Opinion
2:22-cv-01573-HL
07-18-2023
PROGRESSIVE UNIVERSAL INSURANCE COMPANY, a foreign insurer, Plaintiff, v. JONI MINICA, JODY MINICA, Defendants.
FINDINGS AND RECOMMENDATION
Andrew Hallman, United States Magistrate Judge
Plaintiff, Progressive Universal Insurance Company (“Progressive”), brings suit against Defendants, Joni and Jody Minca, seeking a declaration that Progressive has no duty to indemnify or defend Jody Minica and Jane Doe Minica under policies of insurance issued by Progressive with respect to claims against Defendants Minica in Joni Minica, individually v. Jody Minica and Jane Doe Minica, individually and the marital community comprised thereof; Alfredo Sanchez and Jane Doe Sanchez, individually and the marital community comprised thereof; John/Jane Does IV, Corporations I-X, Superior Court of the State of Washington for the County of Benton, Cause No. 22-2-00182-03 (the “underlying suit”).
Before this Court are Progressive's Motions for Default Judgment based on the Court's prior entry of default. ECF 10, 13. For reasons set forth below, this Court recommends that Progressive's Motion for Default Judgment be GRANTED.
Progressive filed two separate motions for default and default judgment related to each named Defendant. ECF 4, 6, 10, 13. Because both default judgment motions make the same argument related to the coverage of the vehicle involved in the accident, and seek the same declaration, the Court treats these motions as one for the purpose of this Findings and Recommendation.
BACKGROUND
Progressive issued Defendant Jody Minca a motor vehicle insurance policy for a 2011 Chevrolet Silverado Pickup. Cantrell Decl., ¶10. On February 19, 2019, Jody Minica was driving a different vehicle, a 2015 Chevrolet Volt, when she collided with a third party. Cantrell Decl., ¶5. Three years later, Joni Minica filed the underlying suit against Jody Minca and other parties involved in the accident. Cantrell Decl., ¶ 6.
Vehicles covered under the applicable policy are “any auto or trailer shown on the declarations page . . . any additional auto; or any replacement auto.” Cantrell Decl. Ex. A at § 5. The vehicle involved in the accident was not listed on the declarations page of the applicable policy. Cantrell Decl., ¶10.
An “[a]dditional auto means an auto [the insured] become[s] the owner of during the policy period that does not permanently replace an auto shown on the declarations page if: (1) [Progressive] insure all other autos [the insured] own; the additional auto is not covered by any other insurance policy; [the insured] notif[ies] [Progressive] within 30 days of becoming the owner of the additional auto; and [the insured] pay[s] any additional premium due.” Cantrell Decl. Ex. A at § 1. Further, a “Replacement auto means an auto that permanently replaces an auto shown on the declarations page. A replacement auto will have the same coverage as the auto it replaces if the replacement auto is not covered by any other insurance policy.” Cantrell Decl. Ex. A at § 11. State Farm has confirmed that it issued an insurance policy to Joni Minica for the 2015 Chevrolet Volt, and neither Jody or Joni Minica offered Progressive any evidence that within 30 days of becoming the owner of the 2015 Chevrolet Volt they notified Progressive or paid any additional premiums or bought it as a replacement vehicle. Cantrell Decl.
Progressive filed this action on October 18, 2022. ECF 1. Progressive seeks a declaratory judgment that it owes no duty to defend or indemnify any party related to the underlying suit because the vehicle involved in the accident was not covered by Progressive. Compl ¶ 7.2-7.5; ECF 13 at 2-3.
Specifically, Progressive requests the following declaratory judgment:
With regard to the February 19, 2019, automobile accident that forms the basis of the instant action, Progressive does not owe a duty to defend or indemnify Jody Minica and Jane Doe Minica under the Progressive Policy for any and all claims asserted or that could be asserted against Jody Minica. Because the 2015 Chevrolet Volt that was involved in the subject automobile accident is not listed in the Declarations page of the policy, and does not qualify as a “covered auto,” an “additional auto,” or a “replacement auto,” as those terms are defined by the Progressive Policy, Defendant Jody Minica is not entitled to any coverage pursuant to the terms and conditions of the Progressive Policy.ECF 13 at 2-3.
Defendants Joni and Jody Minica were properly served with a Summons and Complaint. Neal Decl. Ex. 1, ECF 11; Neal Decl. Ex. 1, ECF 14. Defendant Joni Minica failed to file an Answer by November 17, 2022, as required by FRCP 12(a)(1). Neal Decl., ECF 11, ¶ 4. Defendant Jody Minica failed to file an Answer by November 28, 2022, as required by FRCP 12(a)(1). Neal Decl., ECF 14, ¶ 4. Defendants also failed to file a Notice of Appearance. Neal Decl. ¶ 5, ECF 11; Neal Decl ¶ 5, ECF 14. Defendants are not in the military. Id. ¶ 7.
On December 20, 2022, Progressive filed its Motion for Entry of Default. ECF 4. On January 5, 2023, the Court granted Progressive's Motion for Entry of Default Against Defendant Joni Minica. ECF 8. Progressive now moves for default judgment, and Defendants have failed to respond. ECF 13.
LEGAL STANDARDS
Under Rule 55(a), the clerk of the court is required to enter an order of default if a party against whom affirmative relief is sought has failed to timely plead or otherwise defend an action. See FED. R. CIV. P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.”). For the purposes of default judgment, all well-pleaded allegations in the complaint, except those relating to damages, are assumed to be true. Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977); see also TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (providing the general rule that “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true”).
“Rule 55 provides that ‘after the clerk's entry of default against a defendant, a court may enter default judgment against that defendant.'” Glacier Films (USA), Inc., v. Tenorio, Case No. 3:15-cv-01729-SB, 2016 WL 3766465, at *1 (D. Or. June 22, 2016) (quoting FirstBank P.R. v. Jaymo Properties, LLC, 379 Fed.Appx. 166, 170 (3d Cir. 2010)). “The district court's decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).
In exercising this discretion, courts in this circuit consider the factors discussed in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986). Glacier Films, 2016 WL 3766465, at *1. The Eitel factors are (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the litigation; (5) the possibility of dispute over material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy favoring decisions on the merits. Eitel, 782 F.2d at 1471-72. The court's analysis begins with “the general rule that default judgments are ordinarily disfavored.” Id. at 1472 (citation omitted).
DISCUSSION
A. Procedural Requirements
This Court first considers whether Progressive has complained with all necessary procedural requirements to obtain a default judgment.
As a preliminary matter, this Court is satisfied that it has personal jurisdiction over Defendants based on the facts alleged in the record. A district court “has an affirmative duty” to determine whether it has subject matter jurisdiction and personal jurisdiction over the defendant before entering a default judgment. Allstream Bus. US, LLC v. Carrier Network Sols., LLC, Case No. 3:20-cv-01970-IM, 2021 WL 3488086, at *3 (D. Or. Aug. 9, 2021); In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). The court “may dismiss an action sua sponte” where personal jurisdiction does not exist. Id. But it must first give the plaintiff moving for a default judgment the opportunity to show facts supporting the exercise of personal jurisdiction. Id. at 712-13.
This Court has jurisdiction over this claim pursuant to 28 U.S.C. § 1332 as the amount in controversy exceeds $75,000.00, exclusive of interest and costs, and diversity amongst the parties is complete. Compl. ¶ 3.1. The Court also has jurisdiction over the defendants because they and their vehicles reside in the state of Oregon. Compl. ¶ 3.2.
In addition, Progressive has satisfied the procedural requirements for entry of a default judgment under Rules 55(a), 55(b), and 54(c). This Court properly entered default against Defendants under Rule 55(a), ECF 8, and Progressive's requested default judgment does not differ in kind or exceed the remedy pleaded in the Complaint. Compl. ¶ 7; FRCP 54(c). Defendants were personally served, Neal Decl. Ex. 1., and did not appear personally or by a representative and is not entitled to written notice of the application for default judgment. FRCP 55(b); Allstream, 2021 WL 3488086, at *4. Accordingly, all procedural requirements for a default judgment are satisfied.
B. Default Judgment Under FRCP 55.
Finding procedural compliance, this Court now turns to Plaintiff's Motion for Default Judgement, considering whether discretion should be exercised to enter a default judgment under the Eitel factors.
First Eitel Factor
The first Eitel factor considers whether the plaintiff would suffer prejudice if default judgment is not entered. PepsiCo, Inc., v. Cal. Security Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002); Philadelphia Inckin. Ins. Co. v. United Revolver Club of Sacramento, Inc., Case No. 2:18-cv-2960-KJM DB, 2020 WL 773419, at *1-2 (E.D. Cal. Feb. 18, 2020). Progressive could potentially be asked to defend or indemnify Defendants against the claims filed in the underlying suit. Thus, the Court finds this potential prejudice weighs in favor of granting a default judgment. See Aspen Ins. UK Ltd. v. Killarney Constr. Co., Case No. C 11-1294 RS, 2012 WL 1831498, at *2 (N.D. Cal. May 18, 2012) (finding insurer would be prejudiced if default judgment was not entered).
Second and Third Eitel Factors
The Court considers the merits of Progressive's substantive claims and the sufficiency of the complaint together because of the relatedness of the two inquiries. As part of this inquiry, the Court must consider whether the allegations in the complaint are sufficient to state a claim that supports the relief sought. PepsiCo, 238 F.Supp.2d at 1175; Philadelphia Intim., 2020 U.S. Dist. LEXIS 27406, 2020 WL 773419 at *3.
The federal Declaratory Judgment Act permits “any court of the United States . . . [to] declare the rights and other legal relations of any interested party seeking such declaration” “[i]n a case of actual controversy within its jurisdiction.” 28 U.S.C. § 2201(a). And, “[a]ny such declaration shall have the force and effect of a final judgment or decree[.]” Id.
Under Oregon law, “the interpretation of an insurance policy is a question of law,” and the court's “task [is] to ascertain the parties' intentions. Coelsch v. State Farm Fire and Casualty Co., 298 Or.App. 207, 211 (2019) (citing Hoffinan Constr. Co. of Alaska v. Fred S. James & Co., 313 Or. 464, 469 (1992). The court does so by examining the terms and conditions of the insurance policy as interpreted from “the understanding of the ordinary purchaser of insurance.” Totten v. New York Life Ins. Co., 298 Or. 765, 771 (1985). If a word or phrase is explicitly defined in the policy, the court applies that definition. Coelsch, 298 Or.App. at 211; Gonzales v. Farmers Ins. Co. of Or., 345 Or. 382, 387 (2008). If the policy does not define a particular term, the court will consider if the term has a plain meaning and is susceptible to only one plausible interpretation. Coelsch, 298 Or.App. at 211. If the term has a plain meaning, the court's analysis ends. Id. If the term is capable of more then one plausible interpretation, the court examines the term in “the particular context in which that term is used in the policy and the broader context of the policy as a whole.” Hoffinan, 313 Or. at 470. Only if ambiguity remains, the court then will interpret the term's meaning against the insurance company. Id; Coelsch, 298 Or.App. at 212.
Progressive argues that it is entitled to a declaration that it owes no duty to defend or indemnify Defendants for any claims asserted by Joni Minica because the 2015 Chevrolet Volt driven by Jody Minca during the accident was not a covered, additional or replacement auto under the Policy. Mot. for Default Jdt. 9-11, ECF No. 13; see also Allstate Ins. Co. v. Morgan, 123 F.Supp.3d 1266, 1273 (D. Or. 2015) (stating that “if the insurer can establish that the insured is precluded from coverage, it has neither the duty to defend nor the duty to indemnify the insured.”).
Here the allegations in the complaint and declarations of Progressive support Progressive's request for default judgment. Vehicles covered under the applicable policy are “any auto or trailer shown on the declarations page . . . any additional auto; or any replacement auto.” Cantrell Decl. Ex. A at § 5. The vehicle involved in the accident was not listed on the declarations page of the applicable policy. Cantrell Decl., ¶10.
An “Additional auto means an auto [the insured] become[s] the owner of during the policy period that does not permanently replace an auto shown on the declarations page if: (1) [Progressive] insure all other autos [the insured] own; the additional auto is not covered by any other insurance policy; [the insured] notif[ies] [Progressive] within 30 days of becoming the owner of the additional auto; and [the insured] pay[s] any additional premium due.” Cantrell Decl. Ex. A at § 1. Further, a “Replacement auto means an auto that permanently replaces an auto shown on the declarations page. A replacement auto will have the same coverage as the auto it replaces if the replacement auto is not covered by any other insurance policy.” Cantrell Decl. Ex. A at § 11. State Farm has confirmed that it issued an insurance policy to Joni Minica for the 2015 Chevrolet Volt, and neither Jody or Joni Minica offered any evidence that they notified Progressive within 30 days of becoming the owner of the 2015 Chevrolet Volt, paid any additional premiums, or bought it as a replacement vehicle. Cantrell Decl.
In short, the merits of Progressive's claim for declaratory relief and sufficiency of its pleadings and record presented here favor entry of default judgment under the second and third Eitel factors.
Fourth Eitel Factor
Under the fourth factor cited in Eitel, “the court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct.” PepsiCo, 238 F.Supp.2d at 117677. In this action, Progressive does not seek any monetary damages. Instead, it seeks solely a declaratory judgment that it owes no duty to defend or indemnify Defendants in the underlying suit. Accordingly, the fourth Eitel factor favors granting default judgment. See PepsiCo, 238 F.Supp.2d at 1177 (finding that the fourth Eitel factor favored granting default judgment when monetary damages were not sought).
Fifth Eitel Factor
Under the fifth factor, the court considers the possibility of dispute concerning material facts. Here, the Court may assume the truth of all well-pleaded facts in the complaint, and the Court must apply the definitions provided in the insurance contract. Thus, absence of disputed material facts here weighs in favor of entering a default judgment. See Atain Specialty Ins., 2016 WL 3354344 at *5 (noting absence of genuine disputes of material fact in insurance policy exclusion supported entry of declaratory judgment).
Sixth Eitel Factor
“The sixth Eitel factor considers the possibility that the default resulted from excusable neglect.” PepsiCo, 238 F.Supp.2d at 1177. Here, Defendants were properly served and had ample notice of Progressive's intent to pursue a default judgment, yet they have not filed any response. Therefore, there is no indication that Defendants' default has resulted from excusable neglect.
Seventh Eitel Factor
While cases should be determined on their merits where possible, courts recognize that this factor alone is not enough to prevent entry of a declaratory judgment. See Alain Specially Ins., 2016 WL 3354344 at *6. Here, Defendants have not appeared in this action, despite being notified. Thus, the Court finds that the policy of resolving cases on their merits should not prevent the entry of default judgment under the facts of this case.
In summary, after considering each of the Eitel factors, the Court concludes that they weigh in favor of entry of default judgment against Defendants. Progressive's motions for default judgment should therefore be granted.
RECOMMENDATION
For the reasons stated above, this Court recommends that Progressive's Motions for Default Judgment, ECF No. 10, 13, be GRANTED and the following declaratory judgment entered:
With regard to the February 19, 2019, automobile accident that forms the basis of Joni Minica, individually v. Jody Minica and Jane Doe Minica, individually and the marital community comprised thereof; Alfredo Sanchez and Jane Doe Sanchez, individually and the marital community comprised thereof; John/Jane Does IV, Corporations I-X, Superior Court of the State of Washington for the County of Benton, Cause No. 22-2-00182-03, Progressive does not owe a duty to defend or indemnify Jody Minica and Jane Doe Minica under the Progressive Policy for any and all claims asserted or that could be asserted against Jody Minica. Because the 2015 Chevrolet Volt that was involved in the subject automobile accident is not listed in the Declarations page of the policy, and does not qualify as a “covered auto,” an “additional auto,” or a “replacement auto,” as those terms are defined by the Progressive Policy, Defendant Jody Minica is not entitled to any coverage pursuant to the terms and conditions of the Progressive Policy.
SCHEDULING ORDER
The Findings and Recommendation will be referred to a district judge. Objections, if any, are due fourteen (14) days from Service of the Findings and Recommendation. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.
A party's failure to timely file objections to any of these findings will be considered a waiver of that party's right to de novo consideration of the factual issues addressed herein and will constitute a waiver of the party's right to review of the findings of fact in any order or judgment entered by a district judge. These Findings and Recommendation are not immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1) of the Federal Rules of Appellate Procedure should not be filed until entry of judgment.