Allstate Life Ins. Co. v. Tyler-Howard, Case No. 3:19-cv-00276

• Decision Date: 08 October 2019
• Docket Number: Case No. 3:19-cv-00276
• Parties: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK, Plaintiffs, v. CYNTHIA TYLER-HOWARD a/k/a CYNTHIA TYLER, RUQAYYAH HOWARD, and KENNETH E. PURVIS, Defendants.
• Court: United States District Courts. 6th Circuit. United States District Court of Middle District of Tennessee

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK, Plaintiffs,
v.
CYNTHIA TYLER-HOWARD a/k/a CYNTHIA TYLER,
RUQAYYAH HOWARD, and KENNETH E. PURVIS, Defendants.

Case No. 3:19-cv-00276

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

October 8, 2019

JUDGE CAMPBELL
MAGISTRATE JUDGE NEWBERN

MEMORANDUM

Pending before the Court is Plaintiff's Motion for Entry of Default Judgment Against Defendants Cynthia Tyler-Howard a/k/a Cynthia Howard and RuQayyah Howard (Doc. No. 24). Plaintiff filed the instant action alleging claims of civil fraud, unjust enrichment, conversion, and negligence against Cynthia Howard; aiding and abetting fraud against RuQayyah Howard and Kenneth Purvis; and insurance fraud and constructive trust against all Defendants. (Doc. No. 1). Plaintiff filed proof of service of process of Cynthia Howard and RuQayyah Howard, but have not served Kenneth Purvis. On August 8, 2019, the Clerk granted Entry of Default as to Cynthia Howard and RuQayyah Howard. (Doc. No. 23).

I. STATEMENT OF FACTS¹

Plaintiff Allstate Life Insurance Company of New York ("Allstate Life"), issued a structured settlement annuity contract, No. 95004776 (the "Annuity"), by which it was obligated to make monthly payments of $3,820.00, with a monthly 3% increase. The term of the payments was August 20, 1994 through July 20, 2014, and thereafter for the life of Kamar Purvis. Monthly

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payments after August 20, 2014, were contingent on Kamar Purvis being alive. Kamar Purvis died on July 8, 2004. Allstate Life had no notice of his death and continued to deposit payments into a Citibank account in the name of Cynthia Tyler M/N/G Kamar Purvis. Allstate continued to deposit payments into the Citibank account until July 20, 2018.

Plaintiff alleges Defendants held out Kamar to be alive in order to continue to receive payments. In August 2007, Allstate Life was served with a petition for transfer of the structured settlement payment to Henderson Receivables Original LLC. The petition included an affidavit and several other documents purportedly signed by Kamar Purvis. (Doc. No. 1-9). On July 11, 2010, Cynthia Howard wrote to Allstate Life requesting information as guardian to Kamar Purvis. (Doc. No. 1-11). On July 16, 2018, Cynthia Howard submitted an information request form to Allstate Life indicating that Kamar Purvis was "living" and giving his "knew [sic] address" in Nashville, Tennessee. (Doc. No. 1-12). On November 9, 2018, Cynthia Howard called Allstate and told the Allstate representative that Kamar Purvis was 31 years old and living with her.

Allstate Life claims it paid $338,831.67 to Cynthia Howard for the benefit of Kamar Purvis between August 20, 2017 and July 20, 2018. (Doc. No. 14). Plaintiff claims these payments also unjustly enriched Cynthia Howard's other children, RuQayyah Howard and Kenneth Purvis, because "during their minority, [Kenneth Purvis and RuQayyah Howard] resided with [Cynthia Howard] and inevitably benefited from the funds [Cynthia Howard] was receiving and to which she was not entitled." (Comp., Doc. No. 1, ¶ 41).

II. STANDARD OF REVIEW

Federal Rule 55(b) governs the entry of default judgment. "When an application is made to the court under Rule 55(b)(2) for the entry of judgment by default, the district judge is required

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to exercise sound judicial discretion in determining whether the judgment should be entered." 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civ.3d § 2685 (1998). "This element of discretion makes it clear that the party making the request is not entitled to a default judgment as of right." Id. The court should deny a motion for default judgment when the complaint fails to state a claim upon which relief can be granted. Lee v. United Serv. Assocs., Inc., No. 4:07-cv-57, 2007 WL 2788459 at * 1...