Grayson v. Allstate Insurance Co., 051616 FED9, 14-55959
|Party Name:||MATTHEW GRAYSON and GABRIEL L. PEPER, Plaintiffs - Appellants, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee.|
|Judge Panel:||Before: FLETCHER and GOULD, Circuit Judges, and LEMELLE, Senior District Judge.|
|Case Date:||May 16, 2016|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
NOT FOR PUBLICATION
Argued and Submitted May 2, 2016 Pasadena, California
Appeal from the United States District Court D.C. No. 2:13-cv-05324-BRO-JCG for the Central District of California, Beverly Reid O'Connell, District Judge, Presiding
Matthew Grayson and Gabriel L. Peper appeal the district court's grant of summary judgment in favor of the defendant, Allstate Insurance Company ("Allstate"). The lower court ruled in favor of Allstate because it found that Allstate did not breach the implied covenant of good faith and fair dealing. This case arises out of an automobile accident in which Peper's vehicle struck Grayson's motorcycle, causing Grayson severe injuries. Peper's insurer, Allstate, recognized soon after the accident that Peper was likely at fault and that Grayson's claims would exceed Peper's $15, 000 policy limit. Grayson's attorney then sent Allstate a letter offering to settle Grayson's bodily injury claim for the policy limit. After conferring with Peper, Allstate's claim representative, Donna Czupryn, sent a letter to Grayson's attorney stating that she was "authorized to accept" Grayson's policy limit demand. Additionally, because Grayson's offer did not include a release of Peper, Czupryn included Allstate's standard release form with the letter. The letter stated that Allstate would promptly send the settlement check upon execution of the release. However, the standard release form included terms not contained in the original offer, meaning Czupryn's communication qualified as a rejection and counteroffer rather than an acceptance. Diamond Fruit Growers, Inc. v. Krack Corp., 794 F.2d 1440, 1443 (9th Cir. 1986) ("At common law, an acceptance that varies the terms of the offer is a counteroffer and operates as a rejection of the original offer.").
After receiving Czupryn's letter, Grayson's counsel answered by identifying her letter as a counteroffer and explicitly rejecting it. Allstate responded within one day of receiving Grayson's rejection by having outside counsel prepare a revised release form. Allstate's counsel sent the revised release to...
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