Nationwide Mutual Insurance Co. et al. v. Jeffrey Pasiak et al. (2012)

MEMORANDUM OF DECISION MOTION TO BIFURCATE

INTRODUCTION

The Plaintiffs filed a declaratory judgment action seeking a determination as to whether they owe a duty to defend and indemnify the defendants, Jeffrey Pasiak and Pasiak Construction Services, LLC, as a result of an action filed by Sara Socci and Kraig Socci (the “Socci” case) for an incident that occurred on May 9, 2006.¹  The underlying action was tried to conclusion and resulted in a verdict against the defendant Jeffrey Pasiak.   During the course of the underlying Socci action, this declaratory judgment was filed naming as defendants Jeffrey Pasiak, Pasiak Construction Services, LLC, and the Soccis.   Nationwide filed a summary judgment motion seeking a determination that they did not have an obligation to defend in the underlying action.   This court ruled that the plaintiffs had an obligation to defend the action pursuant to the Nationwide policies with the defendants.   During the underlying action, Jeffrey Pasiak was also represented by his private counsel as well as the counsel appointed by the plaintiffs in the defense of the Socci action.²

The plaintiffs filed a second summary judgment motion in this action seeking a judgment that there is no obligation to indemnify.   The court granted the motion in part finding that the plaintiffs were not obligated to indemnify pursuant to the homeowners policy but denied summary judgment as to the obligation to indemnify pursuant to the umbrella policy.

After the verdict in the underlying Socci case, the defendants filed a twelve-count Counterclaim in the instant action alleging various acts of bad faith including insufficient defense in the Socci action as well as insufficient settlement efforts by the plaintiffs.   Additionally, Jeffrey Pasiak appealed the verdict in the Socci case.   This appeal is presently pending and awaiting a decision after argument.

The instant action has been plagued by discovery disputes including the extent of disclosure of communications and documents which were a part of the underlying Socci case.   The basis of many of the objections is the impact that disclosure of this information may have to the Socci case in the event the verdict is overturned by the Appellate Court and returned for trial to this court.   The defendants and the plaintiffs in this action claim that because Sara and Kraig Socci are parties to this action any disclosures are available to them and could be used if there is a reversal and new trial.

DISCUSSION

The plaintiffs seek to bifurcate the trial and discovery in the declaratory judgment claim from the defendant's counterclaims and stay discovery in the counterclaims until such time that the underlying litigation currently on appeal, has been resolved.   The plaintiffs argue that discovery in the counterclaim proceedings should be stayed as discovery may lead to prejudicing the defendants if the underlying case is remanded for new trial.   During the course of this action the plaintiffs have attempted to conduct discovery but they argue that the necessary discovery may have adverse effects upon it and the Pasiak defendants in the event the underlying Socci action is overturned and requires a new trial.   In particular, Nationwide contends that in defending the multiple claims filed by its insured, it is necessary to obtain the information as to documents, instructions or advise from Pasiak's private counsel to address the bad faith claims.   Nationwide contends that it “must obtain discovery concerning the scope of Pasiak's relationship with his counsel and all of his communications with counsel relating to the defense strategy in the Underlying Litigation, including the appeal, and the potential for settlement of that case.”  (Plaintiff's October 28, 2011 Memorandum at 8.) Nationwide has indicated that it must schedule depositions of Pasiak and his independent counsel.   Lastly, the Pasiak defendants may include additional claims of bad faith in the event the plaintiffs through discovery disclose information to the Socci defendants that would prejudice Pasiak if there is a re-trial.

Practice Book § 15–1 provides, in pertinent part:  “In all cases, whether entered upon the docket as jury cases or court cases, the judicial authority may order that one or more of the issues joined be tried before the others.”

Our Supreme Court has stated that “[t]he interests served by bifurcated trials are convenience, negation of prejudice and judicial efficiency ․ The bifurcation of trial proceedings lies solely within the discretion of the trial court.”  (Citation omitted;  internal quotation marks omitted.)  Barry v. Quality Steel Products, Inc., 263 Conn. 424, 449, 820 A.2d 258 (2003).   If the court in its discretion determines that the issues “cannot all be heard conveniently together,” bifurcation is appropriate.  Fowler v. Connecticut Life & Casualty Ins. Co., 2008 WL 4150290 (Conn.Super.CT. Aug. 19, 2008) [46 Conn. L. Rptr. 206].

In the present case, Nationwide's declaratory judgment is seeking to determine whether it has a duty to indemnify Pasiak for the damages assessed against him in the underlying Socci litigation.   Thus, this may be a situation where bifurcation is appropriate because litigation of the declaratory judgment may obviate the need to litigate some, or all, of the counterclaims.   Further, there is an issue of whether the consolidation of the actions in one proceeding would encourage judicial economy more than its bifurcation.   This is so because Pasiak has submitted a claim for a jury trial in determining his counterclaims.   However, a declaratory judgment action does not attempt to determine a verdict in one party's favor;  it seeks only to “declare rights or other legal relations.”  General Statutes § 52–29(a).   Thus, it is generally held that a jury trial is only appropriate in a declaratory judgment action if there are issues of fact to be decided.   See Practice Book § 17–56(a)(6) (providing procedure for declaratory judgments and stating that “[i]ssues of fact necessary to the determination of the cause may be submitted to the jury as in other actions”);  see also Wallingford v. Reliance Ins. Co., Superior Court, judicial district of New Haven, Docket No. 99 0420955 (January 13, 2000, Silbert, J.) (26 Conn. L. Rptr. 270) (no right to jury trial in declaratory judgment action seeking insurer's duty to defend and indemnify because no facts at issue, only interpretation of contract which is a matter of law).³

The issues related to the bifurcation concern not only the distinction of court trial and jury trial but also the impact of the various issues of discovery and evidence that will specifically impact the diverse claims.

Therefore, this court will consider the following in determining whether to grant the bifurcation of the declaratory judgment action and the counterclaims:  1) whether the bifurcation furthers convenience;  2) whether the bifurcation avoids prejudice;  or 3) whether the bifurcation encourages judicial economy by expediting litigation.

The plaintiffs argue that the bifurcation is necessary to accomplish all three of the considerations outlined by the court.   The first area of inquiry is whether the bifurcation furthers convenience.   The declaratory judgment action is not claimed for a jury trial.   The hearing of this action will require only the time of the court and will not involve the parties in a lengthy and sometimes difficult jury selection.   Allowing the declaratory judgment to continue as a court trial will not only reduce the amount of time necessary for the trial of the contractual issues but will enable the trial to continue on multiple dates without the need to consider jury availability.   The witnesses and testimony that will be offered on this issue will likely be limited to enable a trial to proceed expeditiously.⁴

The plaintiffs contend that some prejudice will arise because the indemnification issues are contractual only and thus to allow testimony or evidence in regards to the counterclaim issues that include a bad faith claim will certainly place them in a difficult position.   What may ultimately result in prejudice to the defendant Pasiak and possibly Nationwide if the action is retried and they are parties, is the information concerning communications between counsel and client and between counsel for Pasiak and counsel for Nationwide.   Additionally, documents that are disclosed by Nationwide and others in the bad faith claims may create prejudice if the verdict is overturned and a new trial ordered.   Therefore, there is a sufficient basis to determine possibly prejudice which can be avoided by a bifurcation.   Nationwide also contends that the trial of the declaratory judgment would not involve a lengthy process such as the counterclaims and thus they would be subjected to a rather lengthy time period for trial in contrast to the narrow issues involved in the declaratory judgment.   It is also recognized that the legal issues on the counterclaims are separate and distinct thus the evidence and testimony would not be duplicative if the court bifurcates the declaratory judgment action.   Therefore, a bifurcation would avoid possible prejudice.

Lastly, the trial of the declaratory judgment separate and distinct from the counterclaims will aid in the final resolution of the longstanding issues of coverage.   Such a determination will not only resolve the contractual issues but may impact the remaining claims for an orderly determination of the pending issues.

CONCLUSION

For all of the foregoing reasons, the motion to bifurcate is granted.   The trial of this matter is scheduled to begin on August 28, 2012.

The court will issue a separate memorandum as to the extent and nature of the testimony and evidence that will be permissible in the declaratory judgment trial.

THE COURT

Brazzel–Massaro, J.

FOOTNOTES

FN1. This action was filed by way of a complaint dated March 12, 2008 and is entitled Sara and Kraig Socci v. Jeffrey Pasiak, FST CV 08–5006811S..  FN1. This action was filed by way of a complaint dated March 12, 2008 and is entitled Sara and Kraig Socci v. Jeffrey Pasiak, FST CV 08–5006811S.

FN2. It should be noted that Pasiak's private counsel did not take an active part in the trial proceedings before the court but it is represented that there may have been advise to Pasiak or discussions concerning the trial strategy between counsel for Nationwide and private counsel..  FN2. It should be noted that Pasiak's private counsel did not take an active part in the trial proceedings before the court but it is represented that there may have been advise to Pasiak or discussions concerning the trial strategy between counsel for Nationwide and private counsel.

FN3. The pleadings in the instant action do not contain a claim for jury trial in the declaratory judgment.   Thus, there may be an inherent incongruity in an attempt at consolidating these actions into one trial, especially since the defendant Pasiak requested a jury of six for his counterclaim..  FN3. The pleadings in the instant action do not contain a claim for jury trial in the declaratory judgment.   Thus, there may be an inherent incongruity in an attempt at consolidating these actions into one trial, especially since the defendant Pasiak requested a jury of six for his counterclaim.

FN4. The court will address in a separate memorandum the nature of the trial and any limitation of evidence and testimony..  FN4. The court will address in a separate memorandum the nature of the trial and any limitation of evidence and testimony.

Brazzel–Massaro, Barbara, J.