Oliver v. Geico General Insurance Company, 2:15-cv-00204

Plaintiff Charlene Oliver was rear-ended on May 9, 2011; she claimed injuries and sought uninsured/underinsured motorist (UIM) benefits under her GEICO policy.
Adverse driver’s insurer paid/settled for $15,000; Oliver’s GEICO UIM policy limit was $15,000 per person / $30,000 per accident.
Plaintiff submitted a UIM claim to Geico; Geico disputed entitlement to the full $15,000 and offered $4,000, which plaintiff rejected.
Plaintiff sued in Nevada state court asserting breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and bad faith, and sought punitive damages and attorneys’ fees.
Geico moved to bifurcate trial under Fed. R. Civ. P. 42(b) to try the breach-of-contract claim first; plaintiff opposed, arguing the claims involve the same evidence and witnesses.
The district court denied bifurcation, finding contract liability is not a prerequisite to bad-faith claims and that unified trial better serves convenience, avoids needless duplication, and does not unduly prejudice Geico.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether contractual liability is a prerequisite to pursuing a bad-faith claim	Oliver: bad-faith claim is independent; success on contract is not required	Geico: bad-faith claim depends on first establishing contractual liability; contract should be tried first	Court: Not required; Nevada law follows majority rule that bad-faith need not await directed verdict on contract
Whether the court should bifurcate breach-of-contract and bad-faith claims under Rule 42(b)	Unified trial is efficient; claims share same evidence, witnesses, and experts	Bifurcation would avoid waste if contract claim disposes of case and prevent juror confusion/overload	Court: Denied bifurcation—trial together promotes convenience and economy; little risk of prejudice or jury confusion

Martin v. State Farm Ins. Co., 960 F. Supp. 233 (D. Nev. 1997) (district court discussion that many courts delay bad-faith claims pending resolution of coverage disputes)
Albert H. Wohlers & Co. v. Bartgis, 969 P.2d 949 (Nev. 1998) (Nevada Supreme Court rejected the directed-verdict prerequisite and adopted majority approach allowing bad-faith claims without prior contract adjudication)
Drennan v. Maryland Cas. Co., 366 F. Supp. 2d 1002 (D. Nev. 2005) (recognizing Wohlers and that a plaintiff need not secure a directed verdict on contract to state a prima facie bad-faith claim)
Hirst v. Gertzen, 676 F.2d 1252 (9th Cir. 1982) (trial court has broad discretion to bifurcate under Rule 42(b))
O'Malley v. U.S. Fidelity & Guaranty Co., 776 F.2d 494 (5th Cir. 1985) (bifurcation appropriate when resolution of one claim may dispose of entire case)