In at least one of the iterations in the tortured history of the Yan Fang Du case previously posted here, the Federal Ninth Circuit Court of Appeals tried to invent a good-faith duty to initiate settlement negotiations for liability insurance companies in California.
Since the Yan Fang Du Federal case was decided, a California State Court has refused to adopt such a rule in the absence of California authorities. There is no duty to initiate settlement negotiations at the present time in California, even when the insured's liability is probable and the injured claimant's damages are "great," according to the California State Court deciding the case of Reid v. Mercury Insurance Co., 220 Cal. App. 4th 262, 277, 162 Cal. Rptr. 3d 894, 906 (Cal. 2d DCA, Div. 8, 2013), review denied (unreported) (Cal. January 21, 2014).
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