United States District Court, M.D. Pennsylvania
Richard Caputo United States District Judge
before me is the Motion to Sever and Stay Plaintiff's Bad
Faith Claim (Doc. 13) filed by Defendant GEICO General
Insurance Company (“Defendant”). Because
Defendant fails to satisfy its burden of demonstrating that a
severance and stay of Plaintiff's bad faith claim is
warranted under the circumstances, I will exercise my
discretion and deny Defendant's motion.
commenced this action against Defendant in the Court of
Common Pleas of Lackawanna County, Pennsylvania on or about
October 3, 2016. (See Doc. 1, Ex. “A”,
generally). As alleged in the Complaint, Plaintiff,
on June 12, 2009, was a passenger in a vehicle driven by
Robert Murphy (“Murphy”) that was insured by
Defendant with underinsured motorist coverage in the amount
of $300, 000.00. (See id. at ¶¶ 3, 5).
Murphy's vehicle was struck by a vehicle driven by Merle
Wesley (“Wesley”), causing Plaintiff to suffer
serious and permanent injuries as a result of the accident.
(See id. ¶¶ 6-7, 9). Plaintiff resolved
her third party claim for the limits of Wesley's
insurance policy. (See id. at ¶¶ 14-15).
Plaintiff contends that despite being entitled to the limits
of Murphy's policy, i.e., $300, 000.00, GEICO
has only made one $40, 000.00 settlement offer. (See
id. at ¶¶ 28-30). As such, Plaintiff asserts
claims against Defendant for breach of contract and bad
(See id., generally).
removed the action to this Court on November 2, 2016.
(See Doc. 1, generally). Shortly
thereafter, Defendant filed its Answer with Affirmative
Defenses. (See Doc. 6, generally). On May
26, 2017, Defendant filed the instant motion to sever and
stay Plaintiff's bad faith claim. (See Doc. 13,
generally). Defendant's motion is fully briefed
and ripe for disposition.
of the Federal Rules of Civil Procedure provides, in
pertinent part, that “[o]n motion or on its own, the
court may at any time, on just terms, add or drop a party.
The court may also sever any claim against a party.”
Fed.R.Civ.P. 21. The Federal Rules of Civil Procedure give
district courts broad discretion in deciding whether to sever
a case. See Graudins v. Retro Fitness, LLC, 921
F.Supp.2d 456, 467 (E.D. Pa. 2013) (citation omitted). Courts
consider the same factors in deciding a motion to sever under
Rule 21 as they do in resolving a motion to bifurcate under
Rule 42(b). See id. at 468; accord White v. ABCO
Eng'g Corp., 199 F.3d 140, 145 n.6 (3d Cir. 1999)
(“A separation pursuant to Rule 42(b) separates
elements of the complaint for trial, but all the aspects
‘remain[ ] part of one single action which would result
in a single judgment.' On the other hand, if claims are
severed pursuant to Rule 21 they ‘become independent
actions with separate judgments entered in
each.'”); Graudins, 921 F.Supp.2d at 468
(“Severance pursuant to Rule 21 essentially creates a
separate case, the disposition of which is final and
appealable. Rule 42(b) does not create a new case, but
bifurcates issues or claims within a single case for separate
trials. A claim that is bifurcated under this rule is not
final and appealable as long as other claims in the case
remain unresolved.”) . These factors are the
“convenience of the parties, avoiding prejudice, and
promoting expedition and economy.” Id. at 468.
The party seeking severance bears the burden under Rule 21.
See Paragon Office Servs., LLC v. United Health care Ins.
Co., No. 11-2205, 2012 WL 4442368, at *1 (N.D. Tex.
Sept. 26, 2012) (citation omitted).
motion, Defendant argues that severance of the bad faith
claim is warranted in order to avoid unfair prejudice
“by preventing premature discovery of work-product
evidence that is inadmissible and irrelevant to a UIM
claim.” (Doc. 14, 6). Defendant further contends that
allowing discovery to proceed on the breach of contract and
bad faith claims at the same time will compromise its ability
to defend fully the underinsured motorist claim. (See
id. at 8). Defendant additionally asserts that it would
be prejudiced by evidentiary issues that would arise at trial
if a jury hears both claims simultaneously. (See id.
at 9). Conversely, Defendant argues that severance and stay
of the bad faith claim would not prejudice Plaintiff
“whatsoever”. (See id.). Moreover,
Defendant represents that severance and stay of the bad faith
claim will promote judicial economy and the convenience of
the parties. (See id. at 9-11). In its reply brief,
Defendant asserts that a severance and stay of
Plaintiff's bad faith claims is also appropriate here
based on Plaintiff's dilatory conduct in litigating the
instant claims. (See Doc. 27, 2-8).
motion will be denied. In this case, both the convenience of
the parties and judicial economy weigh against severance.
More particularly, if the bad faith claim is severed,
Plaintiff would have to bear the costs of two trials and the
resolution of both claims would be delayed. See
Graudins, 921 F.Supp.2d at 468. Moreover, although
Defendant argues that resolution of the breach of contract
action will greatly impact and potentially moot the bad faith
claim, it is sufficient to note that “litigation on the
bad faith claim is not contingent upon the success of the
breach of contract claim” and Plaintiff could
“simultaneously prevail on a bad faith claim and lose
on a UIM claim.” Newhouse v. GEICO Casualty
Co., No. 17-0477, 2017 WL 4122405, at *3 (M.D. Pa. Sept.
18, 2017) (denying motion to sever and stay the
plaintiff's bad faith claim). Likewise, severance would
hinder judicial economy by requiring separate cases and
separate trials instead of handling these claims in a single
action. See Graudins, 921 F.Supp.2d at 468; see
also Griffith v. Allstate Ins. Co., 90 F.3d 344, 347
(M.D. Pa. 2014) (denying motion brought pursuant to Rule
42(b) and stating, inter alia, “the court
fails to see how [bifurcation] is reasonable given the
circumstances. Discovery, dispositive motions, pre-trial
motions, and trial place a substantial burden on any party.
Bifurcation would essentially double the life of this action
requiring a second discovery period, more dispositive
motions, more pre-trial motions, and a completely separate
potential prejudice to Defendant of litigating the breach of
contract and bad faith claims simultaneously does not
outweigh the countervailing interests of judicial economy and
the prompt resolution of this entire matter. See id.
Additionally, the potential evidentiary problems identified
by Defendant do not provide a sufficient basis for severing
the claims in this matter. (See Doc. 14, 9). As
explained in Griffith,
The Federal Rules of Evidence allow documents and testimony
to be entered for narrow purposes. At this point it is
premature to determine whether specific pieces of evidence
would be admissible wholly or on a limited basis. The best
way to make that determination is to keep the matters joined,
allow discovery to proceed, and bring both claims to trial as
quickly as possible. Any discovery disputes or questions of
privilege can be handled through the discovery dispute
procedures employed by the court.
Griffith, 90 F.Supp.3d at 348; see also
Newhouse, 2017 WL 4122405, at *5 (“For the breach
of contract claim, however, GEICO would have to provide
information concerning how it values an insurance claim
regardless of whether the bad faith claim was
severed.”); Graudins, 921 F.Supp.2d at 469
(“this Court will address those concerns by considering
any evidentiary motions made by the parties, as well as by
giving appropriate instructions, which ‘juries are
presumed capable of following.'”). Defendant's
proffer of prejudice does not outweigh the interests of
convenience and judicial economy, nor does it justify the
severance and stay of Plaintiff's bad faith claim.