This matter arose out of a fire loss. The Plaintiff’s factory was destroyed during a fire that occurred in November of 2002. At the time of the loss, the Plaintiff carried an insurance policy with the Defendant carrier.
The Plaintiff filed a bad faith and breach of contract litigation against the carrier relative to the handling of the claim. During the course of that litigation, the Defendant carrier filed the Motion for Protective Order and Motion to Sever and Stay Plaintiff’s Bad Faith Claim.
In support of their motion, the Defendants asserted that the Plaintiffs were seeking nondiscoverable information and further argued that allowing the Plaintiffs to proceed with their bad faith claim at this early stage of the litigation would prevent and impede the expeditious and judicially and economical conclusion of the entire case as engaging in discovery on both the breach of contract claim and the bad faith claim would unnecessarily delay adjudication of the underlying contractual claim. The Defendants more specifically argued that allowing the combined discovery efforts would result in a large volume of time consuming objections and motions practice, much to the detriment of the concerns of judicial economy and efficiency. As such, the defense requested that the Plaintiff’s bad faith claim be severed and stayed pending the resolution of the breach of contract claim.
After conducting a thorough review of the applicable Rules of Civil Procedure, and in particular, Rules 4011 and 4012, the court found that the Defendants were not entitled to the requested protective order.
|Judge Carmen D. Minora|
Accordingly, the Defendant’s Motion for Protective Order was denied without prejudice to the defense right to revisit this issue in the event that the Plaintiff did not conduct discovery in a legally responsible manner.
On the request for a severance and stay of the bad faith claim, Judge Minora noted that he had the power and discretion to grant this request under Pa. R.C.P. 213, if appropriate. Relying, in part, on the Monroe Court of Common Pleas decision in the Post-Koken case of Hakim v. Erie Insurance Exchange, 6241-CV-2013 (C.P. Monroe Co. 2015 Williamson, J.), Judge Minora found that the Defendants may be prejudiced by allowing the bad faith claim to be joined with the breach of contract claim during the course of a trial. The court found that there may be information relevant to the bad faith claim that was not relevant to the breach of contract claim and which may prejudice the Defendants in the eyes of the jury and/or may possibly confuse the jury in its efforts to reach a verdict.
In balancing all of the issues presented, including the issues of judicial economy and possible prejudice to the Defendants, Judge Minora exercised his broad discretion and granted the Defendant’s Motion to Sever the Bad Faith Claim pending the resolution of the Plaintiff’s breach of contract claim.
However, Judge Minora refused to stay discovery on the bad faith claim as doing so would cause an unnecessary delay of the matter. The court also found that there are more efficient measures to protect the Defendants from prejudice as opposed to ordering a "blanket freeze" on all discovery with respect to the bad faith claims.
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