In Santacroce v. Sametz, a plaintiff brought suit against both the alleged tortfeasor for negligence, and the tortfeasor’s insurer for bad faith in violation of Mass. Gen. Laws chs. 176D and 93A. The insurer, as is often the case, moved to sever and stay the Chapter 176D and 93A claims. This motion was denied by the trial judge, who noted that “privileges [work product and attorney client] can be protected by less drastic methods than severance and staying these claims.” The insurer appealed this ruling to a single justice of the Appeals Court. On appeal, Justice Fecteau of the Appeals Court began by stating that normally, procedural rulings such as these are “committed to the sound discretion of the trial judge,” but nevertheless reversed the trial judge. Justice Fecteau pointed to the dual role the insurer held as both a defendant itself and an insurer of a co-defendant, charged with a duty to defend its insured. This dual role could create prejudice to the insured if the claims against both the insurer and the insured proceeded simultaneously. Specifically, discovery of the insurer’s claims-handling information could conceivably be prejudicial to the interests of the insured. Accordingly, Justice Fecteau ruled that percipient evidence in the insurer’s claims file relevant to the underlying tort action would be discoverable, but discovery of claims-handling information would be subject to a stay until disposition of the underlying action was reached by judgment or settlement.
While decisions by single justices do not carry precedential weight, it is worth noting that Massachusetts judges appear to recognize the importance of severing and staying bad faith claims against insurers by third party plaintiffs when those claims are joined with the negligence claims against insureds. Not only is this approach appropriate because a resolution of the negligence claim in the insured’s favor may moot the bad faith claim against the insurer, it also allows the insurer to focus its attention on the defense of its insured rather than on itself.
The order can be found here.