Vidrio

Mercury Insurance Company (Mercury) appeals from the trial court’s order imposing $1,857.50 in monetary sanctions after the court determined Mercury’s claims adjuster and the lawyer it had provided to defend its policyholder in this personal injury action had failed to negotiate in good faith at a mandatory settlement conference. Because neither Code of Civil Procedure section 177.5 nor California Rules of Court, rule 2.30 nor any other statute or court rule authorizes the imposition of sanctions on a nonparty insurer in this circumstance, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Underlying Litigation

Miguel Vidrio, Jr., and Patricia Salinas filed a lawsuit in December 2006 alleging they had been injured a year earlier when, as a result of Maria L. Hernandez’s negligence, the car Hernandez was driving collided with the car being driven by Vidrio. Hernandez was insured by Mercury, which provided her with a defense.

In response to a March 2007 request for a statement of damages, Vidrio claimed he had suffered general damages of $30,000, medical expenses of $3,836.98, loss of earnings of $1,223.60 and property damage of an undetermined amount. Salinas claimed…