LORI A. WACKER-CIOCCO and MICHAEL J. CIOCCO, Plaintiffs-Respondents,
GOVERNMENT EMPLOYEES INSURANCE COMPANY, d/b/a GEICO, Defendant-Appellant
Argued: September 22, 2014,
Approved for Publication March 16, 2015.
On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5298-12.
Stephen A. Rudolph argued the cause for appellant ( Rudolph & Kayal, attorneys; Mr. Rudolph, on the briefs).
Alexander W. Ross, Jr., argued the cause for respondents ( Rakoski & Ross, P.C., attorneys; Mr. Ross, on the brief).
Before Judges LIHOTZ, ESPINOSA and ST. JOHN. The opinion of the court was delivered by ESPINOSA, J.A.D.
[439 N.J.Super. 605] OPINION
In Procopio v. Government Employees Insurance Company, 433 N.J.Super. 377, 80 A.3d 749 (App.Div. 2013), the plaintiff insured asserted a claim for underinsured motorist (UIM) benefits and a bad faith claim against his carrier. Although the trial court bifurcated the claims for trial, holding the bad faith claim in abeyance, it compelled discovery to proceed on all claims. We held it was an abuse of discretion for the trial court to order tat discovery on both claims proceed simultaneously. In this case, the initial decision to deny the severance motion came after some discovery
related to the bad faith claim had been provided and before Procopio was decided. This interlocutory appeal presents the question whether the disclosure of some bad faith-related materials brings the denial of a severance motion and the decision to compel related discovery within the scope of the trial court's proper exercise of discretion. We hold that it does not.
[439 N.J.Super. 606] Plaintiff Lori A. Wacker-Ciocco had an automobile insurance policy issued by defendant Government Employees Insurance Company (GEICO) that provided uninsured/underinsured motorist benefits in the amount of $300,000 per accident. She was seriously injured in a motor vehicle accident on April 5, 2011, when she was rear-ended by a vehicle operated by John Laratta, and incurred medical expenses that exceeded $300,000. Laratta's vehicle was insured by a policy that provided coverage of $100,000 per accident. Plaintiff sought and obtained GEICO's permission to settle her claim against Laratta within his policy limits for $99,000. She then notified GEICO of her demands for $200,000 in UIM benefits and for arbitration of her UIM claim.
Plaintiff's complaint, filed in December 2012, asserts a claim for UIM benefits as well as a claim that GEICO acted in bad faith. In support of her bad faith claim, plaintiff alleged that GEICO declined to participate in arbitration, failed to make a reasonable effort to settle the UIM claim and demanded documents unrelated to the UIM claim.
In the relevant motion practice, plaintiff sought to obtain, and then compel, the depositions of GEICO's UIM claims adjusters and documents related to the bad faith claim. GEICO filed motions to sever the bad faith claim and stay discovery on that issue. In July 2013, GEICO submitted claim records to plaintiff's counsel. GEICO simultaneously filed a motion to sever and stay [439 N.J.Super. 607] plaintiff's bad faith claim and discovery relative to that claim until the underlying UIM action was concluded. In support of its motion, GEICO referred to correspondence previously sent to plaintiff's counsel in which it asserted there was a dispute regarding " causation and quantum of damages that warranted discovery prior to good faith realistic settlement negotiations."  To support its claim that causation was a legitimate issue, GEICO quoted the January 30, 2012 report of plaintiff's treating physician, in which he stated, " [a]t this point, I am not certain to the exact etiology of avascular necrosis in the left hip; however it is possible that the accident could have been the cause of her avascular necrosis that then led to the
need for subsequent total hip ...