United States District Court, D. Nevada
R. HICKS UNITED STATES DISTRICT JUDGE.
the court is Plaintiff Brotherhood Mutual Insurance
Company's motion for default judgment against Defendants
David P. Davis and Kari F. Davis. ECF No. 15. Defendants have
failed to respond. Because the requirements for default
judgment are met in this case and the relief is warranted,
the court will grant Brotherhood Mutual's motion and
order the clerk of court to enter judgment in its favor.
case stems from a pending state-court suit for a wrongful
death allegedly caused by Defendants' negligence. ECF No.
7 at 2-3. The plaintiffs in that suit are the parents of the
decedent, a young child who unfortunately drowned in
Defendants' residential swimming pool after having
wandered out of her own nearby home. Id. at 2-3.
Defendant David Davis is a director of
non-party Teen Challenge of Nevada, a Nevada
non-profit corporation that is insured under a commercial
policy issued by Brotherhood Mutual. Id:, ECF No. 1
at 1. Defendants have filed a claim under this policy
"for a defense and indemnity against" the
state-court suit. ECF No. 7 at 2. Brotherhood Mutual
acknowledges that its policy with Teen Challenge covers the
latter's executive officers and directors while they act
within the scope of their duties; however, Brotherhood Mutual
contends in this suit that, due to several different
exclusions, the policy would not cover the events underlying
the state-court suit. Id. at 4-5.
Mutual therefore filed the instant suit against Defendants,
asking this court to grant it declaratory relief finding that
the insurance policy at issue "does not provide
indemnity coverage for the insurance claims made by Davis
arising out of the" state-court suit. Id. at 6.
After Brotherhood Mutual filed the operative first amended
complaint (ECF No. 7), it separately served both Defendants
at their residence by substitute service. ECF No. 15 at 4;
see also ECF Nos. 9-10. After Defendants failed to
answer the complaint or otherwise respond, Brotherhood Mutual
filed notices of intent to enter default within seven days.
ECF Nos. 11-12. Defendants again failed to respond and
Brotherhood Mutual filed a request to enter default, which
the clerk of this court entered. ECF Nos. 13-14. Brotherhood
Mutual now moves this court for default judgment.
a default judgment is a two-step process governed by Federal
Rule of Civil Procedure 55. Eitel v. McCool, 782
F.2d 1470, 1471 (9th Cir. 1986). First, Rule 55(a) provides,
"[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." Second, after the
clerk enters default, a party must seek entry of default
judgment under Rule 55(b). Nonetheless, while entry of
default by the clerk is a prerequisite to an entry of default
judgment, "a plaintiff who obtains an entry of default
is not entitled to default judgment as a matter of
right." Warner Bros. Entm 't, Inc. v.
Caridi, 346 F.Supp.2d 1068, 1071 (CD. Cal. 2004)
granting or denying relief is entirely within the court's
discretion. Id. The Ninth Circuit has identified
seven relevant factors in determining whether to grant
default judgment, including: (1) the possibility of prejudice
to the plaintiff; (2) the merits of the plaintiffs
substantive claims; (3) the sufficiency of the complaint; (4)
the sum of money at stake in the action; (5) the possibility
of a dispute concerning material facts; (6) whether the
default was due to the excusable neglect; and (7) the strong
policy favoring decisions on the merits. Eitel, 782
F.2d at 1471-72.
court takes the well-pleaded factual allegations in the
non-defaulting party's complaint as true, except as to
the amount of damages. Televideo Sys., Inc. v.
Heidenthal, 862 F.2d 915, 917-18 (9th Cir. 1987). Where
damages are not readily ascertainable from the record, the
court may conduct a hearing on the issue of damages before
entering default judgment. Geddes v. United Fin.
Grp., 559 F.2d 557, 560 (9th Cir. 1977). Finally,
"[a] default judgment must not differ in kind from, or
exceed in amount, what is demanded in the pleadings."
Fed.R.Civ.P. 54(c). III. Discussion The court finds that
default judgment is warranted in this case. Brotherhood
Mutual has satisfied the procedural requirements for default
judgment, including properly serving Defendants and acquiring
the clerk's entry of default, and there is no reason to
believe either defendant is a "minor or incompetent
person ...." Fed.R.Civ.P. 55(b)(2). Moreover, all the
applicable factors weigh in favor of granting this relief.
importantly, the court has reviewed the insurance policy at
issue and, based on the facts that Brotherhood Mutual
alleges, several coverage exclusions are very likely
applicable to the underlying accident. For instance, the
policy only insures Teen Challenge's executive officers
and directors "while [they are] acting within the scope
of their duties" ECF No. 7 at 5 (citing ECF No. 7-2 at
9, ¶l 1(d)). Here, there is no basis for believing that
Defendants' residential pool and any acts or omissions
that may have contributed to the drowning would fall within
the scope of Davis's duties as a Teen Challenge director.
Moreover, Defendants' residence is not one of the real
properties insured under the policy. Id. at 4-5
(citing ECF No. 7-2 at 2, 7). And while Defendants could have
disputed the facts underlying these conclusions or argued
that the insurance policy does apply, they have failed to
answer the complaint or otherwise defend against this suit.
court will therefore grant default judgment in favor of
Brotherhood Mutual and grant Brotherhood Mutual its requested
declaratory relief. See ECF No. 15 at 4-5.
THEREFORE ORDERED that Plaintiff Brotherhood Mutual Insurance
Company's motion for default judgment (ECF No. 15) is
FURTHER ORDERED that the following DECLARATORY RELIEF IS
GRANTED in favor of Brotherhood Mutual in regards to the
insurance policy between itself and Teen ...