Graciano v. Mercury General Corp.Annotate this Case
Plaintiff Sonia Graciano was injured after she was hit by a car driven by Saul Ayala. Ayala was insured by defendant California Automobile Insurance Company (CAIC). Three weeks after Graciano's attorney first contacted CAIC regarding the accident, Graciano misidentified both the driver and the applicable insurance policy. CAIC investigated the accident, identified the applicable policy and the correct driver, and offered to settle Graciano's claim with a "full policy limits offer." Graciano did not accept CAIC's full policy limits offer and, in this suit, alleged CAIC and its parent and affiliated companies acted in bad faith, based on an alleged "wrongful failure to settle." Graciano argued CAIC could have and should have earlier discovered the facts, and should have made the full policy limits offer more quickly. The jury found in favor of Graciano and this appeal followed. CAIC argued that, as a matter of law, there was no evidence to support the verdict that CAIC acted in bad faith by unreasonably failing to settle Graciano's claim against Saul. The Court of Appeal agreed, and reversed the judgment.