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  • Case Opinion

Bayshore Recycling Corp. v. Ace Am. Ins. Co.

United States District Court for the District of New Jersey

April 27, 2020, Filed

Case No. 19-cv-21618-MCA-ESK

Opinion

OPINION AND ORDER

Kiel, United States Magistrate Judge

THIS MATTER having come before the Court on defendant's request to stay plaintiff's claim for bad faith (the "Motion"), and the Court having reviewed the parties' submissions (ECF Nos. 9, 11, and 13), decides the Motion on the papers and without argument pursuant to Federal Rule of Civil Procedure (the "Rules") 78. For the reasons that follow, and for good cause shown, defendant's request for a stay of plaintiff's bad faith claim pending resolution of plaintiff's insurance claim for coverage is GRANTED.

Plaintiff brings this insurance coverage action against defendant seeking, inter alia: (1) a judgment declaring that it is entitled [*2]  to recover under an insurance policy (the "Policy") that has been issued by defendant to plaintiff, (2) damages for its breach of contract claim, and (3) punitive damages for its bad faith claim. (Complaint ("Compl.") at ¶ 1.) Defendant seeks to sever plaintiff's bad faith claim and stay discovery as to that claim pending resolution of plaintiff's claim for coverage under the Policy. (Defendant's February 18, 2020 Brief, p. 6; ECF No. 9, p. 10.)

LEGAL ANALYSIS

Rule 21 provides courts with the authority to sever and stay claims for pretrial proceedings or trial in the interests of justice and efficiency. Fed.R.Civ.P. 21; Rodin Props.-Shore Mall, N.V. v. Cushman & Wakefield of Pa., Inc., 49 F.Supp.2d 709, 721 (D.N.J. 1999). The factors used to determine whether severance is appropriate include: (1) whether the issues sought to be tried separately are significantly different from one another, (2) whether the separable issues require the testimony of different witnesses and different documentary proof, (3) whether the party opposing the severance will be prejudiced if it is granted, and (4) whether the party requesting severance will be prejudiced if it is not granted. Picozzi v. Connor, No. 12-04102, 2012 U.S. Dist. LEXIS 95129, 2012 WL 2839820, at *6 (D.N.J. July 9, 2012) (internal quotations and citation omitted).

The Court has broad discretion in deciding whether to sever a claim under Rule 21. See Riverview Towers Apartment Corp. v. QBE Ins. Corp., No. 14-06744, 2015 U.S. Dist. LEXIS 57100, 2015 WL 1886007, at *1 (D.N.J. Apr. 17, 2015). With requests to sever bad faith [*3]  claims from first-party coverage claims, "this Court has refused to adopt a blanket rule that a plaintiff's bad faith claim should be severed in every coverage case.[...] Every case is different and must be decided on its own facts." Ames v. USAA Life Ins. Co., No. 18-09865, 2018 U.S. Dist. LEXIS 186315, 2018 WL 5634684, at *2 (D.N.J. Oct. 31, 2018).

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2020 U.S. Dist. LEXIS 73168 *; 2020 WL 1986484

BAYSHORE RECYCLING CORPORATION, Plaintiff, v. ACE AMERICAN INSURANCE COMPANY, Defendant.

CORE TERMS

bad faith claim, severance, coverage, prejudiced, discovery, plaintiff's claim, weighs, breach of contract claim, significant difference, declaratory judgment, insurance coverage, pending resolution, documentary proof, REQUESTING, witnesses, handling, insurance claim, defense motion, opposing party, bad faith, quotations, LITIGATED, promoted, promptly, damages, reasons