Opinion
SA-19-CV-1477-DAE
02-10-2021
SENTRY SELECT INSURANCE COMPANY, Plaintiff, v. JOSE CISNEROS RIVAS, Defendant.
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
To the Honorable Senior United States District Judge David A. Ezra:
This Report and Recommendation concerns the Motion for Default Judgment (Docket Entry 15) filed by Plaintiff Sentry Select Insurance Company. This motion was referred to me for report and recommendation pursuant to 28 U.S.C. § 636(b), and a hearing was held on February 2, 2012. For the reasons set out below, I recommend that Plaintiff's motion (Docket Entry 15) be GRANTED, and that DEFAULT JUDGMENT be entered against Defendant Jose Cisneros Rivas.
I. Jurisdiction.
Plaintiff seeks declaratory judgment against Defendant Rivas, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). I have authority to make this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B).
II. Background.
As this case is before the Court after a default by Defendant Rivas, Plaintiff's well-pleaded allegations against him in the complaint are taken as true. See Nishimatsu Constr. Co. Ltd. v. Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
A. The Factual Allegations.
Defendant filed an uninsured motorist insurance claim with Plaintiff in connection with a motor vehicle accident that occurred on April 26, 2019. (Docket Entry 1.) At the time of the accident, Plaintiff was an insurance provider to Road Start Transport, Inc, for whom Defendant was driving a truck when the accident occurred. (Id. at 3-4.) Defendant has recounted different versions of the cause of the accident: one version involves sneezing, becoming light-headed, and losing control of the vehicle; another version involves evasive maneuvers to avoid an unidentified motorist swerving into his lane, which resulted in Defendant losing control of the vehicle. (Id. at 3.)
Plaintiff alleges that, even if Defendant's second version of the accident is accepted, Defendant is not entitled to uninsured motorist benefits. Defendant has never claimed that his truck came into contact with another motorist in such a way that caused the accident; Plaintiff argues that such contact is a requirement for coverage under Plaintiff's uninsured motorist policy. (Id. at 4-5.)
B. The Proceedings on Default.
Plaintiff's complaint was filed on December 22, 2019. (Docket Entry 1.) Plaintiff filed its amended complaint on March 11, 2020. (Docket Entry 5.) Plaintiff attempted to serve Defendant, but was unable to do so either by certified mail or by in-person service through a process server. (See Docket Entry 11.) With the Court's permission, substitute service of the summons and complaint was ultimately accomplished on Defendant's attorney, Edward A. Quesada, on August 8, 2020. (Docket Entry 13.) Defendant did not answer the complaint, and the Clerk of Court entered default against Defendant on October 29, 2020. (Docket Entry 16.)
Plaintiff filed its motion for default judgment (Docket Entry 15), and supplemented that motion with additional briefing and evidence (Docket Entries 18, 19). A hearing on the motion was held before the undersigned on February 2, 2021. Defendant neither responded to the motion or supplements, nor appeared at the hearing.
III. Analysis.
The Fifth Circuit has established a three-step process for securing a default judgment. New York Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). First, a default occurs when a defendant has failed to plead or otherwise respond to the complaint within the time required by Rule 12 of the Federal Rules of Civil Procedure. FED. R. CIV. P. 55(a); New York Life Ins., 84 F.3d at 141. Next, an entry of default may be entered by the clerk when the default is established by affidavit or otherwise. Id. Third, after the clerk enters default, a party may move for default judgment. Id. As noted above, each of these steps have occurred in this case. (See Docket Entries 20, 34.) Accordingly, the Court may consider the entry of default judgment at this time.
This Report and Recommendation first considers the propriety of default judgment in the case, and then considered the specific relief requested by Plaintiff.
A. The Propriety of Default Judgment.
A court may enter default judgment only if there is "a sufficient basis in the pleading for the judgment entered." Nishimatsu Constr., 515 F.2d at 1206. To obtain a default judgment, Plaintiffs must establish that (1) a default was entered against Defendants; (2) Defendants are neither minors nor incompetent people; (3) Defendants are not in military service; and (4) Defendants were provided with notice of the motion for default judgment. Henderson v. Fenwick Protective Inc., No. 3:14-cv-505-M-BN, 2015 WL 9582755, at *3 (N.D. Tex. Nov. 23, 2015). Plaintiffs must also make a prima facie showing of jurisdiction. Id.
Each of the above factors have been met in this case. A default was entered against Defendant on November 29, 2020. (Docket Entry 16.) Plaintiff has presented clear evidence that Defendant is not in military service (Docket Entries 15-1, 15-2), and satisfied the undersigned at the hearing held on February 2, 2021, that Defendant is neither incompetent to proceed nor a minor. Plaintiff has also shown that Defendant's attorney was provided notice of the amended complaint, of the motion for default judgment, and of the hearing on the motion. (See Docket Entry 19-1, at 167-68.)
Plaintiff has also established jurisdiction. Title 28 U.S.C. § 1332 provides the Court with "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different States." 28 U.S.C § 1332(a). Here, Plaintiff is a citizen of Wisconsin and Defendant is a citizen of California, and the amount in controversy exceeds the jurisdictional threshold, as the value of the policy is $1,000,000, and Rivas has claimed damages well in excess of $75,000. (Docket Entry 5, at 1-3; Docket Entry 1, at 3-4.) Thus, considering either the amount of the policy or the amount of the potential claim, the amount in controversy supports this Court's jurisdiction over the case. See Hartford Ins. Grp. v. Lou-Con Inc., 293 F.3d 908, 911 (5th Cir. 2002) (in declaratory judgment action on insurance policy, amount in controversy may sometimes be determined by reference to amount of liability under policy, and sometimes by reference to amount of claim). Finally, as Defendant has filed an insurance claim with Plaintiff, there is a live controversy over which Plaintiff may seek resolution before the Court by way of declaratory judgment. See 28 U.S.C. § 2201.
B. Plaintiff's Requested Relief.
Rule 55 gives the court discretion to convene an evidentiary hearing on the issue of damages. FED. R. CIV. P. 55(b). "A court may enter default judgment against a party and determine damages without the benefit of an evidentiary hearing 'where the amount claimed is a liquidated sum or one capable of mathematical calculation.'" Henderson, 2015 WL 9582755, at *3 (quoting Leedo Cabinetry v. James Sales & Distrib., Inc., 157 F.3d 410, 414 (5th Cir. 1998)). "A sum capable of mathematical calculation is one that can be 'computed with certainty by reference to the pleadings and supporting documents alone.'" Id. (quoting James v. Frame, 6 F.3d 307, 311 (5th Cir. 1993)). However, "[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). Accordingly, the relief requested in a plaintiff's complaint limits the relief available in a default judgment. See Sapp v. Renfroe, 511 F.2d 172, 176 n.3 (5th Cir. 1975).
As noted above, Plaintiff does not seek damages in this case; it filed suit seeking a declaratory judgment under 28 U.S.C. § 2201. (Docket Entry 5, at 2; Docket Entry 1.) Plaintiff asks for a judgment that it is not liable to Plaintiff under its uninsured motorist policy for the motor vehicle accident occurring on April 26, 2019. (Docket Entry 1.) It supports this claim by presenting copies of the claim filed by Defendant and its own uninsured motorist policy. (See Docket Entry 19-2, at 3-158, 159, 162.)
In a diversity action, the applicable substantive law is the underlying state law. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938). In this case, there are three potential applicable bodies of state law: that of Texas (where the alleged accident occurred); that of Indiana (where the policy was issued), and that of California (where Defendant resides). (Docket Entry 18, at 6-7.) Regardless of which state's law governs this case, however, Plaintiff is entitled to a declaratory judgment. In each state, actual contact with another vehicle is required to trigger uninsured motorist coverage. See, e.g., TEX. INS. CODE ANN. § 1952.104(3) (West 2007) ("actual physical contact must have occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured"); Allied Fid. Ins. Co. v. Lamb, 361 N.E.2d 174, 179 (Ind. Ct. App. 1977) ("We hold that 'physical contact' within the meaning of the hit-and-run provision of uninsured motorist coverage occurs when an unidentified vehicle strikes an object impelling it to strike the insured automobile and a substantial physical nexus between the unidentified vehicle and the intermediate object is established."); CAL. INS. CODE § 11580.2(b)(1) (West 2005) (defining uninsured motorist coverage for bodily injury to require that "[t]he bodily injury has arisen out of physical contact of the automobile with the insured or with an automobile that the insured is occupying."). As noted above, neither account of the accident provided by Defendant involved actual contact with another vehicle. (See Docket Entry 5, at 3.) Absent such contact, Plaintiff is entitled to a declaratory judgment that it is not liable to Defendant under its uninsured motorist policy for the accident arising on April 26, 2019.
Plaintiff is also entitled to costs. FED. R. CIV. P. 54(d)(1). At the February 2, 2021, hearing before the undersigned, Plaintiff indicated that as costs it sought only its $400 filing fee, which is shown by the docket entries his case. (See Docket Entry 1, Docket Entry 18, at 18.) Thus, declaratory judgment and costs may be awarded without further evidentiary hearing.
IV. Conclusion.
Based on the foregoing, I recommend that Plaintiff's motion for Default Judgment (Docket Entry 15) be GRANTED and that DEFAULT JUDGMENT be entered against Defendant Rivas declaring that Plaintiff is not liable to Defendant for the a motor vehicle accident on April 26, 2019, and awarding Plaintiff court costs totaling $400.
V. Instructions for Service and Notice of Right to Object.
The United States District Clerk shall serve a copy of this report and recommendation on all parties by either (1) electronic transmittal to all parties represented by attorneys registered as a "filing user" with the clerk of court, or (2) by mailing a copy to those not registered by certified mail, return receipt requested. Written objections to this Report and Recommendation must be filed within fourteen days after being served with a copy of same, unless this time period is modified by the district court. 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72(b). The party shall file the objections with the clerk of the court, and serve the objections on all other parties. A party filing objections must specifically identify those findings, conclusions or recommendations to which objections are being made and the basis for such objections; the district court need not consider frivolous, conclusive or general objections. A party's failure to file written objections to the proposed findings, conclusions and recommendations contained in this report shall bar the party from a de novo determination by the district court. Thomas v. Arn, 474 U.S. 140, 149-52 (1985); Acuña v. Brown & Root, Inc., 200 F.3d 335, 340 (5th Cir. 2000). Additionally, failure to file timely written objections to the proposed findings, conclusions and recommendations contained in this Report and Recommendation shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the district court. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc). SIGNED on February 10, 2021.
/s/_________
Henry J. Bemporad
United States Magistrate Judge