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Atain Specialty Insurance Co. v. Firebaugh Business Association

United States District Court, E.D. California

May 3, 2018

ATAIN SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
FIREBAUGH BUSINESS ASSOCIATION, Defendant.

         OBJECTIONS DUE: 21 DAYS

          FINDINGS AND RECOMMENDATIONS THAT PLAINTIFF'S APPLICATION FOR DEFAULT JUDGMENT BE GRANTED IN PART (Doc. 8)

          SHEILA K. OBERTO, UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         On April 11, 2018, Plaintiff Atain Specialty Insurance Company (“Plaintiff”) filed a “Notice of Motion and Motion to Enter Judgment by Default” (the “Motion”) against Defendant Firebaugh Business Association (“FBA”). (Doc. 8.) No opposition to the Motion has been filed. (See Docket.)

         The Motion is therefore deemed unopposed. After having reviewed the papers and supporting material, the matter is deemed suitable for decision without oral argument pursuant to Local Rule 230(g), and the Court hereby VACATES the hearing set for May 9, 2018. For the reasons set forth below, the undersigned RECOMMENDS that the Motion be GRANTED.

         II. FACTUAL BACKGROUND[1]

         Plaintiff initiated this diversity action by filing its complaint against FBA on January 29, 2018. (See Doc. 1 (“Compl.”).) The Complaint asserts one claim for rescission of two insurance policies issued by Plaintiff. (See id.) Plaintiff does not seek monetary damages.

         On April 2, 2015, FBA submitted a Commercial Insurance Application (the “Application”) to Plaintiff. (Compl. ¶ 15.) The Application was signed by Carla Delgado on behalf of FBA. (See Id. and Ex. 4 to Compl.) Based on answers provided by FBA in the Application, Plaintiff issued a Commercial Lines Policy, No. CIP247552 (“Policy No. CIP247552”), providing coverage for a “non profit community service” business located at 1599 Q St., Firebaugh, CA 93622, and with a policy period beginning April 8, 2015, to April 8, 2016. (Compl. ¶¶ 16-19 and Ex. 5 to Compl.) Plaintiff also issued a Commercial Lines Policy, No. CIP286132 (“Policy No. CIP286132), the renewal of Policy No. CIP247552, for the policy period April 4, 2016 through April 4, 2017, based on the Application. (Id. ¶19.)

         The Application included the following questions:

Question No. 8: “Is a fee charged for parking?
Question No. 9: “Recreation facilities provided?”
Question No. 12: “Are social events sponsored?”
Question No. 13. “Are athletic teams sponsored?” (If the answer is yes, the application requests the following information: “Type of sport, ” whether the sport is a “contact sport, ” “age group” of participants in sport, and “extent of sponsorship” of the sport.)

(See Ex. 4 to Compl. at 37.) In response to Question Nos. 8, 9, and 12, FBA answered “N” for “no.” FBA left Question No. 13 blank on the Application.

Policy No. CIP247552 provided that:
This policy was issued based on the information supplied on an application and other correspondence, including your claims or loss history. This information is attached to and considered to be part of this policy. You should review this information carefully because the truth of this information was of paramount importance in influencing our decision to issue this policy. You, for all the insureds under this policy, do warrant the truth of such information to the best of your and their knowledge at the ...

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