Cases

21st Century Insurance Co. v. Superior Court (2015) 240 Cal.App.4th 322

Plaintiff was injured in an auto accident. He sued the insured. The carrier, GMSR’s client, defended under a $100,000 limits policy. The plaintiff and the insured claimed that two other policies with $25,000 limits each also provided coverage. The plaintiff refused the carrier’s offer of the $100,000 policy limits. Instead, the he and the insured settled for over $4 million, a covenant not to execute, and an assignment to the plaintiff of the insured’s rights against the carrier. The plaintiff sued the carrier for bad faith. The trial court denied summary judgment and GMSR sought writ relief. In a published decision the Court of Appeal held that (1) the carrier was not bound by the settlement made when it was defending, distinguishing other authority holding that a carrier might be bound when it defends under only one of several policies and (2) that no potential coverage existed under the other two policies.

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