Calestini v. Progressive Casualty Insurance Company, NO. 3:09-CV-1671 (M.D. Pa. Dec. 16, 2009) (District Court Denies Insurance Company Attempt To Bifurcate And Stay Underinsured Motorists and Bad Faith Claims Which Were Filed Under Post-Koken Clause.)
On December 16, 2009 the District Court for the Middle District of Pennsylvania denied Progressive Casualty Insurance Company’s Motion to bifurcate and stay where the insured filed breach of contract and bad faith claims against his insurance company after it failed to pay underinsured motorists benefits. Mark Calestini (“Castelini”) was injured in two separate accidents and filed underinsured motorist (UIM) claims for both. When the claims were not resolved, he filed breach of contract and bad faith lawsuits in state court which were removed to the Middle District of Pennsylvania. Progressive filed a motion to bifurcate the UIM and bad faith claims and then stay the bad faith claims.
Progressive argued for bifurcation citing a concern of prejudice that (1) the evidence of the claims are different; (2) privileged material may be disclosed in the bad faith claims but not the contract claims; (3) Progressive may be deprived of the use of privileged materials in the defense of the bad faith claim and (4) counsel may be witnesses in the bad faith claim. Judge Caputo of the Middle District noted that the Defendant has the burden to show that bifurcation is appropriate and that the reasons offered do not support bifurcation and stay. He wrote that the Defendant’s claim of prejudice was “of no moment” and that it would be more economical to reveal all the evidence at once. He decided that the concern over privilege can be addressed by filing approriate motions for protective orders to keep the evidence and information limited when the cases are heard. Also, he said the attorney being a witness is simply a risk of litigation and if it arises, it can be handled in a customary fashion.
He found in his discretion no prejudice and denied the motion to bifurcate and stay. Thus, the case will proceed.
Attorney Jim Conaboy of Abrahamsen, Conaboy & Abrahamsen, P.C. was the prevailing attorney on behalf of Mr. Calestini. This case has received statewide attention as it is a very favorable opinion for injured parties who make claims against their insurance carriers for uninsured and underinsured motorist benefits.