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Buccheri v. Geico Insurance Co.

United States District Court, D. New Mexico

August 17, 2017



          Laura Fashing, United States Magistrate Judge.

         THIS MATTER comes before the Court on defendant GEICO's Motion to Bifurcate and Stay Discovery and Proceedings as to Plaintiff's Extra-Contractual Claims, filed on June 9, 2017. Doc. 23. Plaintiff filed a response on June 22, 2017 (Doc. 33), and GEICO filed a reply on July 6, 2017 (Doc. 34). The Court, having reviewed the parties' submissions and the relevant law, and being otherwise fully advised, finds the motion is not well taken, and it will be denied.

         I. Background

         Plaintiff Rita Buccheri filed this action in the Second Judicial District Court for the State of New Mexico on April 3, 2017. Doc. 1-1 at 2-17. Defendant GEICO removed the case to this Court on April 26, 2017. Doc. 1. In her complaint, plaintiff alleges that, on November 10, 2014, another driver crashed into the front passenger side of her vehicle, then fled the scene. Id. at 3. At the time of the crash, plaintiff was listed as an “additional driver, ” insured on her son Craig Neri's uninsured/underinsured (UM/UIM) policy with GEICO. Id. at 2. Plaintiff alleges that, as a result of the crash, she suffered a ruptured right kidney, and incurred more than $70, 000 in medical expenses. Id. at 3-4. Plaintiff further alleges that the other driver was solely at fault for the crash.[1] 4. Plaintiff filed a claim with GEICO-which paid $2, 358.71 on her claim for property damage, but denied her claim for personal injury damages. Doc. 1-1 at 5-17, Doc. 33 at 2 n.3, Doc. 33-3 at 9.

         In her complaint, plaintiff brings a claim for breach of contract based on the non-payment of UM benefits. Count VIII. Plaintiff also brings a separate claim for breach of contract. Count V. In addition, plaintiff brings claims under the New Mexico Unfair Practices Act, the Trade Practices and Frauds Act and the insurance code, as well as claims for insurance bad faith, and breach of the implied covenant of good faith and fair dealing. Counts I, II, III, V. Plaintiff also asks for injunctive relief and punitive damages. Counts VI, VII.

         GEICO moves the Court to bifurcate plaintiff's extra-contractual claims (Counts I, II, III, IV, V[2], VI, VII) and to stay all discovery on these claims, pending resolution of the contract claim (Count VIII). GEICO argues that bifurcation is appropriate for two reasons. First, GEICO argues that plaintiff must prove she is entitled to recover damages for her UM claims under the insurance policy before her extra-contractual claims are ripe for adjudication. Doc. 23 at 6-9. Second, GEICO argues that bifurcation will prevent confusion and unfair prejudice to GEICO. Doc. 23 at 9-11.

         II. Legal Standard

         A district court's discretion in deciding whether to sever issues for trial is “broad” and “considerable.” United States ex rel. Bahrani v. ConAgra, Inc., 624 F.3d 1275, 1283 (10th Cir. 2010) (quoting Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1285 (10th Cir. 1999)); Angelo v. Armstrong World Indus., 11 F.3d 957, 964 (10th Cir. 1993). Federal Rule of Civil Procedure 42, which governs bifurcation in federal civil actions, permits the Court to order a separate trial of any claim or issue “[f]or convenience, to avoid prejudice, or to expedite and economize.” Fed.R.Civ.P. 42(b). “Bifurcation is not an abuse of discretion if such interests favor separation of issues and the issues are clearly separable.” Angelo, 11 F.3d at 964.

         “Regardless of efficiency and separability, however, bifurcation is an abuse of discretion if it is unfair or prejudicial to a party.” Id. Moreover, bifurcation is to be decided “on a case-by-case basis” and should not be regarded as “routine.” Marshall v. Overhead Door Corp., 131 F.R.D. 94, 97-98 (E.D. Pa. 1990). Bifurcation under Rule 42(b) is inappropriate when it will “not appreciably shorten the trial or [a]ffect the evidence offered by the parties” because claims are inextricably linked. F.D.I.C. v. Refco Group, Ltd., 184 F.R.D. 623, 629 (D. Colo. 1999). The party seeking bifurcation bears the burden of proving that it is proper “in light of the general principle that a single trial tends to lessen the delay, expense, and inconvenience.” Belisle v. BNSF Ry. Co., 697 F.Supp.2d 1233, 1250 (D. Kan. 2010).

         The Court also has broad discretion to stay proceedings incident to its power to manage its docket. Clinton v. Jones, 520 U.S. 681, 706 (1997); Abdulhaseeb v. Calbone, 600 F.3d 1301, 1310 (10th Cir. 2010). In addition, the Court may stay discovery pursuant to Federal Rule of Civil Procedure 26(c), which for good cause shown allows the Court to limit discovery to protect a party from “annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c); Nankivil v. Lockheed Martin Corp., 216 F.R.D. 689, 692 (M.D. Fla. 2003); Johnson v. N.Y. Univ. Sch. of Educ., 205 F.R.D. 433, 434 (S.D.N.Y. 2002). The party seeking a stay bears the burden of establishing the need for it. Clinton, 520 U.S. at 708.

         III. Discussion

         a. Plaintiff is not required to establish breach of contract before her extra-contractual claims are ripe for adjudication.

         GEICO argues that plaintiff must prove that she is legally entitled to damages in order to recover under the UM portion of her policy. Doc. 23 at 6. GEICO further argues that it has the right to litigate plaintiff's UM claim before any extra-contractual claims may be brought. Id.[3]Plaintiff counters that “the tort of insurance bad faith is legally independent of the obligation to pay contractual claims, ” that “New Mexico allows bad faith claims to stand regardless of whether any contractual benefits are owed, ” and that “a determination of causation is not necessary before Plaintiff can establish bad faith based [on] the way GEICO handled her claims.” Doc. 33 at 1, 9.

         As the Honorable Magistrate Judge William Lynch recently observed, “[b]ifurcation of bad faith claims from breach of contract claims can be confusing because of the variety of contexts in which the issue can arise. . . . Further complexity arises because an insurer can act in bad faith in its handling of a first party claim for ...

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