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Hartford Underwriters Insurance Co. v. Davis Paige Management Systems LLC

United States District Court, E.D. Virginia, Alexandria Division

March 6, 2018

HARTFORD UNDERWRITERS INSURANCE COMPANY, et al., Plaintiffs,
v.
DAVIS PAIGE MANAGEMENT SYSTEMS LLC, Defendant.

          REPORT & RECOMMENDATION

          Michael S. Nachmanoff United States Magistrate Judge.

         This matter comes before the Court on Plaintiffs' Motion for Default Judgment (Dkt. No. 8). Having reviewed the record and pleadings, the undersigned Magistrate Judge recommends entering default judgment in the Plaintiffs' favor for the reasons that follow.

         I. Background

         On November 3, 2017, Plaintiffs Hartford Underwriters Insurance Company, Trumbull Insurance Company, Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, and Twin City Fire Insurance Company[1] filed a Complaint to recover damages from Defendant Davis Paige Management Systems LLC's failure to pay premiums on two insurance policies. See Compl. ¶¶ 1, 8-9, 14, 21 (Dkt. No. 1). Plaintiffs allege that at Defendant's request, they issued a Workers Compensation and Employers Liability Insurance Policy for the following periods: June 20, 2014 to June 20, 2015, June 20, 2015 to June 20, 2016, and June 20, 2016 to June 20, 2017, and a Commercial Package Insurance Policy for the following periods: June 20, 2015 to June 20, 2016 and June 20, 2016 to June 20, 2017. Id. ¶ 8. Plaintiffs cancelled both policies on December 24, 2016. Id.

         Pursuant to these policies, Defendant contracted to pay premiums to Plaintiffs, some of which were defined and others of which were dependent on the results of an audit, the number of employees, and the employees' responsibilities and work classifications. Id. ¶ 9. Upon the conclusion of each policy period, Plaintiffs conducted an audit of Defendant's records, resulting in Defendant owing additional premiums in the amount of $150, 190.44, reflected in a bill dated February 27, 2017, sent to Defendant. Id. ¶ 11; see Final Insurance Bill (Dkt. No. 1-1). Defendant did not object to or dispute this balance on the insurance policies but failed to pay the amount past due despite Plaintiffs' repeated requests. Compl. ¶¶ 13-14, 18-21. Plaintiffs now seek recovery of $150, 190.44, exclusive of pre- and post-judgment interest, attorneys' fees, and costs, from Defendant. Id. ¶¶ 14, 21.

         II. Procedural History

         On November 9, 2017, Plaintiffs' process server personally served Defendant through its registered agent, Michael E. P. Davis, pursuant to Federal Rule of Civil Procedure 4(c), (e), and (h). (Dkt. No. 4). See Business Entity Details for Davis-Paige Management Systems LLC, Virginia State Corporation Commission, https://sccefile.scc.virginia.gov/Business/T020821 (listing Mr. Davis as Defendant's registered agent).[2] Defendant did not file a response within 21 days of receipt (i.e. November 30, 2017) (Dkt. Nos. 4-8). On January 12, 2018, the Clerk entered a default against Defendant (Dkt. No. 7). Two weeks later, Plaintiffs filed this Motion for Default Judgment (Dkt. No. 8).

         III. Service of Process, Jurisdiction, and Venue

         The docket reflects that Defendant has been properly served pursuant to Federal Rule 4(h)(1)(B). See Summons Return Executed (Dkt. No. 4); Burns Aff. ¶¶ 3-4 (Dkt. No. 6); Pls.' Mot. for Default J. ¶¶ 9-10 (Dkt. No. 8). This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332, as Plaintiffs are seeking damages in excess of $75, 000, exclusive of interest and costs, and the Parties are citizens of different states. Compl. ¶ 6; Pls.' Mot. for Default J. ¶ 7. Plaintiffs are citizens of Connecticut and Indiana, and Defendant is a citizen of Virginia.[3] Compl. ¶¶ 2-5.

         This Court also has personal jurisdiction over Defendant. Virginia's long-arm statute authorizes the exercise of personal jurisdiction over Defendant if it 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). As stated in the Complaint, Defendant is a Virginia corporation with its principal place of business in Virginia. See Compl. ¶ 5. Venue is proper pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events or omissions giving rise to the claim against Defendants occurred within the Eastern District of Virginia. See Id. ¶ 7.

         IV. Legal Standard

         Default judgment is appropriate if the well-pled allegations of the complaint establish that the plaintiff is entitled to relief and the defendant has failed to plead or defend within the time frame set out in the rules. Fed.R.Civ.P. 55; see Music City Music v. Alfa Foods, Ltd., 616 F.Supp. 1001, 1002 (E.D. Va. 1985). By defaulting, the defendant admits the plaintiff's well-pled allegations of fact, which then provide the basis for judgment. See Partington v. Am. Int'l Specialty Lines Ins. Co., 443 F.3d 334, 341 (4th Cir. 2006); Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Nevertheless, “‘[a] court confronted with a motion for default judgment is required to exercise sound judicial discretion in determining whether the judgment should be entered, and the moving party is not entitled to default judgment as a matter of right.'” ReadyCap Lending, LLC v. Servicemaster Prof'l Cleaning, Inc., No. 2:15-cv-451, 2016 WL 1714877, at *2 (E.D. Va. Apr. 12, 2016) (quoting EMI April Music, Inc. v. White, 618 F.Supp.2d 497, 505 (E.D. Va. 2009)). Here, because Defendant has not answered or otherwise timely responded, the well-pled allegations of fact contained in the Complaint are deemed to be admitted.

         V. Analysis

         Having examined the record, the undersigned Magistrate Judge finds that the well-pled allegations of fact contained in the Complaint, and supported by Plaintiffs' Motion for Default Judgment, establish that Defendant breached its agreement to pay premiums on two insurance policies. ...


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