Legal News

Court Stays Bad Faith Claim, Picks Up Breach of Insurance Contract Claims First

By Brian Harris

On Aug. 2nd Judge Albert Masland of the Cumberland County Court of Common Pleas in ECSM Utility Contractors, Inc. v. Selective Insurance Group, Inc., et. al. granted in part the defendant?s motion to bifurcate and stay the plaintiff?s bad faith claims in a combined coverage and bad faith case. 

Judge Masland wrote:

 ?First, the court agrees that resolution of plaintiff?s contract claim in defendants favor could eliminate the need for consideration of the bad faith claims. . . Second, defendants believe the contract claim is ripe for resolution via summary judgment. Thus, if defendants are correct, the entire matter may be resolved expeditiously without resort to a jury trial and onerous discovery regarding the bad faith claims. Accordingly, the court grants defendants? motion in part and stays plaintiff?s statutory bad faith claims pending the resolution of defendants? motions for summary judgment. However, should the court deny these motions, the stay will be lifted and plaintiff will be able to pursue its bad faith claims in anticipation of a jury trial on the contract claims, which, if successful, will be immediately followed by a non-jury trial of the bad faith claims. Finally, in light of plaintiff?s concerns regarding protracted litigation caused by this stay, the court directs defendants to file their motions for summary judgment within 30 days. . .?

I believe that  Masland has delivered in a few short lines a relatively simple mechanism for dealing with the oftentimes thorny problem of combined breach of contract and faith cases. 

Severance and stay are, it seems, simple mechanisms that are often requested in combined cases like ECSM, but are all too often denied for fear of somehow bogging down the case. Masland seems to have resolved that issue effectively by imposing upon the defendants the duty to file a dispositive motion on the coverage issue within a brief amount of time. Thus, the approach taken by Masland would also, it seems, impose upon defendant insurers seeking to avail themselves of the benefit of bifurcation and stay, the obligation not to request bifurcation and stay until such time as they are ready to seek a dispositive ruling on a breach of contract/coverage issue by way of motion such as motion for summary judgment.

Charles Haddick
Dickie McCamey & Chilcote
http://www.dmclaw.com

I welcome feedback from readers, along with any suggestions for topics you would like to see discussed in this space.  Please e-mail me at chaddick@dmclaw.com.

Full post as published by The Legal Intelligencer Blog on September 17, 2010 (boomark / email).