Hankins v. United States Fire Ins. Co.

Decision Date05 August 2022
Docket NumberCivil Action 5:22-cv-72 (MTT)
CourtUnited States District Courts. 11th Circuit. Middle District of Georgia


Plaintiff Ricko Hankins has moved for default judgment against Defendant United States Fire Insurance Company (U.S Fire). For the following reasons, that motion (Doc 6), as amended (Doc. 7), is GRANTED in part and DENIED in part.


The allegations of the complaint, deemed admitted because of U.S. Fire's default, establish these facts. U.S. Fire issued a policy of occupational accident insurance to Hankins, which was in effect on May 29, 2019. Doc. 1 ¶ 4.1. On that day, Hankins was injured in an auto collision while working, which is considered an “occupational accident” as defined in the issued policy. Id. ¶ 4.2. Hankins incurred injuries as a result of the accident that rendered him totally disabled. Id. ¶ 4.3. Under the agreement between U.S. Fire and Hankins, U.S. Fire owed Hankins 104 weeks of temporary disability payments. Id. ¶ 4.4. Hankins complied with all conditions precedent for receiving disability payments under the contract with U.S. Fire and provided all necessary documentation necessary for U.S. Fire to properly evaluate Hankins's claims under the policy. Id. ¶¶ 4.5-4.6.

On June 5, 2020, U.S. Fire began paying Hankins $996.18 every two weeks in temporary disability benefits. Id. ¶ 4.7. However, those payments stopped on September 22, 2020, after Hankins was only paid sixteen weeks of temporary disability benefits out of the 104 weeks he was owed under the policy. Id. ¶¶ 4.8-4.10. Hankins remains totally disabled as defined by the policy, and thus U.S. Fire owes Hankins the remaining eighty-eight weeks of temporary total disability payments. Id. ¶¶ 4.11-4.12.

Hankins is permanently and totally disabled as that term is defined for Social Security benefits under SSI. Id. ¶¶ 4.13-4.14. As of Hankins's forty-eighth birthday on June 5, 2022, he is entitled to permanent total disability payments until he turns seventy. Id. ¶¶ 4.15-4.17. Finally, the agreement between U.S. Fire provided for payment of Hankins's medical expenses incurred as result of the occupational accident within 104 weeks of the accident. Id. ¶ 4.18. Because U.S. Fire has only paid a fraction of these bills, Hankins claims he is entitled to the remainder. Id.

Hankins filed suit against U.S. Fire on February 15, 2022, alleging “breach of contract” and “bad faith” failure to pay an insurance claim under O.C.G.A. § 33-4-6. Doc. 1. U.S. Fire was served on March 3, 2022. Docs. 6-3 ¶ 3; 6-4. U.S. Fire failed to answer or otherwise defend and is now in default. Docs. 4; 5. The Clerk of Court, however, did not enter default judgment because the damages, as alleged in Hankins's complaint, were not a “sum certain.” Doc. 5. Hankins then moved for default judgment. Doc. 6. After a preliminary review of that motion, the Court advised Hankins that additional briefing was required to determine whether the Court could award Hankins the unaccrued future payments due under the disability policy in one lump sum, and if so, whether the Court must reduce such an award to present cash value. Doc. 7 at 1. Hankins complied and amended his motion accordingly. Docs. 7; 7-1; 7-2; 7-3. The matter is now ripe for adjudication.


Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk of Court must enter a party's default if that party's failure to plead or otherwise defend an action against it “is shown by affidavit or otherwise.” After default has been entered, the Clerk may enter a default judgment on the plaintiff's request if the claim “is for a sum certain or a sum that can be made certain by computation,” as long as the party is not a minor or incompetent and has not made an appearance. Fed.R.Civ.P. 55(b)(1). In all other cases, the plaintiff must apply to the Court for a default judgment. Fed.R.Civ.P. 55(b)(2). The Court must hold an evidentiary hearing to determine damages unless all the essential evidence is already in the record. See S.E.C. v. Smyth, 420 F.3d 1225, 1232 n.13 (11th Cir. 2005) (We have held that no such hearing is required where all essential evidence is already of record.”); see also Fed.R.Civ.P. 55(b)(2) (“The court may conduct hearings[.]).

After the Clerk's entry of default, a defendant is deemed to have admitted all well-pleaded factual allegations in the complaint. Nishimatsu Const. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).[1] However, an entry of default against the defendant does not establish that the plaintiff is entitled to a default judgment. The defendant is not deemed to admit facts that are not well-pleaded or conclusions of law. Id. “The Court must consider whether the unchallenged facts constitute a legitimate cause of action, since the party in default does not admit a mere conclusion of law. In considering any default judgment, the Court must consider (1) jurisdiction, (2) liability, and (3) damages.” Johnson v. Rammage, 2007 WL 2276847, at *1 (M.D. Ga. Aug. 7, 2007) (citing Pitts v. Seneca Sports, Inc., 321 F.Supp.2d 1353, 1356 (S.D. Ga. 2004)). The defendant is also not deemed to admit the plaintiff's allegations relating to the amount of damages. Patray v. Nw. Publ'g, Inc., 931 F.Supp. 865, 869 (S.D. Ga. 1996); see also Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003) (“A court has an obligation to assure that there is a legitimate basis for any damage award it enters.”).


To enter a valid default judgment, the Court must, of course, have both personal and subject matter jurisdiction. Rash v. Rash, 173 F.3d 1376, 1381 (11th Cir. 1999); see also Sys. Pipe & Supply, Inc. v. M/V Viktor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001) (“When entry of default is sought against a party who has failed to plead or otherwise defend, the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.”). Here, the Court has subject matter jurisdiction over Hankins's claims based on diversity jurisdiction. Hankins alleged he is a citizen of Georgia and the amount in controversy exceeds $75,000, while U.S. Fire is a foreign corporation with its principal place of business in New Jersey and incorporated under the laws of Delaware. 28 U.S.C. § 1332; Doc. 1 ¶¶ 1.1-1.3.

Moreover, the allegations sufficiently allege that the Court has personal jurisdiction over U.S. Fire. Personal jurisdiction can be either general or specific.

General jurisdiction exists where a nonresident defendant's connections with the forum state are “continuous and systematic” so as to render the nonresident defendant “at home in the forum State.” Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (quotation and citation omitted). Specific jurisdiction, on the other hand, must arise out of the events or transactions underlying the claim that forms the basis of the lawsuit. Walden v. Fiore, 571 U.S. 277, 283-84 (2014). In other words, for specific jurisdiction to be proper, “the defendant must have ‘purposefully availed' itself of the privilege of conducting activities-that is, purposefully establishing contacts-in the forum state and there must be a sufficient nexus between those contacts and the litigation.” Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1267 (11th Cir. 2010) (citations omitted).

Here, Hankins adequately alleged both general and specific jurisdiction over US. Fire. As to the former, Hankins alleged “U.S. Fire is authorized to do business in the State of Georgia and has a registered agent in the State of Georgia and U.S. Fire's activities in Georgia are “continuous and systematic.” Doc. 1. ¶¶ 2.3, 2.5. With respect to the latter, Hankins alleged “U.S. Fire sold insurance to Plaintiff in Georgia in the form of an occupational insurance policy,” the contract at issue was entered into in the State of Georgia, and [t]he damage to Plaintiff and this cause of action arises out of U.S. Fire's activities in Georgia.” Id. ¶¶ 2.1, 2.2, 2.4. In sum, the Court has both subject matter and personal jurisdiction over this matter.


Hankins's complaint asserts claims for “breach of contract” and “bad faith” failure to pay an insurance claim under O.C.G.A. § 33-4-6. Hankins has adequately alleged liability as to both claims and is entitled to attorney's fees under O.C.G.A. § 33-4-6, but not expert fees and costs. Further, Hankins has submitted sufficient evidence to support an award of $278,655.48 in breach of contract damages, $139,327.74 in bad faith damages, and $9,850.00 in attorney's fees.

A. U.S. Fire's Liability
1. Breach of Contract

“The elements for a breach of contract claim in Georgia are the (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken.” SAWS at Seven Hills, LLC v. Forestar Realty, Inc., 342 Ga.App. 780, 784, 805 S.E.2d 270, 274 (2017). Here, Hankins specifically alleged he entered into an agreement with U.S. Fire to make “certain payments to Plaintiff in the event of an injury resulting from an occupational accident.” Doc. 1 ¶ 5.1. When that occupational accident occurred on May 29, 2019, U.S. Fire subsequently failed to make the required temporary disability, permanent total disability, and medical expense payments as required by the insurance contract. Id. ¶¶ 5.3, 5.6. These allegations are sufficient to entitle Hankins to default judgment on his breach of contract claim against U.S. Fire.

2. Bad Faith Refusal to Pay a Claim

Pursuant to O.C.G.A. § 33-4-6, a Plaintiff may recover damages for an insurer's bad faith refusal to pay a claim if (1) the...

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