The opinion
Filed 1/7/25 Coast National Insurance Co. v. Klinefelter CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
COAST NATIONAL INSURANCE D084514, D084515
COMPANY,
Plaintiff and Appellant,
(Super. Ct. No. CIVSB2203671)
v.
MARGIE A. KLINEFELTER et al.,
Defendants and Respondents.
APPEALS from an order of the Superior Court of San Bernardino,
John M. Pacheco, Judge. Affirmed.
Horvitz & Levy, Karen M. Bray, Felix Shafir; Lehavi Stargardter and
Limor Lehavi for Plaintiff and Appellant.
McGee, Lerer & Associates, Daniel M. McGee, Catherine Lerer; Esner,
Change, Boyer & Murphy, Andrew N. Chang, and Rowena J. Dizon for
Defendants and Respondents.
Coast National Insurance Company (Coast National) appeals the trial
court’s granting of Margie A. Klinefelter, Nicholas Cappiello (Nicholas), and
Tiffany Camarillo’s (Tiffany)1 (collectively, the Klinefelter parties) special
motion to strike under Code of Civil Procedure2 section 425.163 and the
striking of its breach of contract cause of action. It contends the court erred
in concluding the parties never entered into a settlement agreement and
that, therefore, no contract existed. We disagree and affirm the order.
FACTUAL AND PROCEDURAL BACKGROUND
I.
Accident and Settlement Offer
In January 2021, a vehicle driven by Coast National’s insured, David
Manuel Vasquez, collided with a vehicle driven by Anthony Cappiello, in
which Klinefelter was a passenger. Klinefelter was injured, while Cappiello
died as a result of the accident. Cappiello was survived by his adult children,
Nicholas and Tiffany. Vasquez was arrested and charged with several
crimes. Bristol West Insurance (Bristol West) handled the bodily injury
liability claims related to the accident under an insurance policy issued to
Vasquez and underwritten by Coast National.
On January 26, 2021, counsel for the Klinefelter parties sent a letter to
Bristol West offering to settle their claim for damages against Vasquez
1 For purposes of clarity, we refer to Nicholas and Tiffany by their first
names. We intend no disrespect.
2 Statutory references are to the Code of Civil Procedure unless
otherwise indicated.
3 Section 425.16 is commonly referred to as the anti-SLAPP statute
because a special motion thereunder seeks to strike a “ ‘[s]trategic lawsuit
against public participation,’ ” or SLAPP. (Wilson v. Cable News
Network, Inc. (2019) 7 Cal.5th 871, 882, fn. 2 (Wilson).)
2
within policy limits. The letter set forth the following specific terms for the
offer:
“If you want to settle this claim within your insureds’
policy limits, you must unequivocally:
“1. Offer all of your company’s applicable policy limits in
writing, this includes other applicable insureds with your
company, including your applicable insureds that we are
unaware of.
“2. Be diligent to locate other possible insurance policies
and inform them of this offer. Provide us with all the
contact information for the other carrier(s) the day you
learn of other Insurance policies.
“Provide us with a notarized statement from your insured
driver and owner, if different that they are unaware of
other insurance policies that might provide coverage for
this accident.
“3. Provide us with a certified copy of your declaration
page.
“4. Provide us with a notarized statement from your
insured driver as to whether or not your insured driver was
an agent at the time of the accident.
“5. Provide us with an acceptable release.
“The written acceptance and compliance with these
terms must be in our hands before February 17, 2021. No
term is more important than any other term; therefore, this
offer cannot be accepted without the unequivocal
acceptance and compliance of all the terms. Below is an
explanation of terms 4 and 5. If there are other possible
applicable policies, we cannot sign any release until we are
ready to settle all claims against your insureds.”
3
Regarding term 4, the letter requested a declaration of agency as
specified:
“Your insured driver’s signature on the declaration of
agency must be notarized and include: your insured driver’s
name; where your insured driver was coming from at the
time of this accident; where your insured driver was going
to at the time of this accident; the purpose of the insured
driver’s trip at the time of this accident; and, whether or
not your insured driver was employed at the time of this
accident. If your insured driver was unemployed, please
provide a notarized declaration informing us of this fact.”
As to the release required by term 5, counsel also “reserve[d] the right
to verbal/written statements under oath and/or physical records from your
insureds regarding any further information we feel we may need before we
sign the release.” The letter further clarified what would constitute an
“acceptable release,” stating:
“Do not attempt to release or protect parties that are not
insured under your policy. Do not attempt to release
damages that are not part of this settlement. Do not
attempt to include liens in your release and/or settlement
offer that are not your legal duty. Do not deny or dispute
liability. Do not try to impose or transfer duties or risks
onto our client or our firm that are your legal duties or
risks. Do not attempt to impose or transfer duties and/or
risks onto our client(s) or law firm that are not our client’s
or firm’s legal duties or risks to assume and/or may be
unethical for our firm to assume. Do not send us a release
or a proposed release that does not meet the terms of this
offer; if you do, we will consider it a counteroffer and
pursue your insureds for the full value of our client’s
claim.”
The letter closed by requesting that Bristol West contact the law firm’s pre-
litigation manager if the offer was unclear or if they wanted to alter a term or
4
condition. It further stated, “If we agree to alter any ‘Terms’ or conditions,
you must receive this change in writing by a partner of our law firm.”
On February 4, 2021, William Decker, a senior claims adjuster for
Bristol West, contacted the pre-litigation manager via email and reached out
to counsel for the Klinefelter parties via regular mail. He requested
documentation confirming that Nicholas and Tiffany were Cappiello’s rightful
heirs, a copy of Cappiello’s death certificate, and a “Declaration of Agency”
template, if they had one. Given that Vasquez remained incarcerated and
subject to visitation restrictions due to the Covid-19 pandemic, he also
requested waiver of the notarization requirement for Vasquez’s declarations
regarding coverage and agency and additional time to respond. He did not
receive responses, so he emailed the pre-litigation manager again on
February 8, 2021, reiterating the same questions and requests.
Counsel for the Klinefelter parties responded on February 11, 2021,
and agreed to waive the notarization requirement. He further stated that
they did not have an agency declaration template and “d[id] not believe [the
Klinefelter parties] need[ed] additional time to respond to claimants’
settlement offer.”
On February 16, 2021, a day before the deadline, Decker emailed and
faxed letters to counsel for the Klinefelter parties that provided the following
response to the settlement offer:
“We are accepting your demand to settle for the policy limit
of $15,000.00.
“Enclosed is a release for your review. Please have your
client(s) execute the release and return it to our National
Document Center at the address above or fax it to [number]
if it meets your approval. If it does not meet your approval,
please contact the undersigned so we can address the
issue(s) expediently. Please include a claim number on all
correspondence or use this letter as a cover sheet.
5
“A certified copy of our insured’s declarations page, an
executed Declaration of Agency, an executed Declaration of
Unemployment, an executed Declaration of No Other
Insurance, and an email from [counsel for the Klinefelter
parties] waiving the notarization requirement is also
enclosed.”
Counsel for the Klinefelter parties sent a response on March 3, 2021, which
stated, “This letter is in response to your February 16, 2021 offers. We do not
accept your settlement offers for any of our clients.”
II.
Lawsuits
In February 2022, the Klinefelter parties sued Vasquez in San
Bernardino County Superior Court. In their amended complaint, they allege
two negligence causes of action, a survival claim, and one declaratory relief
cause of action seeking a declaration that the parties had not settled
(Klinefelter, et al. v. Vasquez, San Bernardino case No. CIVSB2203671) (the
Klinefelter action).
In August 2022, Coast National filed suit against the Klinefelter
parties, also in San Bernardino County Superior Court (Coast Nat’l Ins. Co. v.
Klinefelter, et al., San Bernardino case No. CIVSB2219457) (the Coast
National action). Their first cause of action for breach of contract alleged the
parties had a valid and enforceable settlement agreement that the Klinefelter
parties had breached by filing the Klinefelter action. The second cause of
action, for declaratory relief, sought a declaration that the settlement
agreement was valid and enforceable. The third cause of action sought
specific performance of the settlement agreement.
Coast National also filed a complaint-in-intervention in the Klinefelter
action, asserting one claim for a declaration that the parties had an
enforceable settlement contract.
6
III.
Anti-SLAPP Motion and Order
In January 2023, the Klinefelter parties filed an anti-SLAPP motion in
the Coast National action seeking to strike Coast National’s breach of
contract claim. They asserted that their filing of a lawsuit was a protected
activity within the meaning of section 425.16. Thus, they argued Coast
National’s breach of contract cause of action should be stricken because it
was based on the Klinefelter parties’ protected act of filing a wrongful death
complaint.
The Klinefelter parties explained that the burden then shifted to Coast
National to establish a probability that it would prevail on the merits of its
breach of contract claim. They added that section 425.16, subdivision (b) and
Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 824, imposed an added
burden that Coast National overcome the Klinefelter parties’ constitutional
defenses. In particular, they highlighted the defenses raised in their fifth
affirmative defense that “they have a protected right and privilege to engage
in the activity by which Plaintiff claims to have been injured, including [the
Klinefelter parties’] filing of their personal injury action, which constitutes
protected activity under California statute including but not limited to Code
Civ. Proc. § 425.16, Civ. Code § 47 and the U.S. Constitution and California
Constitution.” Again citing Wilcox, the motion stated that “It is well settled
the First Amendment creates a privilege from civil liability for actions
constituting the exercise of the right to petition the government for redress of
grievances (citation) and this right encompasses the act of filing a
lawsuit . . . .” The anti-SLAPP motion also sought recovery of attorney fees
and costs.
7
In opposing the motion, Coast National argued its “evidence in
conjunction with this motion shows that a binding contract was formed when
Coast National sent the Acceptance Letters in response to the Offer Letter
from the Klinefelter parties and fulfilled all conditions stated in the
offer . . . .” It pointed out that, in the Klinefelter action, “the only after the
fact excuses the Klinefelter parties could come up with in an attempt to open
the policy were that the policy declarations Coast National provided were not
certified, and that the release included Vasquez’s ‘principals, agents, heirs
and representatives’ who were persons not insured under Vasquez’s Coast
National insurance policy. This latter fact purportedly presented a problem
because the Offer Letter stated ‘[d]o not attempt to release or protect parties
that are not insured under your policy.’ ” However, Coast National contended
the declarations were certified and that the standard release language did
not attempt to release parties not insured under the policy.
The Klinefelter parties’ reply brief focused on Coast National’s failure
to overcome the petition and litigation privileges. They argued that Coast
National’s evidence about the parties’ settlement communications
demonstrated that the Klinefelter attorneys were zealously advocating for
their clients. They further highlight that their attorneys’ interpretation of
Coast National’s acceptance as invalid was debatable under California law
and that their opinions were protected by the First Amendment. In their
view, the parties’ respective claims for declaratory relief were the appropriate
vehicle for resolving the dispute; suing the Klinefelter parties alone for
damages, separate from their counsel, was “a step too far.”
The Klinefelter parties also argued Coast National’s evidence
demonstrated it did not unequivocally accept and comply with the terms of
the settlement offer. The offer instructed Coast National: “Do not attempt to
8
release or protect parties that are not insured under your policy. . . . Do not
deny or dispute liability. . . . Do not send us a release or a proposed release
that does not meet the terms of this offer; if you do, we will consider it a
counteroffer and pursue your insureds for the full value of our client’s claim.”
The Klinefelter parties submitted that Coast National’s response did not
comply with these terms because the release included the following language:
“I/we, Margaret Klinefelter, release and forever discharge David Manuel
Vasquez and their principals, agents, heirs and representatives . . . ” and
“ . . . there is no admission of liability.”
At the beginning of the hearing, the court sent the parties its tentative
ruling granting the anti-SLAPP motion. Thereafter, Coast National’s counsel
indicated that Coast National was not disputing that the motion related to
protected activity.
In its final order, the court granted the motion and struck Coast
National’s breach of contract cause of action. The court found that the breach
of contract cause of action “ar[ose] from protected activity, namely, [the
Klinefelter parties’] filing of the ongoing personal injury action,” and observed
that Coast National appeared to concede as much. As to whether Coast
National met its burden to show the probable validity of its claim, the court
noted that, had there been a valid settlement agreement, the claim would
have been legally sufficient. However, it concluded Coast National “failed to
submit evidence upon which a valid contract could be found.” In particular,
the court explained:
“Even assuming defendants’ proposal was sufficiently
specific enough to constitute an acceptable offer, the terms
of defendants’ proposal required actual performance for
there to be acceptance, i.e. Coast National’s mere stated
acceptance was insufficient to form a contract. (See Davis
9
v. Jacoby ( 1934) 1 Cal.2d 370, 378 [discussing the
distinction between unilateral and bilateral contracts].)
“. . . .While Coast National attempted to tender the
documents defendants demanded, the letter from
defendants made clear that an acceptable release
agreement would not cover ‘parties that are not insured
under [its] policy’ and could not contain a denial of liability.
The release submitted by Coast National released Vazquez
and his ‘principals, agents, heirs and representatives. . . .’
The release also had a provision indicating there was no
admission of liability, which is significant given defendants’
express requirements and since the proposed release
contained other language suggesting Vazquez retained his
right to sue for damages. ‘An acceptance must be absolute
and unqualified’ and a ‘qualified acceptance is a new
proposal.’ (Civ. Code, § 1585; Panagotacos v. Bank of
America (1998) 60 Cal.App.4th 851, 855-856.) As a result,
no contract was ever formed.”
The court awarded fees in favor of the Klinefelter parties. It also
consolidated the Klinefelter action with the Coast National action.
IV.
Appeals
The court granted the anti-SLAPP motion by minute order on
March 3, 2023, and ordered the Klinefelter parties’ counsel to prepare the
order. Counsel did so, but when the court did not sign it right away, Coast
National filed a notice of appeal on April 4, 2023, in an abundance of caution.
The court finally signed the order on June 30, 2023. Coast National then
filed another notice of appeal on August 11, 2023. The Klinefelter parties
asked Division Two of this court to consolidate the two cases, which it did,
10
before the matter was transferred to this division. Both appeals pertain to
the exact same parties and trial court order.4
DISCUSSION
“[T]he anti-SLAPP statute is designed to protect defendants from
meritless lawsuits that might chill the exercise of their rights to speak and
petition on matters of public concern. [Citations.] To that end, the statute
authorizes a special motion to strike a claim ‘arising from any act of that
person in furtherance of the person’s right of petition or free speech under the
United States Constitution or the California Constitution in connection with
a public issue.’ ” (Wilson, supra, 7 Cal.5th at pp. 883–884.)
“Litigation of an anti-SLAPP motion involves a two-step process. First,
‘the moving defendant bears the burden of establishing that the challenged
allegations or claims “aris[e] from” protected activity in which the defendant
has engaged.’ [Citation.] Second, for each claim that does arise from
protected activity, the plaintiff must show the claim has ‘at least “minimal
merit.” ’ [Citation.] If the plaintiff cannot make this showing, the court will
strike the claim.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995,
1009.)
We review an order granting or denying an anti-SLAPP motion de
novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325.) Therefore, we engage in
the same two-step process that the trial court undertook in assessing an anti-
4 Although the procedural posture by which this consolidated matter
came to us is somewhat unusual, we conclude both appeals would have been
independently appealable and timely. The court’s minute order was not
appealable because it called for preparation of a subsequent order (Davis v.
Taliaferro (1963) 218 Cal.App.2d 120, 123), but pursuant to California Rules
of Court, rule 8.104(d)(2) and (e), we would have treated the notice of appeal
as filed after entry of the appealable order on June 30, 2023.
11
SLAPP motion. (See Mendoza v. ADP Screening & Selection Services, Inc.
(2010) 182 Cal.App.4th 1644, 1652.)
In this case, Coast National does not contest that the anti-SLAPP
statute applies, so the dispute lies at the second prong of the analysis;
namely, whether Coast National demonstrated that its breach of contract
claim has at least minimal merit.
This oft-quoted minimal merit language requires some elaboration.
The second prong analysis required under section 425.16 requires the
plaintiff to “establish[ ] that there is a probability that the plaintiff will
prevail on the claim.” (§ 425.16, subd. (b)(1).) To establish this probability,
“the plaintiff need only have ‘ “stated and substantiated a legally sufficient
claim.” ’ ” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).)
“Put another way, the plaintiff ‘must demonstrate that the complaint is both
legally sufficient and supported by a sufficient prima facie showing of facts to
sustain a favorable judgment if the evidence submitted by the plaintiff is
credited.’ ” (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821
(Parker).)
“In deciding the question of potential merit, the trial court considers
the pleadings and evidentiary submissions of both the plaintiff and the
defendant [citation]; though the court does not weigh the credibility or
comparative probative strength of competing evidence, it should grant the
motion if, as a matter of law, the defendant’s evidence supporting the motion
defeats the plaintiff’s attempt to establish evidentiary support for the claim.”
(Parker, supra, 28 Cal.4th at p. 821; accord GetFugu, Inc. v. Patton
Boggs LLP (2013) 220 Cal.App.4th 141, 155.)
As discussed, this matter involves a purported agreement to settle. “ ‘A
settlement agreement is a contract, and the legal principles which apply to
12
contracts generally apply to settlement contracts.’ ” (Monster Energy Co. v.
Schechter (2019) 7 Cal.5th 781, 789 (Monster Energy).) To demonstrate that
the Klinefelter parties breached the purported settlement contract, Coast
National must establish the existence of a contract, Coast National’s
performance or excuse for nonperformance, the Klinefelter parties’ breach,
and resulting damages to Coast National. (See J.B.B. Investment Partners
Ltd. v. Fair (2019) 37 Cal.App.5th 1, 9.)
The foundational issue in dispute here is the first element, with the
parties disputing whether a contract exists. A contract does not exist without
the following: “1. [p]arties capable of contracting; [¶] 2. [t]heir consent; [¶]
3. [a] lawful object; and, [¶] [a] sufficient cause or consideration.” (Civ. Code,
§ 1550.) “Consent is not mutual, unless the parties all agree upon the same
thing in the same sense.” (Civ. Code, § 1580.) “ ‘ “The existence of mutual
consent is determined by objective rather than subjective criteria, the test
being what the outward manifestations of consent would lead a reasonable
person to believe. [Citation.] Accordingly, the primary focus in determining
the existence of mutual consent is upon the acts of the parties involved.” ’ ”
(Monster Energy, supra, 7 Cal.5th at p. 789.)
As the trial court explained, it has long been the case that an offeror
may seek acceptance, not in the form of a promise to perform, but by
performance. (Davis v. Jacoby (1934) 1 Cal.2d 370, 378; Civ. Code, § 1584
[“Performance of the conditions of a proposal, or the acceptance of the
13
consideration offered with a proposal, is an acceptance of the proposal”].)5
Whichever mode of acceptance the offer requests, the “acceptance must be
absolute and unqualified . . . [a] qualified acceptance is a new proposal.” (Civ.
Code, § 1585.) In other words, the “ ‘terms proposed in an offer must be met
exactly, precisely and unequivocally for its acceptance to result in the
formation of a binding contract [citations]; and a qualified acceptance
amounts to a new proposal or counteroffer putting an end to the original
offer . . . .’ ” (Panagotacos v. Bank of America (1998) 60 Cal.App.4th 851,
855–856.)
We agree with the court’s conclusion that the Klinefelter parties’ offer,
in stating that “this offer cannot be accepted without the unequivocal
acceptance and compliance of all the terms,” conditioned acceptance upon
performance of the terms set forth in the offer. One of the terms was to
provide them with “an acceptable release.” The Klinefelter parties expressly
instructed Coast National in the offer, “Do not attempt to release or protect
parties that are not insured under your policy” and “Do not deny or dispute
liability.” In response, Coast National offered a release that “releases and
forever discharges David Manuel Vasquez and their principals, agents, heirs
and representatives, from any and all rights, claims, demands, causes of
action, and damages of any kind, known or unknown, existing or arising in
the future, resulting from or related to bodily injury, and/or death from an
accident that occurred on or about January 5, 2021, at or near Fontana, CA.”
5 As the Restatement (Second) of Contracts explains, “Language or
circumstances sometimes make it clear that the offeree is not to bind himself
in advance of performance. His promise may be worthless to the offeror, or
the circumstances may make it unreasonable for the offeror to expect a firm
commitment from the offeree. In such cases, the offer does not invite a
promissory acceptance, and a promise is ineffective as an acceptance.”
(Rest.2d Contracts § 32, com. b.)
14
(Italics added.) The release further stated, “there is no admission of
liability.” This language does not “exactly, precisely and unequivocally”
match the terms of the offer such that Coast National may be said to have
performed in a manner that constituted acceptance of the offer. Stated
differently, it is not evident from the plain language of the release that Coast
National met its burden of supporting its claim that a contract exists with
“ ‘a sufficient prima facie showing of facts.’ ” (Parker, supra, 28 Cal.4th at
p. 821.)
Coast National challenges this conclusion on multiple grounds. First,
Coast National contends we should follow the decisions in the recent, similar
cases of CSAA Ins. Exchange v. Hodroj (2021) 72 Cal.App.5th 272 (Hodroj)
and Travelers Commercial Insurance Company v. Hall (C.D. Cal.,
Mar. 15, 2023, No. CV 22-8234 PA (MAAx)) 2023 U.S. Dist. LEXIS 115226
(Travelers).6 We find both cases distinguishable. In Hodroj, the offer was
“conditioned on written acceptance within 21 days.” (Hodroj, at p. 275.)
Although the offer allowed CSAA to condition their acceptance of the offer by
requiring Hodroj to “execute a Release of all Bodily Injury Claims against
[CSAA’s] insureds and their heirs only, which Release is not inconsistent
with the terms and conditions of this offer” (id. at p. 277), Hodroj did not
require a release as an acceptance term. Likewise, in Travelers, even though
the same firm that represents the Klinefelter parties here made a similar
6 “ ‘Although not binding, unpublished federal district court cases are
citable as persuasive authority.’ ” (Gray v. Quicken Loans, Inc. (2021)
61 Cal.App.5th 524, 528, fn. 2.)
15
settlement offer,7 the terms specified only that, “ ‘[W]ritten acceptance of
these terms must be in our hands before December 31, 2019.’ ” (Travelers, at
p. *2.) In neither case did the offer appear to expressly require acceptance in
the form of performance of the terms of the contract.8 Thus, authority
supported those courts in concluding that written acceptance was sufficient to
form the contract, even if the subsequently presented release did not fully
conform to the language of the offer. In other words, because here
performance was a material term of the contract, our conclusion in this case
does not violate the “well-established principle of contract law” that “when
parties agree on the material terms of a contract with the intention to later
reduce it to a formal writing, failure to complete the formal writing does not
negate the existence of the initial contract.” (Hodroj, at p. 276.) Here, the
offer did not contemplate the release would be a later reduction of the
7 The settlement offer “stated, in part: ‘If you want to settle this claim
within your insured’s policy limits, you must . . . offer all of your applicable
policy limits in writing,’ ‘[p]rovide us with a copy of your declarations page,’
and ‘[p]rovide us with an acceptable release.’ ” (Travelers, supra, 2023 U.S.
Dist. LEXIS at p. *2.) It further provided: “ ‘The release must only release
your insureds. Do not attempt to release parties that are not under your
policy’ and ‘do not send us a proposed release that clearly does not meet the
terms of this offer; if you do, we will consider it a counter offer and pursue
your insureds for the full value of our client’s claim.’ ” (Ibid.)
8 In its reply brief, Coast National argues neither case is distinguishable
on this point. It certainly is possible the offers and releases in those cases
employed identical language and the reviewing courts simply did not recite
all of the relevant language to make that clear. If that was the case, we
respectfully disagree with their conclusions. However, our review of the
Hodroj and Travelers opinions does not reveal that those claimants expressly
conditioned acceptance on compliance with of all these terms, including a
compliant release, in the same way the Klinefelter parties did here. On these
facts, we conclude Coast National has not demonstrated a valid acceptance of
the contract pursuant to Civil Code section 1585.
16
agreement to writing. Rather, the contract was not formed until an
acceptable release demonstrating unqualified acceptance was provided.
Seemingly having learned from these cases, the Klinefelter party’s
counsel retooled the offer letter to require, versus allow, an “acceptable
release” and to state that “written acceptance and compliance with these
terms must be in our hands before February 17, 2021.” (Italics added.) We
conclude this addition language makes acceptance of the instant offer
contingent upon performance of the terms of the offer, thus making it
materially different from the ones put forth in Hodroj and Travelers.9
Coast National next argues that its release of “principals, agents, heirs
and representatives” does not run afoul of the offer’s prohibition of any
“attempt to release or protect parties that are not insured under your policy.”
They first assert that the Klinefelter parties have never suggested that
anyone other than Vasquez could have been a “party” to their personal injury
action or provided evidence that they could have sued any other “party.” This
contention interprets the demand that Coast National not “attempt to release
or protect parties that are not insured under your policy” (italics added) as
referring only to “parties” to the subsequent lawsuit. Our initial observation
is that, given that the Klinefelter parties sent this offer a year before they
filed suit, a more reasonable interpretation of their reference to “parties” in
9 Both parties cast aspersions on the other regarding their motives in
making such strategic decisions, but we need not comment on any of these
motives to conclude that Hodroj and Travelers do not dictate the outcome of
this case.
17
their offer is simply as referring to individuals.10 Regardless, the Klinefelter
parties dispute Coast National’s assertion, pointing to allegations in their
complaint that Doe defendants employed Vasquez and that he was an agent
and employee acting within the scope of his agency. In our view, a
reasonable person would not find mutual consent to a term Coast National
sought to add simply because, at the pre-litigation stage, the Klinefelter
parties had not yet identified by name an employer Doe defendant. As the
Klinefelter parties explained, this was a material point in any release for
them because an employer potentially would have a higher policy limit that
would adequately compensate them for their losses. Thus, an acceptance
that added a term waiving liability for a potential employer would not match
the offer.
Even if the settlement offer is read as prohibiting the release of anyone
not insured under the policy, Coast National submits there is no evidence the
release deviated from this prohibition. It goes on to state that “[t]he policy
expressly covered several drivers in addition to Vasquez—i.e., Michelle
Garcia, Ernesto Vasquez, and Gloria Vasquez” and that “[t]here is no
evidence these additional individuals were not Vasquez’s principals, agents,
heirs, and representatives.”11 The Klinefelter parties respond by arguing
10 One definition of “party” is “a particular individual: PERSON.”
(Merriam-Webster’s Unabridged Dict. Online (2024)
<https://unabridged.merriam-webster.com/unabridged/party, par. 6(b)> [as of
January 7, 2025], archived at <https://perma.cc/XWT6-3GME> [select “View
the live page”].)
11 The Klinefelter parties contend Coast National waived this argument
because it did not raise it in the trial court. Coast National disputes this
assertion. Although it appears Coast National’s argument at the hearing was
somewhat different than the one they make on appeal, it is not a clear case of
forfeiture. Regardless, as we explain, the argument fails on the merits.
18
that it was Coast National’s burden, not theirs, to demonstrate that these
individuals were insured under its policy and that no one else could be
Vasquez’s “principals, agents, heirs and representatives.”
The status of these drivers is not entirely clear because only Vasquez is
listed under the heading “Named Insured.” Ernesto and Gloria Vasquez are
listed as “additional drivers” on the declaration page produced by Coast
National but the page states that they are “excluded.” Likewise, Michelle
Garcia is listed as a “driver” for “Vehicle 1” but is not identified as an insured
driver. Coast National does not elaborate as to what this information means.
Even if we credit Coast National’s evidence as demonstrating that it insured
these other individuals under the policy (see Parker, supra, 28 Cal.4th at
p. 821), since Coast National wanted to add the language about “principals,
agents, heirs and representatives” to the release, it had the burden of setting
forth the evidence showing that the release did not “attempt to release or
protect parties that are not insured under your policy.”
Coast National responds that it provided the declarations from Vasquez
the offer requested, which demonstrated that he was not employed or acting
as an agent at the time of the accident. It also points to a declaration it
provided from a woman experienced in providing “consulting and expert
testimony regarding the theoretical and practical aspects of claims handling”
that asserted it is common custom in the insurance industry to release the
insured as well as their “principals, agents, heirs and representatives” and
that “[t]hese are not ‘parties that are not insured’ under the policy.” But
again, when the Klinefelter parties requested the employment and agency
declarations from Vasquez, they did not express in the offer a willingness to
waive claims against any employers, should it turn out Vasquez was lying.
Instead, they expressly warned Coast National not to attempt to release or
19
protect parties that were not insured under the policy. Thus, if Coast
National wanted to add language and show that it still complied with the
terms required for acceptance, it was its burden to provide further evidence
regarding Vasquez’s lack of employment. A declaration indicating such
language is typical in the industry and seemingly meaningless12, is not
sufficient to demonstrate unequivocal acceptance in this case.
Turning to the next disputed passage in the release, Coast National’s
view is that stating “there is no admission of liability” is not synonymous
with denying liability. At the hearing, Coast National argued such a
statement simply does not admit liability and analogized it to the use of the
phrase “I won’t admit or deny” in discovery responses. We do not find this to
be an apt analogy. Although Coast National did not explain its reasoning,
this phrase might be used in the discovery context when the responding party
does not know all the facts necessary to fully answer the question posed
without further discovery. Here, by contrast, Coast National seeks to
unequivocally accept an offer that says “Do not deny or dispute liability” by
expressly disclaiming any admission of liability. What is left when one
refuses to admit liability? The most obvious inference is that the party
denies liability but, at the very least, one clearly disputes liability.
Accordingly, this response is not an unqualified acceptance of the offer.
The only case Coast National relies on to argue the proposed release
does not dispute liability when it says, “there is no admission of liability” is
Jerves v. United States (9th Cir. 1992) 966 F.2d 517. Putting aside that the
Ninth Circuit’s interpretation of federal law does not bind us in interpreting
12 As the Klinefelter parties highlight, if there were no “principals” not
insured under the policy—other than, potentially, Michelle Garcia, Ernesto
Vasquez, and Gloria Vasquez—why did Coast National feel compelled to
include “principals” in the release?
20
California law, this case does not provide the firm precedent Coast National
suggests it does. The court in Jerves was evaluating whether a woman who
was injured on a naval base and sued the United States had complied with
Title 28 United States Code section 2675(a). (Jerves, at p. 519.) This statute
prohibits federal government employees from suing the United States for
money damages under certain circumstances without first presenting the
claim to the appropriate federal agency and “either receiving a conclusive
denial of the claim from the agency or waiting for six months to elapse
without a final disposition of the claim being made.” (Ibid.) The claimant did
not wait six months and alleged that a settlement offer from the agency
constituted a conclusive denial even though it stated, “[w]ithout admitting
liability and without prejudice, the United States of America is willing to
settle all claims . . . ”. (Ibid.) The Ninth Circuit disagreed, explaining that
“[n]owhere in the letter does the [agency] declare that it has reached a final
conclusion regarding Jerves’ claim.” (Ibid.) As further evidence that this was
not a conclusive denial, the Ninth Circuit explained that “[a]lthough the
[agency] does not admit liability neither does it deny liability on behalf of the
United States.” (Ibid.) This last statement establishes only that, under the
relevant federal statute, the phrase “without admitting liability” is not a
clear statement that a government agency has definitively denied a
claimant’s claim, allowing the claimant jurisdiction to file a lawsuit.
Even if we were to apply Jerves to the release language here that “there
is no admission of liability,” we would conclude the release does not make a
clear statement as to liability. In other words, it could reasonably be
interpreted as denying or disputing liability and, thus, is not an “absolute
and unqualified” acceptance of the offer. (Civ. Code, § 1585.) Accordingly, we
21
conclude Coast National has not substantiated a legally sufficient breach of
contract claim. (Navellier, supra, 29 Cal.4th at p. 88.)
On a final note, Coast National argues that, because the Klinefelter
parties acknowledged it was “a debatable position as to whether or not the
parties reached a settlement agreement,” all doubts should be resolved in
Coast National’s favor, and we should permit the breach of contract claim to
proceed and have a trier-of fact decide the factual question of whether Coast
National sufficiently accepted the settlement offer. Coast National cites for
this supposed concession by the Klinefelter attorneys to the Klinefelter
parties’ reply brief in the lower court, wherein the attorneys addressed the
petition privilege and their duty to zealously advocate for their clients, and to
oral argument on the same issue. The Klinefelter attorneys made this
statement in the context of explaining that they advised their clients that
Coast National’s response did not unequivocally accept the offer and arguing
that an attorney’s opinion, right or wrong, is protected by the First
Amendment. They argued Coast National was “trying to retaliate and
conduct strategic litigation by suing the clients only, which drives a wedge
between [the] attorney-client relationship” and makes attorneys afraid to
advise their clients about settlement.
There is always a debate in litigation as to which side has the correct
interpretation. We will not construe the facts against one side simply
because their counsel acknowledged the existence of the dispute. Attorneys
22
rendering an opinion to their clients that they have a legally tenable position
is not extrinsic evidence of the existence of mutual assent to a contract.13
Accordingly, we conclude Coast National has not established that there
is a probability that it will prevail on its breach of contract claim. (See
§ 425.16, subd. (b)(1).)14
DISPOSITION
The order is affirmed. The Klinefelter parties are entitled to their costs
on appeal.
HUFFMAN, Acting P. J.
WE CONCUR:
O’ROURKE, J.
IRION, J.
13 Coast National also argued that “the fact that two different courts—the
trial court here and the Travelers court—reached diametrically different
conclusions as to whether a settlement contract was formed based on
virtually identical facts alone compels the conclusion Coast National’s breach
of contract claim should not be stricken under the anti-SLAPP statute.” This
argument is unavailing because it is based on the faulty premise that the
material facts are identical, which we have concluded they are not.
14 Because we conclude the evidence proffered by Coast National does not
establish formation of a binding contract, we need not reach the parties’
arguments regarding the Klinefelter parties’ asserted defenses of privilege.
23