Doyle Archer, insured by Farmers Insurance Exchange (Farmers) under a policy with $15,000 per-person bodily injury liability limits, rear-ended Kathleen Ann Wood’s vehicle at a red light in Hesperia, California, pushing it into another car. On July 30, 2021, Wood’s attorney sent Farmers a letter offering to settle Wood’s personal injury claim against Archer for the “total available policy limit of $100,000, or less,” conditioned on written acceptance by a stated deadline and delivery of a declaration confirming the available policy limits; the letter added that “[i]f this demand exceeds the policy, then we hereby make a policy limit demand.” On August 25, 2021, within the deadline, Farmers sent a letter agreeing to pay Wood the maximum $15,000 available to her individually under the policy’s per-person limit (with the remaining $15,000 of the policy’s $30,000 per-accident limit going to other passengers involved in the collision) and enclosing the requested declaration pages.

After Farmers’ acceptance, Archer completed an asset declaration, submitted at Wood’s request, representing that he owned one vehicle and had $5,000 in the bank; Wood’s own investigation later identified other assets Archer did not disclose. Wood refused to sign the settlement paperwork and, on November 29, 2021, sued Archer directly. When Farmers’ subsequent demand that Wood honor the settlement went unanswered, Farmers sued Wood for breach of contract, declaratory relief, and specific performance; the two actions were consolidated in San Bernardino County Superior Court.

Farmers moved for summary judgment, or in the alternative summary adjudication, on its declaratory relief cause of action, arguing it had fully performed every term of Wood’s written settlement offer and that a binding agreement resulted. The trial court denied the motion, and Farmers petitioned the Court of Appeal for a writ of mandate. The Court of Appeal issued an order to show cause why the requested relief should not be granted, teeing up the single question whether Farmers’ August 25, 2021 letter accepting Wood’s policy-limits demand created a binding settlement agreement.

In the published case of Farmers Insurance Exchange v. The Superior Court for the County of San Bernardino, No. E087128 (Cal. Ct. App., 4th Dist., Div. 2, August 2026) — the Court of Appeal granted Farmers’ petition for writ of mandate, directing the trial court to vacate its order denying summary judgment or adjudication and enter a new order granting Farmers summary adjudication on its declaratory relief claim. This opinion was originally filed on July 9, 2026 and was not initially certified for publication; on August 4, 2026, the Fourth Appellate District, Division Two, ordered it published, explaining in an attached order that the opinion advances a new construction of governing law, addresses an apparent conflict in the law, and involves a legal issue of continuing public interest. It is now citable authority.

Writing for a unanimous panel, Justice McKinster reviewed the summary adjudication question de novo, applying the settled rule that a writ of mandate will issue where denial of summary adjudication would force trial on a nonactionable claim, citing Rancho Cucamonga Central School Dist. v. Superior Court (2025) 116 Cal.App.5th 718. Because a settlement agreement is governed by ordinary contract principles, requiring mutual consent to the same terms judged by objective, outward manifestations rather than either party’s subjective understanding, citing Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781 and Civil Code sections 1550 and 1580, the court found the undisputed correspondence between the parties established a binding agreement as a matter of law: Wood’s counsel offered to settle for the “policy limit” if her stated $100,000 figure exceeded what the policy actually provided, and Farmers accepted by tendering its actual $15,000 per-person limit along with the declaration pages Wood’s letter had required.

The panel rejected Wood’s argument that Farmers’ response was actually a counteroffer, since it offered $15,000 rather than the $100,000 stated in her letter, explaining that her own letter’s plain language made clear a demand for “the policy limit” applied whenever her stated figure exceeded the actual coverage available, so Farmers’ tender of the true per-person limit tracked, rather than varied from, the terms she had proposed. The court found this case squarely governed by CSAA Ins. Exchange v. Hodroj (2021) 72 Cal.App.5th 272, which held that where parties agree on a settlement’s material terms intending to later reduce the agreement to a more formal writing, a later disagreement over the content of that formal writing does not retroactively void the underlying agreement or transform a rejected draft into a counteroffer that discharges the original deal.

The panel likewise rejected Wood’s alternative argument that, even if a contract was formed, Archer’s incomplete asset declaration breached the agreement and gave her the right to rescind. The court explained Wood’s original settlement offer was never made contingent on any asset declaration from Archer at all; that requirement arose only afterward, and its inclusion did not operate as a novation displacing the settlement Farmers had already accepted, again citing Hodroj’s holding that later-added terms in a follow-up writing do not unwind an already-binding settlement. Because no triable issue of material fact remained as to contract formation, the panel held Farmers was entitled to summary adjudication on its declaratory relief cause of action, granted the petition, and awarded Farmers its costs.