Lester v. Homesite Insurance Company of the Midwest
Filing
21
MEMORANDUM OPINION AND ORDER denying Defendant's 7 MOTION to Bifurcate and Stay. Signed by Judge David A. Faber on 11/25/2014. (cc: counsel of record) (mjp)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
GREEN LESTER,
Plaintiff,
v.
CIVIL ACTION NO. 1:14-20361
HOMESITE INSURANCE COMPANY
OF THE MIDWEST,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the court is the motion to bifurcate and stay
filed by defendant Homesite Insurance Company of the Midwest
(“Homesite”).
(Doc. No. 7).
For the reasons set forth below,
that motion is DENIED.
I.
Factual and Procedural Background
On November 19, 2012, plaintiff Green Lester (“Lester”)
entered into a contract to purchase a home located at 202
Glenwood Haven Road in Princeton, West Virginia.
II.
See Complaint ¶
According to Lester, he purchased the Glenwood Haven Road
property as a retirement home and intended to begin living there
full-time in late May of 2013.
home on December 18, 2012.
See id.
Plaintiff closed on the
See id.
On or after November 19, 2012, Lester applied, by telephone,
for a homeowners’ insurance policy from Progressive Insurance on
the Glenwood Haven Road property.
See id. at ¶¶ II, III.
Defendant Homesite is the underwriter for Progressive’s
homeowner’s insurance division.
See id. at ¶ III.
Homesite
issued a homeowner’s policy on the home dated November 29, 2012.
See id.
On May 5, 2013, the Glenwood Haven Road home caught fire and
was partially or completely destroyed.
See id. at V.
Plaintiff
was not present at the time of the fire as he was staying at his
home in Iaeger, West Virginia.
See id.
Thereafter, Homesite
denied coverage for the fire and has attempted to rescind the
insurance policy issued on the home on the basis that Lester
allegedly made “material misrepresentations in connection with
the application for the . . . policy or negotiations for said
policy.”
Id.
On May 9, 2014, Lester filed the instant complaint in the
Circuit Court of Mercer County alleging that Homesite had
breached the insurance contract that it issued to him.
On July
2, 2014, Homesite removed the case to this court on the basis of
diversity jurisdiction.
Homesite has also filed a counterclaim
for declaratory relief seeking a declaration to the effect that
Lester made a material misrepresentation with respect to the
subject insurance policy that renders it void ab initio.
Homesite now asks the court to bifurcate its counterclaim
from plaintiff’s breach of contract claim and decide the
counterclaim first.
Homesite also asks for a stay of all
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“extracontractual” discovery.
Plaintiff opposes defendant’s
motion.
II.
Analysis
Rule 42(b) of the Federal Rules of Civil Procedure provides
as follows:
Separate Trials. For convenience, to avoid prejudice,
or to expedite and economize, the court may order a
separate trial of one or more separate issues, claims,
crossclaims, counterclaims, or third-party claims.
When ordering a separate trial, the court must preserve
any federal right to a jury trial.
The decision to grant a motion to bifurcate is within the broad
discretion of the court and, in deciding whether to bifurcate
claims for trial, the exercise of that discretion will be set
aside only if clearly abused.
See Dixon v. CSX Transp., Inc.,
990 F.2d 1440, 1443 (4th Cir. 1993).
“[T]he party seeking
bifurcation has the burden of showing that separate trials are
proper in light of the general principle that a single trial
tends to lessen the delay, expense and inconvenience.”
Belisle
v. BNSF Ry. Co., 697 F. Supp.2d 1233, 1250 (D. Kan. 2010)
(internal quotation marks omitted); Lowe v. Phila. Newspapers,
Inc., 594 F. Supp. 123, 125 (E.D. Pa. 1984) (same).
In this case, Homesite has not shown that bifurcation would
further judicial economy.
Homesite argues this court can avoid
the time and expense of a trial on the breach of contract claim
because such a claim will be moot if the court determines that
coverage does not exist.
Of course, this argument only makes
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sense if Homesite prevails on the coverage issue.
If the court
orders bifurcation and the coverage issue is not resolved in
Homesite’s favor, the court would be forced to hold two trials.
“[T]he potential for two trials does not serve judicial economy.”
North Pacific Ins. Co. v. Stucky, No. CV 12-15-H-DLC, 2013 WL
5408837, *2 (D. Mont. Sept. 25, 2013).
The Stucky court
explained the fallacy of defendant’s argument in this regard:
North Pacific asserts that establishing the existence
or non-existence of coverage would serve judicial
economy because a finding that coverage did not exist
would render the Stucky’s counterclaims moot. Thus, a
determination of non-coverage, North Pacific argues,
would prevent this Court and the parties from wasting
resources on claims that could be disposed of by a
coverage determination. However, this assertion is
predicated on the assumption that North Pacific will
prevail on the issue of coverage. If coverage is
determined to exist, another trial would still be
necessary to determine damages.
Id.
Recognizing this possibility exists, Homesite maintains that
“the parties and the Court will benefit from a bifurcated trial
process.”
Homesite’s Reply Memorandum at p. 3 (Doc. No. 14).
The court cannot agree.
Under the facts of this case, the
process outlined by Homesite is not convenient nor does it
promote judicial economy or efficiency.
As noted above, bifurcation would promote judicial economy
only if Homesite prevails on the coverage issue.
If it does not,
the court and parties would be burdened with two phases of
discovery, motions, voir dires, and two separate trials.
Accordingly, under the facts of this case, judicial economy and
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efficiency are not served by bifurcation.
Moreover, defendant
has not demonstrated that it will be prejudiced by a unitary
trial of this matter.
bifurcate is DENIED.
For all these reasons, the motion to
Having denied the motion to bifurcate, the
court likewise denies the motion to stay.
III.
Conclusion
For the reasons set forth herein, defendant’s motion to
bifurcate and stay is hereby DENIED.
The Clerk is directed to send copies of this Memorandum
Opinion and Order to all counsel of record.
It is SO ORDERED this 25th day of November, 2014.
ENTER:
David A. Faber
Senior United States District Judge
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