H.B. Fuller Company v. TSE Industries, Inc.

Background

H.B. Fuller Company sued TSE Industries, Inc., seeking relief on contractual, warranty, tort, and indemnification claims and seeking insurance coverage under liability policies issued to TSE by Hartford Fire Insurance Company and Twin City Fire Insurance Company. H.B. Fuller claimed to be an additional insured under those policies. National Union Fire Insurance Company later intervened and asserted similar claims as H.B. Fuller’s subrogee.

The motion addressed specified coverage claims in H.B. Fuller’s Second Amended Complaint and National Union’s Intervenor Complaint. Hartford Fire Insurance Company and Twin City Fire Insurance Company filed the motion, and TSE joined it. H.B. Fuller opposed the motion, and National Union joined H.B. Fuller’s opposition. The court referred to the two insurance-company movants collectively as “Hartford.”

The Requested Bifurcation and Stay

Hartford relied on Federal Rules of Civil Procedure 21 and 42(b). Rule 21 permits a court to sever a claim against a party, but Hartford offered no argument explaining why Rule 21 applied. Rule 42(b) allows separate trials for convenience, to avoid prejudice, or to promote efficiency. The court explained that the party seeking bifurcation—the separation of issues or claims for separate trials—has a heavy burden.

Hartford argued that TSE first had to be found liable in a separate trial before H.B. Fuller could pursue its coverage claims against Hartford and Twin City Fire. Hartford also argued that bifurcation and a stay were necessary to address potential discovery disputes and concerns about conflicts of interest.

Court’s Analysis

The court was not persuaded that a separate trial to establish liability was necessary before the coverage claims could proceed. It said the need for bifurcation could be considered at the dispositive-motion stage or later. The court found Hartford’s reliance on Engineering & Construction Innovations, Inc. v. L.H. Bolduc Co., Inc. misplaced because, as Hartford acknowledged, the parties in that case had agreed to try liability first.

The court also concluded that the requested bifurcation and stay would not promote convenience or judicial economy. The facts underlying the claims overlapped, discovery was scheduled to continue, and Hartford’s concerns about potential discovery disputes did not establish good cause to pause discovery. The court said it was prepared to resolve any discovery dispute before discovery closed and dispositive motions were filed.

The court further found that Hartford had not shown it would be prejudiced if the motion were denied. It rejected Hartford’s argument that its participation in discovery created the type of conflict of interest discussed in the authorities Hartford cited, noting that TSE and Hartford already had separate counsel and that the conflict scenario described in another case had not developed here.

Disposition

The court held that Hartford had not met its heavy burden to show that bifurcation at the pretrial stage would serve the purposes of the federal rules. It noted that the court could bifurcate the trial later if the claims should not be presented together. The court ordered that the Motion to Stay, including TSE’s joinder, was DENIED.