Nichols v. United States Fidelity & Guaranty Co.

The sole issue on this appeal is whether an insured’s cause of action against an automobile liability insurer for bad faith in failing to settle an accident claim within policy limits and in regard to the handling of the subsequent action brought upon such claim, which resulted in a judgment against the insurer in excess of policy limits, vests in the insured’s trustee in bankruptcy pursuant to sec. 70 (a) (5) of the Bankruptcy Act. 2

Plaintiff alleged that defendant’s policy had the standard provision 3 giving the insurer absolute control over the investigation and settlement of any claim or…