Friday, January 3, 2020

Another Federal Middle District Court Decision Denying a Post-Koken Motion to Sever and Stay a Bad Faith Claim


Intertwined

In the case of Ferguson v. USAA, No. 1:19-CV-401 (M.D. Pa. Dec. 5, 2019 Rambo, J.), the Federal Middle District Court determined that a bad faith claim could proceed independently of a breach of contact claim, even if the breach of contact claim failed.

In its decision, the Ferguson court also denied the carrier’s Motion to Sever the bad faith claim and stay bad faith discovery. 

In so ruling, the court noted that, even if the claims of breach of contract and bad faith are distinct, they are “significantly intertwined from a practical perspective,” including the fact that both claims involved discovery on the injuries alleged on what efforts the carrier completed to investigate the claims asserted. 

This court found that attempting to separate the breach of bad faith claims and stay discovery on the bad faith claims “would potentially create a discovery mess, requiring truncated depositions, Interrogatories, and Request for Production of Documents, only to have them all re-started following the conclusion of the first leg.” The court found that this risk of judicial inefficiency warranted a denial of the Motion to Sever and Stay the Bad Faith Claim. 

The court additionally rejected the Defendant’s request to sever and stay the bad faith claim as a request that “at root, [asks] the court to manipulate this case’s procedural framework in a way that will make litigation convenient for insurers, which the court will not do.” 

The court acknowledged that legitimate attorney/client privilege and work product issues could arise if the claims were allowed to proceed in conjunction. The court noted that the party’s interests issues by way of a Motions for Protective Order filed by the defense and/or Motion to Compel filed by the Plaintiff. 

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

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