Friday, January 11, 2019

Statewide Split of Authority Continues: Motion to Sever and Stay Bad Faith Claims Denied in Eastern District PA Federal Case

In the case of Goldstein v. Am. States Ins. Co., No. 18-CV-3163 (E.D. Pa. Nov. 28, 2018 Baylson, J.), the Eastern District Federal Court of Pennsylvania denied a Defendant carrier’s Motion to Sever and Stay an Plaintiff’s Bad Faith Claim in a post-Koken litigation.  

In this matter, the defense argued that the bad faith claim should be resolved through a bench trial in federal court and the breach of contract claim was to be tried in front of a jury.   The defense additionally argued that the resolution of the breach of contract claim could serve to moot the bad faith claim.   The defense additionally relied upon an argument that each of the claims presented would require different types of evidence such that the defense would be prejudice if the jury heard evidence on both the bad faith claims and the breach of contract UIM claim.  

The court ultimately ruled that bifurcation would not serve the interests of judicial economy.

The court additionally noted that it could address concerns of the jury considering irrelevant and/or prejudicial evidence when deciding the breach of contract claim through the use of appropriate jury instructions. 

In addition to the above-noted rationale, the court in this matter noted that the bad faith claim might not be rendered moot by a resolution of the breach of contract claim given that the claims of bad faith could arise for more than just the refusal to provide coverage. 

It was noted that, in this matter, the Plaintiff had additionally alleged bad faith conduct in the form of allegations that the Defendant carrier had failed to conduct a reasonable investigation of their claims, failed to adopt reasonable standards for prompt investigation, and otherwise breached other fiduciary duties owed to the Plaintiff.  

As noted, in the end, the court denied the carrier’s Motion to Sever and Stay the Bad Faith Claims.  

Anyone wishing to review a copy of this decision may click this LINK.

Consider visiting the Post-Koken Scorecard on the Tort Talk Blog to review the split of authority across Pennsylvania on this issue.  To get to the Scorecard, go to Tort Talk at www.TortTalk.com, scroll down the right hand column until you see "Post-Koken Scorecard," and click on the date below that title.

Source:  “Digest of Recent Opinions” Pennsylvania Law Weekly (Dec. 11, 2018)

No comments:

Post a Comment