Discovery and Severance

Procopio v. Gov’t Employees Ins. Co., 433 N.J. Super. 377 (App. Div. 2013).  As Judge Parrillo stated in today’s opinion, rulings of trial level judges on discovery matters, and on whether to sever some claims from others, are both discretion calls.  In this case, the Appellate Division granted leave to appeal from a Law Division decision that severed plaintiff’s uninsured motorist (“UIM”) claim from his claim of bad faith by the defendant insurer (and other claims) but declined to bifurcate discovery in a similar fashion.  The panel found an abuse of discretion in the Law Division’s refusal to bifurcate discovery.

Judge Parrillo relied primarily on Taddei v. State Farm Indem. Co., 401 N.J. Super. 209 (App. Div. 2008).  There, the Appellate Division stated, in dicta, that a UIM claim could be severed from a bad faith claim, “with the latter being held in abeyance until conclusion of the former.  The severed bad faith claim would then be activated, triggering the possibility for the right to discovery, motions, and, if necessary, a separate trial….”  That would preserve a plaintiff’s right to a bad faith claim if the plaintiff won on the UIM claim, while eliminating the need for proceedings on the bad faith claim if the plaintiff lost on the UIM claim.  Under that Taddei procedure, “the insurer would not be required to produce its claim file prematurely, otherwise, privileged material may be disclosed which would jeopardize the insurance company’s defense.”

Cases in other states that Judge Parrillo cited also supported the panel’s conclusion here.  Judge Parrillo found those cases “compelling.”  There was “very little benefit in allowing discovery to proceed simultaneously since a claim for UIM benefits is separate and distinct from a claim of bad faith and the evidence used to establish each claim is very different ….”  Requiring simultaneous discovery would waste time and money, and would, as Taddei had suggested, jeopardize the insurer’s defense of the UIM claim by the disclosure of potentially privileged materials in the claim file.  Those adverse impacts outweighed any benefits of simultaneous discovery.  Accordingly, the panel ordered reversal and remand.

 

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  1. […] In Procopio v. Gov’t Employees Ins. Co., 433 N.J. Super. 377 (App. Div. 2013), discussed here, the Appellate Division ruled that it was an abuse of discretion for the Law Division to order that […]

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