Sheppard v. Direct General Insurance Company

Filing 21

MEMORANDUM OPINION AND ORDER denying without prejudice 11 MOTION by Direct General Insurance Company to Bifurcate Declaratory Judgment Action From UTPA, Common Law Bad Faith and Excess Judgment Claims. Signed by Judge Robert C. Chambers on 6/19/2017. (cc: attys; any unrepresented parties) (mkw)

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
DANNY SHEPPARD,
Plaintiff,
v.

CIVIL ACTION NO. 3:16-11418

DIRECT GENERAL INSURANCE COMPANY,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant Direct General Insurance Company’s Motion to
Bifurcate. ECF No. 11. Direct General seeks to cleave away Plaintiff’s declaratory judgment
action, which address whether there is coverage for Plaintiff’s loss, from Plaintiff’s bad faith,
excess judgment, and Unfair Trade Practices Act (“UTPA”) claims. Direct General also seeks a
stay of discovery for all claims except the declaratory judgment action. For the following reasons
the Court DENIES Direct General’s Motion without prejudice.
Broadly, Direct General believes that time and resources could be saved were the Court to
only consider Plaintiff’s first cause of action requesting a declaratory judgment on whether the
policy issued by Direct General includes bodily injury coverage. Direct General contends that this
claim can be decided with minimal discovery because its resolution is primarily based on legal,
not factual, grounds. For this reason, Direct General appears to believe that a trial on Plaintiff’s
declaratory judgment action is extremely unlikely and therefore does not argue that it will be
prejudiced in any way were Plaintiff’s claims tried in a single trial. Direct General believes that a

determination in its favor that coverage did not exist renders Plaintiff’s other claims either moot
or subject to substantial reconfiguration in order to continue to be viable.
Plaintiff argues that he will be prejudiced by bifurcation and a stay of discovery. Bifurcated
trials would reduce Direct General’s incentive to settle, increase its time to prepare, and unduly
delay Plaintiff’s pursuit of his bad faith and UTPA claims. Plaintiff further argues that discovery
should not be stayed based on factors enunciated in the West Virginia Supreme Court case of Light
v, Allstate Ins. Co., 506 S.E.2d 64 (1998).
The Court is not convinced that either time or resources would be conserved in any
meaningful way were Plaintiff’s claims bifurcated and discovery stayed. Nor is the Court
convinced that Plaintiff would not be prejudiced in time or resources were the claims separated.
Pursuant to Federal Rule of Civil Procedure 42(b) a court may order separate trials “[f]or
convenience, to avoid prejudice, or to expedite and economize.” Fed. R. Civ. P. 42(b). Courts have
broad authority to structure the way in which cases will be tried before them. Moore’s Federal
Practice § 42.20 (3d ed. 2009). The decision to bifurcate a case is left to the discretion of the trial
court and on the basis of the specific circumstances of the litigation. Id. (collecting cases); see also
Alaniz v. Zamora-Quezada, 591 F.3d 761, 773-74 (5th Cir. 2009); Hangarter v. Provident Life &
Accident Ins. Co., 373 F.3d 998, 1021 (9th Cir. 2004). Moreover, although bifurcation is not
unusual, it is the exception rather than the rule. Dallas v. Goldberg, 143 F. Supp. 2d 312, 315
(S.D.N.Y. 2001).
In three recent decisions, by federal district courts in West Virginia that are remarkably
similar to this case, trial judges, including this Court, found it premature request bifurcation early
in the discovery process. See Chaffin v. Watford, No. 3:08-cv-0791, 2009 WL 772916, at *1
(S.D.W. Va. Mar. 18, 2009) (Chambers, J.); Holley v. Allstate Ins. Co, No. 3:08-cv-01413, (S.D.

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W.Va. Feb. 12, 2009) (Chambers, J.) Tustin v. Motorists Mutual Ins. Co, 2008 WL 5377835 (N.D.
W.Va. Dec. 22, 2008).
The Court is guided by the principles and reasoning stated in these cases. The facts present
here provide no reason for this Court to depart from the sound reasoning of past decisions. The
issues raised by Plaintiff’s claims are neither complex nor do they require onerous discovery for
either party. Plaintiff has brought a commonplace first-party insurance claim. The constellation of
deponents is almost certainly in the single digits, and the documents related to cases like these
should not be difficult to locate, nor prove voluminous. There is, however, a very real chance that
bifurcating the case and limiting discovery will result in duplicative discovery. Plaintiff will likely
seek discovery on his declaratory judgment action that would include the same people and
documents as his other state law claims. On balance, it appears to the Court that bifurcation, rather
than a single action, presents the higher risk of increased costs and time for all involved and the
possibility of prejudice befalling Plaintiff in further delaying his attempt at recovery.
That interpreting the policy presents a threshold issue is irrelevant to the Court’s decision.
Nearly every case that comes before the Court has a threshold issue that upon resolution in one or
the other parties’ favor might obviate other claims. The proponent of bifurcation must show more
than the ordinary to convince the Court to disrupt the customary course of litigation. See Athey v.
Farmers Ins. Exch., 234 F.3d 357, 362 (8th Cir. 2000) (trial court did not abuse its discretion by
denying a motion to bifurcate where defendant made no showing of prejudice). The issue of the
meaning of the policy can be addressed in a summary judgment motion.
For the same reasons, the Court denies Direct General’s request to stay discovery. Plaintiff
should not be required to conduct discovery twice when it can all be done at once, especially in
the case of a straightforward first-party insurance claim.

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For the foregoing reasons Direct General’s Motion to Bifurcate and Stay Discovery is
DENIED without prejudice. ECF No. 11. Should some aspect of the litigation change over the
course of discovery, the Court would entertain another motion to bifurcate.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented parties.

ENTER:

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June 19, 2017