United States District Court, W.D. Kentucky, Paducah Division
MEMORANDUM OPINION AND ORDER
B. RUSSELL, SENIOR JUDGE.
a fire in her residence, Heather Alvey filed a proof of loss
with her insurer, State Farm Fire and Casualty Company. The
parties failed to settle that claim, and so Alvey brought
this action for breach of contract and for statutory and
common-law bad faith. Now, State Farm asks the Court to
bifurcate the trial of, and stay discovery on, Alvey's
bad-faith claims until the breach-of-contract claim has been
resolved. Alvey opposes that motion in full. Having carefully
considered the record before it, the Court finds bifurcation,
along with a stay of discovery, to be warranted. Accordingly,
State Farm Fire and Casualty Company's Motion to
Bifurcate and to Stay Discovery, [R. 9], is GRANTED.
2016, a fire destroyed the home, garage, and personal
property of Heather Alvey. [R. 1-1 at 2, ¶ 3
(Complaint).] Prior to the incident, Alvey had purchased a
renter's insurance policy from State Farm Fire and
Casualty Company. [Id. at 1-2, ¶ 2.] Alvey
submitted a claim and State Farm made good on the policy-at
least at first. [Id. at 2, ¶ 4.] But after a
subsequent investigation suggested that the fire had been no
accident, State Farm refused to reimburse Alvey for any loss.
[Id. at 3-4, ¶¶ 9, 17.]
instant lawsuit followed. In her complaint, Alvey brings
claims against State Farm for breach of contract,
[id. at 2, ¶¶ 3-5], for statutory and
common-law bad faith, [id. at 2-4, ¶¶
6-15], and for a declaratory judgment of her rights under the
insurance contract, [id. at 4, ¶¶ 16-19].
Having removed Alvey's action to this Court,
[see R. 1 (Notice of Removal)], State Farm moves to
bifurcate the trial of the breach-of-contract and bad-faith
claims, and to stay discovery of the latter until the former
is resolved, [R. 9 (Motion to Bifurcate and Stay Discovery)].
Alvey opposes that motion in full. [R. 10 (Response).]
Federal Rule of Civil Procedure 42(b), the Court may order
separate trials for “convenience, to avoid prejudice,
or to expedite and economize.” Fed.R.Civ.P. 42(b). In
determining whether separate trials are appropriate, the
Court considers “several facts, including ‘the
potential prejudice to the parties, the possible confusion of
the jurors, and the resulting convenience and
economy.'” Wilson v. Morgan, 477 F.3d 326,
339 (6th Cir. 2007) (quoting Martin v. Heideman, 106
F.3d 1308, 1311 (6th Cir. 1997)). “The language of Rule
42(b) places the decision to bifurcate within the
discretion” of this Court. Saxion v. Titan-C-Mfg.,
Inc., 86 F.3d 553, 556 (6th Cir. 1996) (citing Davis
v. Freels, 583 F.2d 337, 339 (7th Cir. 1978)).
this Court is vested with the “inherent authority to
manage” its docket and affairs “with a view
toward the efficient and expedient resolution of
cases.” Dietz v. Bouldin, __U.S. __, __, 136
S.Ct. 1885, 1892 (2016) (collecting cases). “[T]he
power to stay proceedings” is one arrow in that quiver.
Gray v. Bush, 628 F.3d 779, 785 (6th Cir. 2010)
(alteration in original) (quoting Landis v. N. Am.
Co., 299 U.S. 248, 254 (1936)). In exercising its
judgment, this Court must “weigh competing interests
and maintain an even balance.” Landis, 299
U.S. at 255 (citing Kan. City S. Ry. Co. v. United
States, 282 U.S. 760, 763 (1931); Enelow v. N.Y.
Life Ins. Co., 293 U.S. 379, 382 (1935)).
begin, State Farm asks the Court to bifurcate the trial of
Alvey's breach-of-contract and bad-faith claims. From
State Farm's perspective, bifurcation is more efficient
because Alvey's bad-faith claims depend on a threshold
determination that State Farm, as the insurer, has an
obligation to pay under the policy. [R. 9-1 at 4 (Memorandum
in Support).] Bifurcation also avoids the prejudice and
confusion which, according to State Farm, might arise from
litigating the bad-faith claims alongside the
breach-of-contract claim. [Id. at 2-3.] The Court
all pertinent factors weigh in favor of bifurcation. First,
the viability of Alvey's bad-faith claims is contingent
upon the existence of an enforceable contractual obligation
to pay. See Davidson v. Am. Freightways, Inc., 25
S.W.3d 94, 100 (Ky. 2000) (“Absent a contractual
obligation, there simply is no bad faith cause of action,
either at common law or by statute.”). Because
“resolution of [that] single issue” will be
“dispositive of an entire claim, ” it is more
convenient and economical to decide the breach-of-contract
claim before passing on the bad-faith claims. In re
Beverly Hills Fire Litig., 695 F.2d 207, 216 (6th Cir.
1982). Second, bifurcation will allow “the jury to
focus on a single issue at a time” and, therefore, will
avoid the introduction of irrelevant evidence. Brantley
v. Safeco Ins. Co. of Am., No. 1:11-CV-00054-R, 2011 WL
6012554, at *3 (W.D. Ky. Dec. 1, 2011). Third, separate
proceedings will mitigate possible prejudice to State
Farm-even if that prejudice might not be as severe as in the
context of litigating a third-party bad-faith claim. See
Foster v. Am. Fire & Cas. Co., No. 13-426-GFVT, 2014
WL 7499427, at *3 (E.D. Ky. Jan. 8, 2014) (collecting cases).
fact that Alvey has brought a first-party (as opposed to a
third-party) bad-faith claim does not change that calculus.
True enough, some courts take a different approach when
confronted with the question of whether to bifurcate a
first-party action. See, e.g., Woody's
Rest., LLC v. Travelers Cas. Ins. Co. of Am., No.
5:12-CV-92-JMH-REW, 2014 WL 108317, at *2-4 (E.D. Ky. Jan. 9,
2014); Lively v. USAA Cas. Ins. Co., No.
CIV.A.08-422-JMH, 2009 WL 1116327, at *1 (E.D. Ky. Apr. 24,
2009); Tharpe v. Ill. Nat'l Ins. Co., 199 F.R.D.
213, 214-15 (W.D. Ky. 2001). A split in authority is
unremarkable, however, since the decision to bifurcate is
discretionary and made on a case-by-case basis. In light of