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.,

Plaintiffs and Appellants,

v.

INTERINSURANCE EXCHANGE 

OF THE AUTO CLUB,

Defendant and Respondent.

B294361

(Los Angeles County 

Super. Ct. No. BC599460)

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.

__________________________
2

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 claimshandling process leading up to the letter gives context to our 

analysis.
3

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 
4

“[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.”
5

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. 
6

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 
7

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 
8

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.
9

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.
10

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 
11

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:
12

“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
13

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.” 
14

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.
15

[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 
16

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. 
17

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.) 
18

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 
19

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 declarationdeadline 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 
20

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 
21

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 
22

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. 
23

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 
24

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 
25

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 
26

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 courtapproved 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.
27

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.
28

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 claimshandling 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.