Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Los Angeles County, No. BC336562, James R. Dunn, Judge.
Harrington, Foxx, Dubrow & Canter, Mark W. Flory, Michael C. Denlinger, and James K. Lo for Plaintiff and Appellant.
Law Offices of William J. Diffenderfer and Lisa L. Pan for Defendant and Respondent.
TURNER, P.J.
I. INTRODUCTION
This action was brought by an excess insurer alleging a primary insurer’s bad faith failure to accept a reasonable settlement within policy limits. Plaintiff, Topa Insurance Company, the excess insurer, appeals from a judgment after a court trial in favor of defendant, American Economy Insurance Company, the primary insurer. We find no prejudicial error and affirm the judgment.
II. BACKGROUND
On November 26, 2002, James LeGoff was severely injured when a non-tempered glass shower door in a friend’s apartment shattered. The six-unit apartment building was owned and maintained by Edwin Gromis, M.D., Cecile Gromis, and Gromis Equities (the owners). The owners were insured for $1 million per occurrence under a liability policy issued by defendant. The owners also had $2 million in excess liability insurance per occurrence under a policy issued by plaintiff.
Mr. LeGoff sued the owners. Defendant provided a defense. There was disputed evidence whether Mr. LeGoff was totally or partially disabled and whether he was able to work. The administrative law judge who adjudicated Mr. LeGoff’s Social Security Administration claim found he was disabled within the meaning of the Social Security Act. The administrative law judge further ruled in part, “The claimant’s disability status shall be reviewed in one year . . . .” But an independent medical examiner found Mr. LeGoff was not totally disabled and should undergo vocational rehabilitation. The owner’s defense counsel: evaluated the possibility of a liability finding at 60 percent; estimated damages at $225,000; which gave rise to a settlement value of $204,000. Mr. LeGoff offered to settle his personal injury action for $999,999. Defendant rejected the offer. A panel of arbitrators subsequently awarded Mr. LeGoff $1.318 million against the owners. Defendant paid $1 million. Plaintiff, as the excess insurer, contributed the remaining $318,000.
Following the arbitration award in Mr. LeGoff’s favor, plaintiff brought the present declaratory relief and equitable subrogation action against defendant. Plaintiff argued defendant unreasonably refused to accept Mr. LeGoff’s $999,999 settlement offer, which was within the primary policy limit. Plaintiff sought reimbursement of the $318,000 it paid to satisfy the award. Following a court trial, judgment was entered for defendant. The trial court found defendant did not breach its duty to accept a reasonable settlement offer within its policy limits.
III. DISCUSSION
A. Standard of Review
Plaintiff had the burden of proving defendant rejected a reasonable settlement demand. (Isaacson v. California Ins. Guar. Assn. (1988) 44 Cal.3d 775, 793 (Isaacson); see Hamilton v. Maryland Cas. Co. (2002) 27 Cal.4th 718, 730-731.) Ordinarily, our review is for substantial evidence to support the judgment. (Crisci v. Security Insurance Co. (1967) 66 Cal.2d 425, 431-432 (Crisci); Walbrook Ins. Co. v. Liberty Mutual Ins. Co. (1992)5 Cal.App.4th 1445, 1457; Betts v. Allstate Inc. Co. (1984) 154 Cal.App.3d 688, 708; Cain v. State Farm Mut. Auto. Ins. Co. (1975) 47 Cal.App.3d 783, 792.) Here, however, plaintiff does not assert insufficiency of the evidence to support the judgment. Rather, plaintiff contends the trial court committed prejudicial error in its application of the law to the facts. Our review of the legal issues is de novo. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175-1176; Chambers v. Kay (2002) 29 Cal.4th 142, 148.)
B. The Insurer’s Duty To Accept A Reasonable Settlement Within Policy Limits
There is an implied covenant of good faith and fair dealing in every liability insurance policy that obligates the insurer to accept a reasonable demand to settle a lawsuit against the insured within policy limits. (Hamilton v. Maryland Cas. Co., supra, 27 Cal.4th at p. 724; PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal.4th 310, 312 (PPG); Comunale v. Traders & Gen. Ins. Co. (1958) 50 Cal.2d 654, 658-659 (Comunale).) In Comunale, our Supreme Court first considered whether an insurer who declined to defend its insured and refused to accept a reasonable settlement offer was liable for a judgment against the policy holder in an amount exceeding the policy limits. Our Supreme Court held: “[A]n insurer, who wrongfully declines to defend and who refuses to accept a reasonable settlement within the policy limits in violation of its duty to consider in good faith the interest of the insured in the settlement, is liable for the entire judgment against the insured even if it exceeds the policy limits.” (Comunale, supra, 50 Cal.2dat p. 661; see Hamilton v. Maryland Casualty Co., supra, 27 Cal.4th at p. 725.) The Comunale holding was subsequently extended to a case in which the insurer did provide a defense, but refused to accept a reasonable settlement offer within policy limits. (Johansen v. California State Auto. Assn. Inter-Ins. Bureau (1975) 15 Cal.3d 9, 14-19 (Johansen).) The implied covenant settlement obligation exists in order to avoid exposing the insured to personal liability in excess of the insurance policy limits. (Ibid.; Comunale, supra, 50 Cal.2d at p. 659.) If an insurer unreasonably refuses to settle a third-party action against the insured, the policyholder may sue the insurance company in tort. (PPG, supra, 20 Cal.4th at p. 312; Wolkowitz v. Redland Ins. Co. (2003) 112 Cal.App.4th 154, 162.)
There is no contract and therefore no direct implied covenant liability as between a primary and an excess insurer. (Commercial Union Assurance Companies v. Safeway Stores, Inc. (1980) 26 Cal.3d 912, 917-918; Fireman’s Fund Ins. Co. v. Maryland Casualty Co. (1994) 21 Cal.App.4th 1586, 1599.) However, an excess carrier forced to pay a judgment above the primary insurer’s policy limits is equitably subrogated to the insured’s rights against the primary insurer. Therefore, the excess carrier can, as here, sue the primary insurer for unreasonably refusing to settle a third-party action. (Commercial Union Assurance Companies v. Safeway Stores, Inc., supra, 26 Cal.3d at pp. 917-918; Fireman’s Fund Ins. Co. v. Maryland Casualty Co., supra, 21 Cal.App.4th at p. 1601; Walbrook Ins. Co. v. Liberty Mutual Ins. Co., supra, 5 Cal.App.4th at p. 1454; Northwestern Mut. Ins. Co. v. Farmers Ins. Group (1978) 76 Cal.App.3d 1031, 1050-1051.) In United Services Auto. Assn. v. Alaska Ins. Co. (2001) 94 Cal.App.4th 638, 647, our colleagues in the Fourth Appellate District, Division One, set forth the applicable measure of damages: “Ordinarily, an excess insurer’s damages in an equitable subrogation action against a primary insurer are the sums the excess insurer paid to settle a third party claim against the insured due to the primary insurer’s wrongful refusal to settle. (See Commercial Union Assurance Companies v. Safeway Stores, Inc.[, supra,] 26 Cal.3d [at p.] 918.)”
The insurer’s obligation is to accept a settlement demand that is reasonable. (Hamilton v. Maryland Cas. Co., supra, 27 Cal.4th at p. 724; Isaacson, supra, 44 Cal.3d at p. 793.) In deciding whether to settle, the insurer must give at least as much consideration to the insured’s interest as it does to its own. (Crisci, supra, 66 Cal.2d at p. 429.) California courts have repeatedly held: “In determining whether an insurer has given consideration to the interests of the insured, the test is whether a prudent insurer without policy limits would have accepted the settlement offer. (Kinder v. Western Pioneer Ins Co. [(1965)]231 Cal.App.2d 894, 900; Critz v. Farmers Ins. Group [(1964)]230 Cal.App.2d 788, 798[, disapproved on another point in Crisci, supra, 66 Cal.2d at p. 430]; Martin v. Harford Acc. & Indem. Co. [(1964)]228 Cal.App.2d 178, 183; Davy v. Public National Ins. Co. [(1960)]181 Cal.App.2d 387, 400; see Hodges v. Standard Accident Ins. Co. [(1961)]198 Cal.App.2d 564, 579.)” (Crisci, supra, 66 Cal.2d at p. 429.) Moreover, the insurer must fairly appraise the potential exposure and the strengths and weaknesses of the case based on facts known or available at the time of the settlement demand. (Isaacson, supra, 44 Cal.3d at pp. 792-793; Camelot by the Bay Condominium Owners’ Assn. v. Scottsdale Ins. Co. (1994) 27 Cal.App.4th 33, 48.) The insurer must make an “honest and intelligent” decision whether to settle the claim. (Brown v. Guarantee Insurance Co. (1957) 155 Cal.App.2d 679, 685 [“In order that it be honest and intelligent it must be based upon a knowledge of the facts and circumstances upon which liability is predicated, and upon a knowledge of the nature and extent of the injuries so far as they reasonably can be ascertained”].) In Isaacson, our Supreme Court held, “The reasonableness of a settlement offer is to be evaluated by considering whether, in light of the victim’s injuries and the probable liability of the insured, the ultimate judgment is likely to exceed the amount of the settlement offer.” (Isaacson, supra, 44 Cal.3d at p. 792; see Archdale v. American Intern. Specialty Lines Ins. Co. (2007) 154 Cal.App.4th 449, 464.) Whether a settlement demand within policy limits is reasonable depends on the likelihood the third party will recover a judgment against the insured in excess of those limits. (Samson v. Transamerica Ins. Co. (1981) 30 Cal.3d 220, 243; Johansen, supra, 15 Cal.3d at p. 16.) The Supreme Court has explained: “[T]he only permissible consideration in evaluating the reasonableness of the settlement offer becomes whether, in light of the victim’s injuries and the probable liability of the insured, the ultimate judgment is likely to exceed the amount of the settlement offer.” (Johansen, supra, 15 Cal.3d at p. 16; see Blue Ridge Ins. Co. v. Jacobsen (2001) 25 Cal.4th 489, 498.) The likelihood the third-party will recover against the insured in excess of the policy limits must be substantial. (Murphy v. Allstate Ins. Co. (1976) 17 Cal.3d 937, 941; Northwestern Mut. Ins. Co. v. Farmers Ins. Group, supra, 76 Cal.App.3d at p. 1041; see Comunale, supra, 50 Cal.2d at p. 659 [“great risk”].) The insurer’s conduct must be measured against “the totality of the circumstances” in which its decision was made. (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 723; see Nager v. Allstate Ins. Co. (2000) 83 Cal.App.4th 284, 288.)
C. Plaintiff Was Not Entitled To A Judgment In Its Favor As A Matter Of Law
On appeal, as it did in the trial court, plaintiff relies on an inference our Supreme Court articulated in Crisci, supra, 66 Cal.2d at page 431: “The size of the judgment recovered in the personal injury action when it exceeds the policy limits, although not conclusive, furnishes an inference that the value of the claim is the equivalent of the amount of the judgment and that acceptance of an offer within those limits was the most reasonable method of dealing with the claim.” (Italics added, quoted with approval in Johansen, supra, 15 Cal.3d at p. 17; see Archdale v. American Intern. Specialty Lines Ins. Co., supra, 154 Cal.App.4th at p. 471, fn. 23; Walbrook Ins. Co. v. Liberty Mutual Ins. Co., supra, 5 Cal.App.4th at p. 1461; Twentieth Century-Fox Film Corp. v. Harbor Ins. Co. (1978) 85 Cal.App.3d 105, 112; Northwestern Mut. Ins. Co. v. Farmers Ins. Group, supra, 76 Cal.App.3d at p. 1054; Martin v. Hartford Acc. & Indem. Co., supra, 228 Cal.App.2d at p. 183; Davy v. Public Nat. Ins. Co., supra, 81 Cal.App.2d at p. 401.) In Crisci, an insurer refused to settle a personal injury action for its $10,000 policy limits. A jury awarded the injured party $100,000. (Crisci, supra, 66 Cal.2d at p. 428.) The insured became indigent, her physical health declined, and she attempted suicide. (Id. at p. 429.) The insured then brought an action against her insurer for failure to accept a reasonable settlement offer within the policy limits. (Ibid.) The trial court awarded the insured $91,000. The insurer appealed. Amicus curiae argued, “[W]henever an insurer receives an offer to settle within the policy limits and rejects it, the insurer should be liable in every case for the amount of any final judgment whether or not within the policy limits.” (Id. at p. 430.) Our Supreme Court declined to adopt the proposed rule, finding instead that there was sufficient evidence the insurer breached its duty. (Id. at pp. 431-432.) Our Supreme Court did observe, however, without citation to any legal authority: “[I]t is not entirely clear that the proposed rule would place a burden on insurers substantially greater than that which is present under existing law. The size of the judgment recovered in the personal injury action when it exceeds the policy limits, although not conclusive, furnishes an inference that the value of the claim is the equivalent of the amount of the judgment and that acceptance of an offer within those limits was the most reasonable method of dealing with the claim.” (Id. at p. 431, italics added.)
The Supreme Court next invoked the Crisci inference in Johansen, supra, 15 Cal.3d at page 17. The injured party offered to settle her personal injury claim for the $10,000 policy limits. The insurer refused claiming it would await a judicial determination whether the policy provided coverage. A $33,889 judgment was entered against the insured. In response to the insured’s implied covenant breach claim, the insurer argued it acted in good faith when it refused to settle because it believed there was no coverage. Our Supreme Court held, “[A]n insurer’s ‘good faith,’ though erroneous, belief in noncoverage affords no defense to liability flowing from the insurer’s refusal to accept a reasonable settlement offer.” (Id. at p. 16, fn. omitted.) Our Supreme Court concluded the insurer had breached its duty to accept a reasonable settlement offer. (Id. at p. 19.) In so holding, our Supreme Court observed the insurer had repeatedly conceded the $10,000 settlement offer was reasonable and the judgment against the insured far exceeded that amount: “[D]efendant has repeatedly conceded that in light of the serious character of [the injured party’s] injuries and the overwhelming evidence that [the insured] had been negligent, [the] $10,000 offer was eminently reasonable. As noted above, the final judgment against the [insured] actually amounted to almost $34,000. ‘The size of the judgment recovered in the personal injury action when it exceeds the policy limits, although not conclusive, furnishes an inference that the value of the claim is the equivalent of the amount of the judgment and that acceptance of an offer within those limits was the most reasonable method of dealing with the claim.’ ([Crisci], supra, 66 Cal.2d at p. 431.)” (Johansen, supra, 15 Cal.3d at pp. 16-17.)
Plaintiff argues proper application of the Crisci inference should have resulted in a judgment in its favor as a matter of law. Plaintiff reasons: the Crisci inference must be given the effect of a rebuttable presumption; in order to rebut the Crisci inference, defendant had to produce evidence the arbitrators had information before them that defendant did not possess when it turned down the settlement offer; it was undisputed, however, that the same evidence defendant had before it when it rejected the settlement offer was relied on by the arbitrators in awarding damages to Mr. LeGoff; therefore, defendant cannot rebut the inference; and plaintiff is entitled to a judgment in its favor as a matter of law. But the Crisci inference is just that—a permissible inference; it is not a rebuttable presumption—one that is conclusive if not rebutted. (Cain v. State Farm Mut. Auto. Ins. Co., supra, 47 Cal.App.3d at p. 797 [“An inference (under Crisci) is clearly not a presumption”]; see California Insurance Law Handbook (2008 ed.) § 31:18.2 [fact and amount of excess judgment may be introduced to raise rebuttable inference].) Evidence Code section 600 states: “(a) A presumption is an assumption of fact that the law requires to be made from another fact or group of facts found or otherwise established in the action. A presumption is not evidence. [¶] (b) An inference is a deduction of fact that may logically and reasonably be drawn from another fact or group of facts found or otherwise established in the action.” Our Supreme Court has explained: “[A]n inference is a permissive deduction while a presumption is a deduction directed to be drawn by law. [Citations.]” (Engstrom v. Auburn Automobile Sales Corp. (1938) 11 Cal.2d 64, 69; accord, Anderson v. I.M. Jameson Corp. (1936) 7 Cal.2d 60, 66-67 [“‘when the law requires the jury to draw a certain designated conclusion from particular evidence, that conclusion so forced upon the jury is a presumption. Where mandatory presumptions are not exacted, it is the right and duty of the jury to draw such reasonable inferences from the evidence as may appeal to and satisfy their minds’”].) Under Crisci, a trier of fact may infer that the value of the injured party’s claim is reflected in the amount of the judgment against the insured. The law does not require the trier of fact to so conclude. The Crisci court so stated, “The size of the judgment recovered in the personal injury action when it exceeds the policy limits, although not conclusive, furnishes an inference that the value of the claim is the equivalent of the amount of the judgment . . . .” (Crisci, supra, 66 Cal.2d at p. 431, italics added.) Therefore, the trial court properly viewed the amount of the arbitration award in Mr. LeGoff’s favor as one of several factors to be weighed in resolving whether defendant breached its duty to settle the underlying case for a reasonable amount.
We also agree with the trial court’s conclusion as to the meaning of “value of the claim” as used in Crisci—“The size of the judgment recovered . . . when it exceeds the policy limits . . . furnishes an inference that the value of the claim is the equivalent of the amount of the judgment . . . .” (Crisci, supra, 66 Cal.2d at p. 431, italics added.) “Value of the claim” refers to the amount by which the injured party has been damaged. It does not reflect a consideration—unique to the decision whether to settle—of the odds that the defendant will be found liable. (See Northwestern Mut. Ins. Co. v. Farmers Ins. Group, supra, 76 Cal.App.3d at p. 1054 [inference confirmed by other evidence]; Martin v. Hartford Acc. & Indem. Co., supra, 228 Cal.App.2d at p. 183 [“the verdict itself is one indication of what the company might have anticipated”]; Davy v. Public Nat. Ins. Co., supra, 181 Cal.App.2d at p. 401 [“The actual verdict of $24,268 is evidence of the serious nature of the injuries involved and what the company may have anticipated if it had given the issue of damages contemplative consideration”].) Assessing settlement value requires an insurer to consider both the likelihood of being found liable and potential damages. If liability is questionable, a lower settlement value may be assigned. If potential damages are very high, a greater settlement value may be assessed. In either case, however, upon trial, liability is decided and damages awarded without regard to the considerations attendant to a settlement decision. (See Settling the Case—Defendant, 4 Am.Jur., Trials 379; 14 Couch on Insurance (3d ed. 1997) § 203:23.) It follows that the Crisci inference is but one of many a trier of fact could draw from the totality of the evidence in any given case asserting an insurer failed to comply with its duty to accept a reasonable settlement offer within policy limits.
D. Application Of The Isaacson “Mathematical Formula” Was Not Error
Plaintiff argues the trial court erroneously adopted the mathematical approach employed in Isaacson. In Isaacson, the California Insurance Guarantee Association refused to pay $500,000 to settle a personal injury action against the insureds; it offered only $400,000. The insureds contributed the balance of $100,000 to settle the case. They then sued the California Insurance Guarantee Association in tort to recover the $100,000. The parties agreed the estimated maximum exposure was $750,000 and the possibility of a verdict for the injured party was 50 percent. (Isaacson, supra,44 Cal.3d at p. 782.) Our Supreme Court held there was no substantial evidence the defendant breached its duty to settle. (Id. at p. 794.) Our Supreme Court reasoned: “The evidence offered by plaintiffs shows a medical malpractice case of uncertain liability and damages. An estimated maximum exposure of $750,000 was about a 50 percent possibility. This evidence does not indicate that [defendant] failed to accept a reasonable settlement offer when it rejected [a] $500,000 settlement demand . . . .” (Ibid.) In California Practice Guide: Insurance Litigation, the authors borrow from Isaacson and explain: “Suppose the injured party makes a $500,000 policy limits settlement demand in a case of unclear liability and damages. If a ‘fair appraisal’ of the case is that the potential adverse verdict is $750,000 and the chances of such a verdict are 50-50 ($750,000 x 50%=$375,000), the policy limits demand may be unreasonable as a matter of law.” (Croskey et al., California Practice Guide: Insurance Litigation (The Rutter Group 2007) ¶ 12:333, p. 12B-30 (rev. #1, 2004).)
Plaintiff contends, without citing any legal authority on point, that Isaacson applies only when the underlying claim is resolved by a settlement; it does not apply where an excess judgment or arbitration award has been recovered against the insured. In Isaacson, as discussed above, both the insureds and the California Insurance Guarantee Association contributed to settlement of the injured party’s lawsuit. The insureds then sought to recover their contribution to settlement from the California Insurance Guarantee Association. Our Supreme Court held the plaintiffs failed to offer sufficient evidence the California Insurance Guarantee Association breached its duties in refusing to pay $500,000 in settlement: “The evidence offered by plaintiffs shows a medical malpractice case of uncertain liability and damages. An estimated maximum exposure of $750,000 was about a 50 percent possibility. This evidence does not indicate that [the California Insurance Guarantee Association] failed to accepted a reasonable settlement offer when it rejected [the] $500,000 settlement demand, and instead paid $400,000.” (Isaacson, supra, 44 Cal.3d at p. 794.) In the present case, where defense counsel believed there was a 60 percent chance of liability in the underlying lawsuit, the trial court reasoned in part: “When one multiples the $1,318,000 [judgment] by 60 [percent], the reasonable settlement value or ‘fair appraisal of the case’ was $790,800. The court finds that at the time of defendant’s rejection, the $999,999 was not a reasonable demand within policy limits, and defendant’s refusal to settle at that amount was not unreasonable.” In Isaacson, our Supreme Court employed this so-called “mathematical approach” in determining whether the insurer’s decision not to settle was reasonable. Reasonableness is a factor in a “bad faith claim” whether the underlying action is resolved by settlement or by judgment. Therefore, the Isaacson analysis is not limited to cases in which the underlying action was settled.
Plaintiff suggests the trial court could not apply both the Isaacson analysis and the Crisci inference. We disagree. Both the Isaacson analysis and the Crisci inference may be useful in determining whether the defendant insurer breached the duty to accept a reasonable settlement within policy limits. A trier of fact can consider the amount of a judgment against the insured, the estimated maximum exposure, and the evaluated likelihood of a liability finding. These factors are not mutually exclusive. They all may bear on the trier of fact’s determination.
Plaintiff’s citation to Lamb v. Belt Casualty Co. (1935) 3 Cal.App.2d 624, 631-633, and our Supreme Court’s discussion of that decision in Isaacson, is unavailing. Lamb involved an evidentiary presumption—not an inference—that arose from the fact the insurer had denied coverage, refused to defend, and wrongfully forced the insured to mount its own defense. The presumption discussed in Lamb had no application in Isaacson nor does it apply to the present case. In Isaacson, our Supreme Court held: “The Court of Appeal’s conclusion that the settlement had a presumptive effect under Lamb, supra, 3 Cal.App.2d [at pages] 631-632, is erroneous. This case is factually distinguishable from cases in which the presumption described in Lamb applies. The presumption operates where the insurer has wrongfully refused to cover or defend a claim, leaving the insured to mount his own defense or suffer a default. In order to recover reimbursement from the insurer, the insured must demonstrate that the claim was covered under the policy in question, or that the insurer breached its duty to defend. Once a breach of contract is proved, the insured’s act of settling the claim is said to raise the presumption that the third party’s claim against him was legitimate, and that he was liable in the amount which he agreed to pay in settlement. (Ibid.) Here, however, [the California Insurance Guarantee Association] never denied coverage, nor did it refuse to defend plaintiffs in the malpractice case, and it also agreed to participate in the final settlement by paying $400,000.” (Isaacson, supra, 44 Cal.3d at pp. 793-794, orig. italics.) The present case, like Isaacson, is factually distinguishable from cases in which the Lamb presumption applies. Defendant did not deny coverage nor refuse to defend in the present case. Defendant provided the owners with a defense.
E. The Trial Court Did Not Err In Its Application Of The Isaacson Analysis
Plaintiff contends: even if Isaacson applies, it was prejudicial error to adopt the $1.318 million judgment figure as the estimated maximum exposure; the owner’s defense counsel, Robert Armstrong, had evaluated the “worst case scenario” exposure at $1.5 to $2 million and liability had been assessed at 60 percent; therefore, the settlement value was $900,000 to $1.2 million. This argument presupposes defendant could rely only on its “worst case scenario” exposure to assess settlement value. We disagree. There was evidence Mr. Armstrong did not communicate his “worst case scenario” to defendant until after the $999,999 settlement offer had expired. Moreover, in reaching his “worst case scenario” figure of $1.5 to $2 million, Mr. Armstrong accepted the amounts Mr. LeGoff claimed as damages—based in part on an alleged inability to work ever again—and assumed 100 percent liability. Mr. Armstrong testified, “I’m not necessarily accepting that, even under the worst case scenario, . . . a jury would accept those figures.” An insurer evaluating a case for settlement purposes is not required to accept the injured party’s view of damages. In reaching its opinion of reasonable settlement value, the trial court, as trier of fact, assumed $1.318 million—the amount of the arbitration award in Mr. LeGoff’s favor—was a reasonable estimated damage figure for purposes of determining settlement value. There was no prejudicial error in so finding.
IV. DISPOSITION
The judgment is affirmed. Defendant, American Economy Insurance Company, is to recover its costs on appeal from plaintiff, Topa Insurance Company.
We concur: ARMSTRONG, J., KRIEGLER, J.