Forrest B. White, Jr. Masonry Inc. v. ABG Caulking Contractors, Inc. et al

Filing 23

MEMORANDUM OPINION & ORDER granting 10 Motion to Bifurcate; granting [] Motion to Stay; granting 16 Motion for Extension of Time to File; see order for specifics. Signed by Senior Judge Thomas B. Russell on 3/12/2014. cc:counsel (KJA)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CIVIL ACTION NO. 5:13-CV-00194-TBR
FORREST B. WHITE, JR. MASONRY, INC.

Plaintiff

v.
ABG CAULKING CONTRACTORS, INC., et al.

Defendants

MEMORANDUM OPINION AND ORDER
Presently pending before the Court are the following Motions:
(1) Defendant Swiss Re International SE’s (Swiss Re) Motion to
Bifurcate and Stay Discovery, 1 (Docket No. 10), to which Plaintiff
Forrest B. White, Jr. Masonry Inc. (White Masonry) has responded
in opposition, (Docket No. 20); and
(2) Defendant Swiss Re and nonparty First Specialty Insurance
Corporation’s (First Specialty) joint Motion to Extend Time to
Serve Initial Disclosures. (Docket No. 16.) White Masonry has
not responded in opposition to this Motion, and the time to do so
now has passed.
This action arises from a construction project in Christian County, Kentucky, on
which White Masonry and Defendant ABG Caulking Contractors, Inc. (ABG), were
subcontractors. White Masonry asserts two distinct claims in this action. First, White
Masonry alleges that ABG negligently damaged certain equipment that White Masonry
had rented for use at the site. Second, White Masonry alleges that ABG’s liability

1

By Order of March 11, 2014, the Court granted Swiss Re and First Specialty’s joint motion to
substitute First Specialty in place of Swiss Re. (Docket No. 22.) Although the Motion to Bifurcate and
Stay Discovery, (Docket No. 10), was filed by Swiss Re, the Court will proceed to address it as if it had
been filed by the substituted party, First Specialty.

Page 1 of 4

insurer, Swiss Re, violated provisions of the Kentucky Unfair Claims Settlement
Practices Act and breached common law duties of good faith and fair dealing toward
White Masonry in failing to properly investigate and attempt to settle the claim against
its insured, ABG.
Swiss Re first moves to bifurcate White Masonry’s negligence claim against
ABG from its bad faith claim against Swiss Re, and to stay discovery on the latter
claim. Federal Rule of Civil Procedure 42(b) provides that a court may bifurcate a
matter into separate trials “[f]or convenience, to avoid prejudice, or to expedite and
economize.” The decision to bifurcate is firmly within the discretion of the trial court.
Smith v. Allstate Ins. Co., 403 F.3d 401, 407 (6th Cir. 2005). “In determining whether
separate trials are appropriate, the court should consider several facts, including ‘the
potential prejudice to the parties, the possible confusion of the jurors, and the resulting
inconvenience and economy.’” Wilson v. Morgan, 477 F.3d 326, 339 (6th Cir. 2007)
(quoting Martin v. Heideman, 106 F.3d 1308, 1311 (6th Cir. 1997)). Courts should look
to case-specific facts to determine whether bifurcation is proper, placing the burden on
the party seeking bifurcation to show separation of issues is the most appropriate
course. E.g., Brantley v. Safeco Ins. Co. of Am., 2011 WL 6012554, at *1 (W.D. Ky.
Dec. 1, 2011).
It is clear under Kentucky law that White Masonry’s bad faith claims against
ABG’s insurer cannot proceed until White Masonry proves it is entitled to recover
against ABG. See Wittmer v. Jones, 864 S.W.2d 885, 891 (Ky. 1993) (“[A]t trial, the
underlying negligence claim should first be adjudicated. Only then should the direct
action against the insurer be presented.”); see also Shearer v. Ohio Cas. Ins. Co., 2012

Page 2 of 4

WL 4338675, at *1 (E.D. Ky. Sept. 20, 2012) (applying Wittmer, 864 S.W.2d at 891).
Thus, bifurcation serves the interests of judicial economy and convenience where
resolution of one claim may resolve the entire matter. Bifurcation of the trials will
avoid the expense of litigating issues that may never arise. Bifurcation also will permit
the jury to focus on a single issue at a time, thereby avoiding the introduction of
potentially confusing evidence until absolutely necessary.

Furthermore, the Court

recognizes the risk of prejudice, particularly to Swiss Re, inherent in trying White
Masonry’s bad faith claim simultaneously with its negligence claim against ABG.
Trying the two claims together would be prejudicial because it would unnecessarily
interject the issue of bad faith into the primary dispute of liability, thereby making
discovery more difficult and complicating the issues at trial. See Shearer, 2012 WL
4338675, at *2; Hardy Oil Co. v. Nationwide Agribus. Ins. Co., 2011 WL 6056599, at
*1 (E.D. Ky. Dec. 6, 2011); Pollard v. Wood, 2006 WL 782739, at *2 (E.D. Ky. Mar. 27,
2006). Bifurcation would not, however, prejudice White Masonry, as it will have the
opportunity to litigate its bad faith claim against Swiss Re if it succeeds on its
underlying claim against ABG. Therefore, the Court finds bifurcation of the negligence
and bad faith claims appropriate here and will GRANT Swiss Re’s Motion to Bifurcate.
The Court reaches a similar conclusion in regard to Swiss Re’s request to
bifurcate the discovery process and stay discovery of White Masonry’s bad faith claims
pending resolution of the primary dispute over liability.

“Trial courts have broad

discretion and inherent power to stay discovery until preliminary questions that may
dispose of the case are determined.” Gettings v. Bldg. Laborers Local 310 Fringe
Benefits Fund, 349 F.3d 300, 304 (6th Cir. 2003) (citing Hahn v. Star Bank, 190 F.3d

Page 3 of 4

708, 719 (6th Cir. 1999)). Here, the Court finds that staying discovery of White
Masonry’s bad faith claims pending resolution of its negligence claim against ABG
would prevent prejudice, eliminate potentially unnecessary litigation expenses, and also
further the interests of judicial economy. As such, the Court will GRANT Swiss Re’s
Motion to Stay Discovery.
Swiss Re/First Specialty also jointly move for an extension of time to serve their
initial disclosures pursuant to Fed. R. Civ. P. 26(a)(1). (Docket No. 16.) In view of the
Court’s decision above to bifurcate this action and stay discovery of White Masonry’s
bad faith claims, the Court will GRANT this Motion as well.
CONCLUSION AND ORDER
Having considered the parties’ respective arguments and being otherwise
sufficiently advised, for the foregoing reasons;
IT IS HEREBY ORDERED as follows:
(1) Defendant Swiss Re’s Motion to Bifurcate and Stay Discovery,
(Docket No. 10), is GRANTED. This matter shall be bifurcated
into two separate proceedings, the first encompassing White
Masonry’s negligence claim against Defendant ABG, and the
second its bad faith claims against Defendant Swiss Re. Discovery
relating to White Masonry’s bad faith claims is stayed pending
resolution of its negligence claim against ABG;
(2) First Specialty’s Motion to Extend Time to Serve Initial
Disclosures, (Docket No. 16), is GRANTED. First Specialty shall
serve its initial disclosures pursuant to Fed. R. Civ. P. 26(a)(1)
within 14 days after the Court’s entry of an order lifting the stay of
discovery ordered in paragraph (1) above.
IT IS SO ORDERED.
Date:
cc:

March 12, 2014

Counsel

Page 4 of 4