WHITNEY v. STATE FARM MUT. AUTO. INS. CO.
258 P.3d 113 (2011)
Zebuleon WHITNEY, Appellant,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellee.
Supreme Court of Alaska.
August 19, 2011.
Before: CARPENETI, Chief Justice, FABE, WINFREE, CHRISTEN, and STOWERS, Justices.
CARPENETI, Chief Justice.
The driver of a pickup truck collided with a bicyclist, seriously injuring the bicyclist. The bicyclist sought a settlement agreement in excess of the maximum coverage of the driver's insurance policy. The insurance company responded with an offer to tender policy limits, which the bicyclist refused. After a series of court proceedings in both state and federal court, the driver sued his insurance company, complaining in part that his insurance company had breached its duty to settle. The insurance company moved for partial summary judgment on a portion of the duty to settle claims. The superior court granted the motion. The parties then entered a stipulation by which the driver dismissed all remaining claims, preserving his right to appeal,1 and final judgment was entered in the insurance company's favor. Because the insurance company's rejection of the bicyclist's settlement demand and its responsive tender of a policy limits offer was not a breach of the duty to settle, we affirm the superior court's grant of summary judgment to that extent. But because the superior court's order exceeded the scope of the insurance company's motion for partial summary judgment, we reverse the superior court's order to the extent it exceeded the narrow issue upon which summary judgment was appropriate. We remand for further proceedings concerning the surviving duty to settle claims.
II. FACTS AND PROCEEDINGS
On July 6, 2006, Zebuleon Whitney was leaving a gas station in his Dodge Ram pickup. He pulled out in front of a bicyclist, Michael Giannechini, whom he had seen coming down the road to Whitney's left. The vehicles collided and Giannechini was seriously injured. The parties do not dispute that Whitney was the primary cause of the accident.
Whitney's Dodge was insured by an automobile liability policy issued by State Farm, which had a policy limit of $100,000 for injury to a single person, and $300,000 per occurrence. However, a family may have multiple State Farm insurance policies, as State Farm issues separate policies for each vehicle. Giannechini's counsel, Daniel Libbey, knew
that Whitney's parents owned several vehicles, and that Whitney had a brother who was part of the same household. On April 5, 2007, Libbey sent a letter entitled "Settlement Offer" to State Farm counsel John Burns, who had been retained by State Farm to represent Whitney. The letter acknowledged receiving copies of the insurance policies for the Whitney family's other vehicles, and requested a copy of an expired policy on one such vehicle. The letter also stated Libbey's understanding that State Farm issues a separate policy on each vehicle it insures, and that "[i]f Zebuleon is not a named insured on these policies, then he is defined as a covered insured (as a resident relative) and entitled to stacking of additional coverage for his liability for this accident." Libbey offered no legal basis for this conclusion.