The Medical Protective Company v. Erfani

Filing 58

ORDER Denying Plaintiff's 49 Ex Parte Application for Default Judgment; and Denying 53 Motion for Reconsideration. Signed by Judge Dana M. Sabraw on 12/5/2011. (All non-registered users served via U.S. Mail Service)(knb)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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THE MEDICAL PROTECTIVE
COMPANY,

CASE NO. 09cv2833 DMS (CAB)
ORDER DENYING PLAINTIFF’S
EX PARTE APPLICATION FOR
DEFAULT JUDGMENT AND ITS
MOTION FOR
RECONSIDERATION

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Plaintiff,
vs.

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SHERVIN ERFANI, DMD,

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Defendant.

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In this action by an insurance company for rescission of an extension contract to a professional

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liability policy, Plaintiff’s motion for summary judgment was denied by order filed September 8,

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2011. Plaintiff The Medical Protective Company (“MPC”) filed an ex parte application for entry of

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default judgment and a motion for reconsideration of the September 8, 2011 order. MPC requests

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either default judgment against Defendant or amendment of the September 8, 2011 order so as to grant

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its summary judgment motion and rescind the extension contract ab initio. The insured, Defendant

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Shervin Erfani, DMD, proceeding pro se, did not file an opposition. American Insurance Company

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(“American”), which is seeking equitable contribution from MPC in a related case, filed a request to

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consider its amicus curiae brief in opposition to MPC’s ex parte application and motion for

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reconsideration, together with a request for judicial notice of filings in the related case. American’s

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request for consideration of its amicus brief is denied, and its request for judicial notice is granted.

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09cv2833

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For the reasons which follow, MPC’s ex parte application for a default judgment and its motion for

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reconsideration are DENIED.

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MPC’s ex parte application pursuant to Federal Rule of Civil Procedure 55(b)(2) is based on

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Dr. Erfani’s failure to respond to MPC’s first amended complaint and the evidence preclusion

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discovery sanctions which were ordered against him. Neither is a sufficient ground for a default

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judgment against him.

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Dr. Erfani filed an answer to MPC’s initial complaint, but not to the amended complaint. The

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amended complaint narrowed the scope of the rescission claim initially asserted by MPC. (Decl. of

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Alan H. Lazar filed Jul. 29, 2011 at 5-6.) Accordingly, the Court declines to issue a default judgment

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based on Dr. Erfani’s failure to respond to the amended complaint. See Wash. Nat. Ins. Co. v.

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Hendricks, 855 F. Supp. 1542, 1549 (W.D. Wis. 1994) (default judgment based on failure to respond

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to amended complaint denied).

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Because Dr. Erfani has not actively participated in this case and has not appeared for his

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deposition, evidence preclusion sanctions were ordered against him. (See Order Granting Plaintiff’s

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Request for Discovery Sanctions filed Jun. 7, 2011; Recommendation Regarding Pl.’s Mot. for an

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Order Extending the Evidence Preclusion Discovery Sanctions to the First Am. Compl. field Aug. 8,

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2011 & Order Adopting Recommendation Regarding Pl.’s Mot. for an Order Extending the Evidence

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Preclusion Discovery Sanctions to the First Am. Compl. field Aug. 9, 2011.) None of the applicable

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orders provided notice to Dr. Erfani that a default judgment would be issued against him for his failure

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to appear for his deposition. MPC has not followed the procedures required for default judgment as

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a sanction pursuant to Rules 37 and 41(b). Accordingly, the evidence preclusion discovery sanctions

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are an insufficient ground for a default judgment.

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To the extent MPC moves for reconsideration of the September 8, 2011 order pursuant to

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Rules 59(e) and 60, it has not met the standard applicable under either rule. Rule 59(e) provides for

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motions to alter or amend a judgment. No judgment has been entered in this case. With respect to

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Rule 60(b), MPC has not identified which one of the six permissible grounds for reconsideration is

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the basis for its motion. To the extent MPC proceeds under the catch-all provision of Rule 60(b)(6),

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see Hamilton v. Newland, 374 F.3d 822, 825 (9th Cir. 2004), relief is available if the party
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09cv2833

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demonstrates "extraordinary circumstances," Straw v. Bowen, 866 F.2d 1167, 1172 (9th Cir. 1989).

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MPC has not demonstrated extraordinary circumstances. To the contrary, the basis for its motion is

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disagreement with the Court’s order. However, the Court has discretion under Rule 54(b) to consider

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MPC’s motion for reconsideration. See Fed. R. Civ. Proc. 54(b) (court may revise its order “at any

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time before the entry of a judgment adjudicating all the claims and all the parties' rights and

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liabilities.”).

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MPC contends summary judgment should be entered in its favor, rescinding the extension

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contract ab initio. In the September 8, 2011 Order, the Court found MPC failed to meet its burden as

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a plaintiff moving for summary judgment on its own claim. See C.A.R. Transp. Brokerage Co., Inc.

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v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (requiring evidence which would

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entitle the moving party to a directed verdict if it went uncontroverted at trial). MPC’s motion for

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reconsideration does not present grounds to change this conclusion. However, the Court clarifies the

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September 8, 2011 order herein as follows: there are genuine issues of material fact (1) whether Dr.

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Erfani’s misrepresentations were material in light of the guarantee in MPC’s policy to offer an

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extension contract; and (2) whether MPC complied with its contractual obligation to offer an

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extension contract to Dr. Erfani.

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Based on the foregoing, MPC’s ex parte application for default judgment and motion for

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reconsideration are DENIED.

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IT IS SO ORDERED.

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DATED: December 5, 2011

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HON. DANA M. SABRAW
United States District Judge

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