Terry Blankenbaker v. Progressive Casualty Insurance

MEMORANDUM **

In April 1997, Terry Blankenbaker was driving a car on Interstate 40 near Bar-stow, California. Norma Blankenbaker, Raymond Shipley, and Denise Shipley were passengers in Mr. Blankenbaker’s car. Because a sandstorm decreased visibility, Mr. Blankenbaker stopped his car behind a large truck. A car driven by Janet Ingram, in which Janet Jarrett was a passenger, rear-ended Mr. Blankenbaker’s car. As a result of the collision, Mrs. Blankenbaker died and Mr. Blankenbaker, Mr. Shipley, Ms. Shipley, Ms. Ingram, and Ms. Jarrett suffered injuries. Ms. Ingram was insured by Progressive Casualty Insurance Company (“Progressive”) with a policy limit of $30,000.

After failing to reach a settlement, Plaintiffs 1 filed suit against Ms. Ingram and were awarded more than $2.3 million in damages. Ms. Ingram assigned to Plaintiffs her right to bring this action in exchange for an agreement on the part of Plaintiffs not to execute the judgment against her. Plaintiffs then sued Progressive, alleging Progressive acted in bad faith when it rejected a proposed settlement offer 2 and failed to inform Ms. Ingram of the proposed settlement.

The district court granted summary judgment to…

Dissenting

The full panel agrees that there are genuine and material fact issues whether Progressive complied with its duty to notify Ms. Ingram of the settlement offer made by Plaintiffs. The crux of the majority’s decision to affirm is its conclusion that “no reasonable jury could find Progressive’s assumed breach caused any damage to Ms. Ingram.” This mistaken conclusion is understandable because nearly a month after Ms. Ingram arguably learned of the offer, she made statements, indicating a disinclination to accept the offer. But those statements came only after the offer expired. The majority’s premise rests on an inference that with timely notice, she would have had the same attitude later expressed. It is incorrect to give the insurer inferences rather the non-moving party.

California law requires that an insurer “take into account the interest of the insured and give it at least as much consideration as it does to its own interest” when evaluating settlement offers. Comunale v. Traders & General Ins. Co., 50 Cal.2d 654 , 328 P.2d 198, 201 (1958) (In Bank). This is particularly important when a conflict of interest arises, where “an offer to settle an excess claim is made…

FILED

NOT FOR PUBLICATION

AUG 14 2015

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

TERRY BLANKENBAKER; GREG No. 13-55520

BLANKENBAKER; TRACI

BLANKENBAKER; RAYMOND D.C. No. 5:11-cv-01844-CJC-DTB

SHIPLEY; DENISE SHIPLEY,

MEMORANDUM *

Plaintiffs – Appellants,

v.

PROGRESSIVE CASUALTY

INSURANCE COMPANY, a corporation, Erroneously Sued As Progressive Northern Insurance Company,

Defendant – Appellee.

Appeal from the United States District Court for the Central District of California Cormac J. Carney, District Judge, Presiding

Argued and Submitted March 5, 2015 Pasadena, California

Before: MURPHY, ** GOULD, and TALLMAN, Circuit Judges.

* This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by Ninth Circuit Rule 36-3. ** The Honorable Michael R. Murphy, Senior Circuit Judge for the U.S. Court of Appeals, Tenth Circuit, sitting by designation. In April 1997, Terry Blankenbaker was driving a car on Interstate 40 near

Barstow, California. Norma Blankenbaker, Raymond Shipley, and…