State Farm Mutual Automobile Insurance v. Floyd

This is an appeal of a judgment obtained by an insured against his insurer, based on the insurer’s “bad faith” in failing to settle an underlying tort case within policy limits. The earlier tort action had resulted in a judgment against the insured in excess of the policy limits, and the insured sued here for the excess. In this appeal, we examine the nature of “bad faith” and the standard of proof by which it must be shown.

A. PROCEEDINGS

Deborah Ann Jones sued Brian H. Floyd in the Circuit Court of Louisa County for injuries sustained in an automobile collision. After a jury trial, she…