State Farm Mutual Automobile Insurance Co. v. Shelton

MONTGOMERY, Judge.

This is a second appeal. See State Farm Mutual Automobile Insurance Company v. Shelton, Ky., 368 S.W.2d 734. On that appeal the court reversed the judgment and held that an insurer may show fraud and collusion to escape the general rule that an insurer who has a right to defend an action and has had timely notice of the action is bound by the judgment (when later sued by the injured person) as to those issues which were or might have been litigated in the original suit.

On re-trial verdict and judgment were rendered against the insurance company for $10,500, with 6% interest…