1 O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 NATALIE NADIRA JOHN, ) CV 18-8664-RSWL-JEM ) 13 Plaintiff, ) ) ORDER re: Defendant’s 14 ) Applications for Default v. ) Judgment Against Third- 15 ) Party Defendants Arta ) Balaj [40] and Kamille 16 AIG PROPERTY CASUALTY ) Ella Brisick [41] COMPANY GROUP, INC. UNKNOWN ) 17 FORM OR RESIDENCE, ) ) 18 ) Defendant. ) 19 ) ) 20 ) 21 Currently before the Court is Defendant and Third- 22 Party Plaintiff AIG Property Casualty Company Group, 23 Inc.’s (“Defendant”) Applications for Default Judgment 24 Against Third-Party Defendants Arta Balaj [40] and 25 Kamille Ella Brisick [41] (“Applications”). Having 26 reviewed all papers submitted pertaining to the 27 Applications, the Court NOW FINDS AND RULES AS FOLLOWS: 28 the Court DENIES Defendant’s Applications. 1 I. BACKGROUND 2 A. Factual Background 3 Plaintiff Natalie Nadira John (“Plaintiff”) brings 4 this Action against Defendant for breach of contract 5 claims regarding the denial of automobile insurance 6 coverage. On or about March 25, 2018, Plaintiff was 7 involved in a car accident with two other vehicles, 8 allegedly causing third party losses over $150,000 in 9 property and personal injury damages. First Am. Compl. 10 (“FAC”) ¶¶ 13-15, ECF No. 10. Plaintiff allegedly ran 11 into two parked cars, one owned by Balaj (a 2015 Dodge 12 Charger) and one owned by Brisick (a 2015 Mercedes 13 Benz). Third-Party Compl. ¶ 12, ECF No. 22. 14 Plaintiff alleges that at all relevant times, her 15 car was covered by Policy No. 0013913512 (the 16 “Policy”), entered into by Defendant and Plaintiff. 17 Compl. ¶¶ 5-6. Plaintiff alleges she paid all premiums 18 due under the Policy. Id. ¶ 7. Shortly after the 19 accident, Plaintiff contacted an agent of Defendant to 20 make a claim for the losses, including coverage for 21 Balaj and Brisick’s claims against her for hitting 22 their parked cars. Id. ¶ 16; Third-Party Compl. ¶ 13. 23 After several requests for coverage, Defendant advised 24 Plaintiff it had rejected coverage of her claims. 25 Compl. ¶¶ 17-18. Defendant alleges that it denied 26 Plaintiff’s claims because the Policy had been 27 cancelled for nonpayment of premiums. Third-Party 28 Compl. ¶ 13. Plaintiff alleges that Defendant 1 represented to Plaintiff it would honor her claims in 2 return for maintaining her Policy and continuing to 3 make premium payments, and by denying coverage, 4 Plaintiff further alleges that Defendant has breached a 5 duty of good faith and fair dealing. Id. ¶ 18. 6 B. Procedural Background 7 Plaintiff filed her Complaint [1-2] in Los Angeles 8 County Superior Court on September 5, 2018. Defendant 9 removed this Action to this Court pursuant to diversity 10 jurisdiction on October 9, 2018 [1]. Plaintiff filed a 11 First Amended Complaint [10] on October 22, 2018. 12 Defendant filed a Motion to Strike [11] on October 31, 13 2018, which the Court granted on January 4, 2019 [16]. 14 Plaintiff filed a Second Amended Complaint [17] on 15 January 31, 2019, pursuant to the Court’s Order. 16 On February 28, 2019, Defendant filed a Third-Party 17 Complaint against Balaj and Brisick [22], seeking 18 declaratory relief that there is no coverage under the 19 Policy for Balaj and Brisick’s claims. Defendant 20 served Brisick with the Third-Party Complaint on March 21 19, 2019 [29], and Balaj on March 26, 2019 [28]. On 22 May 31, 2019, the Court Clerk entered default against 23 Balaj and Brisick [38, 39]. On July 1, 2019, Defendant 24 filed the instant Applications for Default Judgment 25 [40, 41]. 26 /// 27 /// 28 /// 1 II. DISCUSSION 2 A. Legal Standard 3 Federal Rule of Civil Procedure (“Rule”) 55(b) 4 authorizes a district court to grant default judgment. 5 Pursuant to Local Rule 55-1, the party moving for 6 default judgment must submit a declaration 7 establishing: (1) when and against which party default 8 was entered; (2) on which pleading default was entered; 9 (3) whether the defaulting party is a minor, 10 incompetent person, or active service member; and 11 (4) proper service. Upon default, all factual 12 allegations in the complaint, except those relating to 13 damages, are assumed to be true. TeleVideo Sys., Inc. 14 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) 15 (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 16 (9th Cir. 1977)). 17 In exercising its discretion to grant default 18 judgment, the court must consider the following factors 19 (the “Eitel factors”): (1) possibility of prejudice to 20 the plaintiff, (2) merits of the substantive claim, 21 (3) sufficiency of the complaint, (4) sum of money at 22 stake, (5) possibility of disputes regarding material 23 facts, (6) whether excusable neglect caused the 24 default, and (7) the strong policy favoring decisions 25 on the merits. NewGen, LLC v. Safe Cig, LLC, 840 F.3d 26 606, 616 (9th Cir. 2016) (quoting Eitel v. McCool, 782 27 F.2d 1470, 1471-72 (9th Cir. 1986)). Additionally, if 28 the defaulting party failed to plead or otherwise 1] defend, the court must determine that it has subject 2i}matter and personal jurisdiction. In re Tuli, 172 F.3d 3.707, 712 (9th Cir. 1999). When default judgment is 4/}granted, the relief awarded “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c). Discussion 8 Defendant seeks judgment declaring that there is no coverage under the Policy for Balaj and Brisick’s 10] claims for damage arising from or in any way related to 11] the March 25, 2018 accident that is the subject of this Action. Third-Party Compl. @{@ 17. 13 “Where a complaint alleges that defendants are 14} jointly liable and one of them defaults, judgment 15] should not be entered against the defaulting defendant until the matter has been adjudicated with regard to 17] all defendants.” In re First 7T.D. & Inv., Inc., 253 18] F.3d 520, 532 (9th Cir. 2001). Courts have consistently held that where “a complaint alleges [the] defendants are jointly liable and one of them defaults, 21] judgment should not be entered against the defaulting defendant until the matter has been adjudicated with 23|}regard to all defendants.” See, e.g., Nielson v. 24} Chang, 253 F.3d 520, 532 (9th Cir. 2001). “While this common law rule was originally limited to 26] jointly-liable co-defendants, in recent years, the Ninth Circuit has extended the rule to encompass 28] ‘similarly situated’ parties.” Guotai USA, Company,
1 Ltd. v. J&Company, LLC, No. 2:16-cv-06948-ODW (PLA), 2 2017 WL 1740014, at * 3 (C.D. Cal. May 3, 2017) (citing 3 Garamendi v. Henin, 683 F.3d 1069, 1082-83 (9th Cir. 4 2012)). Thus, this analysis turns “not on labels such 5 as ‘joint liability’ or ‘joint and several liability,’ 6 but rather on the key question of whether under the 7 theory of the complaint,” the outcome is uniform. See 8 United Fabrics Int’l Inc. v. Life N Style Fashions, 9 Inc., No. 2:15-cv-05733-ODW (Ex), 2015 U.S. Dist. LEXIS 10 158140, *3-4, 2015 WL 7454512 (C.D. Cal. Nov. 23, 2015) 11 (citation omitted). 12 Here, Defendant’s third-party claim for declaratory 13 relief depends on the merits of Defendant’s allegation 14 that the Policy was cancelled.
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1 O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 NATALIE NADIRA JOHN, ) CV 18-8664-RSWL-JEM ) 13 Plaintiff, ) ) ORDER re: Defendant’s 14 ) Applications for Default v. ) Judgment Against Third- 15 ) Party Defendants Arta ) Balaj [40] and Kamille 16 AIG PROPERTY CASUALTY ) Ella Brisick [41] COMPANY GROUP, INC. UNKNOWN ) 17 FORM OR RESIDENCE, ) ) 18 ) Defendant. ) 19 ) ) 20 ) 21 Currently before the Court is Defendant and Third- 22 Party Plaintiff AIG Property Casualty Company Group, 23 Inc.’s (“Defendant”) Applications for Default Judgment 24 Against Third-Party Defendants Arta Balaj [40] and 25 Kamille Ella Brisick [41] (“Applications”). Having 26 reviewed all papers submitted pertaining to the 27 Applications, the Court NOW FINDS AND RULES AS FOLLOWS: 28 the Court DENIES Defendant’s Applications. 1 I. BACKGROUND 2 A. Factual Background 3 Plaintiff Natalie Nadira John (“Plaintiff”) brings 4 this Action against Defendant for breach of contract 5 claims regarding the denial of automobile insurance 6 coverage. On or about March 25, 2018, Plaintiff was 7 involved in a car accident with two other vehicles, 8 allegedly causing third party losses over $150,000 in 9 property and personal injury damages. First Am. Compl. 10 (“FAC”) ¶¶ 13-15, ECF No. 10. Plaintiff allegedly ran 11 into two parked cars, one owned by Balaj (a 2015 Dodge 12 Charger) and one owned by Brisick (a 2015 Mercedes 13 Benz). Third-Party Compl. ¶ 12, ECF No. 22. 14 Plaintiff alleges that at all relevant times, her 15 car was covered by Policy No. 0013913512 (the 16 “Policy”), entered into by Defendant and Plaintiff. 17 Compl. ¶¶ 5-6. Plaintiff alleges she paid all premiums 18 due under the Policy. Id. ¶ 7. Shortly after the 19 accident, Plaintiff contacted an agent of Defendant to 20 make a claim for the losses, including coverage for 21 Balaj and Brisick’s claims against her for hitting 22 their parked cars. Id. ¶ 16; Third-Party Compl. ¶ 13. 23 After several requests for coverage, Defendant advised 24 Plaintiff it had rejected coverage of her claims. 25 Compl. ¶¶ 17-18. Defendant alleges that it denied 26 Plaintiff’s claims because the Policy had been 27 cancelled for nonpayment of premiums. Third-Party 28 Compl. ¶ 13. Plaintiff alleges that Defendant 1 represented to Plaintiff it would honor her claims in 2 return for maintaining her Policy and continuing to 3 make premium payments, and by denying coverage, 4 Plaintiff further alleges that Defendant has breached a 5 duty of good faith and fair dealing. Id. ¶ 18. 6 B. Procedural Background 7 Plaintiff filed her Complaint [1-2] in Los Angeles 8 County Superior Court on September 5, 2018. Defendant 9 removed this Action to this Court pursuant to diversity 10 jurisdiction on October 9, 2018 [1]. Plaintiff filed a 11 First Amended Complaint [10] on October 22, 2018. 12 Defendant filed a Motion to Strike [11] on October 31, 13 2018, which the Court granted on January 4, 2019 [16]. 14 Plaintiff filed a Second Amended Complaint [17] on 15 January 31, 2019, pursuant to the Court’s Order. 16 On February 28, 2019, Defendant filed a Third-Party 17 Complaint against Balaj and Brisick [22], seeking 18 declaratory relief that there is no coverage under the 19 Policy for Balaj and Brisick’s claims. Defendant 20 served Brisick with the Third-Party Complaint on March 21 19, 2019 [29], and Balaj on March 26, 2019 [28]. On 22 May 31, 2019, the Court Clerk entered default against 23 Balaj and Brisick [38, 39]. On July 1, 2019, Defendant 24 filed the instant Applications for Default Judgment 25 [40, 41]. 26 /// 27 /// 28 /// 1 II. DISCUSSION 2 A. Legal Standard 3 Federal Rule of Civil Procedure (“Rule”) 55(b) 4 authorizes a district court to grant default judgment. 5 Pursuant to Local Rule 55-1, the party moving for 6 default judgment must submit a declaration 7 establishing: (1) when and against which party default 8 was entered; (2) on which pleading default was entered; 9 (3) whether the defaulting party is a minor, 10 incompetent person, or active service member; and 11 (4) proper service. Upon default, all factual 12 allegations in the complaint, except those relating to 13 damages, are assumed to be true. TeleVideo Sys., Inc. 14 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) 15 (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 16 (9th Cir. 1977)). 17 In exercising its discretion to grant default 18 judgment, the court must consider the following factors 19 (the “Eitel factors”): (1) possibility of prejudice to 20 the plaintiff, (2) merits of the substantive claim, 21 (3) sufficiency of the complaint, (4) sum of money at 22 stake, (5) possibility of disputes regarding material 23 facts, (6) whether excusable neglect caused the 24 default, and (7) the strong policy favoring decisions 25 on the merits. NewGen, LLC v. Safe Cig, LLC, 840 F.3d 26 606, 616 (9th Cir. 2016) (quoting Eitel v. McCool, 782 27 F.2d 1470, 1471-72 (9th Cir. 1986)). Additionally, if 28 the defaulting party failed to plead or otherwise 1] defend, the court must determine that it has subject 2i}matter and personal jurisdiction. In re Tuli, 172 F.3d 3.707, 712 (9th Cir. 1999). When default judgment is 4/}granted, the relief awarded “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c). Discussion 8 Defendant seeks judgment declaring that there is no coverage under the Policy for Balaj and Brisick’s 10] claims for damage arising from or in any way related to 11] the March 25, 2018 accident that is the subject of this Action. Third-Party Compl. @{@ 17. 13 “Where a complaint alleges that defendants are 14} jointly liable and one of them defaults, judgment 15] should not be entered against the defaulting defendant until the matter has been adjudicated with regard to 17] all defendants.” In re First 7T.D. & Inv., Inc., 253 18] F.3d 520, 532 (9th Cir. 2001). Courts have consistently held that where “a complaint alleges [the] defendants are jointly liable and one of them defaults, 21] judgment should not be entered against the defaulting defendant until the matter has been adjudicated with 23|}regard to all defendants.” See, e.g., Nielson v. 24} Chang, 253 F.3d 520, 532 (9th Cir. 2001). “While this common law rule was originally limited to 26] jointly-liable co-defendants, in recent years, the Ninth Circuit has extended the rule to encompass 28] ‘similarly situated’ parties.” Guotai USA, Company,
1 Ltd. v. J&Company, LLC, No. 2:16-cv-06948-ODW (PLA), 2 2017 WL 1740014, at * 3 (C.D. Cal. May 3, 2017) (citing 3 Garamendi v. Henin, 683 F.3d 1069, 1082-83 (9th Cir. 4 2012)). Thus, this analysis turns “not on labels such 5 as ‘joint liability’ or ‘joint and several liability,’ 6 but rather on the key question of whether under the 7 theory of the complaint,” the outcome is uniform. See 8 United Fabrics Int’l Inc. v. Life N Style Fashions, 9 Inc., No. 2:15-cv-05733-ODW (Ex), 2015 U.S. Dist. LEXIS 10 158140, *3-4, 2015 WL 7454512 (C.D. Cal. Nov. 23, 2015) 11 (citation omitted). 12 Here, Defendant’s third-party claim for declaratory 13 relief depends on the merits of Defendant’s allegation 14 that the Policy was cancelled. The scarcely pled 15 Third-Party Complaint alleges that an “actual 16 controversy has arisen and now exists” between 17 Defendant and Balaj and Brisick as to their third party 18 losses, but that Defendant has no duty over such losses 19 because the Policy was cancelled due to non-payment of 20 premiums. Third-Party Compl. ¶¶ 15-16. Yet, 21 Plaintiff’s claims set forth in her Second Amended 22 Complaint (“SAC”) allege that she paid all premiums due 23 under the Policy and instead argues that Defendant 24 unjustifiably denied coverage of her losses, including 25 the third-party losses. SAC ¶¶ 7, 10, ECF No. 17. 26 Thus, Plaintiff and Third-Party Defendants Balaj and 27 Brisick are similarly situated with respect to coverage 28 under the Policy, and a declaration that Defendant is 1 not liable for Balaj and Brisick’s loss because the 2 Policy was cancelled may impact Plaintiff’s claims or 3 ability to recover against Defendant. 4 At this early stage of litigation, the Court cannot 5 say that Defendant’s third-party claim is meritorious 6 as pled because there is a dispute between Defendant 7 and Plaintiff as to the status of the Policy and 8 payments made. As such, the Court finds that default 9 judgment is not appropriate at this juncture and DENIES 10 Defendant’s Applications for Default Judgment. 11 III. CONCLUSION 12 Based on the foregoing, the Court DENIES 13 Defendant’s Applications for Default Judgment against 14 Third-Party Defendants Arta Balaj and Kamille Ella 15 Brisick. 16 17 IT IS SO ORDERED. 18 /s/ RONALD S.W. LEW 19 DATED: August 6, 2019 20 HONORABLE RONALD S.W. LEW Senior U.S. District Judge 21 22 23 24 25 26 27 28