Patel Family Trust et al v. AMCO Insurance Company
Filing
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ORDER denying 29 Joint Motion to Bifurcate. Signed by Judge Gregory L Frost on 7/13/12. (sem)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
PATEL FAMILY TRUST, et al.,
Plaintiffs,
Case No. 2:11-cv-1003
JUDGE GREGORY L. FROST
Magistrate Judge Norah McCann King
v.
AMCO INSURANCE COMPANY,
Defendant.
OPINION AND ORDER
This matter is before the Court on the “Joint Motion for Bifurcation” filed by Plaintiff
Patel Family Trust (“Patel”) and Defendant AMCO Insurance Company (“AMCO”). (ECF No.
29.) The Motion asks this Court to enter an order bifurcating the insurance breach-of-contract
claims from the bad faith and punitive damages claims in this action. Intervening Plaintiff Belfor
USA Group, Inc. is not a party to the Joint Motion.
It should go without saying that this action is pending in the United States District Court
for the Southern District of Ohio. Yet, the Joint Motion does not cite to Fed. R. Civ. P. 42(b),
which provides for bifurcated trials for reasons of “convenience, to avoid prejudice, or to expedite
and economize.” Rather, the Joint Motion asks for bifurcation based on a slew of Ohio appellate
cases standing for the proposition that bifurcation of the breach-of-contract and bad faith aspects
of the case are proper and “routine.” (Joint Mot. 3-4, ECF No. 29.) The Joint Motion also
invokes Ohio Rev. Code § 2315.21(B), which provides for mandatory bifurcation of the punitive
damages portion of the case from the compensatory damages portion. In essence, the parties to
the Joint Motion ask this Court to bifurcate the proceedings in this case into separate breach-ofcontract and bad faith/punitive damages phases based on Ohio law.
Ohio law does not, however, govern the question of whether bifurcation of proceedings is
proper in a given case. As the undersigned judge ruled two years ago when addressing the
supposed duty to bifurcate under Ohio Rev. Code § 2315.21(B), the question of whether
bifurcation is appropriate is governed by federal law under the teachings of Erie R.R. Co. v.
Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938) and its progeny (particularly Hanna
v. Plumer, 380 U.S. 460, 465, 85 S. Ct. 1136, 14 L. Ed. 2d 8 (1965)). See Wolkosky v. 21st
Century Centennial Ins. Co., No. 2:10-cv-439, 2010 U.S. Dist. LEXIS 79643, at *3-*8 (S.D. Ohio
July 14, 2012). Bifurcation is a procedural matter addressed by Fed. R. Civ. P. 42(b) and, thus,
Rule 42(b) is the controlling authority for assessing whether a federal court will grant a motion to
bifurcate. See id. at *7; accord Valley Ford Truck, Inc. v. Phoenix Ins. Co., No. 1:10-cv-2170,
2011 U.S. Dist. LEXIS 29210, at *2-*3 (N.D. Ohio Mar. 7, 2011) (rejecting Ohio Rev. Code §
2315.21(B) as “entirely irrelevant” to the issue of bifurcation because bifurcation is a procedural
matter governed by federal law).
The Ohio Supreme Court’s recent decision in Havel v. Villa St. Joseph, 131 Ohio St. 3d
235, 963 N.E.2d 1270, 2012-Ohio-552, does not change this Court’s opinion regarding the
procedural nature of bifurcation. In Havel, the Ohio Supreme Court upheld Ohio Rev. Code §
2315.21(B) against an argument that the statute violated the Ohio Constitution by usurping the
judiciary’s power to make rules controlling the procedure in Ohio’s courts. See id. at ¶¶ 1-2.
Specifically, the issue raised was whether Ohio Rev. Code § 2315.21(B) improperly conflicted
with Ohio Civil Rule 42(B), which, like Fed. R. Civ. P. 42(b), provides for bifurcation of
proceedings in the trial court. Id. The Ohio Supreme Court held that Ohio Rev. Code §
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2315.21(B) was “substantive” under Ohio law because it provided a party with a mandatory right
to bifurcate punitive damages proceedings from the remainder of the case. Id. at ¶¶ 26, 35-36.
Just because the Ohio Supreme Court has interpreted Ohio Rev. Code § 2315.21(B) to
provide a “substantive” right to bifurcation does not mean that a federal court is bound by the
characterization. A state’s characterization of its own rule as “substantive” instead of
“procedural” must “yield to the strong presumptive validity of the properly promulgated federal
procedural rule, which will be upheld as controlling the procedure in the federal court.” Rosales
v. Honda Motor Co., 726 F.2d 259, 262. Accordingly, numerous federal courts have found that
Fed. R. Civ. P. 42(b) controls the issue of bifurcation in federal diversity cases despite the
existence of a state law or rule purporting to substantively govern bifurcation. See, e.g., id. at
261-62 (concluding under Hanna that Fed. R. Civ. P. 42(b) controlled over a Texas substantive
law prohibiting bifurcation); Moss v. Associated Transport, Inc., 344 F.2d 25-27 (6th Cir. 1965)
(holding that Rule 42(b) preempts Tennessee law guaranteeing right to try all facts at the same
time before one jury); see also Getty Petroleum Corp. v. Island Transp. Corp., 862 F.2d 10, 14-15
(2d Cir. 1988) (finding that district court did not have to bifurcate liability and punitive damage
issues despite state law requiring bifurcation), cert. denied, 490 U.S. 1006 (1989); Sellers v.
Baisier, 792 F.2d 690, 694 (7th Cir. 1986) (holding that Fed. R. Civ. P. 42 may be applied in
diversity cases to bifurcate issues of liability and damages despite a state law prohibiting
bifurcated trials). This Court will therefore rule upon the Joint Motion utilizing Fed. R. Civ. P.
42(b) as the relevant authority underlying the analysis.
A decision to bifurcate an action under Fed. R. Civ. P. 42(b) should be grounded in the
facts and circumstances of each case. See Saxion v. Titan-C-Mfg, Inc., 86 F.3d 553, 556 (6th Cir.
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1996). The ultimate decision to grant or deny bifurcation is left to the sound discretion of the trial
court. Id. 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 convenience and economy.” Wilson v. Morgan, 477 F.3d 326, 329 (6th Cir.
2007) (quoting Martin v. Heideman, 106 F.3d 1308, 1311 (6th Cir. 1997)). Bifurcation is,
however, considered an exception to the general rule that favors resolving federal-court disputes
in a single proceeding. Wolkosky at *8.
Presumably because Patel and AMCO rely solely on Ohio law and the fact of their
agreement as the bases for bifurcation, their Joint Motion does not speak to any of the above Fed.
R. Civ. P. 42(b) factors specifically. Accordingly, the Court has before it no facts that would
support a decision to grant bifurcation. While the Court is cognizant of the fact that the Joint
Motion is agreed upon (at least as to Patel and AMCO) and that the parties have contemplated
(and perhaps assumed) there would be bifurcation of the breach-of-contract and bad faith issues in
this case, the Court is hesitant to bifurcate the proceedings without facts demonstrating the
propriety of bifurcation. The Court requires such facts before it will disturb the general rule that
disputes in federal court should be resolved in a single proceeding.
The Joint Motion to Bifurcate (ECF No. 29) is DENIED.
IT IS SO ORDERED.
/s/ Gregory L. Frost
GREGORY L. FROST
UNITED STATES DISTRICT JUDGE
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