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Oliver v. Geico General Insurance Co.

United States District Court, D. Nevada

July 2, 2015

CHARLENE OLIVER, Plaintiff(s),
v.
GEICO GENERAL INSURANCE COMPANY, Defendant(s).

ORDER

JAMES C. MAHAN, District Judge.

Presently before the court is defendant Geico General Insurance Co.'s ("Geico") motion to bifurcate. (Doc. # 17). Plaintiff Charlene Oliver filed a response (doc. # 18) and defendant filed a reply (doc. # 19).

I. Background

The instant action is for underinsured motorist benefits by plaintiff. Plaintiff's claims arise out of a motor vehicle accident. On May 9, 2011, an adverse driver rear ended plaintiff at a traffic light. (Doc. # 1-1 at 6). Plaintiff alleges she suffered injuries as a result of the accident.

At the time of the accident the adverse driver had an insurance policy with Nevada General Insurance Company ("Nevada General"), which provided bodily injury coverage of $15, 000 per person and $30, 000 per accident. Plaintiff also held her own uninsured/underinsured motorist ("UIM") policy with Geico for $15, 000 per person and $30, 000 per accident. Plaintiff's insurance policy also provided for payment of certain medical expenses. (Doc. # 17 at 4).

On March 21, 2014, plaintiff settled her claims against the adverse driver for a total of $15, 000. (Doc. # 17 at 4). On March 28, 2014, plaintiff made a claim for her full $15, 000 UIM policy with Geico. (Doc. # 1-1 at 6). Geico responded that plaintiff was not entitled to payment of the full amount of her policy. ( Id. at 9). Geico offered plaintiff a $4, 000 settlement, which plaintiff rejected. ( Id. at 9).

Plaintiff initiated the instant action in the Eighth Judicial District Court for Clark County, Nevada on January 5, 2015. ( Id. ). Plaintiff asserts causes of action for (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) breach of fiduciary duty; and (4) bad faith. ( Id. ). Plaintiff also requests "punitive and exemplary damages" and attorneys' fees. ( Id. at 10).

II. Legal standard

Federal Rule of Civil Procedure 42(b) grants courts the authority to "order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims." Courts may order separate trials to achieve "convenience, to avoid prejudice, or to expedite and economize" the proceedings. Id. Decisions regarding bifurcation are left to the trial court's discretion. Hirst v. Gertzen, 676 F.2d 1252, 1261 (9th Cir. 1982).

Bifurcation is appropriate when it simplifies the issues for the jury and avoids the danger of unnecessary jury confusion. Id. Bifurcation is particularly appropriate when resolution of a claim or issue might dispose of the entire case. See O'Malley v. U.S. Fidelity & Guaranty Co., 776 F.2d 494, 501 (5th Cir. 1985) (bifurcation was proper because resolution of contractual claim disposed of bad faith claims).

III. Discussion

As an initial matter, Geico asserts that its liability on the contractual claim is a necessary prerequisite for its liability on the bad faith claims. (Doc. # 17 at 6). Plaintiff responds that defendant's assertion is incorrect as the bad faith claims are independent of the breach of contract claim. (Doc. # 18 at 2).

Geico cites to Martin v. State Farm Ins. Co., 960 F.Supp. 233 (D. Nev. 1997), and another District of Nevada case that relied on Martin, for its proposition that a bad faith claim does not occur until after the contract claim has been settled. However, Nevada does not require that a plaintiff establish success on a contractual claim prior to proceeding with a bad faith claim. See, e.g., Albert H. Wohlers & Co. v. Bartgis, 969 P.2d 949, 955 n.2 (Nev. 1998).

In Martin a court in this district explained that many courts have held that bad faith claims against an insurer arising from a dispute over UIM coverage either do not exist, or must be held in abeyance until the contractual coverage claim is resolved. Martin, 960 F.Supp. at 236. However, in Albert H. Wohlers & Co. v. Bartgis, 969 P.2d 949, 955 n.2 (Nev. 1998), the Nevada Supreme Court addressed ...


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