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TOWNSHIP OF HADDON v. ROYAL INS. CO. OF AMERICA

June 19, 1996

TOWNSHIP OF HADDON, Plaintiff,
v.
ROYAL INSURANCE COMPANY OF AMERICA, f/n/a or a/k/a, AMERICAN AND FOREIGN INSURANCE COMPANY, et al., Defendants.



The opinion of the court was delivered by: IRENAS

 IRENAS, District Judge:

 The Township of Haddon ("Plaintiff") brought suit against Royal Insurance Company of America ("Royal"), General Accident Insurance Company ("GAI"), and Merchants Mutual Insurance Company ("Merchants") for specific enforcement of insurance policies, or in the alternative, for bad faith breach of contract. Defendant Royal denies the existence of the insurance policies which Plaintiff contends Royal issued to it covering the period from 1970 until 1976.

 Plaintiff demanded a jury trial on all issues. The Court will bifurcate the cause of action and consider the existence and terms of the allegedly lost insurance policies issued by Royal separately from the remainder of the case. *fn1" The Court recognizes Plaintiff's right to a jury trial on whether the terms of a particular policy provide it with coverage. We find, however, that the Seventh Amendment does not guarantee Plaintiff the right to a trial by jury as to issues relating to the existence and terms of insurance policies alleged to have been lost by Plaintiff. *fn2" Therefore we strike Plaintiff's demand for a jury trial on those issues.

 I. BACKGROUND

 In January of 1993, the Township of Haddon was impleaded by the Township of Voorhees as a defendant in Incollingo v. RCA Corporation, Docket No. 87-4263 (JHR), a civil suit involving liability for clean-up costs incurred in connection with the Buzby Landfill located in Voorhees, New Jersey. At that time, Voorhees Township alleged that Plaintiff was liable for some portion of the costs associated with the clean-up by virtue of Plaintiff's disposal of municipal waste and sludge at Buzby Landfill from 1972 through 1978.

 About a year later, Incollingo was consolidated with other suits involving Buzby Landfill. RCA/General Electric, the named defendant in the Incollingo action and a defendant in the consolidated action, impleaded Plaintiff into the consolidated action, maintaining that Plaintiff is responsible for a portion of the costs associated with the Buzby Landfill cleanup.

 Plaintiff then sought to have Royal, GAI, and Merchants defend and indemnify it in the consolidated suit pursuant to insurance policies under which Plaintiff believed it was covered against such claims. Royal refused Plaintiff's request, contending that it could not locate the policies under which Plaintiff claimed to be insured. Plaintiff was also unable to produce copies of the policies. As a result, Royal refused to either defend or indemnify Plaintiff, and argued that no such policy exists.

 On February 1, 1996, Plaintiff filed this diversity action seeking a declaratory judgment against Royal, a North Carolina corporation. Plaintiff seeks specific performance of the insurance policy as well as compensatory and punitive damages arising from Royal's alleged bad faith breach of contract. On March 1, 1996, Plaintiff filed an amended complaint adding Merchants, a New York corporation, and GAI, a Pennsylvania corporation, as defendants. Plaintiff claims that Merchants issued it various relevant insurance policies between June 8, 1976, and June 8, 1983, and that GAI issued it relevant policies between January 8, 1983, and January 8, 1988. In its amended complaint, Plaintiff demands that each of the defendants defend and indemnify it against any and all claims in the underlying action. The Court has jurisdiction over the complaint pursuant to 28 U.S.C. § 1332 because there is diversity of citizenship between the parties and the amount in controversy exceeds $ 50,000.

 By order dated April 4, 1996, the Court gave the Defendants the opportunity to file a memorandum of law addressing Plaintiff's right to a jury trial on its claim under Royal's lost insurance policies. Defendants Royal and GAI filed such briefs on May 6, 1996. By order dated May 9, 1996, Plaintiff was permitted to file a responsive brief on the issue, and it did so on May 29, 1996.

 II. DISCUSSION

 A. Bifurcation of the Issues

 After reviewing the amended complaint, the Court finds that, given the nature of Plaintiff's cause of action, judicial economy counsels trying the issue of the lost Royal insurance policies separate and apart from the remainder of Plaintiff's claim. Consequently, the Court will bifurcate Plaintiff's cause of action as provided for in the Federal Rules of Civil Procedure. Under Fed. R. Civ. P. 42 a court may order a separate trial of any claim when doing so would be "in furtherance of convenience" or "conducive to expedition and economy." Once the existence of an insurance policy issued by Royal is determined, the possibility of all other claims being settled without litigation will be greatly enhanced. Moreover, bifurcation of Plaintiff's cause of action will enable the Court to avoid the complications associated with trying a case which ...


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