MARK S. DAVIS, District Judge.
This matter is currently before the Court on Defendant GuideOne Specialty Mutual Insurance Company's ("GuideOne") motion for partial summary judgment as to Count II of the Complaint and motion in limine to exclude alleged evidence of bad faith or to bifurcate trial. Docket Nos. 21, 33. For the reasons outlined below, GuideOne's motion in limine to exclude evidence of bad faith or to bifurcate trial is GRANTED with respect to bifurcation. GuideOne's motion for partial summary judgment as to Count II of the Complaint is DENIED.
Plaintiff Saint John's African Methodist Episcopal Church ("Saint John's") filed suit against its insurer, GuideOne, on October 31, 2011 in the Circuit Court for the City of Norfolk, Case No. CL11007838-00, alleging breach of contract and a right to recover attorneys' fees and costs under Virginia Code Section 8.2-209. See Docket No. 1. The action arose out of a coverage dispute between the parties regarding losses and damages that Saint John's allegedly sustained during a November 12, 2009 storm. GuideOne removed the case to this Court pursuant to Title 28, United States Code, Section 1441 on December 16, 2011, on the grounds of diversity under Title 28, United States Code, Section 1332. Docket No. 1.
GuideOne filed a motion for partial summary judgment as to Saint John's request for attorneys' fees and costs on August 3, 2012. Docket No. 21. GuideOne then moved in limine on August 29, 2012 to exclude alleged evidence of bad faith or to bifurcate trial. Docket No. 33. As both motions require the Court to consider Saint John's request for attorneys' fees and costs under § 38.2-209, the Court considers them together in this Order, reaching first the issue of bifurcation and, second, the request for partial summary judgment.
GuideOne has moved in limine to exclude alleged evidence of bad faith or to bifurcate trial on the issue of bad faith. Docket No. 33. The Court considers the request to bifurcate before addressing the exclusion of evidence.
Federal Rule of Civil Procedure 42(b) governs a party's motion to bifurcate. Epps v. Arise Scaffolding & Equip., Inc., No. 2:10cv189, 2011 WL 1566004, at *12 (E.D.Va. Feb. 17, 2011). The rule provides: "For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues...." Fed.R.Civ.P. 42(b). The decision whether to bifurcate pursuant to Rule 42(b) "is within the sound discretion of the trial judge." Bowie v. Sorrell, 209 F.2d 49, 51 (4th Cir.1953). For the reasons outlined below, the Court finds that bifurcation of the bad faith issue and corresponding request for attorneys' fees and costs is appropriate in this case.
When a case is removed to federal court under diversity jurisdiction, state law governs the substantive claims. Jones v. Target Corp., 341 F.Supp.2d 583, 586 (E.D.Va.2004) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020,
Va.Code. Ann. § 38.2-209(A) (2006). This statute does not create an independent cause of action for an insurer's bad faith in coverage disputes. Va.Code Ann. § 38.2-209(B); Massachusetts Bay Ins. Co. v. Decker, No. 7:11-cv-00342, 2012 WL 43614, at *1 (W.D.Va. Jan. 9, 2012). Rather, it is a function of damages that allows the court to award the insured's fees and costs if it finds that "the insurer, not acting in good faith, has either denied coverage or failed or refused to make payment to the insured under the policy." Va.Code Ann. § 38.2-209(A). Thus, judgment against the insurer on a substantive claim is a prerequisite to recovery of attorneys' fees and costs under § 38.2-209.
Because the question of bad faith under § 38.2-209 is reserved to the court and is properly considered only after judgment has been entered against an insured on a substantive cause of action, this Court finds that bifurcation of Saint John's § 38.2-209 request for fees and costs from its breach of contract claim is appropriate. Any reference to GuideOne's alleged bad faith in denying Saint John's insurance claim or failing to pay Saint John's under the insurance policy, as well as any evidence offered solely to establish such bad faith, would serve only to prejudice the jury. Fed.R.Civ.P. 42(b). Therefore, GuideOne's request to bifurcate the question of bad faith is
In its memorandum in support of the motion in limine to exclude alleged evidence of bad faith or to bifurcate trial, GuideOne sets forth three facts it considers relevant to the coverage dispute and seemingly suggests that the determination of that dispute should be limited to evidence supporting those facts. Docket No. 34. This Court declines to summarily exclude evidence absent a specific request identifying the evidence sought to be excluded and explaining why such evidence is beyond the scope of the coverage dispute.
The Court now considers GuideOne's motion for partial summary judgment. Docket No. 21.
District courts are accorded discretion in determining whether to grant or deny motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Andrew v. Clark, 561 F.3d 261, 271 (4th Cir.2009). The court may exercise its discretion to deny a motion for summary judgment "even when the standard appears to have been met." Id. (citations omitted); see also Fed. R.Civ.P. 56 advisory committee notes. Denial of summary judgment is an appropriate exercise of the court's discretion if the court believes that "the better course would be to proceed to full trial." Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
Defendant GuideOne has moved for partial summary judgment on the issue of bad faith and Plaintiff Saint John's corresponding request for attorneys' fees and costs. Docket No. 21. As observed, the Court has discretion to grant or deny GuideOne's motion. Andrew, 561 F.3d at 271. In light of its decision to bifurcate trial, the Court chooses to exercise this discretion without reaching the question of whether the requirements for summary judgment have been met. Bad faith is a question for the court. Va.Code Ann. § 38.2-209(A); Winston, 97 F.3d at 1450; Wilson, 79 Va. Cir. at 591; Haghnazarian, 21 Va. Cir. at 140. Additionally, the matter is properly considered only after judgment has been entered against the insurer. E.g., Tiger Fibers, 594 F.Supp.2d at 655. A verdict in favor of GuideOne on Count I may obviate the need for judgment on Saint John's request for fees and costs under § 38.2-209. Therefore, the Court finds that the best course in this case is to proceed to trial. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. The Court will not
As set forth above, GuideOne's motion in limine to exclude evidence of alleged bad faith or to bifurcate is
It is so