Carter Brothers Manufacturing Company, Inc. v. Lumbermen's Underwriting Alliance
OPINION AND ORDER that defendant Lumbermen's Underwriting Alliance's 167 Motion for a Default Judgment is denied without prejudice as further set out in the opinion and order. Signed by Honorable Judge Myron H. Thompson on 5/10/2012. (Attachments: # 1 Civil Appeals Checklist)(dmn, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
ALLIANCE, an Inter)
insurance Exchange Company, )
Defendant and Third)
GE COMMERCIAL DISTRIBUTION )
FINANCE CORP., et al.,
CIVIL ACTION NO.
OPINION AND ORDER
Plaintiff Carter Brothers Manufacturing Company,
Inc. (“the insured”) filed this suit against defendant
asserting state-law claims for breach of contract and bad
insured’s claim under an insurance policy between the
insurer and the insured.
Jurisdiction is proper pursuant
to 28 U.S.C. § 1332 (diversity).
The insurer has also
filed a counterclaim against the insured and a thirdparty complaint against several loss payees under the
One of these loss payees and third-
party defendants is Wells Fargo Equipment Finance, Inc.
This cause is now before the court on the insurer’s
motion for default judgment on its third-party complaint
against Wells Fargo.
For the reasons that follow, the
motion will be denied.
The record in this case reflects that Wells Fargo was
served with a copy of the summons and complaint; that it
has failed to respond to the summons and complaint within
the time allowed; and that it has failed to respond to an
judgment should not be entered against it.
sufficient to warrant the entry of default under Fed. R.
Civ. P. 55(a), which provides for default “When a party
against whom a judgment for affirmative relief is sought
See SEC v.
has failed to plead or otherwise defend.”
Smyth, 420 F.3d 1225, 1321 (11th Cir. 2005) (discussing
insurer’s failure to plead or otherwise defend’” a claim)
(quoting Lowe v. McGraw-Hill Cos., 361 F.3d 335, 339-40
(7th Cir. 2004)).
Accordingly, the clerk of court has
entered default against Wells Fargo.
warrant entry of a default judgment.”
Nyesa Costa Rica
v. Wilson Cap. Group Holdings, LLC, 2012 WL 1492344, at
*3 (S.D. Fla. Apr. 27, 2012) (Seitz, J.) (citing Tyco
Fire & Sec. LLC v. Alcocer, 218 F. App’x 860, 863 (11th
Instead, a default judgment, including the
specific nature and extent of the relief sought, must be
adequately supported in the record.
See, e.g., Adolph
Coors Co. v. Movement Against Racism and the Klan, 777
entered without a hearing unless the amount claimed is a
Damages may be awarded only if the record
adequately reflects the basis for award via a hearing or
a demonstration by detailed affidavits establishing the
omitted)); Boswell v. Gumbaytay, 2009 WL 1515912, at *8
(M.D. Ala. June 1, 2009) (Watkins, J.) (in entering a
default judgment, the court’s “core duty is ‘to assure
[itself] that there is a legitimate basis for any damage
Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003)).
Here, the insurer has failed to specify what sort of
affirmative relief the court should order.
In its third-
party complaint against Wells Fargo, the insurer alleges:
“[The insured’s] failure to fully comply
with information requests hampered [the
insurer]’s ability to investigate and
determine what, if any, amounts may be
owed to the individual Loss Payees.
“The policy ... directs how [the
insurer] is to handle the Loss Payees’
claims if it denies [the insured’s]
claims because of [the insured’s]
actions and/or failure to comply with
the terms of the policy ....
“[The insurer] has asked this Court to
actions and/or failures to comply with
the terms of the policy void coverage.
“[The insurer] is asking this Court to
determine when payment is properly due
to the Loss Payees and how much each
Loss Payee should properly receive
conditions of the policy.
regard, [the insurer] is prepared to
deposit any undisputed funds that may be
owed to the Loss Payees into the
Registry of the Court should the Court
deem such actions proper.”
Third-Party Complaint (Doc. No. 8) at 8.
third-party complaint then concludes with this prayer for
relief: “A declaration as to what amounts, if any, it
owes the Loss Payee Third-Party Defendants.”
Id. at 9.
Thus, it appears that the insurer does not seek damages
from Wells Fargo, but rather seeks a declaration of the
amount it may owe Well Fargo.
However, as the record now stands, there is nothing
from which the court can determine, first, if the insurer
is liable to Wells Fargo and, second, if so, for how
It appears that this is inherent in the nature of
the insurer’s claim against Wells Fargo, for it appears
that the third-party claim is conditional.
argues that it does not owe the insured anything under
the insurance policy and that, if this be the case, it
may then need to pay some amount to Wells Fargo as a loss
In other words, any payment the insurer is
obligated to make to Wells Fargo is contingent upon a
determination that the insured is not entitled to a
payment itself, a dispute that lies at the center of the
merits issues to be resolved in the insured’s complaint
(asserting breach of contract for failure to pay the
insured) and in the insurer’s counterclaim (asserting
filing this lawsuit), both of which are at issue in
pending motions for summary judgment that have not even
been fully briefed.
See Mots. (Doc. Nos. 177 & 178);
motions for submission on May 25, 2012).
judgment, default or otherwise, for affirmative relief.
Because the insurer has not informed the court what the
relief should be on its third-party complaint against
Wells Fargo, the court, obviously, cannot say what that
relief should be either.
Accordingly, it is ORDERED that defendant Lumbermen’s
Underwriting Alliance’s motion for a default judgment
(Doc. No. 167) is denied without prejudice.
DONE, this the 10th day of May, 2012.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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