State Farm Mutual Automobile Ins. Co. v. Campbell

Facts

Curtis Campbell (plaintiff) was driving along a two-lane highway with his wife. Campbell decided to pass six vans traveling ahead of them. Meanwhile, Todd Ospital’s vehicle was approaching from the opposite direction. Ospital saw Campbell driving on the wrong side of the highway and toward oncoming traffic. To avoid a head-on collision with Campbell, Ospital swerved onto the shoulder of the highway. Ospital lost control of his vehicle and collided with a vehicle driven by Robert Slusher. As a result of the collision, Ospital was killed and Slusher became permanently disabled. The Campbells “escaped unscathed.” Slusher and Ospital’s estate brought wrongful death and tort action suits against Campbell. State Farm Mutual Automobile Insurance Company (“State Farm”) (defendant), Campbell’s insurance company, declined the offers by Slusher and Ospital’s estate to settle the claims for $50,000. State Farm took the case to trial, where they represented Campbell. The jury determined that Campbell was 100 percent at fault and rendered a judgment against Campbell for $185,849. State Farm initially refused to cover the damages awarded in excess of Campbell’s policy limit. While State Farm ended up paying the entire judgment, the Campbells filed a complaint against State Farm and alleged bad faith, fraud, and intentional infliction of emotional distress. A second jury awarded the Campbells $2.6 million in compensatory damages and $145 million in punitive damages. The trial court remitted the award to $1 million in compensatory damages and $25 million in punitive damages. The Utah Supreme Court reinstated the $145 million punitive damages award. State Farm petitioned the Supreme Court for review. The Supreme Court granted certiorari.