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Light, et al. v. Allstate Insurance Co.
IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 1998 Term
No. 24365
IRA LIGHT, et al.
Plaintiffs Below, Respondents,

v.
ALLSTATE INSURANCE COMPANY,
Defendant Below, Petitioner.

Certified Question from the
United States District Court for the
Southern District of West Virginia
Honorable Elizabeth V. Hallanan, Judge
Civil Action No. 5:95-0090

CERTIFIED QUESTION ANSWERED

Submitted: January 14, 1998
Filed: July 7, 1998

Brent K. Kesner                            Kevin B. Burgess Renatha G. Garner                        Hamilton, Burgess, Ellen R. Archibald                            Young & Pollard Kesner, Kesner & Bramble                    Oak Hill, West Virginia Charleston, West Virginia                    Attorney for Respondents Attorneys for Petitioner
CHIEF JUSTICE DAVIS delivered the Opinion of the Court.
JUSTICE MCCUSKEY dissents and reserves the right to file a dissenting opinion.
SYLLABUS BY THE COURT
1.
A de novo standard is applied by this Court in addressing the legal issues presented by a certified question from a federal district or appellate court.

2.
In a first-party bad faith action against an insurer, bifurcation and stay of the bad faith claim from the underlying action are not mandatory. Under Rule 42(c) of the West Virginia Rules of Civil Procedure a trial court, in furtherance of convenience, economy, or to avoid prejudice, may bifurcate and stay a first-party bad faith cause of action against an insurer.

3.
Trial courts have discretion in determining whether to stay discovery in a first-party bad faith claim against an insurer that has been bifurcated and stayed. Factors trial courts should consider in determining whether to stay discovery when bifurcation has been ordered in a bad faith action include: (1) the number of parties in the case, (2) the complexity of the underlying case against the insurer, (3) whether undue prejudice would result to the insured if discovery is stayed, (4) whether a single jury will ultimately hear both bifurcated cases, (5) whether partial discovery is feasible on the bad faith claim and (6) the burden placed on the trial court by imposing a stay on discovery. The party seeking to stay discovery on the bad faith claim has the burden of proof on the issue.



Davis, Chief Justice:
        This Court is presented with a certified question from the United States District Court for the Southern District of West Virginia involving the issue of mandatory bifurcation and a stay of a first-party bad-faith claim against an insurer, pending resolution of the underlying contract or tort claim. We conclude that in a first-party bad faith action against an insurer that also involves an underlying contract or tort claim against the insurer, it is not mandatory that the trial court bifurcate and stay the bad faith claim. Nor, is it mandatory that discovery be stayed on the first-party bad faith claim when bifurcation is ordered.

I.
FACTUAL AND PROCEDURAL HISTORY

        On January 27, 1993, a motor vehicle operated by Ira Light was struck by a motor vehicle owned by Juanita
Keller and driven by her teenage son, Shawn Keller.See footnote 1 1 The Keller vehicle crossed the center line of the
roadway. Consequently, the Kellers were "at fault" for the accident. As a result of the collision, Nila Light, a
passenger in the vehicle operated by Ira Light, her husband, sustained serious injuries. At the time of the accident, the
Lights had a motor vehicle insurance policy with Allstate. The Allstate policy included underinsured motorist coverage
in the amount of $100,000. The Kellers were insured by State Farm Mutual Automobile Insurance Company
(hereinafter State Farm).

        On July 7, 1993, the Lights accepted the full policy limits of $100,000 from State Farm. The Lights executed a release discharging the Kellers from any further claims concerning the accident. Thereafter, the Lights submitted a claim to Allstate for their underinsured motorist coverage, as a result of Mrs. Light's damages exceeding the amount recovered from State Farm. By letter dated November 8, 1993, the Lights were notified by Allstate that Allstate refused to pay the underinsured motorist coverage.
        The underinsured motorist provision contained in the Allstate policy included the following exclusion: "Allstate will not pay any damages an insured person is legally entitled to recover because of . . . bodily injury or property damage to any person if that person or that person's legal representative makes a settlement without our written consent." The policy also stated: "When we pay, an insured person's rights of recovery from anyone else become ours up to the amount we have paid. You must protect these rights and at our request help us enforce them." The Lights contend that Allstate knew they were attempting to settle with the Kellers; but, did not intervene or try to prevent them from settling the claim.
        As a result of Allstate's failure to pay the uninsured motorist claim, the Lights filed a complaint on January 5, 1995, alleging a breach of contract claim against Allstate. Subsequently, in an amended complaint filed February 22, 1995 the Lights asserted a claim against Allstate for unfair settlement practices under W.Va. Code

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