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Vine v. Geico Indemnity Co.

United States District Court, D. Utah

August 14, 2017



          Jill N. Parrish, United States District Court Judge

         Before the court is a Motion to Sever and Stay pursuant to Fed.R.Civ.P. 42(b) filed by Defendant GEICO Indemnity Company. (Docket No. 15). GEICO moves this court to sever and stay both discovery and trial as to Plaintiff Angelique Vine's claim of bad faith until her claim for breach of contract is fully resolved. GEICO has requested a hearing on this matter, but after review of the briefing, the court is not convinced that oral argument would materially advance resolution of the Motion. Instead, the court decides the Motion on the submitted briefing alone. See DUCivR 7-1(f). As explained below, the court grants the Motion in part and denies the Motion in part.[1]


         Defendant GEICO served as Plaintiff Angelique Vine's insurance provider at the time of a rather serious car accident in August 2014. Ms. Vine settled with the other motorist's insurance provider for $25, 000-an amount reaching the full extent of the other motorist's policy limit. Because this amount failed to cover Ms. Vine's medical costs, damages, and other expenses, she filed a claim with GEICO pursuant to her “underinsured motorist” or “UIM” insurance policy to make up the difference. GEICO refused to pay out on Ms. Vine's claim, prompting her to file the instant lawsuit in Utah state court. Ms. Vine's complaint alleged both that GEICO failed to fulfill the terms of the policy and that it acted in bad faith in evaluating her UIM claim. GEICO removed the action to federal court on the basis of diversity jurisdiction on January 12, 2017. (Docket No. 2).

         On April 25, 2017, GEICO filed the instant Motion, seeking to sever Ms. Vine's breach of contract claim from her bad faith claim pursuant to Fed.R.Civ.P. 42(b). (Docket No. 15). GEICO's Motion advocates two entirely separate discovery periods and two separate trials, and requests that discovery and trial for the bad faith claim be stayed until the breach of contract claim is fully resolved with a verdict on the merits. Ms. Vine responded on May 10, 2017, opposing the severance of discovery and the proposal to conduct two separate trials. (Docket No. 19). Instead, Ms. Vine proposed a single discovery period followed by a single trial bifurcated into two consecutive phases, each heard by the same jury. GEICO replied on May 18, 2017. (Docket No. 20). The court now considers the arguments of the parties pursuant to jurisdiction granted by 28 U.S.C. § 1332.


         As explained above, GEICO seeks to sever and stay discovery and trial on Ms. Vine's bad faith claim until her contractual claim is fully resolved pursuant to Fed.R.Civ.P. 42(b). Rule 42(b) provides: “For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims.” Thus, bifurcation of issues for trial is appropriate where the court finds (1) that convenience of a particular party or both parties together favors separate trials; (2) that expedition or economization of time and resources favor separate trials; or (3) that prejudice would result to one or more parties if separate issues were tried in a single trial. King v. McKillop, 112 F.Supp.2d 1214, 1221 (D. Colo. 2000); see also Fed. R. Civ. P. 42(b); Tabor v. Hilti, Inc., 577 F. App'x 870, 878-79 (10th Cir. 2014) (unpublished). Although bifurcation “is not to be routinely ordered, ” see Angelo v. Armstrong World Indus., Inc., 11 F.3d 957, 964 (10th Cir. 1993), this court nonetheless has “broad discretion in deciding whether to sever issues for trial and the exercise of that discretion will be set aside only if clearly abused, ” United States ex rel. Bahrani v. ConAgra, Inc., 624 F.3d 1275, 1283 (10th Cir. 2010) (quotations omitted); see also Angelo, 11 F.3d at 964 (“The district court has considerable discretion in determining how a trial is to be conducted.”). Still, this court may not order bifurcation that would be “unfair or prejudicial to a party” even where “efficiency or separability” may favor such an order. See Angelo, 11 F.3d at 964. Ultimately,

the presumption is that the plaintiff, in a typical case, should be allowed to present her case in the order she chooses. The burden is on the defendant to convince the court that a separate trial is proper in light of the general principle that a single trial tends to lessen delay, expense, and inconvenience to all parties.

Sensitron, Inc. v. Wallace, 504 F.Supp.2d 1180, 1186 (D. Utah 2007) (quoting Patten v. Lederle Labs, 676 F.Supp. 233, 238 (D. Utah 1987)).

         GEICO here argues that it will suffer undue prejudice if both Ms. Vine's contractual claim and her bad faith claim are tried in the same trial before the same jury. Specifically, GEICO asserts that evidence regarding its internal claims handling process is crucial to any defense to the bad faith claim, but irreparably damning in the context of the contractual claim. GEICO relies primarily on the reasoning of McKeen v. USAA Cas. Insur. Co., a case dealing with claims and circumstances identical to those at bar. The McKeen court explained:

An insurer cannot be forced to choose between 1) insisting on its right to exclude evidence of settlement negotiations and coverage determinations (thereby losing the advantage of showing that it was attempting to be reasonable in defense of the bad faith claims) and 2) putting on such evidence and risking a prejudicial inference that it has admitted liability on the contract action.

No. 2:14-cv-00396-DN-PMW, 2016 WL 4256948, at *5 -*6 (D. Utah Aug. 11, 2016) (unpublished) (quotations omitted). On this point, the court must agree. GEICO should not be forced to defend one claim by possibly conceding fault on another. “Jury instructions telling the jury to separate the evidence would not ‘unring the bell' that they had heard regarding settlement, reserves, or other evidence that would be presented to establish bad faith.” Id. at *6. Owing to the potential for significant prejudice to GEICO, and because it appears that both parties agree on this basic premise, bifurcation of the contractual and bad faith claims is manifestly appropriate.

         While they agree that bifurcation is necessary, the parties differ markedly on what form that bifurcation should take. GEICO insists that complete quarantine of issues is necessary- from entirely separate discovery periods to entirely separate jury panels. Ms. Vine counters that such an approach would be unnecessarily duplicative and ultimately prejudicial to her claims. Instead, she recommends a single discovery period followed by a single trial divided into two discrete phases, one for the contractual claim and one for the bad faith claim. The court agrees with Ms. Vine that the complete separation of issues in both discovery and trial would be duplicative, counterproductive, and ultimately unnecessary.

         Each of the Rule 42(b) factors favors a single discovery period followed by a two-phase trial heard by a single jury. First, the court fails to see how two entirely discrete discovery and trial periods would be convenient for either party or the court. It certainly would not be convenient for Ms. Vine, who would be forced to prepare for and litigate two entirely separate trials over what would inevitably become a course of years. GEICO would similarly be forced to expend significant resources for the same length of time. Such a ...

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