United States District Court, N.D. Mississippi, Greenville Division
JACQUELINE E. STANFORD; and ROY STANFORD, SR. PLAINTIFFS
LIBERTY MUTUAL GROUP INC., a/k/a Liberty Mutual Insurance; WARD J. SIMPSON; and JOHN DOE DEFENDANTS
MICHAEL P. MILLS UNITED STATES DISTRICT JUDGE
February 11, 2019, Liberty Mutual Group, Inc., a/k/a Liberty
Mutual Insurance, filed “Defendant's Motion to
Bifurcate and Sever, to Stay Extra-Contractual Claims, and to
Prohibit Insurance Reference at Car Wreck Trial.” Doc.
#41. Liberty Mutual asks that (1) the bad faith claims
brought by Jacqueline Stanford and Roy Stanford be bifurcated
and severed from their underlying uninsured motorist claims;
(2) the bad faith claims be stayed pending resolution of the
underlying uninsured motorist claims; and (3) the issue of
insurance coverage be excluded from trial. See Doc.
#42. The Stanfords did not respond to the motion.
to Federal Rule of Civil Procedure 21, a “court may
… sever any claim against a
party.” Rule 42(b) authorizes a court to
“order a separate trial of one or more separate issues,
claims, crossclaims, counterclaims, or third-party
claims.” “The procedure authorized by Rule 42(b)
should be distinguished from severance under Rule 21.
Separate trials will usually result in one judgment, but
severed claims become entirely independent actions to be
tried, and judgment entered thereon, independently.”
McDaniel v. Anheuser-Busch, Inc., 987 F.2d 298, 304
n.19 (5th Cir. 1993). Accordingly, if this Court were to
sever the claims, bifurcation would be unnecessary.
provides district courts with discretion to sever claims. A
district court may exercise this discretion if an action
“is misjoined or might otherwise cause delay or
prejudice.” Applewhite v. Reichhold Chems.,
Inc., 67 F.3d 571, 574 (5th Cir. 1995). In applying this
discretion, district courts in the Fifth Circuit “have
settled on a standard which accords with that used in other
circuits.” In re Rolls Royce Corp., 775 F.3d
671, 680 n.40 (5th Cir. 2014). Under such standard, courts
consider five factors:
(1) whether the claims arise out of the same transaction or
occurrence; (2) whether the claims present some common
questions of law or fact; (3) whether settlement of the
claims or judicial economy would be facilitated; (4) whether
prejudice would be avoided if severance were granted; and (5)
whether different witnesses and documentary proof are
required for the separate claims.
first factor is analyzed under the “logical
relationship test, ” which asks whether the claims at
issue share an aggregate of operative facts. Cooper v.
Meritor, Inc., No. 4:16-cv-52, 2018 WL 1934065, at *2-3
(N.D. Miss. Apr. 24, 2018). Operative facts are “those
relating directly to the claims in an action.”
Id. (alterations omitted).
Mississippi law, an uninsured (or underinsured) motorist
claim requires that the plaintiff show he is covered by an
uninsured policy and that he is “legally entitled to
recover … damages” against the owner or operator
of an uninsured vehicle. See Wachtler v. State Farm Mut.
Auto. Ins. Co., 835 So.2d 23, 26 (Miss. 2003). A bad
faith claim, in contrast, requires the plaintiff to show that
an “insurer lacked an arguable or legitimate basis for
denying [a] claim, or that the insurer committed a willful or
malicious wrong, or acted with gross and reckless disregard
for the insured's rights.” Liberty Mut. Ins.
Co. v. McKneely, 862 So.2d 530, 533 (Miss. 2003).
However, “[a]n insured seeking to recover on a claim of
bad faith must first establish the existence of coverage on
the underlying claim.” Stubbs v. Miss. Farm Bureau
Cas. Ins., 825 So.2d 8, 13 (Miss. 2002).
extent the bad faith claim depends on showing an underlying
entitlement to benefits, there is indisputably an overlap in
operative facts. However, because the crux of a bad faith
claim depends on how an insured acted, as opposed to the
facts of the underlying accident (the central focus of the
uninsured motorist claim), the Court concludes that the two
claims do not share an aggregate of operative facts.
Accordingly, the first factor weighs in favor of severance,
while the second factor does not.
the third factor, to the extent the bad faith claim depends
on the plaintiffs prevailing on their uninsured motorist
claim, the Court concludes that separating the claims would
advance the interest of judicial economy because resolution
of the uninsured motorist claim in favor of Liberty Mutual
would obviate the need for discovery and trial on the bad
faith claim. See Mason v. State Farm Mut. Auto. Ins.
Co., No. 5:19-cv-2, 2019 WL 1767558, at *2 (E.D. Ky.
Apr. 22, 2019) (“To allow discovery to proceed on bad
faith claims that are dependent on the underlying contractual
claim goes against judicial economy by requiring the Parties
to expend countless hours and resources on claims that may
ultimately be unnecessary.”).
regard to the fourth factor, Liberty Mutual argues it would
be prejudiced in the absence of severance because a single
trial, even if bifurcated into phases, would create confusion
and prejudice with the jury members; and because litigating
the bad faith claim alongside the uninsured motorist claim
would force it to disclose “certain privileged items
relating to the analysis, evaluation, and investigation of UM
claims.” Doc. #42 at 12.
discussed below, Liberty Mutual's concerns regarding a
joint trial may be alleviated by bifurcation, rather than
severance. As to Liberty Mutual's discovery concerns, the
Court notes that discovery has closed without any discovery
disputes. Accordingly, the Court finds no potential ...