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Granite State Insurance Company v. Delta Marine Environmental, LLC

United States District Court, E.D. Louisiana

November 20, 2018

GRANITE STATE INSURANCE CO., ET AL.
v.
DELTA MARINE ENVIRONMENTAL, LLC

         SECTION I

          ORDER & REASONS

          LANCE M. AFRICK UNITED STATES DISTRICT JUDGE.

         Before the Court is plaintiffs Granite State Insurance Company and Commerce & Industry Insurance Company's (collectively, the “plaintiffs”) motion for entry of a default judgment against defendant Delta Marine Environmental, LLC (“Delta Marine”). The plaintiffs request that the Court enter a judgment in their favor and against Delta Marine in the amount of $304, 488.00. They also request pre-judgment interest at an annual rate of 5% and post-judgment interest at the statutory rate until the judgment is paid in full. For the following reasons, the motion is granted.

         I.

         The plaintiffs allege that they issued a workers' compensation insurance policy (the “policy”) to Delta Marine beginning in May 2015.[1] The policy period ran from April 30, 2015 to April 30, 2016 (the “first policy period”).[2] The plaintiffs allege that Delta Marine owed a total of $336, 668 with respect to the first policy period; that Delta Marine paid $318, 307; and that the remaining balance due for the first policy period is $18, 361.[3]

         In November 2016, the plaintiffs allegedly renewed the policy for the period between April 30, 2016 and April 30, 2017 (the “second policy period”).[4] The plaintiffs allege that Delta Marine owed a total of $340, 522 for the second policy period; that Delta Marine paid the plaintiffs $85, 128; and that Delta Marine has a remaining balance due for the second policy period of $255, 394.[5]

         Finally, in April 2017, the policy was allegedly renewed for the period between April 30, 2017 and April 30, 2018 (the “third policy period”).[6] With respect to the third policy period, the plaintiffs allege that Delta Marine owed a total of $56, 703; that Delta Marine was charged a $30 fee; that it paid $26, 000; and that the remaining balance due for the third policy period is $30, 733.[7]

         The total amount that Delta Marine allegedly owes the plaintiffs based on the outstanding balance amounts from each of the three policy periods is $304, 488.[8]Asserting a breach of contract claim, the plaintiffs filed this lawsuit against Delta Marine on April 4, 2018.[9]

         II.

         Pursuant to Federal Rule of Civil Procedure 55(b), the Court may enter a default judgment against a party when it fails to plead or otherwise respond to the plaintiff's complaint within the required time period. Fed.R.Civ.P. 55(b). A plaintiff who seeks a default judgment against an unresponsive defendant must proceed with a two-step process.

         First, the plaintiff must petition the clerk for an entry of default, which is simply “the placement of a notation of the party's default on the clerk's record of the case.” Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 335 (2d Cir. 1986); see also United States v. Hansen, 795 F.2d 35, 37 (7th Cir. 1986) (describing the entry of default as “an intermediate, ministerial, nonjudicial, virtually meaningless docket entry”). Before the clerk may enter the default, the plaintiff must show “by affidavit or otherwise” that the defendant “has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). Beyond that requirement, the entry of default is largely mechanical.

         After the defendant's default has been entered, the plaintiff may request the entry of a judgment on the default. In that context, the court deems the plaintiff's well-pleaded factual allegations admitted. See Nishimatsu Const. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). At the same time, the court does not hold the defaulting defendant “to [have] admitt[ed] facts that are not well-pleaded or to [have] admitt[ed] conclusions of law.” Id. The default judgment should not be entered unless the judgment is “‘supported by well-pleaded allegations' and . . . ha[s] ‘a sufficient basis in the pleadings.'” Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (quoting Nishimatsu, 515 F.2d at 1206).

         If the plaintiff's claim is for a sum certain and the defendant has not made an appearance in court, the clerk may enter a default judgment. Fed.R.Civ.P. 55(b)(1). In all other cases, “the party must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b)(2). No. party is entitled to a default judgment as a matter of right. Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001) (per curiam). The disposition of a motion for the entry of a default judgment ultimately rests within the sound discretion of the court. Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977).

         The Court is entitled to consider many factors when determining whether to enter a default judgment including, “whether material issues of fact are at issue, whether there has been substantial prejudice, whether the grounds for default are clearly established, whether the default was caused by a good faith mistake or excusable neglect, the harshness of a default judgment, and whether the court would think itself obliged to ...


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