morning your honor please the court i'm appearing john gerard on behalf of plaintiff and appellant gabriel pepper i'm going to spend about five minutes of my time where the summary judgment should have been not been granted it should be reversed because there were tribal issues that were presented to the court and the court applied the wrong legal standard essentially  these kinds of cases involving third party bad faith where you have the duty to set up there are distinct rules that apply to that type of case as opposed to a first party case and in this case the court misapplied the standard and now let me let me get this straight the term of the policy of them and share were fifteen thousand dollars correct and we now have a judgment somewhere north north of two million dollars correct and you're wanting what well i represent mr pepper and mr pepper was exposed to that judgment as a result of the failure of all state to accept a reasonable offer within the time period that it was offered and before they counteroffer and cut off that offer and so as a result of the failure to accept the offer and to protect mr pepper my client when they had the reasonable opportunity to do so he has been subjected to the excess judgment because once that offer was counter counter offered in other words once once it was rejected by the inclusion of additional terms for property  damage including allstate as an additional insurer disavowing the representations that required the plaintiff's counsel in the underlying case grayson's counsel no longer had any duty to reinstate that offer at that point and so that some my client was damaged at that point because of the failure of allstate to protect him and that's what the someone is also out with so what should allstate have done when the offer a settlement comes in for fifteen thousand dollars for a policy limits allstate supposed to do what they are what allstate is supposed to do at that point they had already decided that the case was worth more than the policy limits both from a liability standpoint and from a damage standpoint right and so what they needed to do at that point was to protect their insured a conflict of interest had now arisen between their insured and them because if they didn't cross their t s and dot their i's and do exactly what they were supposed to do in accepting that offer but i'm asking what were they supposed to do they are supposed to respond in a timely fashion to the offer and there'd there to accept the offer in a timely fashion but when all but the offer came in with no release attached state doesn't say usually fifteen thousand dollars and there's no release of of the defendant well your defenses left exposed that's what cracked the case so what's also what i'm saying is any reasonable interpretation of this offer would tell you when they're saying we're willing to settle all the bodily injury claims and inclusive of all means that this is not a request for a unilateral payment on the part of all states this is a request to settle the case to give up their claims and if allstate then accepts that you have a binding contract which protects pepper and if they want to memorialize that by asking allstate asking for a release that is consistent with the terms of the offer there's not a problem with that but isn't the cases that say that they would could be held in in some liability fashion if you didn't ask for a release know what those cases are concerned with like late believe it was the driver or the owner and they were going to settle with the other one and so in that case the insurance company was properly saying you can't put us in a catch twenty two where we have more than one insured is covered by the release was saying you checked the problem is that the release that they were insisting upon they insisted upon a release that contain property damage which was not part of the offer that was made by the plaintiff they insisted on on having a disavowal of the representations which were material to making the offer namely that there was no other insurance that was involved that he was not in the course and scope of his employment with as they asked of the property damage ashton the policy limits were fifteen thousand dollars for personal injury and it was also there was coverage with respect to the motorcycle but they were in the process of asking you to you know figure out what it is that for them to say we're not paying that is misrepresenting the unifications that went back and forth no not really because what happens is they're saying you must sign this release that's what the letter saying before we're going to issue any kind of a check the fact that they're talking about having some kind of examination being done of the motorcycle doesn't change the fact that if he signed that release if if if great if if grayson and sign that release that says i'm giving up my property damage point in there and that then puts him in a position where if there is a disagreement down the road about property damage he is at a disadvantage at that point because allstate can say well you gave up your rights against us you gave up your rights for the property damage so all state is in a position now to put the screws that even if it comes after the demand that the plaintiffs says that that doesn't breach the implied covenant well that's the those are a lot of those cases are out of state cases where you have different laws that apply in terms of the the release is dicta because the release that they're talking about in that case the offer only was an offer to settle with someone named jose who was no longer had a valid policy the holding was find me very often and also he tries to frame it that we're setting them up under california law or we can't set them up unless we make a reasonable offer capable of acceptance if they don't accept it they have a duty to accept a reasonable offer which is to find what if you reject without explanation that i don't know what if you reject without explanation the county i'm not quite hearing you are if all mr gratian is never going to be fully and adequately compensated but of course one way i could the one way i can do that iraq is to make a offer that's capable of acceptance and if they don't do their duty to their insured you reject once they reject it i don't have to entertain anything and i'm going to ask my client's rights and i ask you a question sure i mean in order for you to prevail you've got to show bad fa first of all i have is very anonymous yes but those are all cases that the courts have used a lot of language over the years depending on the case specific when they use the term refused the use a term rejection they keep using different terms the fact is the duty is to accept an offer when they know that y bodies against them and that the damages exceed the policy here's here's what bothers me about the case from your side ok you're trying to turn a fifteen thousand dollar life and skin him to insurance policy plus damage to physical source of the motorcycle into a liability of over two million dollars because of a little back and forth there at the beginning asked of the terms of the when they finally consult with attorney after they counter will or they had to do was say we accept this is a proposed release would you entertain this under the language of the goetia asian contract we say yes we say no if they offered a release conforming to the offer and we don't accept it they're in reasonable grounds for not accepting because they have to protect their insur they've actually said was on the motorcycle over for assessment of damage but once we saw i'm not please answer my question they said that they were they wanted to look into the damage is what would happen if we signed that release it supersedes it so but if you're trying to if you are on your side trying to get a good faith settlement why don't you say hey wait a minute guys you left out the motorcycle part of those i don't represent them and they have a much more important provision that offer to sell for bo require them to show that they only had fifteen thousand it required them and this is very important it required them to say i don't have any other insurance i'm not in the scope of my employment on and then they haven't released it says we will leave the fact that they made any representations so that what happened and they and they put all stating that doesn't protect their insured we signed that release in the turns out and it problem she knew it had these provisions she had a right to cross it out but she said well let the attorney race that it's not my duty to raise it ok once one of you down to about a minute if you want to save some time ok that's the point their release didn't say propose what's we're not rejecting your offer but we want to know what you'll sign they have a duty to clarify that they have a duty to inquire about this california will they cite cases in other states it's not the one california they're turning it on its head but let's hear from the other side th that a reasonable jury could look at that and say that picking a fight over the language property damage in the relays was an example of gamesmanship not an example of a lawyer that was in good faith trying to settle i'm not trying to excuse them from a charge of gamesmanship i'm just trying to say that the release you offered was too broad and the property damage was not part of the offer that's true it was in the release but the cover letter i think made clear the context but in any event  within four weeks of the accident happened allstate twice offered its policy limits in exchange for release it did so twice within the very amount of time that the claimant in self and set forth as the deadline for acceptance this type of conduct attempting to settle the case early and often is the sort of thing that the law of california is meant to encourage not to punish and what i would submit i whether this court looks at the case through the lens of specific rules have been articulated by the california courts or through the lens of what is the purpose of this tort of bad faith either way that you look at it the afterwards to try to get it settled as well the part of the lawsuit being filed was there any response to the settlement conditions in the release from the plaintiffs saying well look we need to change this  to delete this language the records show in the event what the record shows is that on approximately november seventeenth the day after two days after the demand expired a letter came from mr stoll saying here are the things that we didn't like i'm sorry i'm getting the timeline were wrong a few days before the demand expired a letter came from mr stoll saying here are the things we don't like about the demand condition of a one for instance and you change that that's right on november seventeenth before the deadline set by the plight of himself had expired a new offer was extended that deleted the things that were objected to after that point the only response from mr stolz office was not there's still something wrong or something want to fix it was a gotcha advisory market about to tell your client to open up the check book or off to the races that's not the sort of thing that california law was meant to encourage and to hold that a case like this is entitle to go to a jury on the facts that we have here which set a very bad precedent from a public policy perspective you think to discredit here's i wanted to hear some evidence at trial that's right let me go to trial in the later on came another decision on the law i'm sorry i didn't hear the law in this in this particular case issues like this sometimes go to trial because of some material factual dispute that might prevent some of disposition without trial i was just trying to put it in the context of a trial judge perhaps what changed after trial to lead to result in your favor at least in the law there wasn't something that changed after trial this when this case on summary judgment there was no trial but i thought there was some evidence presented in connection with the proceedings below well there was an underlying trial there liability and damages trial against mr pepper the two and during the course of that trial one of the defenses that was presented by allstate on behalf of mr pepper was that a release had been effected back in november two thousand and eleven and was tried in a bifurcated context and the jury found that there was not an adequate acceptance of the proposed settlement offer so there's no settlement contract that's the only underlying trial but then the later bad faith case against allstate which is a separate law said never went to trial it was decided on a summary judgment and properly for several reasons one touched on already is the question of a release was a release offered and is a release required to make a settlement offer a reasonable one that has to be right in saying no i didn't contemplate a release i didn't have the authority to vary the terms one way iota i didn't have the authority to even see clarification he went that direction so that he could try to beat the defens settlement at that stage but having that he can't come in this court and say i would have been willing to give a release when he said the opposite to try to win the underlying and that part of the record concerning the trial itself combined with the initial  questioning we had here concerning your client's initial response to that demand because as you have argued because perhaps you're saying the plaintiff here assuming that also means it's objective leon reasonable this is their misconduct excuses your client's initial you argue that's technical issues so i don't view those as technical decisions is but the duty to settle is to discourage insurance companies from unreasonably refusing to settle a case in favor of rolling the dice because i think they might do better at trial if you don't believe  was a refusal by your client to settle unless you had these additional broad terms and i believe that what the facts show was an attempt to settle that wasn't in effect of the tent it was an apt to tend to contain some mistakes the adjuste testified without contradiction that she's used the same method of attempting to settle cases for thirty nine years and it has always worked until she ran into this particular claim in this particular claim that fact in itself is enough to justify the trial course decision there's also the issue of the timing of the offer the both the first offer on nov twelfth in the second offer on nov seventeenth that corrected the relation trimmed down were both within the policy limits in exchange for release of its insured that is good faith conduct as a matter of law in the grassley on a case took that a step further and made clear and held that as long as that offer is within the timeline specified by the claimant itself there's the argument about it that is a sufficiently timely offer a policy when it is their duty under california law for the sure her to consult with the insurer about say terms of sort of like a release terms and conditions and was that done here there's evidence in the record that what is called an access letter was sent very early in the claim by allstate to mr pepper but an excess letter is is a letter that explains that there's the potential for risk above the limits you have the right to consult an attorney you might want to contribute some of your own money if it turns out to be  there were there was evidence there is evidence in the record all that was not argued in the papers concerning consultations between this super and the adjuster and mr pepper where he was expressing concern that he wanted to be sure the release was broad enough and you'll find this in the claim notes section of the of the record in the november two thousand live in time period so the super didn't consult with mr pepper and he was very concerned that he wanted to release to be broad enough to protect him and finally i'd like to close with the what i see as the big picture issue here california law the bad faith settle was created to discourage insurance companies from rolling the dice the facts  this case are totally inconsistent with that type of inference all state attempted to settle maybe it messed it up a little bit on the first effort but then it moved to correct that still within the timeline specified by plaintiff's counsel still within four weeks of the accident if the court were to hold the case on the facts like this could proceed to the jury that would set a bad precedent from the point of view of policy because it would discourage reasonable good faith early settlements and encourage conduct that appears to be designed to avoid a settlement so that a client can have a two and a half million dollar client instead of a fifteen thousand dollar client that's bad for the state because the state's public policy prefer settlements and it's bad for the insureds because if you've got a rule of law that encourages settlements it means that people like mr pepper are protected in this case get settled in november two thousand and eleven but if you articulate a rule that says not a case like this can go to the jury and that gives more incentive to claimants council to find ways to avoid a settlement if they can so that they can take the case to trial and that puts insurance at risk of having to go through litigation and face a potential of a judgment against them before all those reasons the lack of a release the timeliness of the repeated settlement offers by all state and because also its conduct itself is just inconsistent with the rule that motivates or the concern that underlies california is part of the implied covenant of good faith and fair dealing i s twenty two it's a federal case turpin in california more and it states as long as and in an insurer is under a duty to accept reasonable settlement offers then the failure to timely and we have a time sensitive policy limits a man she knew that and she said justice said i had enough time i didn't need clarification is under a duty to accept reasonable settlement offers then the failure to time we act while the reasonable offer remains open breach is the duty as much as an expressed rejection of the offer they considered the insureds interest all they had to do their good hands people think put your insurers interesting least equal to your own you know what the offer is you know your release was non conforming yes assented anyway lost it they kept taking the position we did settle we did settle we did settle now defense council comes in on the back on the breach of the covenant even i use the term bad faith when or city which we cite