Pennsylvania Court Allows For Partial Bifurcation of Bad Faith Claims

In Fertig v. Kelley, et al., the plaintiff was injured in a motor vehicle accident.  The plaintiff sued the driver of the other car, and her insurance company.  The plaintiff claimed that the insurer failed to pay underinsured motorist benefits under her policy.  As such, she asserted claims for breach of contract, and statutory bad faith.

The insurer moved to bifurcate or sever the bad faith claim, and stay discovery of the bad faith claim until the UIM claim was tried.  The Pennsylvania Court of Common Pleas noted that no appellate court in Pennsylvania “has addressed the severance of a UIM claim and a statutory bad faith claim or the stay of bad faith discovery and proceedings pending the resolution of the UIM claim.”  With regard to the plaintiff’s liability claims (against the driver) and UIM claim (a/k/a breach of contract claim against the insurer), the court concluded that since those claims raised similar questions of fact and law, they should be joined for trial purposes.  Conversely, the court determined, that if the plaintiff’s claim for bad faith was tried with her liability and UIM claims, it could result in unfair prejudice to the insurer.  Therefore, the bad faith claim was bifurcated and to be tried after the liability and UIM claims.  However, given the similar issues raised in all claims, the court held that all claims should remain consolidated for discovery.

Often times a plaintiff will commence an action asserting claims against both the tortfeasor, and an insurance company.  Typically, when bad faith claims are involved, a motion to bifurcate is filed, to ensure that the insurance company is not prejudiced by that claim at trial.  This case provides guidance on how Pennsylvania courts faced with similar motions will rule, allowing insurers to know how to best defend themselves against bad faith claims.

Thanks to Colleen Hayes for her contribution to this post.