IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

DONJA SEAWELL, on behalf of herself 

and all others similarly situated, 

Plaintiff(s) 

vs. 

UNIVERSAL FIDELITY CORPORATION, 

Defendant(s) 

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Civil Action 

No. 05-CV-479 

MEMORANDUM IN SUPPORT OF 

DEFENDANT’S MOTION TO 

BIFURCATE TRIAL AS TO LIABILITY AND DAMAGES 

I. INTRODUCTION 

Defendant, Universal Fidelity Corporation submits this Memorandum in 

support of its motion to bifurcate the trial into two (2) stages: a first stage dealing with 

liability (whether Defendant’s letterhead was deceptive or misleading), and a second 

stage, if necessary, dealing with damages. 

II. BACKGROUND. 

Plaintiff commenced this class action on February 2, 2005, alleging that 

Universal Fidelity Corporation violated the Fair Debt Collection Practices Act, 15 

U.S.C. §1692, et seq. (“FDCPA”) Plaintiff contends that on or about September 24, 

2004, Universal Fidelity Corporation wrote and sent to Plaintiff by United States Mail a 

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collection or “dunning” letter which attempted to coerce Plaintiff into paying a debt. 

The basis of Plaintiff’s claim is that the letter was on letterhead that contained the

language “Administrative Office – Record of Notification,” and also depicted an 

American Flag in the left-hand corner of the letterhead. Plaintiff alleges that the use of

this letterhead was a violation of the FDCPA, because it supposedly misled Plaintiff 

into believing that the United States Government approved the letter. 

Under the FDCPA, the damages available in a class action case are limited to

$500,000 or 1% of the net worth of the debt collector, whichever amount is less. 15 

U.S.C. section 1692k (a)(2)(B). The Defendant’s net worth is nowhere near 50 million

dollars, so the true net worth of the Defendant is an issue in the case. Although the

Defendant produced 2005 financial statements and its Chief Financial Officer, Ken 

Sebek, was deposed on the issue, there remains a dispute as to how to calculate the

Defendant’s net worth and how the financial statements should be considered. The

Plaintiffs have retained an expert, Frederick Cantz, to testify as to his opinions on the 

net worth of the Defendant. (Mr. Cantz is the subject of a separate motion in limine 

filed by the Defendant). 

The issue of the Defendant’s net worth only becomes an issue if the jury finds

that the letter in question constitutes a violation of the FDCPA. For the reasons set

forth below, Defendant moves to bifurcate the issues of liability and damages. 

III. DISCUSSION. 

Rule 42(b) of the Federal Rules of Civil Procedure provide that a “Court, in

furtherance of convenience or to avoid prejudice, or when separate trial will be 

conducive to expedition and economy, may order a separate trial of any claim ... or of

any separate issue or of any number of claims ... or issues.” Fed. R. Civ. P. 42(b). As 

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part of its wide discretion in trial management, this Court has the broad discretion to

bifurcate the liability and damages stages of the present case. The decision to 

bifurcate is completely within the discretion of the Trial Court. Lowe v. Philadelphia

Newspapers, Inc., 594 F.Supp. 123, 125 (E.D.Pa. 1984). “The decision to bifurcate vel 

non is a matter to be decided on a case-by-case basis and must be subject to an

informed discretion by the trial Judge in each instance.” Lis v. Robert Packer

Hospital, 579 F.2nd 819, 824 (3rd Cir. 1978), cert. den., 439 U.S. 955, 99 S. Ct. 354, 58

L. Ed. 2nd 346 (1978). 

Generally, bifurcation is only granted where the trial Court ascertains that 

separate trials would “further convenience or avoid prejudice.” McCray v. Pittsburgh 

Corning Corporation, 97 FRD 490, 492 (E.D.Pa. 1983). Bifurcation may prove to be

advantageous by enhancing juror comprehension of the complex issues presented, 

Miller v. New Jersey Transit Authority Rail Operations, 160 F.R.D. 37 (D.N.J. 1995),

citing Bar Laboratories, Inc. v. Abbott Laboratories, 978 F. 2nd 98, 115 (3rd Cir. 1992).

In determining whether or not to bifurcate, the Court must select the procedure

conducive to expedition and economy. Id.

Defendant, as the party seeking bifurcation, has the burden of showing that

bifurcation is proper in light of the general principal that a single trial tends to lessen 

the delay, expense and inconvenience to all parties. Lowe v. Philadelphia Newspapers, 

Inc., 594 F.Supp. 123, 125 (E.D.Pa. 1984). The party seeking bifurcation must

demonstrate that he will suffer prejudice if the separate trials are not granted. 

Marshall v. Overhead Door Inc., 131 F.R.D. 94, 97 (E.D.Pa. 1990). 

Bifurcation of proceedings into separate trials concerning the liability and 

damages is appropriate when ‘the evidence pertinent’ to the two issues is wholly 

unrelated and when the evidence relevant to the damage issue could have a prejudicial

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impact upon the jury’s liability determination. James v. Interstate Credit &

Collections, Inc., 2005 US Dist. Lexis 15814 citing Helminski v. Ayerst Lab, 766 F. 2nd

208, 212 (6th Cir. 1985) (quoting 9.C. Wright & Miller, Federal Practice & Procedures

§2390).

In this matter, the evidence applicable to liability does not overlap with the 

evidence of damages. If Plaintiff fails to prove liability, there will be no need for a 

separate trial as to damages. Thus, judicial economy is promoted. Moreover, 

bifurcation is also warranted because it will avoid the risk of the jury being motivated 

by sympathy for the Plaintiff. Moreover, the testimony about the financial aspects of 

the Defendant will be before the jury at the same time they must decide whether the 

letter in question was misleading. Thus, a bifurcated trial will protect Defendant from 

prejudice.

Defendant also contends that liability is appropriate for the jury; however, if

Defendant is found liable, damages based on the Corporation’s “net worth” are to be

determined by the Court. “In short, the calculation of statutory damages should not 

result in a mini-trial; the statute seeks to avoid a separate contest over damages by 

using the term ‘net worth’ to denote a company’s book value net worth.” Sanders v.

Jackson, 209 F. 3rd 998 (7th Cir. 2000). See also United States v. 88.88 Acres of Land, 

907 F. 2nd 106, 108 (9th Cir. 1990) (The determination of net worth under the Equal

Access to Justice Act should not result in a second major litigation.) 

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IV CONCLUSION. 

In recognizing that Defendants will be prejudiced by a “mini-trial” to ascertain

statutory damages, and that Plaintiff will not be prejudiced by bifurcating the issues of

liability and damages, Defendant’s Motion to Bifurcate should be granted.

 BRIGGS LAW OFFICE, P.C. 

 By: ____/NWB3521/_______________ 

 NORMAN W. BRIGGS

 300 Walnut Street, Suite 2 

 Philadelphia, PA 19106

 Telephone No. 215-925-4632

 Facsimile No. 215-925-1611

 Attorneys for Defendant 

 Universal Fidelity Corporation

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