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Associated Industries Ins. Co., Inc. v. Detail Construction & Waterproofing, Inc.

United States District Court, N.D. California, San Jose Division

May 3, 2017

ASSOCIATED INDUSTRIES INS. CO., INC., et al., Plaintiffs,
v.
DETAIL CONSTRUCTION & WATERPROOFING, INC., Defendant.

          ORDER FOR REASSIGNMENT TO A DISTRICT JUDGE REPORT AND RECOMMENDATION RE MOTION FOR DEFAULT JUDGMENT RE: DKT. NO. 10

          HOWARD R. LLOYD United States Magistrate Judge.

         Plaintiffs Associated Industries Ins. Co. (AIIC) and AmTrust International Underwriters Limited (AmTrust) filed this insurance action, invoking diversity jurisdiction, 28 U.S.C. § 1332. They seek a declaratory judgment that they need not defend or indemnify defendant Detail Construction & Waterproofing (DCW) against claims pending in a state court lawsuit. Plaintiffs also seek reimbursement of defense costs incurred in the underlying state court action, as well as costs incurred here.

         In the present federal action, DCW was served with process (Dkt. 7), but failed to answer or otherwise respond to the complaint. At plaintiffs' request, the Clerk of the Court entered defendant's default on November 22, 2016. (Dkt. 9).

         Plaintiffs now move for default judgment. DCW was served with notice of this motion (Dkt. 10-5), but the court has received no response, and the time for briefing has closed. Although plaintiffs have consented to proceed before a magistrate judge, 28 U.S.C. § 636(c); Fed.R.Civ.P. 73, defendant has never appeared and is in default. Accordingly, this court directs the Clerk of the Court to reassign this action to a district judge, with the following report and recommendation that plaintiffs' motion for default judgment be granted.

         BACKGROUND

         The complaint alleges the following:

         Plaintiff AIIC is a Florida corporation, authorized and engaged in the business of writing insurance in California as an approved surplus line insurance carrier. (Dkt. 1, Complaint ¶ 4). AmTrust is an Irish limited company and alien surplus lines insurance carrier, duly licensed, authorized, and engaged in the business of issuing insurance policies in California. (Id.). DCW is alleged to be a California corporation. (Id 5).

         AIIC and AmTrust provided general commercial liability insurance coverage to one Yvonne Kathleen Holmes dba Detail Construction. There are three policies (collectively, “Policies”) at issue:

• Plaintiff AIIC provided commercial general liability insurance to Yvonne Kathleen Holmes dba Detail Construction as the individual named insured on Policy No. NX100317300, which was in effect from April 8, 2012 through April 8, 2013 (2012 Policy).
• AmTrust provided commercial general liability insurance coverage to Holmes dba Detail Construction as the individual named insured on Policy No. XN102112101, in effect from April 8, 2013 through April 8, 2014 (2013 Policy) and again on Policy No. XN102112102 from April 8, 2014 through April 8, 2015 (2014 Policy).

(Id ¶ 8 & Exs. A-C).

         The complaint alleges that the Policies are based on standard Commercial General Liability Form CG0001 and include the following limitations:

• Under the Policies, plaintiffs are obliged to “pay those sums that the insured becomes legally obligated to pay as damages because of . . . ‘property damage' to which this insurance applies.” (Dkt. 1-1 Complaint, ¶ 9, Ex. A at ECF pp. 2, 12; Dkt. 1-2 Complaint Ex. B at ECF pp. 2, 12; Dkt. 1-3 Complaint, Ex. C at ECF pp. 2, 12).
• The Policies further provide that plaintiffs have “the right and duty to defend the insured against any ‘suit' seeking those damages” and “no duty to defend the insured against any ‘suit' seeking damages for . . . ‘property damage' to which this insurance does not apply.” ...

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