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Procopio v. Government Employees Insurance Co.

Superior Court of New Jersey, Appellate Division

November 21, 2013

JAMES J. PROCOPIO, JR., Plaintiff-Respondent,
v.
GOVERNMENT EMPLOYEES INSURANCE COMPANY, a/k/a and d/b/a GEICO, Defendant-Appellant.

Argued September 23, 2013 [1]

Reargued November 4, 2013

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-6191-11.

Feeda R. Musitief (Fine and Staud, LLP) argued the cause for appellant.

Walter H. Iacovone argued the cause for respondent (Margolis Edelstein, attorneys; Mr. Iacovone, on the brief).

Before Judges Parrillo, Harris and Guadagno.

OPINION

PARRILLO, P.J.A.D.

We granted leave to appeal an interlocutory order of the Law Division that severed for trial purposes plaintiff's underinsured motorist (UIM) claim from his bad faith and other claims against his carrier, defendant Government Employees Insurance Company (GEICO), but nevertheless directed discovery to proceed simultaneously on all claims. For the following reasons, we reverse.

Plaintiff James Procopio, Jr. was injured in an automobile accident with another driver, also insured by GEICO. In his action against the other driver, plaintiff received the tortfeasor's GEICO insurance policy limit of $15, 000. Thereafter, plaintiff filed a complaint against GEICO, asserting claims for UIM benefits under his own policy as well as bad faith refusal to pay the claim, breach of contract, and violations of the New Jersey Consumer Fraud Act (bad faith claims).

During the discovery process, in which plaintiff sought, among other things, his carrier's entire claim file and other information specifically related to prosecution of plaintiff's bad faith claims, GEICO moved to sever the bad faith claims and hold them in abeyance pending resolution of the UIM benefits matter. Plaintiff responded by moving to compel discovery. The motion judge bifurcated the claims for trial, held the bad faith claims in abeyance, but compelled simultaneous discovery on all claims. The judge denied GEICO's motion for clarification or reconsideration, reasoning that defendant would not be prejudiced by compelling discovery of the bad faith claims contemporaneous with discovery of the UIM claim. Recognizing the potential problems inherent in such an approach, however, the court allowed that any discovery requests implicating privileged materials would be subject to a motion for a protective order and that he would not permit discovery into a privileged area.

On appeal, GEICO maintains the motion court abused its discretion by compelling discovery on the bad faith claims to proceed before resolution of the UIM claim. We agree.

In general, pursuant to Rule 4:10-2(a), a party can obtain discovery regarding any non-privileged materials that are relevant to the underlying matter. "New Jersey's discovery rules are to be construed liberally in favor of broad pretrial discovery." Payton v. N.J. Tpk. Auth., 148 N.J. 524, 535 (1997); see also Jenkins v. Rainner, 69 N.J. 50, 56 (1976). We review a trial court's decision on discovery matters under the abuse of discretion standard. Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371 (2011). This standard requires our court to "generally defer to a trial court's disposition of discovery matters unless the court has abused its discretion or its determination is based on a mistaken understanding of the applicable law." Ibid. (quoting Rivers v. LSC P'ship, 378 N.J.Super. 68, 80 (App. Div.), certif. denied, 185 N.J. 296 (2005)).

Under Rule 4:38-2, the trial court may order a separate trial of any claims or issues "for the convenience of the parties or to avoid prejudice[.]" In general, the power to sever claims rests in the trial court's discretion. Tobia v. Cooper Hosp. Univ. Med. Ctr., 136 N.J. 335, 345 (1994). In addition, the authority to stay a proceeding is also within the sound discretion of the trial court. State v. Korbin Sec., 221 N.J.Super. 169, 174 (App. Div. 1987), rev'd, 111 N.J. 307 (1988). The Supreme Court has noted that

the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, ...

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