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Farmers Automobile Insurance Association v. Long

United States District Court, E.D. California

April 16, 2014

FARMERS AUTOMOBILE INSURANCE ASSOCIATION and PEKIN INSURANCE COMPANY, Plaintiffs,
v.
SCOTT T. LONG, PAUL J. DHANENS and DIANE M. DHANENS, Individually and as Co-Administrators of the Estate of PHILIP A. DHANENS, Deceased, Defendants.

FINDINGS AND RECOMMENDATIONS GRANTING PLAINTIFFS' MOTION FOR ENTRY OF DEFAULT JUDGMENT. (DOC. 39).

BARBARA A. McAULIFFE, Magistrate Judge.

On March 10, 2014, Plaintiffs Farmers Automobile Insurance Association and Pekin Insurance Company ("Farmers" or "Pekin" or collectively "Plaintiffs") filed a Motion for Default Judgment against Defendant Scott T. Long ("Defendant" or "Long"). (Doc. 39). In the pending Motion, Plaintiffs seek the entry of a default judgment against Defendant Scott Long in an action seeking declaratory relief concerning Plaintiffs' rights and obligations under an insurance policy. Defendant has not responded to the motion or otherwise appeared in this lawsuit. The motion was referred to this Court pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302. The Court deemed the matter suitable for decision without oral argument pursuant to Local Rule 230(g), and vacated the hearing scheduled for April 11, 2014. For the following reasons, Plaintiffs' Motion for Default Judgment should be GRANTED.

BACKGROUND

This is an insurance coverage action. Plaintiffs Farmers and Pekin are requesting a declaration from this Court that they have no duty to defend Defendant Long under either a Homeowners Policy or a Personal Umbrella Liability Policy issued to Mark and Leigh Ann Long with respect to an underlying state-court action currently pending in the Fresno County Superior Court. Below, the Court sets out the well-pleaded allegations in the complaint. Default has been entered against Scott Long, and therefore, the factual allegations of the complaint are taken as true.

According to the complaint, Plaintiff Farmers entered into a written insurance contract with Mark and Leigh Ann Long, the parents of Scott Long, as named insureds, policy number TH0156752. The policy provided for Homeowners Liability Insurance on a primary basis with an effective policy period from November 30, 2011 to November 30, 2012. (Doc. 2 ¶ 7). Defendant Pekin Insurance Company also issued a personal umbrella policy numbered 0U0019156 to Mark and Leigh Ann Long as named insureds. The effective dates of the umbrella policy were from November 30, 2011 to November 30, 2012 (collectively "the Policy"). (Doc. 2 ¶ 8). Defendant Long is an individual who claims to be an insured on each of the above-mentioned policies. (Doc. 2 ¶ 5).

On or about February 28, 2013, Defendants Paul and Diane Dhanens ("The Dhanens"), parents of the deceased Phillip Dhanens, filed a complaint in the Fresno County Superior Court seeking damages from several defendants including Scott Long in a wrongful death and survival action. (Doc. 2, ¶ 17). The facts of the Dhanens' state court action are tragic. The Dhanens' complaint alleges that their son Phillips Dhanens died during a hazing ritual while a first semester freshman at California State University, Fresno ("Fresno State"), following a fraternity bid night ritual where fraternity officers locked pledges in a room and provided them with fatal quantities of alcohol.

The complaint alleges that on August 31, 2012, Phillip Dhanens attended a pinning ceremony to formally accept the bid to become a pledge of the Theta Chi fraternity. Following a dinner after the ceremony, all of the pledges, including Phillips Dhanens, returned to the fraternity house, where members of the fraternity escorted the pledges to the "Chapter Room" and "ordered them to sit in a semi-circle." (Doc. 5, ¶ 30). Executive Board members of the fraternity then presented alcohol to the pledges, passing several bottles of hard alcohol between them while the officers and other members of the fraternity "encourag[ed] the pledges to drink." (Doc. 5, ¶ 30). The pledges including the decedent were told they were not allowed to leave the room until they drank all of the alcohol present. The Dhanens allege that two full bottles of hard alcohol were finished by the pledges within only two minutes. Fraternity members then gave the pledges additional bottles of alcohol to consume. (Doc. 5, ¶ 30).

After approximately 20 minutes, the decedent had become "visibly incapacitated, exhibiting signs of severe intoxication, including passing out and falling out of his chair and onto the floor." (Doc. 5, ¶ 31). At one point, the decedent was asked by fraternity members if he was alright. (Doc. 5, ¶ 31). The decedent allegedly answered "No, " which the Dhanens allege indicates that the decedent was experiencing "conscious pain and suffering, and that his condition required immediate, qualified attention." (Doc. 5, ¶ 31). Six fraternity members then dragged the decedent to the "Drunk Room, " where he was supposed to be watched over by two other fraternity members referred to as the "Sober Brothers." (Doc. 5, ¶ 32). The decedent was allegedly left unmonitored in the "Drunk Room" until a few hours later, when fraternity members found him covered in his own vomit and lying motionless. (Doc. 5, ¶ 33). The Dhanens specifically allege that "the individual Defendants knew that [the decedent] had consumed too much alcohol as a result of the bid night hazing ritual, that he was ill, and that he was unable to walk or take care of himself." (Doc. 5, ¶ 35). Paramedics were called to the scene, but were unable to revive the decedent. Phillip Dhanens was then rushed to St. Agnes Hospital where he was later pronounced dead. (Doc. 5, ¶ 33).

Plaintiffs filed the instant complaint for Declaratory Judgment in this action on August 5, 2013, against Defendants Diane and Paul Dhanens, individually and as co-administrators of the Estate of Phillip Dhanens and Defendant Scott Long. (Doc. 2).

After receiving a copy of the summons and complaint, Long waived service of process on December 11, 2013 and his answer was due by February 10, 2014. (Doc. 33). On February 18, 2014, after Long failed to answer or otherwise defend against this action and upon Plaintiffs' request, the Clerk entered default against Defendant Scott Long. (Doc. 37). On March 10, 2014, Plaintiffs moved for default judgment against Long. (Doc. 39). Defendant Long did not oppose this motion. The Court has reviewed the motion, exhibits, and the applicable law, and is sufficiently advised on the issues involved.

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 55(b)(2), a plaintiff can apply to the court for a default judgment against a defendant that has failed to plead or otherwise defend against the action. FED. R. CIV. P. 55(b)(2). "Upon default, the well-pleaded allegations of a complaint relating to liability are taken as true." Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). Thus, "[a]t the time of entry of default, the facts alleged by the plaintiff in the complaint are deemed admitted." 10 J. Moore, MOORE'S FEDERAL PRACTICE § 55.11 (3d ed. 2000).

Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (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 excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

Although well-pleaded allegations in the complaint are admitted by a defendant's failure to respond, "necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)); accord DIRECTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007) ("[A] defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law" (citation and quotation marks omitted)).

DISCUSSION

A. Service of Process and Jurisdiction

As an initial matter, the Court finds that service of process on Defendant Scott Long was sufficient. Long executed a waiver of service on December 11, 2013. (Doc. 33). The waiver of service specified that Long must file and serve an answer or motion within 60 days of receipt. After service, Long failed to answer and on February 19, 2013, the clerk entered default against him. (Doc. 37). Accordingly, Long was properly served pursuant to Federal Rule of Civil Procedure 4(d)(3).

Further, the allegations in the complaint are sufficient to establish subject matter jurisdiction in this Court pursuant to 28 U.S.C. § 1332(a)(1). Plaintiffs and Scott Long are citizens of different states: Plaintiff Farmers is a corporation, incorporated in and with its principal place of business in Illinois. (Doc. 2, ¶ 3). Plaintiff Pekin is a corporation, incorporated in and with its principal place of business in Illinois. (Doc. 2, ¶ 4). Scott Long resides in Cuyahoga Falls, Ohio. The amount in controversy exceeds $75, 000 exclusive of interest and costs.

B. The Eitel Factors

Having considered the Eitel factors as discussed below, the Court finds that default judgment is ...


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