Since Havel, Is Bifurcation Mandated in Ohio Bad Faith Cases?

Ohio Bad Faith

According to Havel v. Villa St. Joseph, 131 Ohio St.3d 235, 2012-Ohio-552, bifurcation of the presentation of evidence supporting compensatory damages from that supporting punitive damages is mandated in tort actions.  However, in breach of contract and bad faith hybrid actions, Havel is not controlling.

In a Stewart v. Siciliano, 2012-Ohio-6123, which involved a breach of contract/bad faith hybrid action construing Havel, the court held that R.C. 2315.21(B)(1) does not require bifurcation of a breach of contract claim and bad faith claim.

R.C. 2315.21(B)(1), effective April 7, 2005, requires a trial court to bifurcate the compensatory and punitive damages phases of “a tort action.”  It states: In a tort action that is tried to a jury and in which a plaintiff makes a claim for compensatory damages and a claim for punitive or exemplary damages, upon the motion of any party, the trial of the tort action shall be bifurcated.

In accordance with Havel, therefore, bifurcation of the presentation of evidence supporting compensatory damages from that supporting punitive damages is mandated.  However, the analysis does not end here.  R.C. 2315.21(B)(1) is premised on a “tort action.” Havel presents a typical factual scenario for the application of the statute.  There, the plaintiff sued a hospital for medical malpractice, wrongful death, and violation of Ohio’s Nursing Home Bill of Rights, seeking compensatory and punitive damages.  A different analysis occurs for a hybrid breach of contract/bad faith claim.

R.C. 2315.21(A)(1) defines “tort action” as “a civil action for damages for injury or loss to person or property * * * but does not include a civil action for damages for a breach of contract or another agreement between persons.”  A bad faith claim, although a tort claim, “arises as a consequence of a breach of a duty established by a particular contractual relationship.” Motorist Mut. Ins. Co. v. Said, 63 Ohio St.3d 690, 694 (1992). Therefore, a bad faith claim can be construed to be outside the contemplation of the R.C. 2315.21(B)(1), and bifurcation is not necessarily mandated.

An additional case to look at is Maxey v. State Farm Fire & Cas. Co., 569 F.Supp.2d 720, 724 (S.D. Ohio 2008).  In Maxey, the plaintiff’s home was destroyed in a fire, but the insurance company denied the claim.  The plaintiff sued the insurance company for breach of contract and bad faith, seeking compensatory damages for breach of contract and punitive damages for the bad faith claim.  The insurance company moved the court to bifurcate the bad faith claim and the breach of contract claim.  It also sought bifurcation of claims for compensatory damages and for punitive damages, citing R.C. 2315.21(B).  Exercising its discretion in bifurcation, the district court denied the request to bifurcate the bad faith claim from the breach of contract claim, on the ground that the potential prejudice to the plaintiff and judicial economy outweighed possible prejudice to the insurance company.

The mere fact that the two claims will be tried together is insufficient to find that jury confusion would result, and the interest of judicial economy weighs against bifurcation of the two claims.  See Stewart v. Siciliano, 2012-Ohio-6123.

Consequently, bifurcation is not always mandated in bad faith actions in Ohio.