Archive for the 'NJ – Procedural Issues' Category

TRIAL COURT ERRED GRANTING JUDGMENT ON FRAUD CLAIM TO VOID THE POLICY AT THE END OF PLAINTIFF’S CASE (New Jersey Appellate Division)

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This case focuses on procedural issues and burdens of proof at trial, concerning whether the insured’s alleged fraud during an investigation was grounds to void a policy. At trial, the insured put on her case, and the carrier moved for involuntary dismissal (directed verdict) at the end of plaintiff’s case. The trial court granted judgment to the insurer, and the Appellate Division reversed.

The insured’s claim revolved around a fire loss. In the years before that loss, the insured had a relatively small roof claim, and a large water damage claim. During her testimony at trial, the insured described a meeting with the carrier’s investigator during the fire loss claim. The investigator was not merely a claim adjuster, but was actually a fraud unit investigator – unknown to the insured.

The insured admitted she denied there was any prior damage claim on the water loss, knowing this was not true. She felt it was not the investigator’s business and had nothing to do with the fire loss. The investigator had the insured’s application, which did not include either prior loss. This was part of the investigation, again unknown to the insured. The application itself, however, was never introduced into evidence at trial.

This interview during the claim process was not taken under oath. At her subsequent examination under oath, the insured did admit the two prior loss claims.

Both courts’ focus was on the misleading statement to the investigator about the water damage claim, rather than on the application’s not including the two losses. The two key elements were misrepresentation and materiality. The trial court found a material misrepresentation and voided the policy after plaintiff put on her case.

The Appellate Division disagreed, looking closely at the procedural setting and burdens of proof, in finding that the materiality element was not proved. The court especially noted the different burdens placed on defendant when dismissal is sought at the end of plaintiff’s case, rather than at the end of all parties’ cases.

Plaintiff’s case-in-chief did not include the original application, and the Appellate Division found there was insufficient evidence within plaintiff’s case itself to demonstrate how the water loss was relevant to the fire loss claim, or important in determining the insurer’s course of action. Moreover, the misrepresentation claim was an affirmative defense, with the insurer bearing the burden of proof. As the court stated:

“Accordingly, regardless of whether the information in an application not introduced at trial came from plaintiff or someone else, there was no factual basis for the [trial] judge to find that [the insured] ‘clearly tried to mislead [the investigator] as to something that seemed to justify what looked like misstatements in the application.’ Without the original insurance application or testimony from anyone at [the insurer] as to the nature of the investigation, the trial court clearly erred when it involuntary dismissed [the] suit based on her willful misrepresentation of material facts following her fire loss.”

Finally, the court observed that even though its ruling was based on a fundamental failure to prove materiality in the procedural circumstances at trial below, the insured would not be precluded from arguing at re-trial “a fact-finder could also consider whether [she] corrected her misstatements promptly in her examination under oath in considering their materiality.” July 30, 2019

Pokhan v. State Farm Fire & Cas. Co., New Jersey Superior Court Appellate Division DOCKET NO. A-3336-17T3, 2019 N.J. Super. Unpub. LEXIS 1699, 2019 WL 3425917 (App. Div. July 30, 2019) (Accurso, Fuentes, JJ.)

OCTOBER 2018 BAD FAITH CASES: BIFURCATION OF BAD FAITH COUNT DENIED UNDER FEDERAL RULES WHERE CASE WAS OVER TWO YEARS OLD, ISSUES WOULD NOT BE DECIDED ON THE PLEADINGS, AND ADDITIONAL DISCOVERY REQUIRED TO MOVE TO NEXT STAGE OF LITIGATION (New Jersey Federal)

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In this complex federal case, the carrier sought to bifurcate trial and discovery on coverage and bad faith, asking the court to hold discovery in abeyance pending the coverage determination. The court declined.

“In determining whether bifurcation under Rule 42(b) is proper, ‘courts should consider whether bifurcation will avoid prejudice, conserve judicial resources, and enhance juror comprehension of the issues presented in the case.’” Applying this standard, the court found that “such considerations are not advanced by bifurcation, as this case: (1) was filed over two-and-a-half years ago; (2) will not be disposed of on the pleadings…; and (3) requires additional discovery to move on to the next stage of the litigation.”

The court found it exceedingly clear that this procedurally and substantively complex case was not going to be simplified or expedited “by holding bad faith discovery in abeyance pending a determination of coverage….” The court relied upon Magistrate Judge Clark’s opinion in National Union Fire Ins. Co. v. Becton, observing, “bifurcation of coverage and bad faith claims was not appropriate where case was pending for over three years, the case would not be disposed of on the pleadings, and discovery remained.”

Date of Decision: October 2, 2018

Ventrice v. Lexington Insurance Co., U.S. District Court District of New Jersey Civil Action No.: 2:16-cv-00660, 2018 U.S. Dist. LEXIS 169789 (D.N.J. Oct. 2, 2018) (Cecchi, J.)

AUGUST 2018 BAD FAITH CASES: OVERVIEW OF NEW JERSEY STANDARDS ON FAILURE TO SETTLE BAD FAITH AND FAIRLY DEBATABLE STANDARD; REQUIREMENT OF EXPERT TESTIMONY ON BAD FAITH; INSURED’S SETTLEMENT CONDUCT WHERE INSURER HAS DECLINED COVERAGE; SEVERANCE OF BAD FAITH CLAIMS (New Jersey Appellate Division) (Unpublished)

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This case addresses a wide array of New Jersey bad faith issues. The underlying facts involve disputed coverage and defense obligations in a suit against the insured based on the Telephone Consumer Protection Act (TCPA).

The insurer withdrew its defense based on trial court finding no coverage, which was later reversed on appeal

The insurer had been defending under a reservation of rights, but withdrew the defense when the trial court ruled no coverage was due. The underlying case proceeded. A $19 million judgment was entered on an unopposed summary judgment motion against the insured.

Subsequently, the appellate division reversed the trial court’s coverage ruling, and remanded to explore further factual issues before determining the coverage question.

The insured assigned it claims to the underlying plaintiffs, who counterclaimed for bad faith and failure to settle within policy limits, and who also intervened in the coverage dispute again alleging bad faith. Before reaching a jury in the declaratory judgment action, the court dismissed the bad faith claims “except for the count in its counterclaim that alleged [the insurer] acted in bad faith by failing to settle the underlying action at a time when it controlled that litigation and could have settled the claim within …  policy limits.”

The jury found for the insured on coverage, and the court further awarded attorney’s fees under R. 4:42-9(a)(6). The total award exceeded $5 million.

On appeal, the court went through the relevant policy language and exclusions in great detail. Among other issues addressed, it found the verdict should have been reversed on the issue of what constituted “property damage,” with a single exception, that was also the sole actionable occurrence. Thus, the judgment was significantly undermined on appeal.

Bad faith issues

The court then addressed a variety of bad faith issues. This was triggered by the insurer’s late effort on the eve of trial to renew an attempt to dismiss the bad faith failure to settle claims for failure to bring forth expert testimony to support the failure to settle claim.

The insured “objected to the untimeliness of the motion and requested an adjournment if the court was inclined to dismiss for lack of an expert.” The judge found that there was no actionable bad faith claim under the “fairly debatable standard”, and that the insured had failed to negotiate a reasonable settlement once the defense was withdrawn.

“Alternatively, the judge found that any assessment of [the insurer’s] conduct in this complex case was beyond the ken of the average juror and dismissed the bad faith failure to settle claim because [the insured] had no expert. Noting the case management order required [the insured] to furnish an expert report nearly one year earlier, she denied any adjournment and dismissed the bad faith failure to settle counterclaim.”

The Appellate Division agreed an expert was necessary, but reversed the trial court’s ruling. It found that the motion in limine was functionally a summary judgment motion that was untimely and prejudicial.

The Court then addressed the nature of New Jersey bad faith claims, and the standards applicable in first and third party contexts.

Standards for failure to settle within policy limits

The failure to settle a third party claim within policy limits is governed by the New Jersey Supreme Court’s Rova Farms decision. Because the insurer controls the settlement, it has a fiduciary obligation to exercise good faith in considering settlement. The decision not to settle within policy limits “must be a thoroughly honest, intelligent and objective” decision.

“It must be a realistic one when tested by the necessarily assumed expertise of the company. This expertise must be applied, in a given case, to a consideration of all the factors bearing upon the advisability of a settlement for the protection of the insured. While the view of the carrier or its attorney as to liability is one important factor, a good faith evaluation requires more. It includes consideration of the anticipated range of a verdict, should it be adverse; the strengths and weaknesses of all of the evidence to be presented on either side so far as known; the history of the particular geographic area in cases of similar nature; and the relative appearance, persuasiveness, and likely appeal of the claimant, the insured, and the witnesses at trial.”

Expert needed on bad faith claim to assist jury

Rejecting a settlement by itself does not constitute bad faith. There must be “an assessment of the reasonableness of an insurer’s settlement negotiations in the underlying action” and this assessment “will likely hinge upon the credibility of fact witnesses, as well as expert testimony as to what went wrong on the settlement front and why.”

In this case, the factors were varied and complicated, and expert testimony was necessary to assist the jury in making a bad faith decision under Rova Farms and its progeny. Thus, the trial court was right on the issue that an expert was needed.

Some advice of how to handle late raised issues that will be allowed to go to trial, and the ability to sever bad faith claims

In reversing the dismissal, the appellate judges gave some practical advice to trial courts under these circumstances. Either the trial court have been adjourned to allow time to obtain the expert testimony and response, or the bad faith claim could have been severed and tried after the coverage case. The case was remanded for the trial judge to address the bad faith claim.

Some advice of using “fairly debatable” standard (Pickett) in failure to settle cases (Rova Farms)

The appellate judges then stated they would not address the issue of whether the trial judge’s fairly debatable ruling as a basis for dismissal was proper. The court then went on to discuss the interplay of Rova Farms and the Pickett fairly debatable standard at some length. It observed that the fairly debatable standard arose in the first party context, and that Rova Farms addressed failure to settle third party claims.

The Appellate Division had previously ruled that the fiduciary duty implicated in the third party failure to settle context does not exist in the first party context. However, another Appellate Division panel had ruled that the fairly debatable standard did apply in third party coverage cases (as differentiated from failure to settle cases). Thus, “[n]o reported New Jersey decision has addressed whether Pickett‘s ‘reasonably debatable’ standard applies to an insured’s bad faith refusal to settle claim.”

The Third Circuit has addressed the issue, and found that the Rova Farms’ standards, rather than the Pickett fairly debatable standards should control third party failure to settle claims.

“Whether [the insured] would be held liable for [the third-party’s] injuries was “fairly debatable,” but in the context of a third-party claim with a possibility of an excess verdict, Pickett supplies only part of the equation. The “fairly debatable” standard is analogous to the probability liability will attach in a third-party claim, but it does not consider the likelihood of an excess verdict.

A third-party claim that may exceed the policy limit creates a conflict of interest in that the limit can embolden the insurer to contest liability while the insured is indifferent to any settlement within the limit. This conflict is not implicated when the insured is a first-party beneficiary, where the claimant and the insurer are in an adversarial posture and the possibility of an excess verdict is absent.

Rova Farms, not Pickett, protects insureds who are relegated to the sidelines in third-party litigation from the danger that insurers will not internalize the full expected value of a claim due to a policy cap.”

The present panel chose to decide the issue, though (no pun intended), it acknowledged “the appeal of the Third Circuit’s rationale. An insurer who, while exclusively controlling the litigation, acts in bad faith and refuses to settle a third-party claim within its insured’s policy limits exposes the insured to personal liability. The situation therefore presents different concerns from those posed by a suit where the insurer acts in bad faith and wrongfully denies contractual benefits to the insured under its policy of insurance.”

Failure to negotiate a settlement after coverage denial may not preclude a later bad faith claim

Finally, the panel rejected the trial court’s finding that the insured’s failure to negotiate a settlement once coverage was denied precluded the possibility of a later bad faith claim.

The court looked generally to case law concerning insured’s conduct in settling, or not settling, cases where the insurer has declined involvement on the basis it does not believe coverage is due. Insured are not required as a matter of law to settle at their own expense. Rather, “under certain circumstances, insureds could do so without violating policy terms where there has been a breach by the insurer.”

In sum, the panel reversed the bad faith claim dismissal and remanded the matter to proceed on the bad faith claim.

Date of Decision: July 31, 2018

Penn National Insurance Co. v. Group C Communications, Inc., New Jersey Superior Court Appellate Division, DOCKET NOS. A-0754-15T1 A-0808-15T1, 2018 N.J. Super. Unpub. LEXIS 1833 (N.J. App. Div. July 31, 2018) (O’Connor, Messano and Vernoia, JJ.)

 

MAY 2018 BAD FAITH CASES: BAD FAITH CLAIM SEVERED AND STAYED; SUMMARY JUDGMENT ON CONTRACT CLAIM REVERSED WHERE JUDGE FAILED TO MAKE FINDINGS OF FACT AND CONCLUSIONS OF LAW (Superior Court of New Jersey, Appellate Division)

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In this Hurricane Sandy related litigation, the insured brought claims for breach of contract and bad faith after the insurer denied coverage under a homeowner’s insurance policy pursuant to a surface water exclusion. The trial court severed and stayed the bad faith claim, and both parties moved for summary judgment on the breach of contract claim. The judge presiding over the motion proceeding granted summary judgment in favor of insurer, and denied the insured’s cross-motion for summary judgment “for the reasons set forth in [insurer’s] motion papers.” The motion judge “failed to make any findings of facts or reach any conclusions of law, as mandated by [New Jersey Rule of Court] 1:7-4(a).” The Appellate Division reversed and remanded, reasoning that “[a] trial judge is obliged to set forth factual findings and correlate them to legal conclusions[]” in accordance with the New Jersey Rules of Court.

Date of Decision: May 1, 2018

Estate of Doerfler v. Federal Insurance Co., Superior Court of New Jersey, Appellate Division, Docket No. A-3353-15T2, 2018 N.J. Super. LEXIS 69 (N.J. App. Div. May 1, 2018) (Fuentes, Manahan, and Suter, JJ.)

 

 

APRIL 2018 BAD FAITH CASES: LEAVE TO AMEND AND ADD BAD FAITH CLAIM DENIED WHEN INSURED FAILED TO SHOW GOOD CAUSE AND AMENDMENT WOULD BE FUTILE (New Jersey Federal)

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The insured submitted a claim for property damage and business-income loss after Superstorm Sandy in 2012. Towards the end of the claim evaluation process, the insured sued for breach of contract. Roughly two years after filing its complaint, the insured moved for leave to amend, seeking to add a bad faith claim.

The Court ruled that the insured failed to demonstrate good cause to show it was entitled to amendment beyond the Court’s amendment deadline. Under the federal rules, parties must act diligently, and the insured failed to timely add the bad faith claim upon allegedly learning of new information.

In addition, the Court found that granting the motion to add a bad faith claim would be futile. New Jersey bad faith claims are subject to the “fairly debatable” standard, i.e., “if a claim is ‘fairly debatable,’ no liability in tort will arise.” Under that standard, a bad faith plaintiff must be able to establish bad faith on summary judgment as a matter of law. The Court ruled that because there was uncertainty with the material facts surrounding the claim, summary judgment would be precluded as a matter of law. Thus, the bad faith claim was futile, and the Court denied the insured’s motion to amend.

Date of Decision: April 20, 2018

Lasermaster International Inc. v. Netherlands Insurance Co., United States District Court, District of New Jersey, Civil Action No. 15-7614 (CCC), 2018 U.S. Dist. LEXIS 66520 (D.N.J. Apr. 20, 2018) (Clark, III, M.J.)

 

 

APRIL 2018 BAD FAITH CASES: INSURER FAILS TO (1) MEET ITS BURDEN OF SHOWING THAT PRIVILEGED INFORMATION SOUGHT IS MATERIAL AND (2) THAT BIFURCATION OF BAD FAITH CLAIM WOULD SERVE JUDICIAL ECONOMY (New Jersey Federal)

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In this complex coverage dispute, the insurer appealed two magistrate judge’s decisions to the district judge: (1) a 2017 opinion and order denying insurer’s motion to compel the insured’s production of privileged documents concerning the underlying lawsuits and settlements; and (2) a 2018 opinion and order denying the insurer’s motion to bifurcate and stay discovery regarding the insured’s bad faith counterclaim. The underlying litigation concerned occurrence-based policies that provided coverage for over two decades, and whether insurer has a duty of coverage regarding several class-actions and anti-trust actions brought against the insured after the policy period.

In affirming the magistrate’s 2017 order, the court held that the insurer failed to show how the privileged information was both relevant and material, and failed to show how it could not obtain this information through less intrusive means.

Regarding the 2018 bifurcation order, the insurer argued that “under New Jersey law ‘a policyholder should not be permitted to engage in discovery related to a bad faith claim until such time as it has established as a matter of law that it was entitled to coverage.’” The court rejected this argument, under Federal Rule 42 which governed in this federal action. The district judge held that the insurer failed to meet its burden of showing that bifurcating the bad faith claim would serve judicial economy and not prejudice the parties.

Date of Decision: April 12, 2018

Travelers Casualty & Surery Co. v. Becton Dickinson & Co., United States District Court, District of New Jersey, Civil Action No. 14-4410 (JMV), 2018 U.S. Dist. LEXIS 61853 (D.N.J. Apr. 12, 2018) (Vazquez, J.)

 

APRIL 2018 BAD FAITH CASES: ERISA PREEMPTS BAD FAITH CLAIMS (New Jersey Federal)

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Relying on prior Third Circuit appellate and New Jersey district court precedent, the district court judge ruled that ERISA preempted the plaintiff’s state law bad faith claims. The court listed numerous district court cases supporting this position, summarizing: “Consistent with the jurisprudence of the Supreme Court and the Third Circuit, courts within this District routinely hold that common law claims alleging breach of contract, bad faith, or negligence in connection with the denial of benefits under an ERISA-governed plan are preempted.”

The court had already made clear “[a]t the outset, the Court finds that Plaintiff’s claims for breach of contract (Count One), bad faith (Count Two), and malicious, willful, wanton, and/or reckless disregard of Plaintiff’s rights (Count Three) undoubtedly relate to the Plan, and thus, are preempted under ERISA. As the Third Circuit has explained, claims alleging breach of contract, bad faith, or negligence in connection with the denial of benefits under an ERISA-covered plan are preempted under ERISA, because those claims are ‘are premised on the existence of the plan….’”

Date of Decision: March 22, 2018

Hocheiser v. Liberty Mutual Insurance Co., Civil Action No. 17-6096 (FLW) (DEA), 2018 U.S. Dist. LEXIS 47870 (D.N.J. Mar. 22, 2018) (Wolfson, J.)

JANUARY 2018 BAD FAITH CASES: TRIAL COURT ERRS IN DECIDING BAD FAITH PREMATURELY AS BASIS NOT TO MOLD VERDICT TO POLICY LIMITS (New Jersey Appellate Division)

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This appeal stems from an underlying UIM action that involved a 2012 automobile accident. The insured settled with the underinsured-tortfeasor for $15,000 and filed a UIM claim with the insurer. After settlement negotiations failed, the insured filed suit against the insurer, and each party then filed an offer of judgment. The insurer offered $30,000 and the insured’s offer of judgment amounted to $85,000. Policy limits were $100,000.

The jury ultimately returned a verdict for $375,000. The trial court entered judgment on the verdict for $360,000 plus interest after subtracting the initial $15,000 settlement without prejudice to either party’s right to file a post-judgment motion for molding or other relief. The insurer filed a motion to mold the verdict to the policy limits. The insured filed a motion to amend the complaint to add a bad faith claim and for counsel fees.

The trial court denied the insured’s motion to amend, but allowed her to file a new complaint asserting a bad faith claim. As to the insurer’s motion to mold to the $100,000 policy limit, the trial court stated that it had discretion not to mold the verdict because the insurer engaged in “scorched earth” settlement practices. Lastly, the trial court awarded the insured counsel fees on the non-molded verdict, per the offer of judgment rule.

On appeal, the Appellate Division ruled that the trial court erred in declining to mold the verdict. The Court primarily relied upon case law that commands molding the verdict, because “UIM cases are first-party contract claims against insurers, but they are generally tried as if they were third-party tort actions with the insurer standing in for the uninsured or underinsured tortfeasor . . . . Thus, courts have appropriately recognized the need to mold jury verdicts in these cases to reflect the rights and duties of the parties under the insurance policy.”

The Appellate Division added that the trial court erred in molding the verdict based upon the insurer’s alleged bad faith, when the issue of bad faith had never been pleaded or adjudicated. It rejected the idea of deciding the bad faith issue without giving both parties the opportunity to litigate the issue.

The Appellate Division did affirm the insured’s right to counsel fees under the offer of judgment rule, however, the sum awarded was in error because the fee application submitted to the trial court was deficient. The Appellate Division stated that “a fee application must ‘be supported by an affidavit of services addressing the factors enumerated by RPC 1.5(a)’ and must include a specific enumeration of the services performed and the hours spent.”

The Appellate Division remanded the action back to the trial court for the various reasons articulated.

Date of Decision: December 14, 2017

Seamon v. State Farm Ins. Co., DOCKET NO. A-0293-16T3, 2017 N.J. Super. Unpub. LEXIS 3069 (New Jersey Appellate Division Dec. 14, 2017) (Reisner and Gilson, JJ.)

OCTOBER 2017 BAD FAITH CASES: COMPLAINT STATES PLAUSIBLE BAD FAITH CLAIM BASED ON CLAIMS HANDLING; COURT SEVERS AND STAYS BAD FAITH CLAIM (New Jersey Federal)

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The insured alleged that she suffered serious bodily injuries after a rear-end collision. The vehicle at fault only had $25,000 in available coverage, and the insured’s UIM policy contained limits of $100,000 per person and $300,000 per accident. Alleging injuries amounting to $75,000 in value, the insured filed a UIM claim with the insurer. The insured allegedly forwarded all documentation supporting her injuries to the insurer’s claims adjuster, but the insurer ignored her documentation or acted with reckless indifference to the documentation provided. She filed a claim against the insurer for breach of the implied duty of good faith and fair dealing.

The insured moved to dismiss this claim, arguing that (1) the Court lacked federal subject matter jurisdiction because the insured’s claim does not exceed $75,000; and (2) that the insured failed to state a claim upon which relief can be granted. The insured also moved to sever and stay the insured’s bad faith claim, pending the disposition of the insured’s claim for breach of contract.

(1) The Court denied insurer’s motion to remand, reasoning that “[the insured’s] bad faith claim, if successful, includes the potential for an award of consequential damages and punitive damages . . .” that would exceed the jurisdictional threshold of $75,000.

(2) The Court denied the insured’s motion to dismiss, reasoning that the complaint “sets forth numerous examples of bad faith conduct that sufficiently allege[s] a ‘reckless disregard’ for [the insured’s] rights.” These allegations included delay tactics, conducting an improper investigation, and failing to evaluate medical records in a reasonable manner.

(3) Finally, the Court granted the insurer’s motion to sever and stay the bad faith claim from the insured’s breach of contract claim, citing judicial economy and avoiding prejudice to the insurer.

Date of Decision: September 12, 2017

Gussman v. Government Employees Insurance Company, No. 16-8563, 2017 U.S. Dist. LEXIS 146995 (D. N.J. Sept. 12, 2017) (Rodriguez, J.)

MAY 2017 BAD FAITH CASES: “SEVERANCE AND STAY OF BAD FAITH CLAIMS HAS BEEN CALLED THE ‘PREVAILING PRACTICE’ IN BOTH THE STATE AND FEDERAL COURTS OF NEW JERSEY” (New Jersey Federal)

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In addressing the common practice of severance and stay in New Jersey federal insurance cases involving breach of contract and breach of the implied covenant of good faith and faith dealing (and in this case breach of fiduciary duty as well), the court stated:

This Court has the discretionary authority to sever and stay claims, for purposes of pretrial proceedings, see Fed. R. Civ. P. 26(d)(2), or for trial, see Fed. R. Civ. P. 42(b), in the interests of justice and efficiency. I find that a severance and stay of Counts 2 [breach of the implied covenant of good faith and fair dealing] and 3 [breach of fiduciary duty] makes sense, both as logic and as case management.

If, for example, there is no coverage, then denial of a claim cannot have been in bad faith, so discovery and litigation on the bad faith issue will have been wasted. Only if coverage is found need a court explore complicated issues of the insurer’s motives and the level of certainty it was required to have before denying a claim. In short, “[p]roof an insured is entitled to coverage as a matter of law is a necessary pre-requisite to pursuing discovery regarding a bad faith claim.” ….

No surprise, then, that severance and stay of bad faith claims has been called the “prevailing practice” in both the state and federal courts of New Jersey. …. The same principle applies as to fiduciary breach claims.

Nothing about the claims here suggests that a finding of bad faith or a fiduciary breach is so likely that the Court should collapse the sequence of issues and depart from the usual, sensible practice of severance.

Date of Decision: April 25, 2017

Port Liberte Homeowners Association, Inc. v. Lexington Ins. Co., No. 16-7934, 2017 U.S. Dist. LEXIS 63394 (D.N.J. Apr. 25, 2017) (McNulty, J.)