O'Daniel

In a Montana state court Henry Jessen was awarded a judgment of $35,000' against John T. O’Daniel in a personal injury action for damages as a result of a collision between an automobile driven by Jessen and a truck driven by O’Daniel. O’Daniel had a public liability policy with National Farmers Union Property & Casualty Company, 1 appellant herein, covering this accident, but the policy only covered him up to the sum of $10,000. Jessen’s judgment was affirmed by the Montana Supreme Court. 2 Thereafter, National paid Jessen the full amount of its $10,000 coverage on account of such judgment. O’Daniel died without having made any payment on said judgment. After filing a claim for the excess of said judgment over $10,000 against O’Daniel’s estate, Jessen brought suit in Montana state court on the judgment against Howard O’Daniel, appellee herein and son of John T. O’Daniel, as administrator of the estate of his father.

Appellee answered and filed a cross-complaint against National for negligence and bad faith in failing to settle the personal injury suit within the policy limits. National, a Utah corporation having its principal place of business in Denver, Colorado, removed the…