Progressive Mountain Insurance Company v. Chen et al

Filing 73

ORDER GRANTING 60 Motion for Default Judgment and 61 Motion for Summary Judgment. The Court hereby DECLARES that Petitioner has no obligation to Yaobin. The Court also DECLARES that Petitioner has no obligation to provide coverage,indemnification or a defense to the Season Seafood Respondents in the underlying lawsuit. The Clerk is DIRECTED to close this case. Signed by Judge J. P. Boulee on 2/7/2024. (nmb)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
PROGRESSIVE MOUNTAIN
INSURANCE COMPANY,
Petitioner,
v.

CIVIL ACTION NO.
1:22-CV-1913-JPB

YAOBIN CHEN, et al.,
Respondents.
ORDER

This matter comes before the Court on Progressive Mountain Insurance
Company’s (“Petitioner”) Motion for Summary Judgment [Doc. 61] and Motion
for Default Judgment [Doc. 60]. This Court finds as follows:
PROCEDURAL HISTORY
Petitioner filed this declaratory judgment action against Yaobin Chen
(“Yaobin”), Season Seafood Trading, Inc., Sauting Chen, Ling Liu, Jing Liu and
Jiankang Shi on May 13, 2022. [Doc. 1]. Petitioner subsequently filed a Second
Amended Petition for Declaratory Judgment on November 2, 2022. [Doc. 51].
Yaobin appeared in this matter on June 15, 2022. [Doc. 5]. The remaining
respondents, which shall hereinafter be called “the Season Seafood Respondents,”
are in default.

On March 16, 2023, after the discovery period closed, Petitioner filed a
Motion for Summary Judgment. [Doc. 61]. Petitioner also filed a Motion for
Default Judgment. [Doc. 60]. The motions are now ripe for review.
FACTUAL HISTORY
The Court derives the facts of this case from Petitioner’s Statement of
Material Facts [Doc. 61-2], Yaobin’s Statement of Material Facts [Doc. 68] and
Petitioner’s Response to the Facts Contained in Yaobin’s Brief and Statement of
Material Facts [Doc. 71]. The Court also conducted its own review of the record.
As an initial matter, the Court notes that Yaobin failed to comply with the
Local Rules in several respects. For example, the Local Rules of this Court require
a respondent to a summary judgment motion to include with his responsive brief “a
response to the movant’s statement of undisputed facts.” LR 56.1(B)(2)(a), NDGa.
The Local Rules state that the Court
will deem each of the movant’s facts as admitted unless the
respondent: (i) directly refutes the movant’s fact with concise
responses supported by specific citations to evidence (including page
or paragraph number); (ii) states a valid objection to the admissibility
of the movant’s fact; or (iii) points out that the movant’s citation does
not support the movant’s fact or that the movant’s fact is not material
or otherwise has failed to comply with the provisions set out in LR
56.1(B)(1).
LR 56.1(B)(2)(a)(2), NDGa. Here, Yaobin failed to file a response to Petitioner’s
statement of facts. Consequently, those facts are deemed admitted.
2

Yaobin did include his own Statement of Material Facts in his response
brief. However, some of the facts are not properly supported by the citation
provided, and other facts do not include a citation. In accordance with the Local
Rules, this Court will not consider unsupported facts or facts that Yaobin raises
solely in his brief. The Court will, however, use its discretion to consider all facts
the Court deems material after reviewing the record. The facts of this case, for the
purpose of adjudicating the instant motion, are as follows:
In 2019, Yaobin worked as a full-time employee of Season Seafood as a
truck driver.1 [Doc. 61-2, p. 3]. On August 18, 2019, Season Seafood tasked
Yaobin with picking up a load of fish from a fish farm in Arkansas. Id. at 2. On
his return trip to Atlanta, Yaobin was severely injured in an accident after he lost
control of the 2018 Hino he was driving, crossed the median and struck another
tractor trailer head on. Id. at 2-3.
The 2018 Hino, which was owned by Season Seafood, was insured by
Petitioner pursuant to an automobile insurance policy (the “Policy”). Id. at 5. The
Policy contained several exclusions. For instance, the Policy contained an MCS90 Endorsement. The endorsement had an exclusion which stated that the
Season Seafood was subject to the Workers’ Compensation Act because it had at least
three employees. [Doc. 61-2, p. 4]. It is undisputed that Season Seafood failed to
purchase the required workers’ compensation insurance. Id.

1

3

“insurance . . . does not apply to injury to or death of the insured’s employees
while engaged in the course of their employment.” Id. at 6. The Policy also
included an exclusion that expressly denied coverage for bodily injury to the
insured’s employees and for injuries that would be covered by workers’
compensation. Id. at 7. More particularly, the Workers’ Compensation Exclusion
stated that the Policy does not provide coverage for “[a]ny obligation for which an
insured or an insurer of that insured, even if one does not exist, may be held liable
under workers’ compensation, unemployment compensation, disability benefits
law, or any similar law.” Id.
In addition to the two exclusions identified above, the Policy also contained
an Uninsured Motorist Coverage Endorsement. [Doc. 1-1, p. 43]. Under this
endorsement, Petitioner agreed to “pay for damages, other than punitive or
exemplary damages, which an insured is legally entitled to recover from the owner
or operator of an uninsured auto because of bodily injury or property damage.” Id.
This endorsement applied when: (1) an injury was sustained by an insured; (2) the
injury was caused by an accident; and (3) the events leading to the injury arose
“out of the ownership, maintenance, or use of an uninsured auto.” Id.
Significantly, the endorsement specifically stated that “an ‘uninsured auto’ does
not include any vehicle or equipment . . . shown on the declarations page of this

4

policy.” Id. at 45. Particularly relevant here, the vehicle that Yaobin was driving
was listed on the declarations page.
On July 12, 2021, Yaobin filed a lawsuit against the Season Seafood
Respondents in the State Court of Gwinnett County. [Doc. 61-2, p. 4]. Thereafter,
Petitioner filed the present action for declaratory judgment to determine its rights
and obligations under the Policy.
ANALYSIS
As already stated above, Petitioner filed a Motion for Summary Judgment
and a Motion for Default Judgment. The Court will address the Motion for
Summary Judgment first.
MOTION FOR SUMMARY JUDGMENT
A.

Legal Standard
Under Federal Rule of Civil Procedure 56(a), a “court shall grant summary

judgment if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” A material fact is
any fact that “is a legal element of the claim under the applicable substantive law
which might affect the outcome of the case.” Allen v. Tyson Foods, Inc., 121 F.3d
642, 646 (11th Cir. 1997). A genuine dispute exists when “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party.” Anderson

5

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Ultimately, “[t]he basic issue
before the court on a motion for summary judgment is ‘whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of law.’” Allen, 121 F.3d at
646 (quoting Anderson, 477 U.S. at 251).
The party moving for summary judgment bears the initial burden of showing
that no genuine issue exists as to any material fact, “and in deciding whether the
movant has met this burden the court must view the movant’s evidence and all
factual inferences arising from it in the light most favorable to the nonmoving
party.” Id. After the movant satisfies this initial burden, the nonmovant bears the
burden of showing specific facts indicating that summary judgment is improper
because a material issue of fact does exist. Id. However, “[a] mere ‘scintilla’ of
evidence supporting the opposing party’s position will not suffice; there must be
enough of a showing that the jury could reasonably find for that party.” Walker v.
Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (quoting Anderson, 477 U.S. at 251).
If the record taken as a whole cannot lead “a rational trier of fact to find for the
non-moving party, there is ‘no genuine issue for trial.’” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting First Nat’l Bank of
Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968)).

6

B.

Claim for Declaratory Relief
Petitioner argues that it is entitled to summary judgment because Yaobin’s

claims for coverage are barred by, among other things, the exclusion contained in
the MCS-90 Endorsement and the Workers’ Compensation Exclusion. Petitioner
also asserts that Yaobin is not entitled to uninsured motorist coverage because the
2018 Hino does not meet the definition of an uninsured automobile. Yaobin, on
the other hand, contends that the enforcement of the applicable exclusions would
violate public policy. Below, the Court considers the Policy’s terms as applied to
this case before turning to whether any of the exclusions are unenforceable as
violative of public policy.
Under Georgia law, “insurance is a matter of contract, and the parties to an
insurance policy are bound by its plain and unambiguous terms.” Richards v.
Hanover Ins. Co., 299 S.E.2d 561, 563 (Ga. 1983). Therefore, “as with any
contract,” the Court begins “with the text of the contract itself.” Reed v. AutoOwners Ins. Co., 667 S.E.2d 90, 92 (Ga. 2008). If the contract is unambiguous, the
Court’s role “is simply to apply the terms of the contract as written, regardless of
whether doing so benefits the carrier or the insured.” Id. Courts have “no legal
authority to disregard” policy language that is unambiguous. Cotton States Mut.
Ins. Co. v. Hipps, 481 S.E.2d 876, 878 (Ga. Ct. App. 1997). Finally, “contract

7

disputes are well suited for adjudication by summary judgment because
construction of contracts is ordinarily a matter of law for the court.” Nationwide
Mut. Fire Ins. Co. v. Somers, 591 S.E.2d 430, 433 (Ga. Ct. App. 2003).
In this case, neither party claims that the Policy is ambiguous nor disputes
that the plain language of the exclusion contained in the MCS-90 Endorsement or
the Workers’ Compensation Exclusion operates to bar Yaobin’s claims. The Court
will nevertheless discuss the applicability of each provision in an abundance of
caution. The exclusion contained within the MCS-90 Endorsement provides, in
part, that the “insurance . . . does not apply to injury to or death of the insured’s
employees while engaged in the course of their employment.” [Doc. 61-2, p. 6].
Here, the uncontroverted evidence shows that Yaobin was an employee of Season
Seafood—the insured—and acting in the course and scope of his employment at
the time he was injured. Consequently, in light of the plain language of the
applicable exclusion, Petitioner has no obligation under the Policy to Yaobin.
The Workers’ Compensation Exclusion excludes from coverage “[a]ny
obligation for which an insured or an insurer of that insured, even if one does not
exist, may be held liable under workers’ compensation, unemployment
compensation, disability benefits law, or any similar law.” Id. at 7. In Georgia, for
an injury to be compensable in the workers’ compensation context, “an injury must

8

both occur ‘in the course of employment’ and ‘arise out of employment.’” SGI
Liquidating Corp. v. Hartford Ins. Co., 526 S.E.2d 555, 557 (Ga. 2000). In this
case, it is undisputed that on the day in question, Season Seafood tasked Yaobin
with picking up a load of fish from a fish farm in Arkansas. On his return trip,
Yaobin was involved in a car accident. This Court thus easily concludes that
Yaobin’s injury arose out of his employment (he was employed as a truck driver)
and occurred in the course of his employment (he was instructed by his employer
to pick up fish on the day in question), and therefore the Workers’ Compensation
Exclusion operates to exclude coverage for Yaobin’s claims under the Policy.
The Uninsured Motorist Coverage Endorsement is also at issue here. That
endorsement provides coverage where an insured sustained an injury that was
caused by an accident and arose “out of the ownership, maintenance, or use of an
uninsured auto.” [Doc. 1-1, p. 43]. While this Court concludes that an insured was
injured in an accident, the plain and unambiguous terms of the endorsement state
that an uninsured auto does not include any vehicle or equipment shown on the
declarations page of the Policy. Here, it is uncontroverted that the Hino was listed
on the declarations page of the Policy. As such, the Court finds that Yaobin is not
entitled to coverage under the Uninsured Motorist Coverage Endorsement.

9

In sum, the Court has reviewed the exclusion contained in the MCS-90
Endorsement, the Workers’ Compensation Exclusion and the Uninsured Motorist
Coverage Endorsement. The plain terms of the Policy—by which this Court is
bound—precludes Yaobin from recovering any benefits. Again, Yaobin has not
argued, and the Court does not perceive, that any ambiguity exists in the language
at issue. See Ace Am. Ins. Co. v. Wattles Co., 930 F.3d 1240, 1252 (11th Cir.
2019) (“If the policy language is clear and unambiguous, the contract must be
enforced according to its plain terms.”); see also Hipps, 481 S.E.2d at 878 (“It is
well settled that where no ambiguity in a policy of insurance exists, the courts must
adhere to the contract made by the parties even if it is beneficial to the insurer and
detrimental to the insured . . . .”). The Policy’s language clearly and
unambiguously dictates that Yaobin is ineligible for coverage. Because Petitioner
has shown that no genuine issue of fact exists as to the terms of the Policy, the
burden shifts to Yaobin to establish that a dispute of fact precludes summary
judgment.
Yaobin argues that the exclusion contained in the MCS-90 Endorsement and
the Workers’ Compensation Exclusion are unenforceable because they violate
public policy. As a general rule, exclusions from coverage are not “per se”
prohibited and must be individually evaluated to determine whether they are

10

against public policy. Saxon v. Starr Indemn. & Liab. Co., 793 S.E.2d 659, 662
(Ga. Ct. App 2016). In determining whether an exclusion violates public policy,
courts should consider whether the exclusion “either unfairly penalizes innocent
victims or unfairly exposes the insured to liability.” Id. “This results in a basic
rule that if either of the interests dealt with is left unprotected, the exclusionary
clause in the insurance contract offends public policy. This rule, of course, does
not apply when neither the injured party not the unsuspecting insured is left
unprotected.” Id.
As stated above, Yaobin argues that the exclusion in the MSC-90
Endorsement and the Workers’ Compensation exclusion violates public policy.
Specifically, Yaobin contends that these exclusions violate public policy because
Season Seafood did not purchase workers’ compensation insurance. Without
workers’ compensation insurance, Yaobin contends that he is left without a remedy
for his injuries.
The Court recognizes that Season Seafood failed to obtain the required
workers’ compensation insurance. That does not mean, however, that Yaobin is
left without a remedy. Indeed,
[t]he [Workers’ Compensation Act] requires that employers
insure the payment of workers’ compensation benefits to injured
workers, either by procuring insurance or by qualifying as a selfinsurer. If no insurance is obtained, the employer remains liable
11

for payment of benefits. If the employer becomes insolvent, then
the agent of the employer responsible for procuring workers’
compensation benefits may be held personally liable for payment
of such benefits [awarded by the State Board of Workers’
Compensation].
Id. at 661. This means that even if Season Seafood did not have the required
insurance, it remains liable for the payment of benefits under the Workers’
Compensation Act. As a result, the Court finds that Yaobin has not been left
unprotected. Id. at 662 (determining that public policy was not violated because
the plaintiff had the remedy of the Workers’ Compensation Act). Because Yaobin
has not been left unprotected, the Court finds that these two exclusions are
enforceable and do not violate public policy.
As explained previously, Yaobin was not entitled to uninsured motorist
benefits because the accident did not arise out of the “ownership, maintenance, or
use of an uninsured auto.” [Doc. 1-1, p. 43]. Yaobin does not challenge the
definition of uninsured auto or argue that this portion of the Policy is enforceable
in any way. Instead, Yaobin argues that a separate exclusion—an exclusion that
did not operate to bar Yaobin’s claims—is unenforceable as violative of public
policy. Specifically, the exclusion states that “[c]overage under this endorsement
will not apply directly or indirectly to benefit any insurer or self-insurer under any
of the following or similar laws: a. workers’ compensation law; or b. disability

12

benefits laws.” Id. at 45. Yaobin contends that the exclusion “renders the
[uninsured motorist] coverage useless” because “there is seemingly no scenario
under the [Uninsured Motorist Coverage Endorsement] where uninsured motorist
coverage would ever be applicable.” [Doc. 69, p. 11]. Because this exclusion was
not used to bar coverage in this case, the Court need not decide whether it violates
public policy. 2
As the foregoing analysis shows, the plain language of the Policy
demonstrates that the exclusion contained in the MCS-Endorsement and the
Workers’ Compensation Exclusion operate to preclude Yaobin’s claims.
Moreover, it is clear that the Uninsured Motorist Coverage Endorsement does not
apply here. Importantly, Yaobin has not shown that any of the exclusions are void
as violative of public policy. Accordingly, Petitioner has shown that it is entitled
to summary judgment, and therefore its motion is GRANTED. 3

The Court notes that it is not persuaded that the Uninsured Motorist Coverage
Endorsement operates in such a way where it would never apply.

2

In his response, Yaobin argues that summary judgment is inappropriate because
discovery is still needed. Because the parties had ample time to complete discovery,
Yaobin’s request for additional discovery is DENIED.

3

13

MOTION FOR DEFAULT JUDGMENT
Petitioner also moved for a default judgment as to the Season Seafood
Respondents. Petitioner asks the Court to enter a declaration that it is not required
to provide coverage, indemnification or a defense to the Season Seafood
Respondents in the underlying lawsuit.4
A. Legal Standard
When a defendant fails to file an answer or otherwise defend, a court may
enter judgment by default. Fed. R. Civ. P. 55(b)(2–). Default judgments are
typically disfavored. Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1244-45
(11th Cir. 2015). “Entry of default judgment is only warranted when there is ‘a
sufficient basis in the pleadings for the judgment entered.’” Id. at 1245 (quoting
Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)).
In other words, “[t]he court may grant default judgment [only] on those claims
brought by [the] [p]laintiff that are legally sufficient and supported by well-pleaded
allegations.” Earthlink, Inc. v. Log on Am., Inc., No. 1:02-CV-1921, 2006 WL
783360, at *1 (N.D. Ga. Mar. 24, 2006); see also Bruce v. Wal-Mart Stores, Inc.,
699 F. Supp. 905, 906 (N.D. Ga. 1988) (“In considering a motion for entry of
Yaobin filed the underlying lawsuit against the Season Seafood Respondents on July 12,
2021, in the State Court of Gwinnett County. In the lawsuit, Yaobin seeks damages for
the injuries he sustained in the accident.

4

14

default judgment, a court must investigate the legal sufficiency of the allegations of
the plaintiff’s complaint.”); Functional Prods. Trading, S.A. v. JITC, LLC, No.
1:12-CV-0355, 2014 WL 3749213, at *11 (N.D. Ga. July 29, 2014) (“[A] default
judgment cannot stand on a complaint that fails to state a claim.”). “Conceptually,
then, a motion for default judgment is like a reverse motion to dismiss for failure to
state a claim,” and the Court must determine “whether the complaint ‘contain[s]
sufficient factual matter, accepted as true, to state a claim to relief that is plausible
on its face.’” Surtain, 789 F.3d at 1245 (alteration in original) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). Importantly, “[d]efault judgments are
appropriate in declaratory judgment actions relating to insurance coverage.” U.S.
Auto. Ass’n v. Dimery, No. 1:09-CV-0015, 2009 WL 10672385, at *1 (N.D. Ga.
Apr. 3, 2009).
B.

Motion for Default Judgment
As explained above, summary judgment is appropriate in this case as to

Yaobin. Because the Court adjudicated the case on the merits with respect to
Yaobin, default judgment is likewise appropriate against the Season Seafood
Respondents on the same grounds. See Branch Banking & Tr. Co. v. Poplar Dev.
Co., No. 5:12-CV-457, 2013 WL 2367963, at *1 (M.D. Ga. May 29, 2013) (“[I]f a
plaintiff prevails against the non-defaulting defendants, it is then entitled to

15

judgment against the defaulting . . . defendant as well.”). Ultimately, because the
well-pleaded allegations in the Second Amended Petition for Declaratory
Judgment state a claim and because summary judgment is appropriate as to one of
the respondents, the Motion for Default Judgment is GRANTED.
CONCLUSION
For the reasons stated above, the Motion for Summary Judgment [Doc. 61]
and the Motion for Default Judgment [Doc. 60] are GRANTED. The Court
hereby DECLARES that Petitioner has no obligation to Yaobin. The Court also
DECLARES that Petitioner has no obligation to provide coverage,
indemnification or a defense to the Season Seafood Respondents in the underlying
lawsuit. The Clerk is DIRECTED to close this case.
SO ORDERED this 7th day of February, 2024.

16