Kohler Co. v. Whistling Oak Apts. LLC

Kohler Co. v. Whistling Oak Apts. LLC

Opinion

DECISION AND ORDER

Plaintiff Kohler Company has sued Whistling Oak Apartments LLC for infringement of registered trademarks under 15 U.S.C. § 1114, unfair competition and false designation of origin under 15 U.S.C. § 1125(a), trademark dilution under 15 U.S.C. § 1125(a), and common law trademark infringement, unfair competition, and deceptive trade practices. (ECF No. 1, ¶ 3.) Society Insurance and The Cincinnati Insurance Company issued insurance policies to Whistling Oak and accepted Whistling Oak's tender of defense subject to a reservation of rights. Both Society and Cincinnati filed motions to intervene, bifurcate, and stay the case. (ECF Nos. 17 and 31.) They contend [*2]  that they are not obligated to defend or indemnify Whistling Oak in this action. Cincinnati subsequently withdrew its motion to bifurcate and stay. (ECF No. 39.)

When no party objected to the motions to intervene, the court granted that aspect of Society's and Cincinnati's motions. (ECF No. 43.) Unresolved is that aspect of Society's motion seeking an order bifurcating trials on the issue of insurance coverage and liability and staying the proceedings on liability pending resolution of the insurance coverage issues. Both Kohler and Whistling Oak oppose bifurcating coverage and liability issues and staying the liability issue pending resolution of coverage.

All parties have consented to the full jurisdiction of this court under 28 U.S.C. § 636(c). (ECF Nos. 6, 10, 20, and 42.)

Federal Rule of Civil Procedure 42(b) provides in relevant part, "For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims." The decision whether to bifurcate rests within the sound discretion of the court. Krocka v. City of Chicago, 203 F.3d 507, 516 (7th Cir. 2000). And the power to stay proceedings is "incidental to the power inherent in every court to control the disposition of the causes [*3]  on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 248, 254-55, 57 S. Ct. 163, 81 L. Ed. 153 (1936).

In Mowry v. Badger State Mut. Cas., 129 Wis.2d 496, 385 N.W.2d 171 (1986), the Wisconsin Supreme Court "endorsed the practice of bifurcating the coverage issue and resolving it before turning to the issues of liability and damages in the underlying action." Kreuger Int'l, Inc. v. Fed. Ins. Co., 647 F. Supp. 2d 1024, 1041 (E.D. Wis. 2009). Toward that end, the court instructed insurers who contest coverage to "not only request a bifurcated trial on the issues of coverage and liability" but to also "move to stay any proceeding on liability until the issue of coverage is resolved." Elliott v. Donahue, 169 Wis. 2d 310, 318, 485 N.W. 2d 403, 406 (1992). "Mowry envisioned coverage questions that could be easily and quickly resolved before substantial defense costs in the underlying action would be incurred, and it directed trial courts to expedite the resolution of the coverage question once bifurcation was ordered[.]" Kreuger Int'l, 647 F. Supp. 2d at 1042.

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