Opinion ID: 160332
Heading Depth: 3
Heading Rank: 3

Heading: Royal's Settlement Offer and Reserve.

Text: 42 Signature also suggests that Royal's $100,000.00 settlement offer, coupled with Royal's internal estimated exposure of $400,000.00, is an admission of liability. Compromise or settlement offers are not admissions of liability and Signature cites no authority to suggest otherwise. See, e.g., Martin v. Principal Cas. Ins. Co., 8535 P.2d 505 (Colo. Ct. App. 1991), rev'd on other grounds by Budget Rent-A-Car Corp. v. Martin, 855 P.2d 1377 (Colo. 1993); Colo. R. Evid. 308. We are also unwilling to infer that settlement authority invariably constitutes a final, objective assessment of a claim's worth to which an insurer may be held on penalty of bad faith. Kosierowski v. Allstate Ins. Co., 51 F. Supp.2d 583, 592 (E.D. Pa. 1999). See also Voland v. Farmers Ins. Co., 943 P.2d 808, 812 (Ariz. Ct. App. 1997) (stating that [c]ontrary to plaintiff's contention, that the carriers considered her claim's `fair value' to be $30,000 and therefore offered to settle for that amount does not mean they acknowledged that was `the minimal amount the insurer's own adjuster ha[d] evaluated as being owed to the insured.'). In fact, even an insurer that has entered into a settlement agreement may be able to recover where the insurer defended pursuant to a reservation of rights. See e.g., Maryland Cas. Co. v. Imperial Contracting Co., 212 Cal. App. 3d 712 (4th Dist. 1989). Similarly, Royal's reserve calculation is merely an amount it set aside to cover potential future liabilities. See, e.g., Black's Law Dictionary 1309 (7th ed. 1999) (defining policy reserve as [a]n insurance company's reserve that represents the difference between net premiums and expected claims for a given year). We agree with the district court that Signature is unable to establish damages it incurred from Royal's alleged breach of good faith and fair dealing as to its duty to settle.