S.-Owners Ins. Co. v. A To Z Gulfcoast Servs.
| Decision Date | 29 November 2022 |
| Docket Number | 8:22-cv-1010-TPB-JSS |
| Parties | SOUTHERN-OWNERS INSURANCE COMPANY, Plaintiff, v. A TO Z GULFCOAST SERVICES, LLC and SHAUN MCGLAUN, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
REPORT AND RECOMMENDATION
Plaintiff moves for entry of a final default declaratory judgment against Defendants A to Z Gulfcoast Services, LLC (A to Z) and Shaun McGlaun (McGlaun) pursuant to Federal Rule of Civil Procedure 55(b) and Middle District of Florida Local Rule 1.10(c). (Motions, Dkts. 21, 22.) For the reasons that follow, the undersigned recommends that the Motions be granted and default judgment be entered in Plaintiff's favor against Defendants.
Plaintiff brings this action seeking declaratory relief pursuant to 28 U.S.C. § 2201 and Florida Statutes Chapter 86. (Dkt. 1.) According to Plaintiff's Complaint, McGlaun filed an action against A to Z in the Circuit Court of the Sixth Judicial Circuit, in and for Pinellas County, Florida, for damages that McGlaun allegedly sustained when he fell from a ladder while performing roofing and framing work for A to Z (the Underlying Action). (Id. ¶ 11.)[1] Plaintiff is providing a defense to A to Z in the Underlying Action subject to a commercial general liability insurance policy issued to A to Z by Plaintiff (the Insurance Policy). (Id. ¶ 20.) With this action, Plaintiff seeks a ruling that, pursuant to the terms of the Insurance Policy, it has no duty to defend or indemnify A to Z in the Underlying Action. (Id.)
Under the Insurance Policy, Plaintiff agreed to provide coverage to A to Z for “bodily injury” caused by an “occurrence” within the “coverage territory” and during the policy term. (Dkt. 1-3 at 25.) The “coverage territory” includes the United States (Id. at 39) and the policy term was from April 10, 2018 to April 10, 2019 (Id. at 6). “Bodily injury” is defined as “bodily injury, bodily sickness or bodily disease sustained by a person, including death resulting from any of these at any time.” (Id. at 38.) An “occurrence” is defined to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (Id. at 40.) Pursuant to the Insurance Policy Plaintiff agreed to “pay those sums that [A to Z] becomes legally obligated to pay as damages because of ‘bodily injury' [] to which this insurance applies” and to “have the right and duty to defend [A to Z] against any ‘suit' seeking those damages.” (Id. ¶ 23; Dkt. 1-3 at 25.)
Coverage under the Insurance Policy is also subject to several exclusions, including, as relevant here, a Workers Compensation Exclusion and an Employer's Liability Exclusion. (Id. ¶ 24; Dkt. 1-3 at 26-30 43-44.) The Workers Compensation Exclusion provides that “[t]his insurance does not apply to . . . [a]ny obligation of the insured under a workers compensation law.” (Dkt. 1 ¶ 30; Dkt. 1-3 at 26.) The Employer's Liability Exclusion provides that the insurance does not apply to “bodily injury” to “[a]n ‘employee' of any insured arising out of and in the course of employment by any insured” and excludes from the definition of an “insured” an entity where the claim is for “bodily injury” “[t]o an ‘employee' of any insured while in the course of his or her employment or performing duties related to the conduct of any insured's business.” (Dkt. 1 ¶ 25; Dkt. 1-3 at 43.)[2]
Plaintiff seeks a ruling that, pursuant to the Workers Compensation Exclusion and the Employer's Liability Exclusion, Plaintiff has no duty to defend or indemnify A to Z in the Underlying Action. (Dkt. 1, Count I.) After the complaint was served, neither Defendant appeared or otherwise defended this action. On July 7, 2022, Plaintiff moved for entry of a clerk's default against both Defendants (Dkts. 17, 18), and the Clerk of the Court subsequently entered defaults. (Dkts. 19, 20.) Plaintiff now moves for entry of default declaratory judgments against both Defendants. (Dkts. 21, 22.)
When a party fails to plead or otherwise defend a judgment for affirmative relief, the clerk of the court must enter a default against the party against whom the judgment was sought. Fed.R.Civ.P. 55(a). If the plaintiff's claim is for a sum certain or an ascertainable sum, then the clerk, upon the plaintiff's request and upon an affidavit of the amount due, must enter a judgment by default. Fed.R.Civ.P. 55(b)(1). In all other cases, the party entitled to judgment must apply to the district court for a default judgment. Fed.R.Civ.P. 55(b)(2). A court may enter a default judgment against a defendant who never appears or answers a complaint, “for in such circumstances the case never has been placed at issue.” Solaroll Shade & Shutter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1134 (11th Cir. 1986).
Furthermore, a defaulted defendant is deemed to admit the plaintiff's well-pleaded allegations of fact. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005); Nishimatsu Const. Co. v. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).[3] However, “before entering a default judgment . . . the district court must ensure that the well-pleaded allegations in the complaint, which are taken as true due to the default, actually state a substantive cause of action and that there is a substantive, sufficient basis in the pleadings for the particular relief sought.” Tyco Fire & Sec., LLC v. Alcocer, 218 Fed.Appx. 860, 863 (11th Cir. 2007) (emphasis omitted). Therefore, in considering whether to enter default judgment, the court must first determine whether the complaint states a claim for relief. In addition to the pleadings, the court may also consider evidence presented in support of the motion for default judgment, including testimony and affidavits. Equal Emp't Opportunity Comm'n v. Titan Waste Servs. Inc., No. 3:10-cv-379-MCR-EMT, 2014 WL931010, at *6 (N.D. Fla. Mar. 10, 2014); cf. Super Stop No. 701, Inc. v. BP Prod. N. Am. Inc., No. 08-civ-61389, 2009 WL 5068532, at *2 n.4 (S.D. Fla. Dec. 17, 2009) ().
Plaintiff alleges subject matter jurisdiction based on the court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Dkt. 1 at 1-2.) Under 28 U.S.C. § 1332, a plaintiff must allege that the parties are of diverse citizenship and the amount in controversy exceeds $75,000. In an action for declaratory relief, “the amount in controversy is the monetary value of the object of the litigation from the plaintiff's perspective.” Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003) (quoting Cohen v. Office Depot, Inc., 204 F.3d 1069, 1077 (11th Cir. 2000)). More specifically, in an action brought by a plaintiff-insurer for a declaratory judgment that the plaintiff is not liable under an insurance policy, “the value of the declaratory relief to the plaintiff-insurer is the amount of potential liability under its policy.” First Mercury Ins. Co. v. Excellent Computing Distributors, Inc., 648 Fed.Appx. 861, 865 (11th Cir. 2016) (emphasis in original) (citing Stonewall Ins. Co. v. Lopez, 544 F.2d 198, 199 (5th Cir. 1976)); see also Progressive Mountain Ins. Co. v. Middlebrooks, 805 Fed.Appx. 731, 737 (11th Cir. 2020) () (citing Williams v. Best Buy Co., 269 F.3d 1316, 1319-20 (11th Cir. 2001)).
Here, Plaintiff alleges that “the damages at issue are in excess of $75,000 exclusive of interest and costs.” (Dkt. 1 ¶ 8.) Plaintiff further alleges that the policy at issue provides “Commercial General Liability Coverage in the amount of $1,000,000 for each occurrence.” (Dkt. 1 ¶ 22.) Plaintiff also provides the court with a copy of the amended complaint in the Underlying Action (Dkt. 1-2)[4] and the Insurance Policy (Dkt. 1-3) and cites the general allegations of damages in the underlying amended complaint (Dkt. 1 ¶ 19). Plaintiff also states that it “is providing a defense to A to Z in the Underlying Action subject to the terms and provisions of the” Insurance Policy. (Dkt. 1 ¶ 20.) At the court's direction, Plaintiff provided additional information regarding the amount in controversy, including additional information about the damages sought and settlement offers made in the Underlying Action, as well as an affidavit setting forth the expected cost to defend A to Z in the Underlying Action. See (Dkt. 25.) Based on Plaintiff's representations, the undersigned finds that Plaintiff has sufficiently alleged that the amount-in-controversy threshold is satisfied. Plaintiff also sufficiently alleges that the parties are diverse. See (Dkt. 1 ¶¶ 1-7.) The undersigned therefore finds that the court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332.
In seeking a default judgment, Plaintiff also bears the burden of establishing proper service of the complaint. See Rajotte v. Fabco Metal Prod., LLC, No 6:12-cv-372-ORL-28, 2012 WL 6765731, at *2 (M.D. Fla. Dec. 13, 2012), report and recommendation adopted, No. 6:12-cv-372-ORL-28, 2013 WL 57722 (M.D. Fla. Jan. 4, 2013) (denying motion for default judgment without prejudice due to improper service). Even if a defaulting defendant has actual notice of the action, “[i]nsufficient or improper service cannot support the entry of a default judgment.” Opella v. Rullan, No. 10-civ-21134, 2011 WL 2600707, at *4 (S.D. Fla. June 29, 2011), report and recommendation adopted, No. 10-civ-21134, 2011 WL 13220496 (S.D. Fla. Aug. 9, 2011) (citing ...
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