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ATTORNEYS FOR APPELLANT STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Richard M. Davis Jack A. Kramer Kevin G. Kerr Valparaiso, IN Karl L. Mulvaney Nana Quay-Smith Candace L. Sage Indianapolis, IN ATTORNEY FOR APPELLANT MICHAEL CANCEL Robert D. Brown Merrillville, IN ATTORNEYS FOR AMICUS CURIAE DEFENSE TRIAL COUNSEL OF INDIANA James D. Johnson Max E. Fiester Evansville, IN

ATTORNEYS FOR APPELLEE Timothy F. Kelly Beth L. Brown Crown Point, IN

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In the

Indiana Supreme Court
_________________________________ No. 45S03-0608-CV-302 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY AND MICHAEL CANCEL, Appellants (Defendants below), v. FRANCISCO GUTIERREZ, Appellee (Plaintiff below). _________________________________ Appeal from the Lake Circuit Court, No. 45C01-0006-CT-344 The Honorable Lorenzo Arredondo, Judge _________________________________ On Petition to Transfer from the Indiana Court of Appeals, No. 45A03-0408-CV-368 _________________________________

May 22, 2007 Sullivan, Justice.

A passenger in a truck insured by State Farm Insurance was injured in an accident. The passenger sued both the driver for negligence and State Farm for bad faith. We affirm the trial court's decision denying the driver's request that the claims against him be tried separately from those against State Farm. Neither prejudice to his case nor general policy considerations overcome the fact that the driver did not file his request within the deadline set by the trial court.

Background

Gus Guerrero insured his truck with State Farm Mutual Automobile Insurance Company ("State Farm"). Guerrero allowed Michael Cancel to use the truck to transport a large dollhouse from Gary to Hammond. Francisco Gutierrez and Floyd Turner were passengers in that truck.

As they were driving, the dollhouse somehow became dislodged and fell from the truck. Cancel pulled over and Gutierrez and Turner got out of the truck to retrieve it. Cancel put the truck into reverse and began backing it up. The passenger door swung open and struck Gutierrez in the back. His injury required surgery and subsequent care with medical bills totaling $17,221.

State Farm denied Gutierrez's medical payments claim. State Farm's denial provoked Gutierrez to sue State Farm for breach of contract, breach of a duty of good faith and fair dealing, and punitive damages. At the same time, Gutierrez sued Cancel for negligence, likely mindful that the liability provision of Guerrero's policy provided coverage for bodily injury up to $100,000.

During the run-up to trial, Cancel and State Farm both filed motions to bifurcate the claims against them. Cancel's request was filed several weeks after a deadline established in the trial court's case management order; State Farm's request at issue was filed even later, only a month before trial. The trial court denied both as untimely.

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The jury found in favor of Gutierrez and returned verdicts against State Farm in the amount of $17,221 for breach of contract, $350,000 for bad faith, and $500,000 in punitive damages, and against Cancel in the amount of $160,000.

The Court of Appeals reversed, holding that State Farm had been entitled to judgment on the evidence on the claim of bad faith and the request for punitive damages. State Farm Mut. Auto. Ins. Co. v. Gutierrez, 844 N.E.2d 572 (Ind. Ct. App. 2006). The Court of Appeals did affirm the judgment as to Gutierrez's breach-of-contract claim and the attendant $17,221 award. But it held that the trial court had committed reversible error when it denied Cancel's motion to bifurcate. (Judge Bailey dissented on this point.) Accordingly, the Court of Appeals remanded for a new trial on Gutierrez's negligence allegation against Cancel. Gutierrez sought, and we granted, transfer. State Farm Mut. Auto. Ins. Co. v. Gutierrez, 860 N.E.2d 588 (Ind. 2006) (table). We affirm the decision of the trial court denying Cancel's untimely motion to bifurcate, thereby reinstating the judgment of the trial court with respect to Cancel's negligence. We summarily affirm the remaining portions of the opinion of the Court of Appeals pursuant to Ind. Appellate Rule 58(A)(2).

Discussion

Indiana Trial Rule 42(B) provides that trial courts, "in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim . . . or of any separate issue or of any number of claims . . . or issues, always preserving inviolate the right of trial by jury." As the Court of Appeals has pointed out on several occasions, the rule seeks to balance "the interests of convenience and economy against the likelihood of substantial prejudice to the defendant's case." Jamrosz v. Res. Benefits, Inc., 839 N.E.2d 746, 761 (Ind. Ct. App. 2005) (citing Elkhart Cmty. Sch. v. Yoder, 696 N.E.2d 409, 414 (Ind. Ct. App. 1998)), trans. denied, 855 N.E.2d 1011 (Ind. 2006) (table).

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A showing of prejudice is a prerequisite to establishing that a trial court erred in denying a motion for separate trials. Farm Bureau Ins. Co. v. Crabtree, 467 N.E.2d 1220, 1223 (Ind. Ct. App. 1984), trans. denied. Cancel has not met this standard.

To demonstrate prejudice, Cancel argues the following:

1. "The jury could very easily have thought that if Gutierrez proves his claim against State Farm relating to whether he was entering or alighting from the pickup truck, that that also proves his case against Cancel. In addition, due to the focus of the breach of contract claim being the status of Gutierrez vis-

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