Strauss

— In this insurance bad faith case, we consider whether an insurer must accept a settlement offer exhausting the policy in exchange for the release of only one of three insureds, leaving the remaining insureds subject to liability for a judgment that may exceed the policy limits. The trial court found no duty to settle under these circumstances, granted summary adjudication for respondent Farmers Insurance Exchange (Farmers) on that issue, and eventually entered a stipulated judgment for Farmers. We affirm the judgment.

I. Facts

Appellant Frank C. Strauss (Strauss) suffered serious injuries in an automobile accident involving a truck driven by Kirk Senseney. An employee of New Wave Pool & Spa, Inc. (New Wave), Senseney drove the truck in the course of his employment at the time of the accident. Rodney Fagundes owned New Wave.

Respondent Farmers insured Fagundes under a policy that provided maximum bodily injury coverage of $100,000 per person and $300,000 per occurrence. Senseney and New Wave were also “insured persons” under the policy. In addition, Senseney had a $50,000 personal automobile liability policy through California Casualty. It appears that the extent of…