Integon National Insurance Company v. Lam Hung Doan

Opinion

1 DISTRICT OF NEVADA 3 4 Integon National Insurance Company, Case No. 2:25-cv-01538-CDS-EJY

5 Plaintiff Order Granting the Plaintiff’s Motion for Default Judgment 6 v.

7 Lam Hung Doan, [ECF No. 9] 8 Defendant

9 10 Plaintiff Integon National Insurance Company seeks entry of default judgment against 11 defendant Lam Hung Doan, who has not appeared in this action. Mot., ECF No. 9. Having 12 reviewed Integon’s motion and attached exhibits, I find that it is entitled to such relief so its 13 motion for default judgment against Lam Hung Doan is granted. 14 I. Discussion1 15 Federal Rule of Civil Procedure 55 governs the entry of default by the clerk and the 16 subsequent entry of default judgment by either the clerk or the district court. In relevant part, 17 Rule 55 provides: 18

19 1 As a threshold matter, I briefly address jurisdiction. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (the court sua sponte considered jurisdiction and explained that “[w]hen entry of judgment is sought against 20 a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties.”). This court has jurisdiction to hear this 21 matter because the parties are diverse, and Integon’s declaratory relief claims arise from its potential 22 liability to a third party, Christopher Cruz, not just from the $25,000.00 limit on Doan’s policy with Integon. See March 21, 2025 letter, Pl.’s Ex. 8, ECF No. 9-8 at 2 (explaining that based on Integon’s 23 investigation, the damages or injuries may exceed the limits of liability under the policy—that is, Cruz has incurred over $300,000.00 in medical expenses); see also Jackson v. Am. Bar Assoc., 538 F.2d 829, 831 (9th 24 Cir. 1976) (explaining that when the complaint seeks declaratory relief, “the amount is not what might have been recovered in money, but rather the value of the right to be protected or the extent of the injury 25 to be prevented”). Because Cruz suffered injury and incurred medical costs exceeding $75,000.00, the amount is not speculative, and I find that the amount in controversy meets diversity jurisdiction 26 requirements. Second, this court has personal jurisdiction over Doan because the incident giving rise to the cause of action occurred in Nevada—that is, it is alleged that Doan ran over Cruz in Nevada. See State compl., Pl.’s Ex. 2, ECF No. 9-2 at 3. 1 (a) Entering a Default. 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 2 affidavit or otherwise, the clerk must enter the party’s default. (b) Entering a Default Judgment. 3 (1) By the Clerk. If the plaintiff’s claim is for a sum certain or a sum that can 4 be made certain by computation, the clerk—on the plaintiff's request, with an affidavit showing the amount due—must enter judgment for that amount and 5 costs against a defendant who has been defaulted for not appearing and who is neither a minor nor an incompetent person. 6 (2) By the Court. In all other cases, the party must apply to the court for a default judgment. 7 8 Fed. R. Civ. P. 55(a)–(b). As the Ninth Circuit has clarified, Rule 55 requires a “two-step 9 process” consisting of: (1) seeking a clerk’s entry of default, and (2) filing a motion for the entry 10 of default judgment. See Symantec Corp. v. Glob. Impact, Inc., 559 F.3d 922, 923 (9th Cir. 2009) 11 (noting that Rules 55(a) and 55(b) provide a two-step process for obtaining a default 12 judgment); Cramer v. Target Corp., 2010 WL 2898996, at *1 (E.D. Cal. July 22, 2010) (“Obtaining 13 a default judgment in federal court is a two-step process that includes: (1) entry of default and 14 (2) default judgment.”). 15 Here, Integon has satisfied both steps under Rule 55. First, Integon moved for entry of 16 default against Doan on December 4, 2025. Mot. for default, ECF No. 7. The Clerk of the Court 17 entered default on December 5, 2025. Default, ECF No. 8. Second, Integon moved for default 18 judgment against Doan on January 21, 2026. ECF No. 9. 19 Upon entry of default, I take as true the factual allegations in the non-defaulting party’s 20 complaint, except those related to the amount of damages.2 Fed. R. Civ. P. 8(b)(6); TeleVideo Sys., 21 Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). The allegations in the complaint are as 22 follows. On February 13, 2024, Doan was in a motor vehicle accident with a third party, 23 Christopher Cruz. ECF No. 1 at 3, ¶ 8. Doan was a named insured under an automobile liability 24 25 26 2 Because Integon seeks only declaratory relief, a damages determination is unnecessary. 1 policy insurance issued by Integon.3 Id. The bodily injury liability policy had limits of $25,000.00 2 per person. Id. at ¶ 10. 3 On March 7, 2024, Integon opened a claim file as soon as Cruz’s counsel notified Integon 4 of the loss that resulted from the car accident. Id. at ¶ 11. On May 7, 2024, Integon provided a 5 letter to Doan that included an affidavit of no assets for Doan’s review and execution. Id. at ¶ 12. 6 At some point, Doan signed this letter. Id. 7 On May 10, 2024, Cruz’s counsel sent a “time limited demand” (“the demand”), 8 requesting an affidavit of no assets and enclosing his own form for the same. Id. at 3, ¶ 13. That 9 same day, Integon sent a letter to Doan informing him of the demand and enclosing Cruz’s 10 version of the affidavit of no assets. Id. at ¶ 14. On June 7, 2024, Integon sent a letter to Cruz 11 accepting the $25,000.00 demand. Id. at 4, ¶ 15. Therein, Integon explained that the prior 12 affidavit signed by Doan was tendered, but that it was still waiting for Cruz’s version of the 13 affidavit to be returned by Doan. Id. At some point, Cruz’s counsel rejected Integon’s acceptance 14 of the demand, stating that the failure of Doan to provide its version of the affidavit of no assets 15 constituted rejection of the settlement demand. Id. at ¶ 16. As alleged, Cruz is asserting that 16 Doan’s insurance policy is “opened up” with no policy limits in effect. Id. Integon further alleges 17 that even though it tried to communicate with Doan, he did not respond nor cooperate with the 18 defense of the third-party claim against him. 19 On February 11, 2025, Cruz filed a negligence claim against Doan for bodily injury 20 damages in the Eighth Judicial District Court, County of Clark, Nevada (Case No. A-25-912396- 21 C). Id. at 3, ¶ 9. Based on those allegations, Integon seeks declaratory relief that (1) it is not 22 obligated to pay bodily injury liability limits beyond the $25,000.00 provided to Doan; (2) it is 23 not obligated to pay punitive damages in the underlying action (Case No. A-25-912396-C); and 24 (3) it is not liable for any extracontractual claims as a result of its conduct in the adjustment of 25 the claim and defense of the underlying suit, which includes claims for breach of implied 26 3 The policy number was 2021650129. See Insurance policy, Pl.’s Ex. 1, ECF No. 9-1. 1 covenant of good faith and fair dealing/bad faith or any violation of Nevada’s Unfair Claims 2 Practices Act. ECF No. 9 at 12. The defendant has not responded to the motion or otherwise 3 appeared in this action. 4 Under Eitel v. McCool, the following factors are considered in determining whether to 5 enter default judgment: (1) the possibility of prejudice to the plaintiff; (2) the merits of the 6 plaintiff’s substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake 7 in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default 8 was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil 9 Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). 10 A. Factor one: prejudice to Integon 11 The first Eitel factor favors default judgment. Doan failed to defend this action so Integon 12 will be prejudiced if judgment is not entered as it has no other means to litigate its claim. See 13 PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002) (“Potential prejudice to 14 Plaintiffs favors granting a default judgment. If Plaintiffs’ motion for default judgment is not 15 granted, Plaintiffs will likely be without other recourse for recovery.”). Thus, this factor weighs 16 in Integon’s favor. 17 B. Factor two and three: the merits of the claims and sufficiency of the complaint 18 The second and third Eitel factors favor default judgment when the “plaintiff state[s] a 19 claim on which the plaintiff may recover.” Danning v. Lavine, 572 F.2d 1386, 1389 (9th Cir. 1978). 20 To weigh these factors, I must evaluate the sufficiency of the complaint and the merits of 21 Integon’s request for declaratory relief. 22 Integon is seeking declaratory relief that it is not obligated to pay bodily injury liability 23 limits beyond $25,000 limits. ECF No. 9 at 12. To support its motion for default judgment and 24 allegations in its complaint, Integon attaches a copy of the demand letter sent by Cruz’s counsel. 25 See May 7, 2024 letter, Pl.’s Ex. 4, ECF No. 9-4 at 2. Therein, counsel demanded that Integon 26 tender the policy limits and execute the enclosed affidavit attesting that no other insurance 1 coverage was available to cover the loss. Id. On May 10, 2024, Integon sent a letter to Doan 2 explaining the policy limits under the policy (2021650129) and also providing Doan with a copy 3 of Cruz’s settlement demand letter. May 10, 2024 letter, Pl.’s Ex. 5, ECF No. 9-5 at 2. Integon 4 also explained in the letter that Doan was required to timely complete Cruz’s affidavit and 5 return it to Integon. Id. On June 7, 2024, Integon sent a letter to Cruz stating that it accepted the 6 demand of policy limits, which are $25,000, and inquired about the payment of the claim as well 7 as any outstanding medical liens that have occurred from the loss. June 7, 2024 letter, Pl.’s Ex. 6, 8 ECF No. 9-6 at 2. On March 21, 2025, an Integon adjuster that was reassigned to the claim sent a 9 letter to Doan explaining that the claims for damages or injuries might exceed the policy’s 10 liability limits. ECF No. 9-8 at 2. Integon explained to Doan that Cruz incurred over $300,000 in 11 medical expenses. Id. Integon further explained to Doan that Cruz’s attorney had advised that he 12 would not settle the claim for the policy limits. Id. Because Integon has sufficiently pled 13 allegations to support its request for declaratory relief in its complaint and has provided 14 supporting evidence in its motion for default judgment, both factors two and three also weigh in 15 favor of granting default judgment. 16 C. Factor four: there is no money at stake, rather declaratory relief 17 In assessing the fourth Eitel factor, I consider “the amount of money requested in relation 18 to the seriousness of the defendants’ conduct, whether large sums of money are involved, and 19 whether ‘the recovery sought is proportional to the harm caused by [the] defendant’s conduct.’” 20 Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1212 (W.D. Wash. 2014) (quoting Landstar 21 Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 2d 916, 921 (C.D. Cal. 2010)); see also PepsiCo, 238 F. 22 Supp. 2d at 1176. Here, the plaintiff seeks declaratory judgment but not any money. See ECF No. 23 9. Other judges in this district have found, and I agree, that “[t]he fourth Eitel factor . . . favors 24 entering default judgment [when] there is no sum of money at stake.” Ditech Fin. LLC v. Northgate 25 Homeowners Ass’n, 2018 WL 2943441, at *3 (D. Nev. June 12, 2018); Bank of Am., N.A. v. Giavanna 26 1 Homeowners Ass’n, 2020 WL 3100826, at *3 (D. Nev. June 11, 2020). Thus, this factor also weighs 2 in favor of entry of default judgment. 3 D. Factor five: the possibility of a dispute concerning material facts 4 The fifth Eitel factor weighs the possibility of a dispute regarding facts material to the 5 case. PepsiCo., 238 F. Supp. 2d at 1177. “Upon entry of default, all well-pleaded facts in the 6 complaint are taken as true, except those relating to damages.” Id. (citation omitted). Integon 7 has sufficiently pleaded facts surrounding the policy limits and its efforts to communicate with 8 Doan before initiating this action; therefore, no factual dispute precludes entry of judgment. The 9 defendant has not appeared to rebut any of Integon’s allegations, and although he had the 10 opportunity to dispute whether Integon’s liability should be limited to the policy limits, he 11 chose not to do so. Consequently, there are no disputed issues of fact before the court, so this 12 fifth factor weighs in favor of entry of default judgment. 13 E. Factor six: the possibility of excusable neglect 14 The sixth Eitel factor considers whether the defendant’s default is due to excusable 15 neglect. PepsiCo., 238 F. Supp. 2d at 1177. No evidence before me suggests that Doan failed to 16 respond due to excusable neglect. Thus, the sixth Eitel factor also weighs in favor of entry of 17 default judgment. See United States v. High Country Broad. Co., 3 F.3d 1244, 1245 (9th Cir. 1993) (per 18 curiam) (holding that it was “perfectly appropriate” for the district court to enter default 19 judgment against a defendant that failed to appear in the action). 20 F. Factor seven: the policy of resolving cases on the merits 21 Finally, the seventh Eitel factor considers the policy favoring a decision on the merits. 22 “Cases should be decided on their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. 23 But here, Doan’s failure to respond to the complaint “makes a decision on the merits impractical, 24 if not impossible.” PepsiCo, 238 F. Supp. 2d at 1177. Thus, while this final Eitel factor always 25 weighs against an entry of default judgment, it does not preclude me from entering one. “A 26 decision on the merits is desirable, but under these circumstances, default judgment is 2|| warranted.” Nevada Prop. 1, LLC v. Kiwibank Ltd., 2020 WL 5633048, at *2 (D. Nev. Sep. 21, 2020). II. Conclusion 4 IT IS HEREBY ORDERED that the plaintiff's motion for default judgment [ECF No. 9] GRANTED. 6 Declaratory judgment is entered against Lam Hung Doan with Integon National 7|| Insurance Company as the prevailing party. Integon is not obligated to pay beyond the $25,000.00 provided to Doan for his bodily injury liability limits; it is not obligated to pay punitive damages in the underlying action (Case No. A-25-912396-C); and Integon is not liable for any extracontractual claims as a result of its conduct in the adjustment of the claim and 11|| defense of the underlying suit, which includes claims for breach of implied covenant of good 12] faith and fair dealing/bad faith or any violation of Nevada’s Unfair Claims Practices Act. B The Clerk of Court is kindly instructed, after entering judgment accordingly, to close 14|| this case. /, / 15 Dated: May 15, 2026 LZ 16 if Ca Cristina). Silva 17 UnigedAtates District Judge 18 ly 19 20 21 22 23 24 25 26