United States District Court, E.D. Virginia, Alexandria Division
PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, As subrogee of Autumn Contracting, Inc., Plaintiff.
Y&J CONSTRUCTION, INC., Defendant.
PROPOSED FINDINGS OF FACT AND
F. Anderson, United States Magistrate Judge
matter is before the court on plaintiffs Motion for Default
Judgment against Y&J Construction. Inc, (Docket no. 31)
("motion for default judgment"). In this action.
Pennsylvania National Mutual Casualty Insurance Company
("plaintiff or "Penn National") seeks a
default judgment against defendant Y&J Construction, Inc.
("defendant" or "Y&J Construction")
in the amount of $3, 749, 315.63. Pursuant to 28 U.S.C.
§ 636(b)(1)(C), the undersigned magistrate judge is
filing with the court his proposed findings of fact and
recommendations, a copy of which will be provided to all
October 2. 2015. plaintiff filed the complaint in this action
alleging negligence, breach of contract, and seeking
indemnification for a payment made under an insurance policy.
(Docket no. 1) ("CompL"). Upon the filing of the
complaint, a summons was issued for service on Y&J
Construction at 7769 Water Street, Fulton. Maryland 20759.
(Docket no. 2). Y&J Construction was served with a copy
of the summons and the complaint and its exhibits on December
9, 2015 through personal service on its registered agent,
Youngjae Jeon. (Docket no. 10). In accordance with
Fed.R.Civ.P. 12(a), defendant's responsive pleading was
due on December 30, 2015, twenty-one days after service of
process. Defendant timely filed an answer to the complaint on
December 22, 2015. (Docket no. 7).
District Judge entered an Order on February 2, 2016,
directing discovery to close in this matter by May 13, 2016.
(Docket no. 11). On March 2, 2016, defendant filed a motion
to stay the proceedings pending resolution of a related
declaratory judgment action. (Docket no. 13). That action was
brought by Essex Insurance Company, which sought a
declaratory judgment that no coverage was available to
Y&J Construction under its insurance policy. See
Essex Ins. Co. v. Y&J Construction, Inc., e/a/., No.
1:15-cv-1597-TSE-TCB. The District Judge granted
defendant's motion and entered a stay of these
proceedings pending the conclusion of the related declaratory
judgment action on March 11, 2016. (Docket no. 17).
February 7, 2017, plaintiff filed a motion to vacate the stay
due to the resolution of the related action. (Docket no. 18).
In that matter, the court entered an order finding that Essex
Insurance Company had no obligation (1) to defend Y&J
Construction in this matter, (2) to indemnify Y&J
Construction for any judgment, settlement, or recovery in
this action, and (3) to indemnify Penn National with respect
to any subrogation rights it possesses as a result of Perm
National's payment on behalf of its insured resulting
from the fire caused by Y&J Construction. (Docket no. 20
¶ 7). On February 22, 2017, defendant's counsel
filed a motion to withdraw as counsel for Y&J
Construction, explaining that they had been retained by Essex
Insurance Company under the policy at issue in the
declaratory judgment action. (Docket no. 20). On April 6,
2017, the District Judge entered an order granting the motion
to vacate the stay and defendant's counsel's motion
to withdraw. (Docket no. 22). The District Judge advised
defendant that as a corporate entity, it must be represented
by counsel in federal court proceedings and directed
defendant to secure replacement counsel or face default
judgment. (Id). The District Judge specified that
"[i]f new counsel for Defendant does not enter an
appearance in this case within twenty-one (21) days of the
entry of this order, Plaintiff shall immediately obtain the
entry of default from the Clerk pursuant to Federal Rule of
Civil Procedure 55(a)." (Id. at 2).
twenty-one days have passed since the District Judge's
order, and new counsel for defendant has not yet appeared in
this action. Accordingly, plaintiff filed a motion for entry
of default with an incorporated Roseboro notice on
May 16, 2017. (Docket no. 24). On May 30, 2017, plaintiff
noticed the motion for a hearing before the undersigned on
June 16, 2017. (Docket no. 27). The motion for entry of
default and notice of hearing were mailed to defendant at
7769 Water Street in Fulton, Maryland 20759 on the days they
were filed with the court. (Docket nos. 24, 27). On June 16,
2017, counsel for the plaintiff appeared at the hearing
before the undersigned and no one appeared on behalf of the
defendant. On June 16, 2017, the Clerk of Court entered
default in accordance with Fed.R.Civ.P. 55(a). (Docket no.
30). On August 3, 2017, plaintiff filed this motion for
default judgment along with a supporting memorandum and a
notice setting a hearing for September 1, 2017. (Docket nos.
Findings and Recommendations
of the Federal Rules of Civil Procedure provides for the
entry of a default judgment when "a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend." Fed.R.Civ.P. 55(a). Based on
defendant's failure to obtain new counsel to represent it
in this action as ordered by the District Judge, the Clerk of
Court has entered a default as to defendant. (Docket no. 30).
defendant in default admits the factual allegations in the
complaint. See Fed. R. Civ. P. 8(b)(6) ("An
allegation-other than one relating to the amount of
damages-is admitted if a responsive pleading is required and
the allegation is not denied."); see also
GlobalSantaFe Corp. v. Globalsantafe.com, 250 F.Supp.2d
610, 612 n.3 (E.D. Va. 2003) ("Upon default, facts
alleged in the complaint are deemed admitted and the
appropriate inquiry is whether the facts as alleged state a
claim."). Rule 55(b)(2) of the Federal Rules of Civil
Procedure provides that a court may conduct a hearing to
determine the amount of damages, establish the truth of any
allegation by evidence, or investigate any other matter.
must have both subject matter and personal jurisdiction over
a defaulting party before it can render a default judgment.
Plaintiff alleges that this matter is properly brought in
this court under 28 U.S.C. § 1332 based on complete
diversity of citizenship and an appropriate amount in
controversy. (Compl. ¶ 7).
is a Pennsylvania corporation with its principal place of
business in Harrisburg, Pennsylvania. (Compl. ¶ 1).
Defendant is a Maryland corporation with its principal place
of business in Fulton, Maryland. (Compl. ¶ 5).
Plaintiffs complaint also seeks a judgment in excess of $75,
000. (Compl. ¶ 7). In its answer, defendant did not
contest these allegations, but instead stated that it was
without full and complete information to admit or deny these
allegations. (Docket no. 7 ¶ 2). Given that these
allegations are uncontested, it appears that this court has
jurisdiction over the dispute pursuant to 28 U.S.C. §
court also has personal jurisdiction over defendant because
Virginia's long-arm statute authorizes the exercise of
jurisdiction and defendant satisfies the "minimum
contacts" test under the Due Process Clause of the
Fourteenth Amendment. See CFA Inst. v. Inst, of
Chartered Fin. Analysts of India, 551 F.3d 285,
292 (4th Cir. 2009). Specifically, defendant has transacted
business within Virginia and was transacting business in
Virginia at the time of the incident giving rise to the
complaint. (Compl. ¶ 6). Moreover, defendant did not
object to personal jurisdiction in its answer, so has waived
any objection. Fed.R.Civ.P. 12(h)(B)(ii). Venue is proper in
this court pursuant to 28 U.S.C. § 1391(b)(2) because a
substantial part of the events or omissions giving rise to
the claims occurred in the Eastern District of Virginia.
(Compl. ¶ 8).
to Fed.R.Civ.P. 4(h), a corporation may be served in a
judicial district of the United States in the manner
prescribed in Rule 4(e)(1) for serving an individual or by
delivering a copy of the summons and complaint to an officer,
managing, or general agent, or any other agent authorized by
law to receive service of process.
summons issued on October 2, 2015 (Docket no. 2) was returned
executed on December 29, 2015 (Docket no. 10) with an
affidavit of service that indicates that on December 9, 2015,
a process server personally served Youngjae Jeon, Registered
Agent of Y&J Construction, Inc., at 7769 Water Street,
Fulton, Maryland 20759, with a copy of the summons,
complaint, and attached exhibits (Docket no. 10 at 1). In
response to this service, initial counsel made an ...