Noah Tenenbaum v. Allstate Insurance Company

NOT FOR PUBLICATION WITHOUT THE
              APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NOS. A-0742-25
                                              A-0988-25

NOAH TENENBAUM,

     Plaintiff-Respondent,                APPROVED FOR PUBLICATION
                                                  April 29, 2026
v.                                           APPELLATE DIVISION

ALLSTATE INSURANCE
COMPANY,

     Defendant-Appellant.
____________________________

LINDSAY CIRELLI,

     Plaintiff-Respondent,

v.

GOVERNMENT EMPLOYEES
INSURANCE COMPANY,

     Defendant-Appellant.
_____________________________

          Argued March 16, 2026 – Decided April 29, 2026

          Before Judges      Sabatino,   Natali   and    Walcott-
          Henderson.

          On appeal from interlocutory orders of the Superior
          Court of New Jersey, Law Division, Middlesex
          County, Docket Nos. L-2505-25 and L-2601-25.
            John V. Mallon argued the cause for appellant Allstate
            Insurance Company (Chasan Lamparello Mallon &
            Cappuzzo, PC, attorneys; John V. Mallon, of counsel
            and on the brief; Thomas R. Lloyd, on the brief).

            Evan D. Haggerty argued the case for appellant
            Government     Employees      Insurance   Company
            (Goldberg Segalla LLP, attorneys; Thomas M. Wester,
            on the brief).

            David S. Rochman argued the cause for respondent
            Lindsay Cirelli.

      The opinion of the court was delivered by

NATALI, J.A.D.

      In these appeals, before us on leave granted and consolidated for the

purposes of issuing a single opinion, defendants Allstate Insurance Company

(Allstate) and Government Employees Insurance Company (GEICO) challenge

the court's orders that essentially denied their applications to stay discovery

and sever plaintiffs Noah Tenenbaum's and Lindsay Cirelli's 1 common law bad

faith claims under Pickett v. Lloyd's, 131 N.J. 457, 467 (1993), and those

brought under the recently adopted Insurance Fair Conduct Act (IFCA),




1
  At certain points during our opinion, we refer to plaintiffs by their respective
surnames for clarity. We intend no disrespect in doing so.



                                                                           A-0742-25
                                        2
N.J.S.A. 17:29BB-1 to -3, until resolution of all disputes related to their

underinsured motorist (UIM) claims. 2

      Since we granted leave to appeal, the parties in A-742-25 advised us that

they resolved all issues regarding Tenenbaum's right to UIM benefits under his

Allstate policy, leaving only their dispute regarding the viability of

Tenenbaum's common law bad faith claim and his cause of action against

Allstate under the IFCA.        In light of that development, we discern no

justiciable issue remaining regarding the propriety of the court's orders under

review, and the appeal is accordingly dismissed as moot. The challenges to

the court's orders in A-988-25 remain justiciable, however, and after

considering the parties' arguments, and the applicable law, we conclude the

court erroneously exercised its discretion when it denied GEICO's application

2
   A UIM or uninsured motorist (UM) action is "essentially a contract-based
substitute for a tort action against the tortfeasor." Bardis v. First Trenton Ins.
Co., 199 N.J. 265, 279 (2009) (citing Krohn v. N.J. Full Ins. Underwriters
Ass'n, 316 N.J. Super., 477, 483 (App. Div. 1998)) (stressing that UIM cases
are tried in the manner of third-party tort actions). In light of this principle,
our courts have held that the rules governing liability in a UIM or UM case
"should be no different . . . than those that apply in the trial of an ordinary tort
action arising from a motor vehicle accident." Ibid. (citing Stabile v. N.J.
Mfrs. Ins. Co., 263 N.J. Super. 434, 441 (App. Div. 1993)). Further, as we
have observed, "'whether [the tortfeasor's] inadequacy is no insurance at all or
underinsurance has no conceptual consequence' because '[i]n both instances,
the insured victim's recovery is . . . a substitute for that which would have been
derived from a third-party suit but for the inadequacy of the tortfeasor's
insurance.'" Ibid. (alterations in original) (citing Stabile, 263 N.J. Super. at
441 (App. Div. 1993)).


                                                                             A-0742-25
                                         3
to stay prosecution of plaintiff's common law bad faith claim and its IFCA

cause of action until resolution of her UIM matter.

                                       I.

      We derive the relevant facts from the sparse motion record. As best we

can discern, plaintiffs were involved in separate automobile accidents

allegedly caused by the negligence of an underinsured motorist. Tenenbaum

was insured by a standard policy issued by Allstate and Cirelli similarly

insured by GEICO.

      A-742-25

      In A-742-25, plaintiff's two-count complaint neither sought declaratory

nor other relief with respect to Allstate's alleged breach of his contractual UIM

rights but instead solely asserted a common law bad faith claim and a second

cause of action under the IFCA. Both counts stemmed from the same alleged

conduct underlying Allstate's "bad faith" – the denial of his UIM claim –

which plaintiff contended caused significant "financial loss and delays."

      As to his common law bad faith count, plaintiff specifically alleged he

"asserted a claim for UIM benefits pursuant to the policy, which [Allstate]

continuously and wrongfully has denied fair and reasonable compensation."

With respect to his IFCA-based claim, he claimed to have been "unreasonably

denied a claim for coverage or payment of benefits and has and continues to



                                                                            A-0742-25
                                       4
experience an unreasonable delay for coverage or payment of benefits under a

UIM policy issued by [Allstate]," contrary to N.J.S.A. 17:29BB-3(a)(1). He

also contended Allstate "has engaged in and continues to engage in unfair

claims settlement practices by failing to adequately address the severity of [his

injuries]," in violation of N.J.S.A. 17:29BB-3(a)(2).

      After filing an answer and having its motion to change venue denied,

Allstate filed a motion to dismiss plaintiff's claim under Rules 4:6-2(e) and

4:38-2(a) without prejudice, "pending the resolution of his UIM claim,"

consistent with Procopio v. Gov. Employees Ins. Co., 433 N.J. Super. 377

(App. Div. 2013), and Taddei v. State Farm Indem. Co., 401 N.J. Super. 449

(App. Div. 2008). In response, plaintiff conceded his common law bad faith

could be dismissed without prejudice, but opposed dismissal of his IFCA -

based cause of action.

      After considering the parties' written submissions, the court denied

Allstate's motion and explained its decision in a written statement of reasons.

The court dismissed plaintiff's common law bad faith claim based on consent,

but denied Allstate's motion to dismiss the IFCA claim because the Legislature

created a "wholly distinct cause of action," when it passed the IFCA which

required different proofs from those "needed to resolve the underlying

[UM/UIM] claim."



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                                       5
      The court noted "nothing in the [IFCA] . . . indicates that this stand[ -

]alone cause of action must or should be severed or delayed pending the

outcome of the underlying litigation." It further acknowledged resolution of

the underlying claim would be "a relevant piece of the puzzle," but "other

pieces of the puzzle . . . could ultimately lead to a successful IFCA claim" that

warranted litigating both claims at the same time.

      The court also relied on the language of the statute and its purpose. It

noted an IFCA claim is established "when a [p]laintiff demonstrates 'an

unreasonable delay or unreasonable denial of a claim for payment of benefits

under an insurance policy,'" (quoting N.J.S.A. 17:29BB-3), and thus, the "very

purpose of the IFCA was not to delay the inquiry into whether the [insurance]

company has or is unreasonably delaying or denying the claim." The court

found that causing further delay by severing and staying the claim, as the

common law dictates for bad faith claims, would be "nonsensical and

counterintuitive" under the circumstances.

      The court noted that it "ma[de] no determination on whether an IFCA

claim would be presented to the same trier of fact at the same time as an

underlying UM/UIM claim." It explained that decision would be left to trial

judges but "envision[ed] . . . that the same trier of fact could separately

determine the UM/UIM case and then consider the IFCA claim much like the



                                                                          A-0742-25
                                       6
mechanics of a bifurcated punitive damages trial under [N.J.S.A.] 2A:15 -

5.13." The court was also convinced principles of judicial economy supported

its conclusion "by having the entire matter (UM/UIM claim plus IFCA claim)

'teed up' for one fact finder albeit in a separate presentation."

      With respect to our precedent supporting the severance and stay of

common law bad faith claims, the court explained that while those cases were

"instructive, [they are] not on point for this wholly new statutory cause of

action which the Legislat[ure] intended to be distinct." As noted, after we

granted leave to appeal, the parties informed us that they had resolved their

disputes regarding the underlying UIM claim.

      In light of the subsequent resolution of his UIM claim, Tenenbaum filed

a letter of non-participation and expressed his intent not to file a merits brief.

He further stated that, to the extent Allstate continued to challenge the court's

ruling, he relied upon "the decision of the trial court, notwithstanding we are

of the belief that the issue is moot."

      For its part, Allstate contends the court erred in permitting plaintiff to

prosecute and pursue discovery on their IFCA-based claims while the

underlying UIM claim was then unresolved and further asserts the IFCA

merely adopted the common law approach to bad faith claims for failure to




                                                                           A-0742-25
                                         7
promptly pay an insurance claim, and like those common law claims IFCA

claims and any attendant discovery should abide resolution of the UIM claim.

      Allstate further maintains that despite the resolution of the UIM claim,

the appeal is not moot because the "interests of justice" require us to determine

the applicability of the IFCA to claimants in plaintiff's position.       (citing

Brundage v. Estate of Carambio, 195 N.J. 575, 599 (2008)). Specifically, it

asserts the court's decision forces Allstate to participate in "bad -faith

discovery," and will accordingly result in "irreparable harm and prejudice."

Further, Allstate asserts "trial courts require guidance on this issue" because

"hundreds of claimants" have amended or filed new complaints to assert

violations of the IFCA.

      We reject Allstate's argument that its appeal remains justiciable.

"Mootness is a threshold justiciability determination . . . ."    Betancourt v.

Trinitas Hosp., 415 N.J. Super. 301, 311 (App. Div. 2010). Generally, our

courts "do not resolve issues that have become moot due to the passage of time

or intervening events."   Wisniewski v. Murphy, 454 N.J. Super. 508, 518

(App. Div. 2018) (quoting State v. Davila, 443 N.J. Super. 577, 584 (App. Div.

2016)).   "An issue is 'moot when our decision sought in a matter, when

rendered, can have no practical effect on the existing controversy.'" Redd v.

Bowman, 223 N.J. 87, 104 (2015) (quoting Deutsche Bank Nat'l Tr. Co. v.



                                                                          A-0742-25
                                       8
Mitchell, 422 N.J. Super. 214, 221-22 (App. Div. 2011)). Stated differently, a

"case is moot if the disputed issue has been resolved, at least with respect to

the parties who instituted the litigation," and "a judgment cannot grant

effective relief, or there is no concrete adversity of interest between the

parties." Caput Mortuum, L.L.C. v. S & S Crown Servs., Ltd., 366 N.J. Super.

323, 330 (App. Div. 2004) (citations omitted).

         Applying these well-settled principles, we conclude the issues raised in

Allstate's appeal are moot. As noted, plaintiff never sought declaratory relief

with respect to Allstate's failure to provide him with UIM benefits, instead

limiting the relief requested to violations of the IFCA and common law bad

faith.     Once the parties resolved the underlying UIM dispute, the only

remaining issues were plaintiff's common law bad faith claim and his IFCA

claim.

         As such, there remains no outstanding dispute or controversy between

Allstate and plaintiff regarding the propriety of discovery and no case to sever

or hold in abeyance. Thus, nothing in our decision would have any effect on

the litigation. Under these circumstances, we decline to issue an advisory

opinion regarding a dispute that no longer exists.        See G.H. v. Twp. of

Galloway, 199 N.J. 135, 136 (2009) (citing Crescent Park Tenants Ass'n v.

Realty Eq. Corp. of N.Y., 58 N.J. 98, 107 (1971)).



                                                                          A-0742-25
                                         9
      Although we may consider an issue notwithstanding its mootness if it

"presents a question that is both important to the public and likely to recur,"

Clymer v. Summit Bancorp., 171 N.J. 57, 65-66 (2002), neither circumstance

is present here. We are satisfied Allstate's arguments on appeal are not of

"great public importance," and to the extent its concerns are likely to recur, we

address them below in the context of A-988-25.

      A-988-25

      We initially note that in A-988-25, plaintiff Cirelli's complaint is distinct

from Tanenbaum's in that she sought affirmative declaratory relief to address

GEICO's failure to provide her with UIM benefits. She also contended that

GEICO committed common law bad faith when it improperly "failed to adjust

[her] claims in good faith" and "failed to provide an adequate basis" for

denying her "demands for compensation of her personal injuries and UIM

benefits." As to her IFCA claim, she alleged GEICO failed to provide any

offer or settlement and accordingly requested GEICO acknowledge,

investigate, and attempt to amicably resolve the UIM claim in a fair and

reasonable fashion.

      GEICO denied all of plaintiff's allegations and asserted numerous

affirmative defenses including causation, notice, statute of limitations, and

those under the New Jersey Automobile Reparation Reform Act, N.J.S.A.



                                                                            A-0742-25
                                        10
39:6A-1. It thereafter filed an application to sever plaintiff's common law bad

faith claim and statutory IFCA cause of action and stay discovery until

resolution of her UIM claim. The court initially granted GEICO's application

and memorialized its decision in a July 18, 2025 order.

      GEICO then moved to extend discovery, and plaintiff filed a cross-

motion for reconsideration of the July 18th order.           Plaintiff asserted

reconsideration was appropriate because the court failed to consider the

significance of the enactment of the IFCA, which created a new statutory cause

of action to address an insurer's alleged intransigence when adjusting first -

party claims.

      GEICO opposed plaintiff's application and maintained that accepting her

position would effectively circumvent the holdings in, among other cases,

Procopio, and Taddei.    After considering the parties' submissions and oral

arguments, the court entered an August 29th order that granted plaintiff's

application thereby vacating its earlier order and permitting prosecution of

plaintiff's common law and IFCA claims as well as allowing discovery of

those claims, coextensive with her UIM claim.

      The court issued both an oral decision and written statement of reasons

explaining its decision. In its written decision, the court stated it would not

"limit plaintiff's pursuit of the IFCA-based claims" and permitted discovery on



                                                                        A-0742-25
                                      11
"any issue relevant to plaintiff's entire complaint." In both decisions, the court

noted it "relied . . . on the punitive damages [statute] as an example" which

"bifurcate[s] trial[s] at the defendant's request," and where the same jury

decides both underlying liability and the punitive damages issue. It further

explained in a bifurcated punitive damage trial "all of the discovery has been

accomplished such that the same trier of fact is able to hear the separate

claim." The court noted, however, that it was not "making any determination

concerning whether the IFCA claims will be heard by a trier of fact at the same

time as the rest of the [p]laintiff's case in chief."

      After the court's decision, plaintiff served three deposition notices upon

GEICO.     Two ostensibly were directed to the individuals responsible for

handling plaintiff's claim and requested the witnesses produce documents

related to plaintiff's common law and statutory bad faith claims. Indeed, the

notices demanded the deponents produce at the time of the deposition a

complete copy of GEICO's claim file and GEICO's "Reserves/Profit Loss

Ratios as to how long a case is held versus payment of the value associated

therewith." Plaintiff also served a deposition notice for the deposition of Todd

Combs, the Chief Executive Office of GEICO.

      In response, GEICO's counsel objected to the deposition notices and

informed plaintiff's counsel that it intended to seek reconsideration of the



                                                                           A-0742-25
                                          12
court's August 29th order. Counsel stated, however, that GEICO would be

"happy to produce a witness with relevant knowledge of the subject claim to

provide testimony relative to the merits of your client's UIM claim . . . but

would not be producing any witnesses to provide testimony relative to the bad

faith allegations," which he maintained should be severed and stayed

consistent with controlling New Jersey precedent.

      Consistent with its representation to counsel, GEICO requested the court

reconsider its August 29th order. The court denied GEICO's motion in an

October 10th order and explained its decision in an oral decision.

      As noted, we granted GEICO's motion for leave to appeal.         GEICO

subsequently requested we stay any bad faith discovery.         We granted its

application and stayed discovery solely with respect to GEICO's bad faith

claims and expressly permitted discovery to proceed on plaintiff's UIM claim.

      Before us, GEICO reprises the arguments it unsuccessfully asserted

before the trial court, maintaining the court erred in granting plaintiff's

application for reconsideration and thereby permitting her to prosecute and

pursue discovery on her common law bad faith and IFCA-based claims while

the underlying UIM claim remained unresolved.           It contends permitting

discovery on the common law claims is contrary to the holding in Procopio,

and further asserts the IFCA merely adopted the common law approach to bad



                                                                        A-0742-25
                                      13
faith claims for failure to promptly pay an insurance claim and thus like those

common law claims the IFCA claim should be severed and stayed, pending the

outcome of the underlying UM/UIM action.

                                       II.

      We begin with a discussion of the relevant standard of review. We

acknowledge that a trial court "has broad case management discretion." Lech

v. State Farm Ins. Co., 335 N.J. Super. 254, 260 (App. Div. 2000). To that

end, Rule 4:38-2(a) instructs that "[t]he court, for the convenience of the

parties or to avoid prejudice, may order a separate trial of any claim, cross -

claim, counterclaim, third-party claim, or separate issue, or of any number of

claims, cross-claims, counterclaims, third-party claims, or issues."

      The authority to sever claims "rests in the trial court's discretion."

Procopio, 433 N.J. Super. at 380 (App. Div. 2013) (citing Tobia v. Cooper

Hosp. Univ. Med. Ctr., 136 N.J. 335, 345 (1994)). The authority to stay a

proceeding is "also within the sound discretion of the trial court." Ibid. (citing

State v. Kobrin Sec., 221 N.J. Super. 169, 174 (App. Div. 1987), rev'd, 111

N.J. 307 (1988)). Our court has noted the power to stay proceedings and sever

claims "is incidental to the power inherent in every court to control the

disposition of the causes on its docket with economy of time and effort for




                                                                           A-0742-25
                                       14
itself, for counsel, and for litigants." Ibid. (quoting Landis v. N. Am. Co., 299

U.S. 248, 254-55 (1936)).

      Further, we apply "'an abuse of discretion standard to decisions made by

[the] trial courts relating to matters of discovery.'"   C.A. by Applegrad v.

Bentolila, 219 N.J. 449, 459 (2014) (alteration in original) (quoting Pomerantz

Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371 (2011)). We "'generally

defer to a trial court's disposition of discovery matters unless the court has

abused its discretion[,] or its determination is based on a mistaken

understanding of the applicable law.'" Ibid. (quoting Pomerantz Paper Corp.,

207 N.J. at 371).     Finally, "the decision to grant or deny a motion for

reconsideration rests within the sound discretion of the trial court."     Pitney

Bowes Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378, 382 (App.

Div. 2015). Accordingly, we will not disturb a trial court's decision on a

motion for reconsideration unless there is a clear abuse of discretion. Ibid.

      We first discuss the principles underlying bad faith claims in the first -

party context as discussed in Pickett, and then the progeny of cases that

establish the common law approach to staying those claims and suspending

discovery while an underlying UIM/UM claim is pending.

      Pursuant to New Jersey law, the duty to act in good faith is "an implied

term of every contract," including insurance policies. Pickett, 131 N.J. at 467.



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                                       15
"The good faith obligations of an insurer to its insured run deeper than those in

a typical commercial contract." Badiali v. New Jersey Mfrs. Ins. Grp., 220

N.J. 544, 554 (2015). The scope of an insurer's duty, however, "is not to be

equated with simple negligence." Pickett, 131 N.J. at 481.

      "If there is a valid question of coverage, i.e., the claim is 'fairly

debatable,' the insurer bears no liability for bad faith."    Wacker-Ciocco v.

Gov't Emps. Ins. Co., 439 N.J. Super. 603, 611 (App. Div. 2015) (citing

Pickett, 131 N.J. at 473-74). "This standard continues to apply to bad faith

claims." Ibid. (citing Badiali, 220 N.J. at 544). We further note an insurer

may make a mistake in its decision without necessarily acting in bad faith. Id.

at 613 (citing Universal-Rundle Corp. v. Com. Union Ins. Co., 319 N.J. Super.

223, 249 (App. Div. 1999)).

      In Taddei, in which the primary issue before the court was whether an

insured was entitled to the full amount of damages based upon a jury award or

the policy limits on the claimant's UM coverage, we nevertheless discussed the

recommended procedure to address coextensive claims of bad faith and

coverage disputes. 401 N.J. Super. at 455. As we explained:

            To respect the rights of all parties, the underlying
            claim could be severed from the bad faith claim, with
            the latter being held in abeyance until conclusion of
            the former. The severed bad faith claim would then be
            activated, triggering the possibility for the right to
            discovery, motions, and, if necessary, a separate trial.

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                                       16
               In this way, the plaintiff's ability to pursue a potential
               bad faith claim would be preserved, but the insurer
               would not be required to produce its claim file
               prematurely, otherwise, privileged material may be
               disclosed which would jeopardize the insurance
               company's defense.

               [Id. at 456-66 (internal citations omitted).]

         In Procopio, we considered a matter involving UIM and common law

bad faith claims and addressed the propriety of severing and staying the bad

faith component of the litigation as suggested in Taddei. 433 N.J. Super. at

378.      We concluded the court's order that bifurcated trials but allowed

simultaneous discovery on the UIM and common law bad faith claims was "an

erroneous exercise of discretion." Id. at 384. We held the more appropriate

approach would be to sever and stay discovery with respect to both claims so

as to:

               promote[] judicial economy and efficiency by holding
               in abeyance expensive, time-consuming, and
               potentially wasteful discovery on a bad faith claim
               that may be rendered moot by a favorable ruling for
               the insurer in the UM or UIM litigation. [Moreover,]
               [t]his procedure also avoids the premature disclosure
               of arguably privileged materials to the prejudice of the
               insurer's defense while, at the same time, preserving
               the insured's pursuit of its bad faith claim.

               [Id. at 381.]

         We also explained in Procopio that "[p]reserving the insured's ability to

pursue his or her bad faith claim while deferring discovery thereon until

                                                                            A-0742-25
                                          17
resolution of the [underlying] claim best accommodates the varying interests

involved." Id. at 383. We concluded bifurcation discouraged abusive pleading

practices because:

            [I]f an insured attempting to prove the validity of his
            or her claim against an insurer could obtain the
            insurer's investigative files—showing exactly how the
            company processed the claim, how thoroughly it was
            considered and why the company took the action it
            did—merely by alleging the insurer acted in bad faith,
            then there would be an open invitation to all plaintiffs
            to include such allegations with every breach of
            contract claim.

            [Procopio, 433 N.J. Super. at 383.]

In light of these concerns, we decided the benefits of simultaneous discovery

were "substantially outweighed by the burdens exacted both institutionally and

individually." Id. at 383-84.

      Finally, in Wacker-Ciocco, the trial court, as in this case, denied

GEICO's application to sever plaintiff's bad faith claim from the merits of the

UIM case. 439 N.J. Super. at 605. It distinguished Procopio because GEICO

produced some discovery regarding plaintiff's bad faith claim prior to filing its

severance application. Ibid. We reversed, applied the principles in Procopio,

and concluded the trial court misapplied its discretion in denying the severance

motion and requiring discovery of both the bad faith and UIM causes of action

despite the partial production of bad faith discovery:



                                                                          A-0742-25
                                       18
            [T]he denial of GEICO's motion to sever and stay and
            the orders compelling discovery pertaining to the bad
            faith claim were based upon a mistaken understanding
            of the applicable law. . . . In Procopio, we clearly
            endorsed the principle that proof an insured is entitled
            to coverage as a matter of law is a necessary pre-
            requisite to pursuing discovery regarding a bad faith
            claim.

            [Id. at 613-14.]

In light of the principles established in Procopio, Taddei, and Wacker-Ciocco,

New Jersey courts, as a matter of common practice, regularly sever first-party

breach of insurance contract claims from bad faith claims, stay discovery of

the bad faith claim, and proceed with resolution of the contract-based claims

before addressing the merits of any bad faith claim.

      Against this background, in February 2020, Senate Bill No. 1559,

entitled "New Jersey Insurance Fair Conduct," was first introduced "to

establish a private cause of action for first-party claimants regarding certain

unfair or unreasonable practices by their insurer."           S. 1559 (2020).

Specifically, and relevant to the case before us, the bill, as provided in its

sponsor's statement, was intended to establish that "a claimant may file a civil

action . . . against its automobile insurer for . . . an unreasonable delay or

unreasonable denial of a claim for payment of benefits under an insurance

policy . . . ." Ibid. We note at no point during the drafting process was




                                                                         A-0742-25
                                      19
"unreasonable delay or unreasonable denial of a claim" defined. See S. 1559

(2021) (third reprint).

      After three subsequent reprints and adoption by the Legislature,

Governor Philip D. Murphy signed into law the IFCA, effective January 18,

2022. As noted, the IFCA provides a private cause of action for first-party

claimants3 to sue their insurance companies if the insurer unreasonably denies

or delays legitimate claims in uninsured and underinsured motorist cases.

Specifically, N.J.S.A. 17:29BB-3(a) provides that "in addition to the

enforcement authority provided to the Commissioner of Banking and Insurance

. . . or any other law":

             [A] claimant, who is unreasonably denied a claim for
             coverage or payment of benefits, or who experiences
             an unreasonable delay for coverage or payment of
             benefits, under an uninsured or underinsured motorist
             policy by an insurer may . . . file a civil action in a
             court of competent jurisdiction against its automobile
             insurer for:

                    (1) an unreasonable delay or unreasonable
                    denial of a claim for payment of benefits
                    under an insurance policy; or


3
   The IFCA defines a "first-party claimant" or "claimant" as "an individual
injured in a motor vehicle accident and entitled to the uninsured or
underinsured motorist coverage of an insurance policy asserting an entitlement
to benefits owed directly to or on behalf of an insured under that insurance
policy." N.J.S.A. 17:29BB-2.



                                                                       A-0742-25
                                       20
                  (2) any violation of the provisions of
                  [N.J.S.A. 17:29B-4].4

            [(Emphasis added).]

      The consequences for a breach of an insurer's duties under the IFCA are

significant. Indeed, a prevailing claimant is entitled to actual damages up to

three times the coverage amount, pre- and post-judgment interest, attorneys'

fees, and litigation expenses. N.J.S.A. 17:29BB-3(d).

      We first reject GEICO's unsupported assertions that the IFCA is merely

a statutory restatement of Pickett as unmoored from the express language of

the IFCA.    See Jeffrey W. Stempel, The 2022 New Jersey Insurance Fair

Conduct Act and the Incomplete Evolution of Policyholder Protection, 75

Rutgers L. Rev. 185, 239 (2022) ("Although one can argue that the IFCA

displaces common law bad faith, it is a weak argument. . . . [N]othing in the

language of the IFCA suggests that it was intended to abrogate common law

bad faith actions."). Indeed, in addition to an unreasonable delay or denial of a

claim, the IFCA incorporates violations of the UCSPA to support a cause of

action and does not expressly incorporate Pickett's "fairly debatable" standard,

4
   N.J.S.A. 17:29B-4 is a section of New Jersey's Unfair Claims Settlement
Practices Act (UCSPA), N.J.S.A. 17:29B-1 to -19, which prohibits "unfair
method[s] of competition or [ ] unfair or deceptive act[s] or practice[s] in the
business of insurance." N.J.S.A. 17:29B-3. N.J.S.A. 17:29B-4 defines and
enumerates those prohibited "unfair methods of competition and unfair or
deceptive acts or practices."


                                                                          A-0742-25
                                       21
which the Legislature was clearly aware of when it passed the IFCA. N.J.S.A.

17:29BB-3(a); Comm. of Petitioners for Repeal of Ordinance No. 522 (2013)

of Borough of W. Wildwood v. Frederick, 435 N.J. Super. 552, 567 (App. Div.

2014) (quoting David v. Gov't Emps. Ins. Co., 360 N.J. Super. 127, 143 (App.

Div. 2003) ("It is firmly established that '[t]he Legislature is presumed to know

the law.'")). Here, it expressly states it is "in addition to" any "other law."

N.J.S.A. 17:29BB-3(a); DiProspero v. Penn, 183 N.J. 477, 492 (2005)

(alteration in original) (quoting O'Connell v. State, 171 N.J. 484, 488 (2002))

("It is not the function of this Court to 'rewrite a plainly-written enactment of

the Legislature []or presume that the Legislature intended something other than

that expressed by way of the plain language.'"). Further, the IFCA creates

unique damages to those afforded under a Pickett claim, such as a successful

claimant's right to attorney's fees and additional damages capped at three times

the coverage limits. N.J.S.A. 17:29BB-3(d).

      For certain, circumstances will undoubtedly exist where the facts of a

Pickett-based bad faith claim and an IFCA claim overlap. Other disputes,

however, may involve an insured's assertions that its insurer's unreasonable

delays, or violations of the UCSPA, apart from any improper coverage denial,

are the animating acts that caused the damages contemplated by the IFCA.




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                                       22
      Despite our acknowledgment that Pickett-based common law bad faith

claims and IFCA claims can support separate and distinct causes of action with

additional remedies, we nevertheless disagree with plaintiff that the new

statutory claim automatically trumps the considered and principled reasons

supporting a stay of discovery and severance in this case for the reasons

detailed in Procopio, Taddei, and Wacker-Ciocco. We reach this conclusion

for the following reasons.

      Neither plaintiff, nor the trial court, addressed the practical issues

attendant to a lawsuit, like plaintiff's, that includes a UIM dispute and both a

common law and statutory claim. Certainly, the existence of the statutory

claim does not displace the necessary analysis supporting a severance and stay

determination. Under plaintiff's and the court's reasoning, the Pickett-based

claims pled in plaintiff's complaint, and any attendant discovery would

proceed simply because an IFCA claim has also been asserted. We reject such

a categorical conclusion as it fails to address notions of judicial economy,

efficiency, and prejudice underlying such highly fact-sensitive discretionary

decisions, and permits a common law bad faith claim to proceed without first

establishing an insured is entitled to coverage, contrary to New Jersey law.

See Taddei, 401 N.J. Super. at 466; Procopio, 433 N.J. Super. at 381; Wacker-

Ciocco, 439 N.J. Super. at 611.



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                                      23
      In this case, we are convinced that similar to a common law bad faith

claim, severing and staying discovery in an IFCA claim until the underlying

UIM claim is resolved generally promotes judicial economy and efficiency by

holding in abeyance "expensive, time-consuming, and potentially wasteful

discovery that may be rendered moot by a favorable ruling for the insurer in

the UM or UIM litigation." Procopio, 433 N.J. Super. at 381. That point is

not a hypothetical concern, and we need only examine the discovery plaintiff

elected to propound upon GEICO, before it even established she had a right to

coverage under the policy, to illustrate the Procopio court's concerns.

      Plaintiff not only served deposition notices on two separate claims

handlers to address bad faith issues, but determined it appropriate to summon

the Chief Executive Officer of a large, multi-state insurer for a deposition. In

addition, plaintiff requested production not only of the claims files to address

the UIM coverage matters (to which GEICO's counsel did not object), but also

GEICO's reserves and "profit/loss ratios" regarding "how long a case is held

versus payment of the value associated therewith."

      Those discovery demands alone will undoubtedly cause the court and the

parties to expend significant time and resources to address the near certain

motion practice associated with those requests. See HD Supply Waterworks

Group, Inv. v. Director, Div. of Taxation, 29 N.J. Tax 573, 586-88 (2017)



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                                       24
(granting a protective order for an "apex deposition" of a senior executive in a

publicly-traded corporation because such discovery presents a "tremendous

potential for abuse or harassment" and movant had not demonstrated "whether

the deponent has distinct, personal, and non-repetitive knowledge of the facts

at issue and whether less intrusive discovery methods [were not] available.").

Discovery regarding reserves will likely involve additional motion practice.

See, e.g., Rhone–Poulenc Rorer, Inc. v. Home Indem. Co., 139 F.R.D. 609,

610-11 (E.D.Pa. 1991) (denying a request for an insurer's reserve information

after concluding the evidence was of "very tenuous relevance, if any relevance

at all" to the dispute and "constitut[ed] work-product material"); see also

Leksi, Inc. v. Fed. Ins. Co., 129 F.R.D. 99, 101-02 (D.N.J. 1989).         This

approach also preserves a plaintiff's ability to pursue a potential IFCA claim

without requiring an insurer to prematurely produce otherwise "privileged

material." Taddei, 401 N.J. Super. at 466 (quoting Bartlett v. John Hancock

Mut. Life Ins. Co., 538 A.2d 997, 1001 (R.I. 1988)); see also Rhone–Poulenc

Rorer, Inc., 139 F.R.D. at 610-11.

      We readily acknowledge that in this case, in the event plaintiff 's UIM

case remains unresolved, and she proceeds with both her common law and

statutory bad faith claims, additional time and resources will be expended after

the UIM claim is resolved. Further, motion practice may ensue and another



                                                                         A-0742-25
                                      25
jury necessarily empaneled. But we do not discern, based on our experience,

that those events would take much time or effort (a second jury may be

empaneled in hours, not days), when compared to the distraction and time

attendant to proceeding with issues unrelated to the UIM coverage, and which

our courts recognize would serve as an impediment to an efficient resolution of

a litigant's primary right to insurance benefits, if appropriate, including

necessary medical payments. Wacker-Ciocco, 439 N.J. Super. at 606.

      Again, the present record proves the point: why should a trial court

wrestle with a likely protective order application regarding the deposition of a

high level insurance executive, address the relevancy and related issues

regarding production of profit and loss information, and consider potential

privilege issues when all of those concerns may, in certain circumstances,

evaporate once the UIM issues are resolved which, in our experience,

represents the vast majority of cases? To put the question is to answer it.

      Nor do we ignore the possibility, as plaintiff's counsel suggested at oral

argument, that plaintiff need not establish coverage to proceed with an IFCA

claim. But that possibility too presumptively supports a stay in this case until

the landscape of the underlying dispute is addressed. There is no question that

even in an IFCA claim, an insurer will be able to defend its actions as

"reasonable." For example, an IFCA claim in which an insurer never receives



                                                                          A-0742-25
                                       26
notice of a claim before a lawsuit is filed, promptly acknowledges receipt of a

claim, conducts an investigation, and successfully defends an underlying claim

on causation or other grounds, certainly is in a fundamentally different

circumstance than an insurer who acts contrary to those facts. We are further

convinced the significant remedies available to successful litigants under the

IFCA will generally incentivize insurers to process UM/UIM claims in a

timely manner regardless of whether a stay is entered.

       We are also unpersuaded that the Punitive Damages Act, N.J.S.A.

2A:15-5.9 to -17 supports the trial court's remedy. As noted by the Wacker-

Ciocco court, unlike that statute, the IFCA contains no statutory mandate for

the bifurcation of the substantive and bad faith claims. 439 N.J. Super. at 612

n.8.

       A few final, but significant comments. A court's grant of a severance

and stay is a highly discretionary decision "limited only by special equities

showing abuse of discretion in that injustice would be perpetrated on the one

seeking the stay, and no hardship, prejudice or inconvenience would result to

the one against whom it is sought." Gosschalk v. Gosschalk, 48 N.J. Super.

566, 579 (App. Div. 1958) (citation omitted). We have detailed the reasons

why, in this case, we concluded the court misapplied its discretion. Of course,

a different case could support a different result. Some UM/UIM cases are



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                                      27
complicated, involving disputed medical and liability issues requiring a fact

finder to resolve, for example, permanency and causation questions. Other

cases are substantially less complex and support expedited proceedings.

      Additional considerations may include whether a common law and IFCA

claim are pled together, or if an IFCA claim is pled alone, the complexity of

any coverage related issues, and the discovery requested by plaintiff in support

of its bad faith claim, by way of example only. We do not address those

circumstances directly because they are not before us.         Rather, we simply

conclude on these facts, where plaintiff has pled a Pickett-based claim as well

as an IFCA claim, and propounded discovery near certain to lead to discovery

disputes, in what appears to be a disputed UIM claim, the better course was to

abide the resolution of the UIM case. The trial court misapplied its discretion

in denying a stay in this case.

      To the extent we have not specifically addressed any of the parties'

arguments, it is because we have considered them and concluded they do not

warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Appeal no. A-742-25 is dismissed as moot. The challenged orders in

appeal no. A-988-25 are reversed and the matter remanded for proceedings

consistent with this opinion. We do not retain jurisdiction.




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