Chen

MEMORANDUM *

Appellants Dan Koo Yuk Chen and Paul Dan (“the Dans”) appeal the district court’s order granting Appellee Scottsdale Insurance Company’s motion for summary judgment and dismissing the Dans’ motion for summary judgment. This court has jurisdiction to review the district court’s final order under 28 U.S.C. § 1291 . We affirm.

Because the parties are familiar with the facts, we will not set them out in detail. On appeal, the Dans argue that Scottsdale breached the covenant of good faith and fair dealing by settling the Tong action and thereby exhausting the policy limits. We disagree.

As California courts have explained, the implied covenant of good faith and fair dealing runs in favor of the insured; thus, generally, third party claimants, such as the Dans, may not bring an action for the breach of the covenant or its duties. See Hand v. Farmers Ins. Exchange, 23 Cal.App.4th 1847 , 29 Cal.Rptr.2d 258, 261 (Cal.App.1994). However, under Section 11580 of the California Insurance Code, a third party claimant who receives a “final judgment” against the insured becomes a third party beneficiary to the insurance contract and may sue directly on its provisions, including…