United States District Court, D. Nevada
December 5, 2014
MENDAKOTA INSURANCE COMPANY, a Minnesota Corporation, Plaintiff,
GIOVANNI VARGAS-ANTIGUA, an individual; MICHEL ANTIGUA-LOPEZ, an individual; DIANE GUTIERREZ, an individual; BIANE
For MENDAKOTA INSURANCE COMPANY: McCormick, Barstow, Sheppard, Wayte & Carruth LLP, Wade M. Hansard, Jonathan Carlson, Las Vegas, Nevada.
ORDER GRANTING APPLICATION FOR DEFAULT JUDGMENT
Jennifer A. Dorsey, UNITED STATES DISTRICT JUDGE.
Presently before the Court is Plaintiff MENDAKOTA INSURANCE COMPANY's Application for Entry of Default Judgment against Defendants GIOVANNI VARGAS-ANTIGUA; MICHEL ANTIGUA-LOPEZ; LUIS LOPEZ-RODRIGUEZ; LIUXY VARGAS-PEREZ; FRANCISCO QUINTANA; RAIDEL ECHAVARRIA; IRADA BITEC-LEYVA; INES PEREZ-MESA; and MARELIS LAFFITA (Doc. 68) and the Points and Authorities in Support Thereof (Doc. 69).
This case arises out of a series of staged motor vehicle collisions that took place September 7, 2011; October 5, 2011; and November 5, 2011. Plaintiff MENDAKOTA INSURANCE COMPANY's (" MENDAKOTA") Complaint for Declaratory Relief (Doc. 1) alleges that the Defendants and each of them were all actual or potential personal injury claimants as a result of these respective motor vehicle collisions. MENDAKOTA's Complaint for Declaratory Relief alleged that MENDAKOTA owed no coverage obligation to its putative insureds, GIOVANNI VARGAS-ANTIGUA or MICHEL ANTIGUA-LOPEZ, or any of the other Defendants who are potential personal injury claimants on several grounds, including (a) MENDAKOTA's auto policy is void due to material misrepresentations made in connection with ANTIGUA-LOPEZ securing the policy; (b) MICHEL ANTIGUA-LOPEZ and GIOVANNI VARGAS-ANTIGUA's non-cooperation with MENDAKOTA, to MENDAKOTA's prejudice; and (c) the fraud engaged by all of the Defendants to this action falls under an exclusion to the MENDAKOTA policy, which excludes bodily injury caused by an intentional act or at the direction of an insured person.
MENDAKOTA's Complaint (Doc. 1) was filed February 13, 2013. Defendants RAIDEL ECHAVARRIA, LUIS LOPEZ-RODRIGUEZ and INES PEREZ-MESA were duly served on March 28, 2013. (Doc. 6, 7 and 8) Defendants MICHEL ANTIGUA-LOPEZ and GIOVANNI VARGAS-ANTIGUA were duly served May 22, 2013. (Doc. 32, 33) Defendants LIUXY VARGAS-PEREZ, MARELIS LAFFITA, FRANCISCO QUINTANNA and IRADA BITEC-LEYVA were served June 24, 2013. (Doc. 38, 39, 40 and 41) None of these Defendants have appeared in this action since service.
On May 9, 2013, the clerk's office entered default as to Defendants LUIS LOPEZ-RODRIGUEZ, RAIDEL ECHAVARRIA and INES PEREZ MESA. (Doc. 22, 23 and 24) On July 25, 2013, the clerk's office entered default as to Defendants MARELIS LAFFITA, IRADA BITEC-LEYVA, MICHEL ANTIGUA-LOPEZ, FRANCISCO QUINTANNA, LIUXY VARGAS-PEREZ and GIOVANNI VARGAS-ANTIGUA. (Doc. 43, 44, 45, 46, 47 and 48)
On February 22, 2014, MENDAKOTA filed a Motion for Default Judgment and a Memorandum of Points and Authorities in Support Thereof. (Doc. 68 and 69)
Pursuant to Federal Rule of Civil Procedure 55(a), " [w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Federal Rule of Civil Procedure 55(d)(2) provides that, " a court may enter default judgment after the party seeking default applies to the clerk of the court as required by subsection (a) of this rule."
On May 10, 2013 and July 25, 2013, the clerk entered default against these various Defendants for their failure to plead or otherwise defend the instant lawsuit. Pursuant to Federal Rule of Civil Procedure 55(b)(2), MENDAKOTA now asks this Court to enter default judgment against these Defendants.
The choice of whether or not to enter a default judgment lies within the discretion of the trial court. Aldade v. Aldade, 616 F.3d 1089, 1092 (9th Cir. 1980). In the determination of whether or not to grant a default judgment, the trial court should consider the seven factors articulated in Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). These factors are:
(1) The possibility of prejudice to Plaintiff;
(2) The merits of the claims;
(3) The sufficiency of the Complaint;
(4) The amount of money at stake;
(5) The possibility of a dispute concerning material facts;
(6) Whether or not default was due to excusable neglect; and
(7) The policy favoring decision on the merits. (Id.)
In applying these Eitel factors, " the factual allegations of the Complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977); see also Fed.R.Civ.P. 9(b).
The first Eitel factor favors default judgment. MENDAKOTA may be prejudiced if the contract of insurance is not rescinded because ANTIGUA LOPEZ obtained the auto policy by misrepresenting material facts in connection with the usage of the vehicle and the number and identity of adult drivers. (Doc. 69, 119-26.) Further, MENDAKOTA may be prejudiced if not afforded declaratory relief stating that Defendants do not have a claim under the auto policy. That is, Plaintiff will be subject to one or more suits brought by these Defendants on this issue if Defendants are not enjoined from asserting rights under the policy. Thus, if MENDAKOTA's Motion for Default Judgment is not granted, MENDAKOTA will likely be without other recourse to protect itself in the lawsuit.
The second Eitel factor weighs in favor of default judgment. MENDAKOTA alleges a cause of action for declaratory relief. The Court finds that the claim that serves as a basis for this relief, fraud, misrepresentation, non-cooperation, each have merit.
The third Eitel factor weighs in favor of default judgment. MENDAKOTA's Complaint sufficiently outlines the various grounds giving rise to the claim for declaratory relief. Moreover, Defendants each waive their rights to contest Plaintiff's Complaint and the allegations contained therein when they failed to file their responsive pleading. Thus, the Court finds that this factor weighs in favor of granting a default judgment.
Under the fourth Eitel standard, the Court considers the amount of money at stake in relation to the seriousness of Defendants' conduct. PepsiCo. Inc. v. Cal. Security Cans., 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). The sum in controversy is over $90, 000 and is based on the intentional misconduct and collusion amongst the Defendants. Thus, the Court finds that this factor weighs in favor of default judgment.
The fifth Eitel factor favors default judgment. Defendant did not answer the Complaint and, thus, " the factual allegations of the Complaint ... will be taken as true." Geddes, supra at 560.
Applying the sixth Eitel factor, the Court cannot conclude that the Defendants' default was due to any excusable neglect. Each Defendant was properly served a Summons and the Complaint. Defendants' failure to respond or litigate this case cannot be attributable to excusable neglect.
The seventh, and final, Eitel factor is mutual. While " cases should be decided upon the merits whenever reasonably possible, " Eitel, supra at 1472, the mere existence of Rule 55(b) " indicates that this preference, standing alone, is not determinative." Cal. Security Cans., supra, at 1177 (citation omitted). Moreover, Defendants' failure to answer or otherwise respond to the Complaint " makes a decision on the merits impractical, if not impossible." Id.
Having reviewed MENDAKOTA's Motion and supporting exhibits, and having considered the Eitel factors as a whole, the Court concludes that entry of default judgment is appropriate against Defendants and each of them.
IT IS HEREBY ORDERED that Plaintiff's Application for Entry of Default Judgment (Doc. 68, 69) is GRANTED. A declaratory judgment is hereby entered in favor of Plaintiff declaring that:
a. Plaintiff has no obligation under The Policy for any damages or award in the actions or to provide coverage with respect to the Actions;
b. MICHEL ANTIGUA-LOPEZ and GIOVANNI ANTIGUA-LOPEZ have breached their duties under The Policy and that Plaintiff has been substantially prejudiced thereby, excusing Plaintiff from any further obligation to provide coverage under The Policy with respect to the action.
This default judgment resolves all remaining claims against all remaining parties.
Accordingly, the Clerk of Court is instructed to enter judgment accordingly and close he case.