Opinion
C.A. No. 01-0438 GMS
June 25, 2002
MEMORANDUM AND ORDER
I. INTRODUCTION
CIGNA Worldwide Insurance Company ("CIGNA") is a Delaware insurance company that provides insurance coverage in many nations. Elegant, Inc., et al. ("defendants") are fourteen corporations and ten unincorporated businesses located in Liberia, West Africa. All of the defendants are insured by CIGNA. The defendants suffered damages during a time of violence and civil unrest in Liberia, prompting them to file for insurance benefits. CIGNA denied coverage and sought declaratory and monetary relief. The defendants failed to move or respond, and on March 12, 2002, default was entered against the defendants. Prior to the entry of default, however, the defendants obtained an injunction from a Liberian court on January 29, 2002. The injunction ordered CIGNA to withdraw its suit before the court.
Presently before the court is CIGNA's motion for default judgment. In its motion, CIGNA seeks a declaration that it is not liable under its insurance contracts with defendants and that the Liberian injunction is invalid. The court agrees with CIGNA and will enter the requested relief for the reasons stated below.
The background outlined is taken largely from plaintiffs brief and from Younis Bros. and Co. v. CIGNA Worldwide Ins. Co., 899 F. Supp. 1385 (E.D. Pa. 1995).
In 1989, Liberia became embroiled in a national crisis when a rebel group known as the National Patriotic Liberation Front ("NPLF"), led by Charles Taylor, and other similar groups, attempted to seize control of the government. By July, 1990, the conflict had become centered in the capital city of Monrovia. Government and rebel forces fought in and around Monrovia, leading to the collapse of civil authority. This collapse was precipitated by the capture of Liberian President, Samuel Kanyon Doe, by Taylor's forces on September 9, 1990 and his subsequent execution by the NPLF. By 1991, Liberia was controlled by two factions, with government forces controlling Monrovia, and rebel forces controlling the rest of the country. After what has been colloquially termed "a 7-year civil war," Charles Taylor was elected President of Liberia in 1997. Us. Dept. of State 2001 Country Reports on Human Rights Practices. Liberia, at 1.
In 1992, the defendants filed for insurance benefits for damages they suffered from 1990 to 1991. CIGNA denied the requests, claiming that damages caused by war or similar circumstances were specifically excluded under the terms of the war risk exclusion clause of the insurance contracts. The war risk exclusion clause states, "This company shall not be liable for loss caused directly or indirectly by . . . (b) insurrection, rebellion, revolution, civil war, usurped power, or action taken by government authority in hindering, combating or defending against such occurrence." (D.I.48, at 9.)
Having denied the defendants' requests for benefits, CIGNA later filed a complaint with the court seeking a declaratory judgment that it was not liable to the defendants. Rather than responding to the complaint in the court, the defendants obtained an injunction from the Liberian court for the Sixth Judicial Circuit, Montserrado County, ordering CIGNA to withdraw its suit in the United States. (D.I.48, Exh. A at 30) Although the fighting has ended, as of March 4, 2002, the United States State Department has determined that Liberian courts continue to suffer from systematic corruption, and that the Liberian judiciary is "subject to political, social, familial, and financial pressures, and the equal application of justice is not always observed." US. Dept. of State, Liberia Country Commercial Guide FY2002, at 6.
III. STANDARD OF REVIEW
When a party against whom ajudgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules, and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default. See Fed.R.Civ.P. 55(a). If the plaintiffs claim against defendant is for other than a certain sum, however, the plaintiff must apply to the court for a judgment by default. See Fed.R.Civ.P. 55(b)(2). Once the default has been entered, the well pleaded facts of the complaint must be accepted as true. See Nishimatsu Const. Co., Ltd v. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). In determining whether to enter a judgment of default, the court must set forth the factors it considered in reaching its decision. See Emasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987).
As noted in the court's introduction, it is clear that the relief sought is for other than a sum certain. Thus, it is appropriate for the court, rather than the clerk, to enter the default. Accepting the well pleaded facts as true, the court concludes that CIGNA's request is reasonable under the circumstances. The court will now set forth the reasons for its decision to grant the judgment.
IV. DISCUSSION
A. CIGNA's Liability to the Defendants
In its brief, CIGNA argues that defendants' damages resulted from a civil war, or at least an insurrection. Thus, CIGNA contends that the war risk exclusion clause precludes the payment of benefits to the defendants.
The term "civil war" as applied to insurance contracts has been defined as "a casting off of all allegiance to the established government, a proclamation of a new government, and the waging war to oust the former and establish the latter." Holiday Inns, Inc. v. Aetna Ins. Co., 571 F. Supp. 1460, 1496 (S.D.N.Y. 1983). During the time period that the defendants' businesses were damaged, Charles Taylor and the NPLF attempted to violently overthrow the government of Liberia and oust President Samuel Doe. Taylor made clear his intention to oust Doe and install himself as President, and succeeded in this attempt. As early as 1991, Taylor had secured significant portions of territory in Liberia, and had killed President Doe. By 1997, Taylor himself controlled Liberia and currently maintains this control. Although he was elected President in 1997, the elections "were conducted in an atmosphere of intimidation, as most voters believed that Taylor's forces would have resumed fighting if he had lost." US. Dept. of State 2001 Country Reports on Human Rights Practices: Liberia, at 1. Charles Taylor's activities during the 1990-1991 period, as described above, comport with the definition of "civil war."
However, even if the turmoil in Liberia during this time period did not rise to the level of a civil war, it clearly qualifies as an insurrection. The Third Circuit has stated that an insurrection "must have been accompanied by action specifically intended to overthrow the constituted government and to take possession of the inherent powers thereof." Younis Bros. and Co., Inc. v. CIGNA Worldwide Ins. Co., 91 F.3d 13, 14 (3d Cir. 1996). During the time period in which the defendants' suffered damages, the NPLF attempted to violently overthrow the government of Liberia. In the process, it succeeded in seizing control of a substantial portion of territory as well as executing the President of Liberia. Indeed, when considering these events, the Third Circuit has determined that, "The events in Liberia constituted an insurrection within the meaning of the war risk exclusion clauses in the CIGNA policies." Id at 15. Thus, the court finds that the events in Liberia during the time period described above constitute an insurrection.
Whether civil war or insurrection, the events in Liberia between 1990 and 1991 would seem to fall within the purview of the war risk exclusion clause of the insurance contracts at issue. All of the defendants' claims for benefits resulted from or are related to events attendant to the forced change in Liberia's political leadership. As noted above, the clause explicitly prohibits recovery "for loss caused directly or indirectly by . . . (b) insurrection . . . [or] civil war . . ." The events of 1990 and 1991 clearly meet any reasonable definition of these terms. The court finds that CIGNA is not liable to the defendants for insurance benefits.
B. The Liberian Judgment is Not Entitled to Comity
The Liberian court's injunction will not preclude the court from entering judgment in favor of CIGNA. In its brief, CIGNA argues that the court should not apply principles of comity to the Liberian court's judgment. A court may deny comity to the judgment of a foreign court "if it finds that the extension of comity "would be contrary or prejudicial to the interest of the' United States." Philadelphia Gear Corp. v. Philadelphia Gear de Mexico, SA., 44 F.3d 187, 191 (3d. Cir. 1994). If the Liberian judicial system is unable to provide parties with due process of law, a right so fundamental that it is guaranteed by two amendments to this nation's Constitution, then the extension of comity would certainly be both contrary and prejudicial to the interests of the United States. See U.S. CONST. am. V; U.S. CONST. am. XIV, § 1.
CIGNA has presented undisputed evidence that the Liberian court system was and remains incapable of granting due process of law to parties. It has asserted that the Liberian judicial system is beset by corruption in the form of political and economic influence, and that Liberian court officers regularly receive bribes. "Defense attorneys often suggested that their clients pay a gratuity to appease judges:, prosecutors, and police officers to secure favorable rulings." US. Dept. of State 2001 Country Reports on Human Rights Practices: Liberia, at 6. As a result of this corruption, the Liberian court system "[is] unable to ensure citizens' rights to due process and a fair trial." Id at 1. Given the fact that, the Liberian judicial system is incapable of guaranteeing sufficient due process of law to parties as required by the United States Constitution, the court finds that extending comity to the Liberian injunction would be contrary to the interest of the United States. Therefore, the court does not deem itself bound by the Liberian injunction and will enter judgment on behalf of the plaintiff.
V. CONCLUSION
Since CIGNA has filed a well-pleaded complaint with reasonable requests for relief and none of the defendants have countered s allegations with any statements of their own, the court shall enter the default judgment requested by the plaintiff. The court is also not bound by the Liberian injunction. The court will, therefore, grant the plaintiffs Motion for Default Judgment.
Therefore, IT IS HEREBY ORDERED that:
1. The Plaintiffs Motion for Default Judgment (DI. 47) is GRANTED;
2. Judgment BE AND IS HEREBY ENTERED in favor of the Plaintiff and against the Defendants.