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Plaintiffs\' and their Counsel\'s Bad Faith Defeats Suit Against Insurer  

No Good Deed Goes Unpunished -  

Plaintiffs Abused the Tort of Bad Faith  Julio Palma and Miriam Cortez (the Plaintiffs) appealed an order  granting summary judgment in a bad faith insurance case against Mercury  Insurance Company (Mercury). Mercury insured Frank McKenzie, who killed  Plaintiffs\' son in a car crash. Plaintiffs obtained a $3 million  judgment in a wrongful death action against McKenzie. McKenzie then  assigned Plaintiffs his rights against Mercury, and Plaintiffs brought  the present action against Mercury on the basis that it failed to accept  their reasonable offer to settle their wrongful death claims. The trial  court granted Mercury\'s motion for summary judgment after determining  Plaintiffs never offered to settle their claims.  

In Julio Palma et al. v. Mercury Insurance Company, B309063, California  Court of Appeals, Second District, Third Division (August 23, 2022) the  Court of Appeals refused to buy plaintiffs\' claims of bad faith. 

FACTUAL BACKGROUND  

In September 2012, Frank McKenzie was driving a vehicle that struck and  killed Oscar Palma, who was riding a moped. At the time, McKenzie was  insured under a Mercury insurance policy with bodily injury liability  limits of $15,000 and property damage limits of $10,000.

On October 15, 2012, attorney Paul Zuckerman sent Mercury a settlement  letter that identified "Oscar Palma (deceased) Estate of Oscar Palma" as  "Our Clients" and states: "Oscar Palma (deceased) Estate of Oscar  Palma, demands that Mercury Insurance tender full policy limits to Oscar  Palma (deceased) Estate of Oscar Palma to resolve their claim.  

The letter stated the offer was to remain open for 14 days, until  October 29, 2012.  Mercury retained attorney Jeffrey Lim and instructed him to accept the  offer. On October 19, 2012, Lim faxed the Carpenter firm a letter  stating Mercury "is tendering to the estate and all heirs of Oscar Palma  Mr. McKenzie\'s $15,000 policy limits.   Between March and July 2013, Mercury sent the Carpenter firm six letters  "reiterat[ing]" its offer of the $15,000 bodily injury policy limits.  Plaintiffs\' Wrongful Death Action Against McKenzie  

On August 28, 2013, the Carpenter firm filed a lawsuit against McKenzie  on behalf of Plaintiffs, Ana Guzman-Palma, and the "Estate of Oscar F.  Palma, a deceased individual." Following a jury trial, the court entered  judgment against McKenzie and in favor of Plaintiffs for $3 million on  their wrongful death claims.