
promising a declaration for months, and that Attorney Parman
clearly needed performance, not another promise. Plaintiffs
would construe the claims handling process as 10 months of
Velasco failing to obtain a declaration; and that “AAA failed even
to try to get Ganuelas’s declaration until 11/21/2012.” Plaintiffs’
assertion that AAA failed to try to obtain a signed declaration
until November 21 is belied by the fact that Attorney Parman
had Attorney Okusanya’s letter of October 24 that (1) conveyed
all of the information necessary for the declaration, and
(2) requested the final draft for Ganuelas to endorse.
We conclude that as a matter of law, the October 31 letter
did not require AAA to provide Marin the declaration in order to
effect acceptance. As such AAA could, and did, convey its
acceptance by letter and voice mail message.
DISPOSITION
The judgment is affirmed. Plaintiffs shall pay AAA’s costs
on appeal.

RUBIN, P. J.
WE CONCUR:

BAKER, J. KIM, J.

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