An insurer did not satisfy its obligation to settle a case of obvious liability within policy limits simply by offering the full policy limits promptly, but demanding a full release of all claims against the insured in return. The claimant insisted on its right to retain its claim for criminal restitution. While the claimant’s proposed amendment to the release did not clearly state that the insured would be entitled to offset the amounts paid by the insurer against any criminal restitution order, the insurer acted unreasonably in rejecting the proposed amendment outright rather than seeking to narrow its scope to permit the offset to which the insured would be entitled as a matter of state law.
California Court of Appeal, Second District, Division 7 (Perluss, P.J.); July 25, 2016 (published August 15, 2016); 2016 WL 3975279