Court: District Court, E.D. Virginia; July 25, 2018; Federal District Court
The court is addressing a Motion for Entry of Default Judgment filed by Plaintiff Empire Fire and Marine Insurance Company against Defendant Glenda Pandt-Brown, who did not respond to the allegations. Defendant Jack Guemple opposes this motion, claiming it would negatively affect his own claims. The court grants the motion, citing that it can impose a default judgment if a defendant fails to defend themselves, provided it has personal and subject-matter jurisdiction, the proper venue, and that the defendant was properly served.
The court highlights that a defendant's default admits the plaintiff's allegations, and even if there are multiple claims or parties, a final judgment can be entered for some parties if there's no reason for delay. In insurance disputes, case law establishes that an injured third party retains the right to defend themselves independently in a declaratory judgment action against both them and their insurer. Thus, a default judgment against one defendant does not limit a co-defendant's ability to contest claims, nor does it bind them to the facts admitted due to the default. This principle ensures that the merits of a non-defaulting party's claims can still be adjudicated.
The court finds that default judgment against Pandt-Brown is justified due to her failure to respond to Empire's Complaint, which was served on November 16, 2017. Under Federal Rule of Civil Procedure 12(a)(1), her time to respond has expired, leading to the admission of all factual allegations in the Complaint. The Complaint establishes jurisdiction, claims for relief, and the basis for venue, affirming that personal jurisdiction over Pandt-Brown is valid as a Virginia domiciliary, and subject matter jurisdiction exists under 28 U.S.C. § 1332 due to diversity of citizenship. The court will evaluate whether the pleadings support a declaratory judgment, applying New York law since the insurance contract was executed in New York. Under New York law, insurance contract exclusions must be specific and clear, with ambiguities interpreted against the insurer. Empire's Complaint indicates that Pandt-Brown chose Supplemental Liability Protection from Empire, which explicitly excludes coverage for accidents occurring while the insured is under the influence of alcohol. The Complaint alleges that Pandt-Brown was intoxicated at the time of the accident, thus presenting sufficient factual allegations to support the existence of a valid insurance agreement and a clear exclusion applicable to her circumstances.
Empire's Complaint establishes that it is not obligated to defend Pandt-Brown against claims related to a September 15, 2015, motor vehicle collision and has no duty to provide her with insurance benefits for associated losses. As a result, the court grants a default judgment against Pandt-Brown, which does not prejudice Guemple's right to defend himself in the related declaratory judgment action. Guemple is not bound by the default judgment or the admitted factual allegations concerning Pandt-Brown, allowing him to present his own case against the insurer and challenge the factual findings made regarding her.
Guemple previously filed a lawsuit against Pandt-Brown in Portsmouth Circuit Court for damages from the collision, and after serving her, provided her with a defense. However, after a period, Pandt-Brown left the country and became untraceable, which led to delays in the proceedings. Despite these delays, the state court denied a motion to continue the trial, resulting in a jury verdict of $1,600,000 in favor of Guemple on October 31, 2017. Empire is a Nebraska-based insurance company, while both Pandt-Brown and Guemple are from Virginia, with the amount in controversy exceeding $75,000 due to the jury's judgment. The events pertinent to the claims occurred within the Eastern District of Virginia.
