National Union Fire Ins. Co. of Pittsburgh, PA v. Winn

CourtDistrict Court, E.D. California
DecidedFebruary 16, 2022
Docket2:21-cv-01140
StatusUnknown

This text of National Union Fire Ins. Co. of Pittsburgh, PA v. Winn (National Union Fire Ins. Co. of Pittsburgh, PA v. Winn) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Union Fire Ins. Co. of Pittsburgh, PA v. Winn, (E.D. Cal. 2022).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 NAT’L UNION FIRE INS. CO. OF No. 2:21-cv-1140-WBS-KJN PITTSBURGH PA, 12 FINDINGS AND RECOMMENDATIONS Plaintiff, 13 (ECF No. 11.) v. 14 ROBERT WINN, 15 Defendant. 16 17 Presently pending before the Court is plaintiff’ National Union Fire Insurance Company 18 of Pittsburgh, PA’s motion for default judgment against defendant Robert Winn.1 To date, 19 defendant has not opposed plaintiff’s motion or otherwise made an appearance in this action. 20 The undersigned recommends plaintiff’s motion for default judgment be GRANTED IN 21 FULL, and that plaintiff be awarded final judgment in the amount of $274,706.42. 22 I. BACKGROUND2 23 Activision Blizzard, Inc. (“Activision”) employed defendant as the Director of Payroll 24 until March 15, 2018. (ECF No. 1 at 2.) From February 2016 to February 2018, defendant 25 misappropriated $305,355.54 from Activision. (Id.) Plaintiff insured Activision for losses 26 1 This motion is referred to the undersigned by Local Rule 302(c)(19) for the entry of findings 27 and recommendations. See 28 U.S.C. § 636(b)(1)(B).

28 2 All facts derive from plaintiff’s complaint unless otherwise noted. (See ECF No. 1.) 1 sustained due to employee dishonesty, and therefore indemnified Activision for losses sustained 2 because of defendant’s misappropriation. (Id.) As a result of indemnifying Activision, plaintiff 3 became subrogated to Activision and Activision assigned plaintiff “all rights, claims[,] and causes 4 of action” it has against defendant. (Id.) 5 Following plaintiff’s demands for repayment, the parties negotiated a settlement 6 agreement (“Agreement”) whereby defendant agreed to pay plaintiff $267,355.54 on a payment 7 schedule. (Id. at 3.) In turn, plaintiff agreed “to forbear from any and all collection efforts” from 8 defendant. (Id.) Defendant failed to make any payments due under the Agreement, and therefore 9 came into default. (Id. at 4.) Pursuant to the Agreement, plaintiff’s counsel provided emailed 10 notice of the default to defendant on May 10, 2021, and demanded defendant cure his default by 11 paying plaintiff within ten days. (Id.) Defendant did not respond. Plaintiff contends that as of 12 this lawsuit, defendant owes $274,706.42 (the principal sum of the Agreement) plus accruing 13 interest and costs (as provided for in the Agreement). (ECF No. 11 at 8.) 14 On June 28, 2021, plaintiff brought this diversity action against defendant for breach of 15 contract. (See ECF No. 1.) Plaintiff alleges that it complied with its obligations under the 16 Agreement, and has been damaged as a result of defendant’s failure to make any payments in 17 accordance with the Agreement’s payment schedule. (Id. at 4-5.) Plaintiff’s complaint and 18 summons were personally served on defendant on July 21, 2021, at defendant’s address. (See 19 ECF No. 6.) Defendant failed to answer or otherwise respond, and the Clerk of the Court entered 20 default. (See ECF Nos. 7, 8, 9.) 21 On December 21, 2021, plaintiff moved for a default judgment and served defendant by 22 mail. (ECF No. 11, 15.) Defendant failed to respond to plaintiff’s motion. The court vacated the 23 February 1, 2021 hearing and, out of an abundance of caution, provided defendants one final 24 opportunity to oppose. (ECF No. 17.) Plaintiff served a copy of this order on defendant by mail 25 on January 24, 2022. (ECF No. 18.) Despite this fact, defendant still has not opposed plaintiff’s 26 motion or otherwise appeared in this action. (See ECF Nos. 17, 18.) Plaintiff seeks judgment in 27 the amount of $274,706.42 be entered against defendant. (ECF No. 11 at 8.) 28 /// 1 II. LEGAL STANDARD 2 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 3 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 4 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not 5 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 6 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 7 (9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies 8 within the district court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 9 1980). In making this determination, the court considers the following factors:

10 1. the possibility of prejudice to the plaintiff, 2. the merits of plaintiff’s substantive claim and the sufficiency of the complaint; 11 3. the sum of money at stake in the action; 4. the possibility of a dispute concerning material facts; 12 5. whether the default was due to excusable neglect, and 6. the strong policy underlying the Federal Rules of Civil Procedure favoring decisions 13 on the merits. 14 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 15 disfavored. Id. at 1472. 16 As a general rule, once default is entered, well-pleaded factual allegations in the operative 17 complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. 18 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. 19 Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); accord Fair Housing of Marin v. Combs, 20 285 F.3d 899, 906 (9th Cir. 2002). In addition, although well-pleaded allegations in the 21 complaint are admitted by a defendant’s failure to respond, “necessary facts not contained in the 22 pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. 23 Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 24 1386, 1388 (9th Cir. 1978)); accord DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 25 2007) (stating that a defendant does not admit facts that are not well-pled or conclusions of law); 26 see e.g., Abney v. Alameida, 334 F. Supp. 2d 1221, 1235 (S.D. Cal. 2004) (“[A] default judgment 27 may not be entered on a legally insufficient claim.”). A party’s default conclusively establishes 28 that party’s liability, but it does not establish the amount of damages. Geddes, 559 F.2d at 560. 1 III. DISCUSSION 2 A. Appropriateness of the Entry of Default Judgment Under the Eitel Factors 3 The undersigned finds that the weight of the Eitel factors entitles plaintiff to a default 4 judgment against defendant and recommends default judgment be entered with respect to liability. 5 1. Plaintiff is prejudiced by defendants’ non-responsiveness.

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National Union Fire Ins. Co. of Pittsburgh, PA v. Winn, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-fire-ins-co-of-pittsburgh-pa-v-winn-caed-2022.