Lassley v. Secura Supreme Insurance Company et al

Filing 46

ORDER AND OPINION denying 24 Defendant Secura Supreme Insurance Company's Motion to Bifurcate and denying 24 Motion to Stay. Signed by Judge John W Sedwick on 9/25/15.(EJA)

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UNITED STATES DISTRICT COURT

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DISTRICT OF ARIZONA

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Brandon Lassley,

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Plaintiff,

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vs.
Secura Supreme Ins. Co.,
Defendant.

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2:14-cv-1677 JWS
ORDER AND OPINION
[Re: Motion at docket 24]

I. MOTION PRESENTED
At docket 24 defendant Secura Supreme Insurance Company (“Secura”) moves
pursuant to Federal Rule of Civil Procedure 42(b) for an order to bifurcate or stay

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proceedings on plaintiff’s claims for breach of contract and bad faith until the jury
determines whether plaintiff is entitled to compensation under the underinsured motorist

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provision in the insurance policy issued by Secura. The response from plaintiff

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Brandon Lassley (“Lassley”) is at docket 28. Secura’s reply is at docket 30. Oral

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argument was heard on September 18, 2015.
II. BACKGROUND

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Lassley alleges that he is a named insured in an automobile insurance policy

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purchased by his parents from Secura (“Policy”).1 The Policy includes underinsured
motorist (“UIM”) coverage with a $500,000 limit. The Policy was in effect at all times
material to this action.

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On January 20, 2011 Lassley was riding in an automobile when the intoxicated

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driver lost control of the vehicle. Lassley was injured in the ensuing crash. Lassley

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settled with the driver for the $100,000 liability limit in the driver’s American Family

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insurance policy. Lassley submitted a UIM claim to Secura in May 2012 and demanded

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policy limits. Secura evaluated Lassley’s claim and concluded that the driver was not

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underinsured, stating that Lassley was “fully compensated for his injuries with the
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$100,000 obtained by the driver’s insurance carrier.”2 The parties nevertheless

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exchanged settlement offers, but were unable to reach a settlement agreement. During

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the course of dealings between Lassley and Secura’s representatives, Secura asked

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and Lassley agreed to submit to an independent medical examination (“IME”). In

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January 2014 the IME physician concluded that the injury to Lassley’s left anterior

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cruciate ligament (“ACL”) likely resulted from the auto accident and that Lassley had
residual knee problems.
The UIM policy states that if the parties are unable to agree on the amount of
Lassley’s damages, they can agree to submit that issue to arbitration. 3 The contract is

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Although Secura denies that Lassley is a named insured, Doc. 4 at 2 ¶ 8, it admits that
he is insured by the policy. See id. at 6 ¶ 43.
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Doc. 28-1 at 6 (May 14, 2013 letter from Secura to Lassley). See also id. at 8 (July 25,
2013 letter from Secura to Lassley) (“SECURA evaluated [Lassley’s] claim (which included
fault, causation and damages) as one in which [Lassley] was fully compensated by the
$100,000 already received.”); id. at 10 (same).
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Doc. 24-1 at 3.

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silent regarding what happens if the parties do not agree to arbitration, which is what

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happened here. 4 Believing he had no other option to vindicate his contractual rights,5

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Lassley brought the present action in July 2014 in which he alleges breach of the

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insurance contract and bad faith. Lassley seeks compensatory and punitive damages.

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The lawsuit was filed in an Arizona superior court. Secura removed the case based on

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diversity of citizenship jurisdiction.

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III. STANDARD OF REVIEW

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Rule 42(b) governs Secura’s motion for bifurcation. It states in pertinent part that

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the court may order a separate trial of one or more separate issues or claims “[f]or
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convenience, to avoid prejudice, or to expedite and economize.”6 This rule “confers

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broad discretion upon the district court to bifurcate a trial.”7 “The piecemeal trial of

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separate issues in a single lawsuit . . . is not to be the usual course,” however, and will

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be ordered only where the party seeking separate trials meets his or her burden of

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proving that bifurcation is necessary.8

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IV. DISCUSSION

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Secura’s peculiar motion asks the court to bifurcate this action into two trials: (1)

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See Doc. 28-1 at 6 (“Given the significant issues in this case, SECURA will not agree to
arbitrate this claim.”); id. at 10 (“Given all the issues in this case, SECURA has declined to
arbitrate this claim.”).

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Doc. 28 at 2.
Fed. R. Civ. P. 42(b).

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Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002).

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9A Charles Alan Wright & Arthur R. Miller, et al., Fed. Prac. & Proc. Civ. § 2388 (3d

ed.).

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a trial on a hypothetical “claim for UIM benefits” not found in Lassley’s complaint9 and

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(2) a trial on the two claims Lassley actually pled (breach of contract and bad faith).10

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Secura argues that the two claims in Lassley’s complaint are not yet ripe for

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adjudication, but instead of seeking dismissal of those claims it asks the court to stay all

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litigation, including discovery, pending the jury’s resolution of a non-existent “claim for

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UIM benefits.”11 Secura cites no cases where a court has granted such an

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extraordinary request, and put actual claims on hold in order for a jury to resolve a

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hypothetical one.

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What is more, even assuming (without deciding) that Secura is correct in
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asserting that Lassley must pursue a “UIM benefits” cause of action and not a breach of

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contract action, bifurcation would still serve no purpose. Secura argues that bifurcation

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will further Rule 42(b)’s goals of avoiding prejudice and expediting the litigation

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because, it argues, Lassley’s “bad faith claim will presumably go away” after the jury

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decides the amount of damages to which Lassley is entitled.12 This is not so. Even if

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such a jury verdict would resolve Lassley’s claim for benefits, it would not resolve
Lassley’s claim for bad faith insurance adjustment. This latter claim does not depend

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on the value of Lassley’s damages. Instead, it focuses on whether Secura violated its

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“obligation to immediately conduct an adequate investigation, act reasonably in

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Secura appears to be arguing that Lassley must bring an action for declaratory relief
seeking an order that determines the amount of damages he is legally entitled to recover from
the driver.
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Doc. 30 at 2.

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Doc. 24 at 6-7.
Id. at 5.

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evaluating the claim, and act promptly in paying a legitimate claim.”13 The jury would
need to hear evidence relevant to this claim regardless of the amount it ultimately
decides that Lassley can recover under the policy.

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V. CONCLUSION

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Based on the preceding discussion, Secura’s motion at docket 24 is DENIED.
DATED this 25th day of September 2015.

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/s/

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JOHN W. SEDWICK
SENIOR UNITED STATES DISTRICT JUDGE

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Zilisch v. State Farm Mut. Auto. Ins. Co., 995 P.2d 276, 280 (Ariz. 2000).

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