BRIDGEWATER WHOLESALERS, INC. v. PENNSYLVANIA LUMBERMENS MUTUAL INSURANCE COMPANY

Filing 30

OPINION/ORDER granting 25 Motion to Sever. Signed by Magistrate Judge Steven C. Mannion on 11/2/15. (DD, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
BRIDGEWATER WHOLESALERS,
INC.,
Plaintiff,
v.

Civil Action No.
2:14-CV-3684-SDW-SCM
OPINION AND ORDER GRANTING
DEFENDANT’S MOTION TO SEVER
[D.E. 25]

PENNSYLVANIA LUMBERMENS
MUTUAL INSURANCE CO.,
Defendant.
MANNION, Magistrate Judge:
Now

before

the

Court

is

Defendant

Pennsylvania

Lumbermens Mutual Insurance Company’s (“Lumbermens”) motion
to

sever

the

bad

faith

claim

of

Plaintiff

Bridgewater

Wholesalers, Inc.’s (“Bridgewater”) Amended Complaint and
stay that claim pending resolution of Bridgewater’s breach
of contract claim.1
argument

was

not

Bridgewater opposes the motion.2
held.

For

the

reasons

Lumbermens’ motion to sever is GRANTED.

1
2

(ECF Docket Entry (“D.E.”) 25).
(D.E. 28).
1

stated

Oral
below,

I.

BACKGROUND AND PROCEDURAL HISTORY
Bridgewater is a supplier of specialty millwork and

wooden doors.3 Lumbermens is authorized to provide insurance
products to businesses located in New Jersey.4
arises

out

of

an

alleged

breach

of

This dispute

insurance

contract

between Bridgewater and Lumbermens for claims stemming from
losses sustained during Superstorm Sandy.5
Bridgewater alleges Lumbermens underpaid its business
loss of income claim.6 On May 12, 2014, Bridgewater filed
its complaint in New Jersey Superior Court.7 The action was
removed

to

operative

this

Court

complaint

on

June

consists

of

9,
two

2014.8

Bridgewater’s

counts:

“Breach

of

Contract” [Count I] and “Breach of the Implied Duty of Good
Faith”

[Count

“maliciously

II].
chose

Count
to

II

avoid

alleges

that

paying

on

Lumbermens
a

business

interruption claim” and that its conduct in handling the

3

(See Amnd. Compl., D.E. 6 at 3).

4

(Id. at 2).

5

(See generally Amnd. Compl., D.E. 6).

6

(Id.).

7

(D.E. 1 at 1).

8

(Id.).
2

insurance claim was “egregious, deliberate, malicious and
motivated solely by improper purposes.”9
II.

DISCUSSION & ANALYSIS

Under Federal Rule of Civil Procedure 21, the Court
has

discretion

to

sever

and

stay

any

claim.10

“Severing

claims under Rule 21 is appropriate where the claims to be
severed are ‘discrete and separate’ so that one claim is
‘capable of resolution despite the outcome of the other
claim.’”11

The

factors

courts

consider

in

determining

whether severance is warranted include: “(1) whether the
issues

sought

different
issues

from

require

to

be

one
the

tried
another,

testimony

separately
(2)
of

are

whether
different

significantly
the

separable

witnesses

and

different documentary proof, (3) whether the party opposing
the severance will be prejudiced if it is granted, and (4)

9

(Amnd. Compl. ¶¶ 45, 47 (D.E. 6 at 11,12)).

10

See Rodin Properties–Shore Mall, N.V. v. Cushman &
Wakefield of Pennsylvania, Inc., 49 F.Supp.2d 709, 721
(D.N.J.1999) (citing Walsh v. Miehle–Goss–Dexter, Inc., 378
F.2d 409, 412 (3d Cir.1967)).
11

(Turner Const. Co. v. Brian Trematore Plumbing & Heating,
Inc., C.A. No. 07–666(WHW), 2009 WL 3233533, at *3 (D.N.J.
Oct.5, 2009) (citations omitted)).
3

whether the party requesting severance will be prejudiced
if it is not granted.”12
The Court first considers whether the issues sought to
be tried separately are significantly different from one
another.

Bridgewater's breach of contract claim concerns

lost sales and Lumbermens’ obligation under the insurance
contract, whereas the bad faith claim addresses Lumbermens’
general claims handling procedures. Lumbermens argues that
these issues are significantly different from one another
and

should

viewing

be

these

tried
claims

separately.13
as

The

separate

Court

and

agrees

distinct

that

actions

“promotes judicial efficiency and economy.”14 Accordingly,
the first relevant factor weighs in favor of severance.
Second,

Bridgewater’s

contract and bad faith claims

require the testimony of different witnesses and different
documentary

proof.

As

evidenced

by

its

interrogatories,

Bridgewater seeks documents from 2011 to present concerning
all of

Lumbermens’

employment contracts,

claims handling

12

Picozzi v. Connor, C.A. No. 12–4102(NLH), 2012 WL
2839820, at *6 (D.N.J. July 9, 2012).
13
14

(Def.'s Br. at 9 (D.E. 25-1)).

Wadeer v. New Jersey Mfrs. Ins. Co., 220 N.J. 591, 2015
WL 668229, at *10 (N.J. Feb. 18, 2015); Nelson v. State
Farm Mut. Auto. Ins. Co., 988 F.Supp. 527 (E.D.Pa.1997).
4

guidelines, confidential employee salary information, and
other subject areas not directly relevant to the contract
claim.15 The Court finds that this discovery distracts from
and will undoubtedly delay the resolution of the primary
focus of the case, i.e., whether the contract claim should
be paid in the amount of the claim or at all.16 As a result,
the second relevant factor also favors severance.
Third, Bridegwater will not be prejudiced if its bad
faith claim is severed and stayed. Bridegwater does not
know if its coverage claim will still be denied even if it
obtains more evidence, let alone if Lumbermens acted or
will act in bad faith. As such, Bridegwater’s bad faith
claim may be premature.

Further, if Bridegwater prevails

on its breach of contract claim, it will have the ability
to

pursue

expects

its

that

resolved.

bad

the

faith

bad

claim.

faith

claim

If

pursued,

will

be

the

Court

expeditiously

Accordingly, the third relevant factor favors

severance.
Last, the Court considers whether Lumbermens will be
prejudiced if severance is not granted. The Court finds

15

(See Def.'s Ex. A, D.E. 25-2).
See Fed. Ins. Co. v. Cont'l Cas. Co., C.A. No. 05–305,
2006 WL 1344811, at *1 (W.D.Pa. May 16, 2006).
5
16

under the circumstances of this case that Lumbermens will
be prejudiced if it is forced to litigate Bridgewater's bad
faith

claim

before

the

contract

claim

is

resolved.

Bridgewater has propounded extensive written discovery on
Lumbermens regarding the bad faith claim.

If Lumbermens

has to litigate the bad faith claim now it will suffer a
“significant
rendered

expenditure

needless

if

of

the

time

insurer

and

money,

prevails.”17

generally
The

Court

agrees with Lumbermens that judicial economy and efficiency
for all parties will be promoted by avoiding expensive and
time-consuming discovery on the bad faith claim.18 The Court
also finds that the litigation of the bad faith claim, and
the

related

discovery

disputes

arising

therefrom,

will

significantly delay the final resolution of the breach of
contract claim.

The contract claim should be the focus of

the case at this time.

Accordingly, the fourth and final

relevant factor favors severance.

17

Procopio v. Gov't Employees Ins. Co., 433 N.J. Super.
377, 383, 80 A.3d 749, 752 (App. Div. 2013).
18

(D.E. 25-1 at 7).
6

III. CONCLUSION
This Court concludes that COUNT II should be severed
and the bad faith issues stayed pending the adjudication of
the breach of contract claim as pled in COUNT I.
For the foregoing reasons,
IT IS on this Monday, November 02, 2015,
1. ORDERED

that

Defendant’s

“Motion

to

Sever

Count

II

(Bad Faith) of Plaintiff’s Amended Complaint and Stay
the Severed Action Pending Resolution of Plaintiff’s
Count I (Breach of Contract)” [D.E. 25] is GRANTED.

11/2/2015 2:25:39 PM

Original: Clerk of the Court
Hon. Susan D. Wigenton, U.S.D.J.
cc: All parties
File

7