May 2010 BAD FAITH CASES A DENIAL OF A MOTION TO SEVER OR STAY IN A BAD FAITH CASE IS NOT IMMEDIATELY APPEALABLE (Allegheny County)

In Vernon v. Erie Insurance Exchange, the insureds were injured in an automobile accident on June 23, 2007, when they were passengers in a vehicle that was struck by another automobile.  On May 29, 2008, they filed a civil lawsuit, alleging (1) a breach of contract for failure to pay benefits under their Underinsured Motorist Policy (“UIM”) coverage, (2) bad faith for failure to make a reasonable effort to settle the case, and (3) loss of consortium.

After pleadings were closed, the case was scheduled for trial on September 15, 2009. On May 29, 2009, the parties appeared before court on the insureds’ Motion to Compel and the insurer’s Motion to Bifurcate the breach of contract and bad faith claims. On June 1, 2009, Judge Strassburger denied the insureds’ Motion to Compel without prejudice and denied the insurer’s Motion to Bifurcate, ruling that “the bad faith claim will be tried immediately upon the UIM case being sent to the jury, or on the scheduled trial date if the UIM case is settled, unless Plaintiffs within 20 days of this Order file a Motion to Bifurcate.” On July 1, 2009, the insurer filed a Notice of Appeal to the Superior Court from Judge Strassburger’s June 1, 2009 order denying its Motion to Bifurcate.  As required by Pennsylvania’s appellate rules, Judge Strassburger issued an opinion explaining her decision.

In addressing the appeal, Judge Strassburger compared this case to Gunn v. Automobile Insurance Company of Hartford. Connecticut, where the Superior Court held that the trial court’s denial of the defendant’s motion to Sever and Stay a Statutory Bad Faith claim did not qualify as an appealable collateral order, and recommended that the Superior Court should quash that appeal.  The Superior Court’s decision in Gunn is summarized elsewhere on this Blog.
Because the underlying motions in Gunn and Vernon were the same, Judge Strassburger opined that the appeal was not from a collateral order, was interlocutory and should be quashed.
Date of Decision: August 3, 2009
Vernon v. Erie Ins. Exc., GD 08-10406, Common Pleas Court of Allegheny County, Pennsylvania, 2009 Pa. Dist. & Cnty. Dec. LEXIS 220 (Pa.. Aug. 3, 2009) (Strassburger, J.).