Oliver v. Geico General Insurance Company

Filing 25

ORDER Denying Defendant Geico General Insurance Co.'s 17 Motion to Bifurcate Trial. Signed by Judge James C. Mahan on 7/2/2015. (Copies have been distributed pursuant to the NEF - SLD)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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CHARLENE OLIVER,

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Plaintiff(s),

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Case No. 2:15-CV-204 JCM (CWH)
ORDER

v.
GEICO GENERAL INSURANCE
COMPANY,
Defendant(s).

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Presently before the court is defendant Geico General Insurance Co.’s (“Geico”) motion to

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James C. Mahan
U.S. District Judge

bifurcate. (Doc. # 17). Plaintiff Charlene Oliver filed a response (doc. # 18) and defendant filed
a reply (doc. # 19).
I.

Background
The instant action is for underinsured motorist benefits by plaintiff. Plaintiff’s claims arise

out of a motor vehicle accident. On May 9, 2011, an adverse driver rear ended plaintiff at a traffic
light. (Doc. # 1-1 at 6). Plaintiff alleges she suffered injuries as a result of the accident.
At the time of the accident the adverse driver had an insurance policy with Nevada General
Insurance Company (“Nevada General”), which provided bodily injury coverage of $15,000 per
person and $30,000 per accident. Plaintiff also held her own uninsured/underinsured motorist
(“UIM”) policy with Geico for $15,000 per person and $30,000 per accident. Plaintiff’s insurance
policy also provided for payment of certain medical expenses. (Doc. # 17 at 4).
On March 21, 2014, plaintiff settled her claims against the adverse driver for a total of
$15,000. (Doc. # 17 at 4). On March 28, 2014, plaintiff made a claim for her full $15,000 UIM
policy with Geico. (Doc. # 1-1 at 6). Geico responded that plaintiff was not entitled to payment

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of the full amount of her policy. (Id. at 9). Geico offered plaintiff a $4,000 settlement, which

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plaintiff rejected. (Id. at 9).

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Plaintiff initiated the instant action in the Eighth Judicial District Court for Clark County,

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Nevada on January 5, 2015. (Id.). Plaintiff asserts causes of action for (1) breach of contract; (2)

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breach of the covenant of good faith and fair dealing; (3) breach of fiduciary duty; and (4) bad

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faith. (Id.). Plaintiff also requests “punitive and exemplary damages” and attorneys’ fees. (Id. at

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10).

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II.

Legal standard

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Federal Rule of Civil Procedure 42(b) grants courts the authority to “order a separate trial

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of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims.” Courts

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may order separate trials to achieve “convenience, to avoid prejudice, or to expedite and

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economize” the proceedings. Id. Decisions regarding bifurcation are left to the trial court’s

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discretion. Hirst v. Gertzen, 676 F.2d 1252, 1261 (9th Cir. 1982).

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Bifurcation is appropriate when it simplifies the issues for the jury and avoids the danger

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of unnecessary jury confusion. Id. Bifurcation is particularly appropriate when resolution of a

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claim or issue might dispose of the entire case. See O'Malley v. U.S. Fidelity & Guaranty Co., 776

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F.2d 494, 501 (5th Cir. 1985) (bifurcation was proper because resolution of contractual claim

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disposed of bad faith claims).

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III.

Discussion

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As an initial matter, Geico asserts that its liability on the contractual claim is a necessary

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prerequisite for its liability on the bad faith claims. (Doc. # 17 at 6). Plaintiff responds that

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defendant’s assertion is incorrect as the bad faith claims are independent of the breach of contract

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claim. (Doc. # 18 at 2).

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Geico cites to Martin v. State Farm Ins. Co., 960 F. Supp. 233 (D. Nev. 1997), and another

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District of Nevada case that relied on Martin, for its proposition that a bad faith claim does not

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occur until after the contract claim has been settled. However, Nevada does not require that a

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plaintiff establish success on a contractual claim prior to proceeding with a bad faith claim. See,

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e.g., Albert H. Wohlers & Co. v. Bartgis, 969 P.2d 949, 955 n.2 (Nev. 1998).

James C. Mahan
U.S. District Judge

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In Martin a court in this district explained that many courts have held that bad faith claims

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against an insurer arising from a dispute over UIM coverage either do not exist, or must be held in

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abeyance until the contractual coverage claim is resolved. Martin, 960 F. Supp. at 236. However,

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in Albert H. Wohlers & Co. v. Bartgis, 969 P.2d 949, 955 n.2 (Nev. 1998), the Nevada Supreme

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Court addressed this precise issue and voiced its disagreement with one of the cases relied upon

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by the court in Martin.

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The Wohlers court found that, although some jurisdictions have adopted the directed

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verdict rule, majority rule is that “a plaintiff need not establish that it is entitled to a directed verdict

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on the contract claim in order to establish a prima facie bad faith claim.” Id. The court held that

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the majority rule represented the “more reasoned approach,” and declined to adopt the directed

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verdict rule. Id.; see also Drennan v. Maryland Cas. Co, 366 F. Supp. 2d 1002, 1006 (D. Nev.

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2005) (acknowledging that since the Martin decision, the Nevada Supreme Court had held a

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plaintiff need not establish he is entitled to a directed verdict on the contract claim to establish a

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prima facie bad faith claim). Accordingly, Geico’s argument that its liability on the contractual

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claim is a necessary prerequisite for its liability on the bad faith claims is without merit.

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The court now turns to the three Rule 42(b) factors to determine whether bifurcation is

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more convenient, avoids prejudice, or will expedite and economize the proceedings. See Fed. R.

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Civ. P. 42(b).

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Geico argues that it does not make sense to try an insurance breach of contract claim with

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bad faith claims because the presentation of evidence on the bad faith claims is “completely

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wasteful and unnecessary if the plaintiff insured does not prevail on her breach of contract claim.”

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(Doc. # 17 at 7). Therefore, Geico argues that it is more expedient to try the contractual claim

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first, as a verdict in favor of Geico will negate the need to try the bad faith claim.

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Plaintiff asserts that all the claims require the same evidence and same witnesses. (Doc. #

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18 at 2). Therefore, defendant asserts that the parties would essentially be trying the same case

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twice, defeating the purpose of judicial economy. (Doc. # 18 at 2). The court agrees.

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As discussed previously, contractual liability is not necessary for plaintiff to proceed with

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her bad faith causes of action. Therefore, the breach of contract issue is not dispositive of the

James C. Mahan
U.S. District Judge

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entire case. Moreover, bifurcation would require the parties to present the same evidence, call the

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same witnesses, and pay the same expert witness fees twice. The court finds that the convenience

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and efficiency factors favor a unified trial.

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Geico argues that trying the claims together will confuse the jury and prejudice Geico.

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(Doc. # 19 at 9). Geico asserts that requiring a jury to sort through all of the evidence of how

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Geico handled plaintiff’s insurance claim in addition to deciding whether plaintiff is deserving of

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any policy benefits is potentially overwhelming based on the nature of the medical evidence,

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medical records, and testimony of physicians. (Doc. # 19 at 9).

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Defendant offers no compelling reasons for the court to doubt the jury’s capability to

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handle the potential evidence in this case. Further, this court has declined to find prejudice in

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factually similar scenarios. See, e.g., Young ex rel. Broughton v. Mercury Cas. Co., No. 2:09-cv-

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02399 JCM-LRL, 2010 WL 2757291, at *1 (D. Nev. July 8, 2010) (finding a unified trial in a UIM

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bad faith and breach of contract case would not prejudice the defendant); Sherwin v. Infinity Auto

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Ins. Co., No. 2:11-cv-00043-JCM-VCF, 2012 WL 600812, at *2 (D. Nev. Feb. 23, 2012) (same).

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As in those cases, the court finds that a unified trial would not prejudice the defendant here.

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IV.

Conclusion

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant Geico

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General Insurance Co.’s motion to bifurcate (doc. # 17) be, and the same hereby is DENIED.
DATED July 2, 2015.
__________________________________________
UNITED STATES DISTRICT JUDGE

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James C. Mahan
U.S. District Judge

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