Wednesday, January 3, 2018

Judge Nealon of Lackawanna County Weighs in on Severance, Stay, and Bifurcation of Post-Koken Bad Faith Claims

In the case of Fertig v. Kelley, No. 16 - CV - 4801 (C.P. Lacka. Co. Dec. 29, 2017 Nealon, J.), Judge Terrence R. Nealon denied a UIM carrier's motion to sever and stay bad faith claims in a Post-Koken matter but held that the bad faith claims would be later bifurcated for trial.

Judge Nealon issued a thorough Opinion that outlined the current status of the splits of authority in the Pennsylvania state and federal courts on the issue of bifurcating and staying a bad faith claim in a Post-Koken lawsuit that also contains third party negligence and UIM breach of contract claims.  

Judge Terrence R. Nealon
Lackawanna County
Judge Nealon confirmed that, to date, no state appellate court has addressed this issue.

The court in Fertig cited to issues of judicial economy in deciding to deny the motion to sever and stay the bad faith claims during the discovery phase of the litigation.  The court directed that any discovery disputes on the bad faith claim could be addressed through motions practice.

In ruling that the bad faith claims would be bifurcated for purposes of trial, Judge Nealon elected to follow the procedure first espoused by Allegheny County Court of Common Pleas Judge R. Stanton Wettick in the cases of Gunn and Wutz

Under that procedure, the trial of the third party negligence claims and UIM claims would go first before the jury, and would then be immediately followed by a bench trial on the bad faith claims. 

Under this procedure, once the jury retires to the deliberation room on the third party and UIM claims, the UIM defendant would be required to turn over additional unredacted discoverable materials from the carrier's file that may have been properly withheld during the pendency of the UIM claim (i.e., information on the carrier's evaluation of the claims, etc.).   The Plaintiff would then have the option of proceeding directly into the bench trial on the bad faith claims or requesting a continuance to digest the information produced.

Anyone wishing to review this decision may click this LINK.



Commentary:  As stated, there remains a split of authority on this issue of severance (and staying) and/or bifurcation of various types of claims in Post-Koken auto accident matters.  A comprehensive list of the cases can be viewed on the Tort Talk Post-Koken Scorecard, which can always be accessed down the right hand column of the blog at www.TortTalk.com.  Here is a quick LINK to the Scorecard for your easy reference.

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