*418 Opinion
Plaintiff Sonia Graciano suffered severe injuries when she was struck by a car driven by Saul Ayala (Saul). Saul was insured by a policy issued by defendant California Automobile Insurance Company (CAIC), which had policy limits of $50,000. Less than three weeks after Graciano’s attorney first contacted CAIC alleging Graciano was injured by one of CAIC’s insureds, during which time Graciano misidentified both the name of the driver and the applicable insurance policy, CAIC completed its investigation of the accident, identified the correct insurance policy and driver, and tried to settle Graciano’s claim against Saul by delivering to Graciano’s attorney a “full policy limits offer.”
Graciano did not accept CAIC’s full policy limits offer and, in the present action, asserts CAIC and its parent and affiliated companies (together Defendants) acted in bad faith, based on an alleged “wrongful failure to settle.” Graciano argues 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 asserts 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. We agree, and reverse the judgment. 1
I
FACTUAL BACKGROUND
A. The Accident
In the early morning hours of October 20, 2007, Graciano was severely injured when she was struck by a 2004 Cadillac driven by Saul, who had been drinking before the accident.
B. The Two CAIC Policies
Saul was a named insured on CAIC policy No. 040115180005897, in effect on the date of the accident (Saul’s policy) with a policy limit of $50,000. The Cadillac was a listed vehicle on Saul’s policy.
*419 CAIC had also insured Jose Saul Ayala (Jose) under a separate policy (policy No. AP00401514; Jose’s policy), and the Cadillac was also a listed vehicle on Jose’s policy. Jose’s policy, which had policy limits of $15,000, had been canceled approximately six months before the accident.
C. The Two Reports of the Accident
Saul’s Report (CAIC Claim No. 20070032006723-81)
Late on the afternoon of October 23, 2007, CAIC first learned of the accident when Saul contacted an adjuster working for CAIC to report he had been in an accident in the early morning hours of October 21, 2007. Saul reported he fell asleep while driving and had struck a woman and injured her. Saul’s claim was handled by the adjusters of the Vista claims unit, and CAIC immediately began investigating this claim. CAIC contacted the California Highway Patrol (CHP) that same day to order a copy of the police report and, at that time, learned the actual date of the accident was October 20, 2007. CAIC also contacted the tow yard the following day and learned the CHP had an “evidence hold” on the Cadillac, which would require permission from the CHP to allow CAIC to inspect it.
Based on the preliminary information, CAIC believed the driver was 100 percent at fault. By October 30, 2007, CAIC’s adjuster believed it would likely be an “excess bodily injury claim,” meaning the amount for which Saul was liable would exceed the amount of coverage provided by CAIC’s policy. However, CAIC apparently did not know at that point the identity of the person injured by Saul.
Graciano’s Report (CAIC Claim No. 20070065006697-01)
Three days after Saul’s report, Ms. DeDominicis contacted a CAIC call center in Texas to report her client (Graciano) had been injured by a driver insured by CAIC. DeDominicis reported Graciano was injured on October 21, 2007, gave the call center “AP00297623” as the driver’s policy number with CAIC, and told CAIC the driver’s name was “Saulay Ala.” 2
CAIC assigned this report to a different claim identification number (claim No. 20070065006697-01), which identified Jose as the insured and identified *420 his last effective policy number as AP00401514. 3 Graciano’s claim was assigned to the La Mesa claims unit. The La Mesa claims unit transferred Graciano’s claim to the fact finder unit (Factfinder unit) in Sacramento, which did coverage investigations, because the listed policy (policy No. AP00401514) appeared to have been canceled before the date of the accident and the Factfinder unit needed to determine whether policy No. AP00401514 had validly been canceled. Ms. Talley of the Factfinder unit attempted to contact Jose without success, requested the underwriting file, and also confirmed it appeared Jose’s policy had been canceled in April 2007. Talley also corresponded with DeDominicis on November 1, 2007, to inform DeDominicis it was investigating a “coverage problem” for Jose under policy No. AP00401514 and had been unable to confirm coverage. Talley also spoke with DeDominicis on November 6, 2007, confirming the coverage investigation was still ongoing but had not been completed.
D. Graciano’s Demand Letter
On November 5, 2007, DeDominicis mailed a demand letter to Talley. The letter identified Jose as the “named insured,” the policy as “Policy # AP00401514,” the “Date of Loss [as] October 21, 2007,” and described Graciano’s extensive injuries. DeDominicis stated she had been retained to pursue Graciano’s remedies “arising out of an event in which your above-referenced insured and/or their vehicle struck [Graciano].” (Italics added.) DeDominicis stated that, considering Graciano’s extensive injuries, “demand is made that Mercury immediately provide a copy of the declaration page and payment of the maximum bodily injury policy limits to Mrs. Graciano. [j[] The offer to settle for verified policy limits shall expire within ten days of today’s date, and shall not be renewed. [][] Thereafter, Mrs. Graciano shall take the position that Mercury is responsible for any extra-policy judgment that is certain to be rendered .... [¶] If there is anything else you need to consider and respond in a timely fashion to this policy limit demand, please do not hesitate to call immediately. . . .” That letter was not received by Talley until November 8.
The previous day, Talley first received the police report of the incident. The police report correctly reflected Saul was the driver but still listed Jose’s old policy (i.e., policy No. AP00297623) as the applicable insurance policy 4
*421 E. CAIC’s Response to the Demand for Jose’s Policy Limits
In the late afternoon of Thursday, November 8, 2007, although its initial investigation indicated Jose’s policy had been canceled for underwriting reasons, CAIC nevertheless requested DeDominicis to grant an extension on Graciano’s demand for a policy limits settlement to give it time to complete its coverage investigation before responding to her demand. DeDominicis refused CAIC’s request.
By Monday, November 12, CAIC’s investigation of Graciano’s report and claim had determined Saul, whom the newly obtained police report listed as the driver who struck Graciano, was a “non-listed driver” on Jose’s policy and, according to the police report, did not reside at Jose’s address. However, CAIC was still concerned Saul could have been the son of the named insured, even though Saul’s address did not match that of Jose. That day, CAIC again tried, without success, to speak with DeDominicis about Graciano’s claim.
On November 14, 2007, CAIC responded to DeDominicis’s “policy limit demand” on Jose’s policy and informed her that its preliminary investigation over the preceding seven days, although not yet complete, made it appear that Jose’s policy was not in force at the time of the accident, and therefore CAIC could not accept DeDominicis’s policy limit demand before the November 15, 2007, deadline. CAIC cautioned that its determination was not final, but did advise Graciano to pursue her uninsured motorist coverage with her own insurer.
F. CAIC Connects Saul’s Report with Graciano’s Report and Offers Policy Limits
On the late afternoon of November 14, Talley of the Factfinder unit again called Jose to inform him the claimant was seriously injured and might pursue Jose. Talley also left messages with the driver named in the police report, Saul, to ask whether Saul had any insurance. However, Talley did not at that time know whether Saul had any insurance, much less that he had insurance with CAIC.
Shortly after noon the following day, Talley spoke on the phone with Saul, who told Talley he did have insurance and that his insurance was with CAIC. This was the first time Talley discovered that a claim under Saul’s name and policy had already been opened in the Vista claims unit. Talley immediately gave Graciano’s claim and demands to the persons in the Vista claims unit handling Saul’s claim. Around 1:45 p.m., an adjuster in the Vista claims unit contacted DeDominicis to explain they were the unit handling Saul’s claim and had just found out that Graciano was the person whom Saul had reported *422 he had injured, and asked DeDominicis for a 24-hour extension to respond to her settlement demand. DeDominicis refused and stated that if CAIC could not “get its act together on what policy handles what, it’s not her problem.” The adjuster immediately forwarded his recommendation to the Vista claims supervisor, who recommended CAIC make a full policy limits offer on Saul’s policy to settle Graciano’s claims against him, and the supervisor immediately approved this offer.
CAIC immediately prepared a letter offering $50,000, which it identified as the full policy limits on Saul’s policy, in full and -final settlement of Graciano’s injury claim. The letter specified the settlement would include any lien claims (noting the hospital at which Graciano was treated would have a statutory lien) and any loss of consortium claims, and asked DeDominicis to advise whether Graciano was married. Graciano stipulated DeDominicis received CAIC’s settlement offer letter before the November 15, 2007, deadline of her demand on Jose’s policy expired. 5
Graciano did not accept CAIC’s offer to settle her claims against Saul. Instead, she pursued her action against Saul. 6 Graciano obtained a judgment against Saul for over $2 million and obtained an alleged assignment of Saul’s rights against CAIC.
G. The Other Admitted and Excluded Evidence
Graciano introduced evidence that CAIC could have more promptly obtained the police report, or at a minimum could have more promptly obtained the “face pages” from the police report of the accident, but negligently did not do so. Had CAIC earlier obtained these pages, it would have earlier learned the driver’s identity. Once the driver’s identity was known, CAIC could have searched its computers to determine whether CAIC insured the driver.
*423 Although the Factfinder unit did receive the police report on November 7, and therefore knew Saul was the driver, no one in the Factfinder unit searched its computerized database under “Saul Ayala” to determine if he was insured by CAIC. Had anyone conducted that search, they could have earlier learned he was insured by CAIC, and this could have led the Factfinder unit to learn of the claim Saul had opened two weeks earlier being processed by the Vista claims unit. 7 Additionally, the Factfinder unit had (by Nov. 12) made a preliminary determination that Jose’s policy had expired and therefore there was no coverage, and at that time the supervisor noted (among other tasks to be performed) someone should contact Jose to determine if he had any “excess” coverage that might be applicable, and also “verify if [Saul] has his own insurance.” These calls to Jose and Saul were made two days later, and when Saul returned this call the next day, Talley first learned of his insurance with CAIC.
When CAIC tendered their policy limits on November 15, it was unaccompanied by either a check or by the declarations page for Saul’s policy. This offer was also subject to the conditions that the policy limits offer of settlement would include (1) any loss of consortium claim and (2) all lien claims “known and unknown.” 8
*424 The court excluded evidence proffered by the defense to support its argument that DeDominicis’s offer to settle for the policy limits was not a genuine offer and that, once CAIC informed her that it appeared there was no coverage under Jose’s policy, its subsequent efforts to settle on behalf of Saul were hampered by DeDominicis’s machinations. For example, although DeDominicis knew (not later than Nov. 7, 2007) that the driver’s name was Saul Ayala, Jr., her November 5 demand letter, as well as her November 7 letter enclosing Graciano’s medical bills and her November 8 letter reiterating the November 15 deadline for CAIC to respond, continued to refer solely to Jose and Jose’s policy number without any mention of Saul. Additionally, the court excluded evidence that CAIC tried to reach DeDominicis telephonically on the afternoon of November 15 to convey the offer to settle, but that those calls went unanswered, and excluded evidence that CAIC’s efforts to fax the offer of policy limits during this same timeframe were prevented because DeDominicis had (in a departure from ordinary procedures) turned her fax machine off. (See fn. 5, ante.)
II
PROCEDURAL HISTORY
Graciano disregarded CAIC’s full policy limits offer and instead pursued her previously filed action against Saul. She obtained a judgment of over $2 million and obtained a partial assignment of Saul’s rights against CAIC to pursue the present action.
The present action alleged a claim for insurance bad faith based on CAIC’s alleged unreasonable refusal to settle Graciano’s claim against Saul. The jury returned a verdict in Graciano’s favor, and CAIC timely appealed.
III
APPLICABLE LEGAL STANDARDS
A. Substantive Standards
Because this action was limited to a claim that CAIC breached its duties to Saul by not taking reasonable steps to settle Graciano’s claim against him, we outline the principles applicable to the claim.
*425
“In each policy of liability insurance, California law implies a covenant of good faith and fair dealing. This implied covenant obligates the insurance company, among other things, to make reasonable efforts to settle a third party’s lawsuit against the insured. If the insurer breaches the implied covenant by unreasonably refusing to settle the third party suit, the insured may sue the insurer in tort to recover damages proximately caused by the insurer’s breach.”
(PPG Industries, Inc. v. Transamerica Ins. Co.
(1999)
An insured’s claim for bad faith based on an alleged wrongful refusal to settle first requires proof the third party made a reasonable offer to settle the claims against the insured for an amount within the policy limits.
(Merritt, supra,
A claim for bad faith based on an alleged wrongful refusal to settle also requires proof the insurer unreasonably failed to accept an otherwise reasonable offer within the time specified by the third party for acceptance.
(Critz, supra,
B. Standard of Review
When a verdict is challenged for lack of substantial evidence, we must determine whether there is evidence that is “ “reasonable in nature, credible, and of solid value; [constituting] ‘substantial’ proof of the essentials which the law requires in a particular case.” [Citations.]’ ”
(DiMartino
v.
City of Orinda
(2000)
When a claim is based on the insurer’s bad faith, alleging either the insurer unreasonably refused to pay policy benefits or did not conduct an adequate investigation, the ultimate test is whether the insurer’s conduct was unreasonable under all of the circumstances.
(Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co.
(2001)
IV
ANALYSIS
A. There Is No Substantial Evidence CAIC Unreasonably Rejected an Offer to Settle Saul’s Liability
An insured’s claim for “wrongful refusal to settle” cannot be based on his or her insurer’s failure to
initiate
settlement overtures with the injured third party
(Reid v. Mercury Ins. Co.
(2013)
The only settlement “offer” CAIC could have accepted was DeDominicis’s November 5, 2007, letter. It identified Jose as the named insured, the relevant policy as Jose’s policy (e.g., “Policy # AP00401514”), and (after describing Graciano’s extensive injuries) stated DeDominicis had been retained to pursue Graciano’s remedies “arising out of an event in which your above-referenced insured and/or their vehicle struck [Graciano]” (italics added), and *428 demanded that CAIC “immediately provide a copy of the declaration page and payment of the maximum bodily injury policy limits . . . .” (Italics added.) Even assuming (as Graciano contends on appeal) the letter implicitly contained an agreement to release “the above referenced insured” in exchange for the “policy limits” of the referenced policy, the plain import of this letter is that Graciano offered only to settle her claims against Jose. 10 Because Graciano never demanded payment of Saul’s policy limits in exchange for a release of Saul’s liability, Saul would not have been protected even had CAIC accepted the terms of Graciano’s demand.
Graciano cites no authority that an offer to release one potentially liable party (here, Jose) in exchange for that party’s policy limits, if rejected by the insurer, can serve as the basis for a “wrongful refusal to settle” claim by a different potentially liable party (here, Saul), and analogous authorities suggest a contrary rule. In
McLaughlin
v.
National Union Fire Ins. Co.
(1994)
*429
Graciano argues these cases do not support reversal because claimants are not required “to begin settlement overtures with letter-perfect offers to which insurers need only respond ‘Yes’ or ‘No.’ An insurer’s duty of good faith would be trifling if it did not require an insurer to explore the details of a settlement offer that could prove extremely beneficial to its insured.”
(Allen
v.
Allstate Ins. Co.
(9th Cir. 1981)
Graciano alternatively argues that, even assuming the November 7 demand letter incorrectly identified the insured and the applicable policy number, those defects were attributable to CAIC because it was CAIC that, in response to Graciano’s report of the injury, changed the driver’s name from “Saulay Ala” (as reported by DeDominicis) to Jose. Graciano argues it is CAIC — not a third party — who is obligated to investigate claims against its insured, and therefore any defect in her demand letter must be attributed to CAIC’s default of their obligations. However, the undisputed evidence is that CAIC did comply with its obligations to investigate potential coverage on this reported claim, because once CAIC received this report from Graciano (which tied her claim to an apparently canceled policy) it tried to contact Jose, immediately began investigating whether the policy had been validly canceled, and kept Graciano apprised of its progress. The defect in her demand letter thus had its genesis in the defect in DeDominicis’s first report of Graciano’s claim, and was not impacted by the investigation undertaken by the Factfinder unit in response to her initial claim.
Graciano attempts to bring the circumstances of this case under the aegis of
Safeco Ins. Co. of America v. Parks
(2009)
Our reason for rejecting Graciano’s reliance on
Safeco
requires a nuanced understanding of the facts presented to, and the resulting analysis by, the
Safeco
court. There, the victim (Parks) sued three tortfeasors, including Miller, for injuries he sustained in 1999 when he was struck by a third person after Miller and the others left Parks at the side of a road.
(Safeco, supra,
In a bifurcated proceeding in the original bad faith action, the trial court entered a declaratory judgment in favor of Parks, finding Safeco had a duty to defend and to indemnify Miller because she was an insured under the Barnette policy. However, Safeco appealed and, in 2004, the appellate court reversed and held Safeco had no duty to defend Miller under the Barnette
*431
policy because she was not an insured under that policy.
(Safeco,
supra,
The lynchpin of the
Safeco
court’s analysis, upon which the balance of its remaining holdings depended, was its discussion of the insurer’s claim that its duty of good faith and fair dealing under the Evelyn policy “never arose because . . . Miller tendered her defense only under the Barnette policy and there was no evidence Safeco had actual knowledge of the [Evelyn] policy when it declined the defense.”
(Safeco,
supra,
The
Safeco
court then concluded the “notice defense” was correctly rejected by the trial court (on a motion for summary adjudication) and later by the jury because the insurer did not establish it had been prejudiced by the delayed notice, reasoning Safeco had attempted to justify its rejection of coverage under the Barnette policy by asserting its automobile exclusion precluded coverage for this accident, and “Safeco now relies on the same automobile exclusion to contend there was no potential for coverage under the substantially identical [Evelyn] policy. As a result, both the trial court and the jury could reasonably infer that Safeco was not prejudiced by the late notice because it would have relied on the automobile exclusion to decline the defense under the [Evelyn] policy.”
(Safeco, supra,
Here, in contrast, there is no evidence Graciano’s misidentification of the applicable policy in her settlement demand did not cause prejudice to CAIC, because there is no evidence CAIC would have relied on the
same
basis for declining to pay the policy limits on Saul’s policy (had Graciano correctly submitted her claim under Saul’s policy) as it cited when it declined her request for the policy limits under Jose’s policy. To the contrary, the only evidence in the record is that Graciano’s misidentification of the applicable policy
did
cause “ ‘actual prejudice [because] the insurer . . . show[ed] a substantial likelihood that, with timely notice, ... it would have [attempted to] settle[] the claim ....’”
(Safeco, supra,
Moreover,
Safeco
provides no support for Graciano’s argument for a second reason: the
same conduct
the
Safeco
court opined
should
have been undertaken by the insurer (and whose absence supported the wrongful failure to settle verdict there)
was
undertaken by CAIC here. Once the
Safeco
court concluded Miller’s misidentification of the applicable policy caused no prejudice to the insurer, and hence the insurer’s duty to investigate was not
*433
excused, it concluded Safeco was obligated to investigate whether any other policy potentially covered her liability to the claimant, and its failure to investigate and discover the Evelyn policy led to the insurer’s rejection of the policy limit demand.
(Safeco,
supra,
Because the undisputed evidence shows CAIC was actually prejudiced by the misidentification of the applicable policy, and also shows (notwithstanding the misidentification) CAIC undertook the type of continued investigation the Safeco court concluded was required, we reject Graciano’s argument that there was substantial evidence under Safeco to support the verdict.
Graciano’s argument under
Safeco
is not, at bottom, that CAIC did not conduct
any
effort to locate and provide coverage for Saul, but is instead an argument that there was substantial evidence CAIC “bungled its investigation” and, but for its errors, could have
sooner
discovered there was a policy providing coverage for her claim. Although this claim is true, it is also irrelevant. A bad faith claim requires “something beyond breach of the contractual duty itself’
(California Shoppers, Inc. v. Royal Globe Ins. Co., supra,
B. There Is No Substantial Evidence CAIC Unreasonably Failed to Timely Tender Saul’s Policy Limits to Attempt to Settle Saul’s Liability
A claim for “wrongful refusal to settle” requires proof the insurer unreasonably failed to accept an otherwise reasonable offer within the time specified by the third party for acceptance.
(Critz, supra,
Here, in the three weeks after it first learned Graciano was alleging someone insured by CAIC had injured her, CAIC was able to (1) determine that the policy identified by Graciano (Jose’s policy) could
not
provide a source of compensation for her, (2) identify that a person (Saul)
different
from the one identified by Graciano (“Saulay Ala”) was responsible for Graciano’s injuries, (3) determine Saul
did
have a policy available as a source
*435
of compensation, and (4) tender CAIC’s “full policy limits” in an attempt to effectuate a settlement of Saul’s liability. Although there was substantial evidence from which a jury could have concluded CAIC was able to resolve the confusion engendered by Graciano’s mi «identification of the applicable insured and insurance policy
earlier
than it did, and to offer to settle earlier than it did, perfection is not required (see, e.g.,
Adelman v. Associated Internat. Ins. Co.
(2001)
More importantly, the undisputed evidence showed CAIC did timely tender Saul’s full policy limits in an attempt to settle Graciano’s claim, and therefore acted in good faith as a matter of law “by offering the policy limits in exchange for a release [thereby doing] all within its power to effect a settlement.”
(Lehto v. Allstate Ins. Co., supra,
*436 DISPOSITION
The judgment is reversed. The trial court is directed to enter judgment on the complaint in favor of defendants. Defendants shall recover their costs on appeal.
Huffman, Acting P. J., and O’Rourke, J., concurred.
A petition for a rehearing was denied November 12, 2014, and the opinion was modified to read as printed above. Respondent’s petition for review by the Supreme Court was denied January 21, 2015, S223002.
Notes
CAIC alternatively asserts on appeal that, even assuming the evidence could have supported the verdict, the trial court prejudicially erred by excluding evidence elaborating on CAIC’s attempt to convey its offer to settle Graciano’s claim against Saul. CAIC also argues the court erred by summarily adjudicating that entities other than CAIC were jointly and severally liable for the judgment under alter ego principles. Because of our conclusion that no substantial evidence supports the finding CAIC wrongfully did not settle Graciano’s claim against Saul, we do not address CAIC’s alternative claims.
Graciano’s sister-in-law provided the name “Saulay Ala, Jr.,” along with “AP00297623” as the driver’s policy number, to DeDominicis when she began acting as Graciano’s attorney. Graciano’s sister apparently obtained that name and policy number from the CHP.
Jose had previously been insured under the policy identified by DeDominicis (i.e., policy No. AP00297623) but, in March 2007, that policy had been canceled and a new policy immediately replaced it that insured Jose and bore the new policy number of AP00401514.
Although Graciano’s brief on appeal states the police report received by CAIC listed “Saul Ayala as the driver . . . with his [CAIC] policy number” (italics added), the police report contains no reference to Saul’s policy No. 040115180005897 and instead listed only Jose’s old policy number as the applicable insurance policy.
However, CAIC was also prepared to prove that CAIC tried twice to reach DeDominicis by phone before the deadline expired to orally convey the offer, but she did not answer. Before preparing and sending the letter offer, CAIC’s adjuster apparently called DeDominicis to convey the offer, but was only able to reach her voicemail. She left a message conveying CAIC’s policy limits offer and asked that DeDominicis return her call. She also tried to reach DeDominicis by phone around 4:30 p.m. and again was unsuccessful. CAIC also sought to show it tried to fax the letter to DeDominicis at 3:21 p.m., at 3:28 p.m., and again at 4:08 p.m., but the fax failed on each occasion because DeDominicis had turned off her fax machine. Because Graciano stipulated DeDominicis timely received the letter, the court excluded this evidence pursuant to Graciano’s motion in limine.
DeDominicis had filed an action, naming Saul, Saul’s wife, and Saul’s corporation, approximately one week before the expiration date set forth in Graciano’s demand letter on Jose’s policy. However, because of the court’s in limine rulings, that evidence was excluded from the jury’s consideration.
The Vista claims unit supervisor apparently received an “ISO ClaimSearch Automatic Update” on November 14 that indicated there were at least two claims arising out of the accident. The claim number assigned to Graciano’s claim on Jose’s policy did appear in that update, but the “claimant” was listed as Saul, and Graciano’s name did not appear on this ISO ClaimSearch Automatic Update. By the following day, this confusion was resolved and the two claims had been consolidated by CAIC.
CAIC’s offer observed that “Palomar Medical Center [the hospital at which Graciano was treated] will have a statutory lien.” Although Graciano’s evidence showed CAIC had not yet placed a “lien stamp” on either of the claim files indicating a notice of the statutory hospital lien had been
received,
CAIC could not have at that time known whether the statutory lien nevertheless had become effective, because a lien apparently would have been effective (and Saul would have potential liability to Palomar Hospital under Civ. Code, § 3045.4) had the lien notice been
“mailed
by registered mail . . . prior to the payment of any moneys to the injured person” by Saul or his insurer. (Civ. Code, § 3045.3, italics added.) Thus, at the time of the offer, CAIC could not “rule out the potential of a hospital lien from Palomar hospital.” Also, considering the compressed timeframe, in which the only contact between the Vista claims unit and DeDominicis was a short phone conversation in which DeDominicis declined CAIC’s request for an extension, the Vista claims unit could not have excluded potential loss of consortium claims against its insured because DeDominicis’s letters described her client as
Mrs.
Graciano. Regardless, Graciano cites no law suggesting an insurer can be held liable for bad faith failure to settle if it makes a “full policy limits” offer and conditions the offer on a full resolution of all potential claims against its insured, and the law appears to be to the contrary. (Cf.
Merritt
v.
Reserve Ins. Co.
(1973)
We recognize that
Brandt
and
Tomaselli,
as well as many other cases on which we rely, involved insurers who allegedly breached the implied covenant of good faith and fair dealing in the context of “first party” coverage claims, whereas the present case involves an alleged breach of the implied covenant of good faith and fair dealing in the context of “third party” coverage. However, the controlling principles have equal applicability in both contexts. (See, e.g.,
Brehm v. 21st Century Ins. Co.
(2008)
Graciano appears to argue the November 7 letter did demand Saul’s policy limits because it “demand[ed] the policy limits of Mercury’s ‘insureds' [and] nowhere refers to the policy limits of Jose” and therefore was “obviously referring to Saul.” We reject Graciano’s argument to the extent it suggests that a third party claimant, after specifically identifying a named insured and his or her policy number, may demand the policy limits of a company’s “insureds” and by such plural reference thereby widen the net to make a demand encompass the universe of unidentified persons and entities who have coverage with the insurer and who may have potential liability for the accident. For example, had Saul been under 21 years of age and been furnished alcohol by a social host (against whom Graciano apparently would have a claim) (Civ. Code, § 1714, subd. (d)) and the host happened to be insured by CAIC, Graciano’s theory would expose CAIC to a wrongful refusal to settle claim by that social host for failing to discover the policy and proffer to the social host’s policy limits in response to Graciano’s demand on Jose’s policy. We decline to adopt a rule that a settlement demand seeking the policy limits of a specifically identified insured may, simply by employing the plural term “insureds,” constitute a demand seeking the policy limits of the universe of persons and entities with whom an insurer may have issued policies.
The
Safeco
court itself cautioned that,
“[i]n this unusual context,
we conclude [the insurer’s] failure to conduct a reasonable search for other Safeco policies breached duties arising under the [other] policy to reasonably investigate and settle [the claim]” and concluded the insurer could not breach its duty to conduct a reasonable investigation and then use the resulting ignorance “to shield itself from liability for breach of the related duty to accept a reasonable settlement demand.”
(Safeco, supra,
Graciano asserts the evidence showed CAIC was negligent and cites
Notrica v. State Comp. Ins. Fund
(1999)