Citizens Insurance Company of the Midwest v. Rogier et al

Filing 40

ORDER GRANTING PLAINTIFF'S MOTIONS FOR DEFAULT JUDGMENT [# 27][#28] AND MOTION FOR MODIFICATION OF SCHEDULING ORDER [#32]. Signed by District Judge Gershwin A. Drain. (TBan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
CITIZENS INSURANCE COMPANY OF THE
MIDWEST,
Case No. 17-cv-13036

Plaintiff,

UNITED STATES DISTRICT COURT
JUDGE
GERSHWIN A. DRAIN

v.
ROGIER ET AL.,
Defendants.
______________________________/

ORDER GRANTING PLAINTIFF’S MOTIONS FOR DEFAULT
JUDGMENT [# 27][#28] AND MOTION FOR MODIFICATION OF
SCHEDULING ORDER [#32]
I. INTRODUCTION
Presently before the Court are Plaintiff’s Motions for Default Judgment and
Motion to Extend the Scheduling Order. Dkt. Nos. 27, 28, 32. Plaintiff moves this
Court to default Defendants Kimberly Rogier and Joshua Vath for failing to file
answers to Plaintiff’s complaint. Plaintiff and Third Party Defendants also move
this Court to Extend the Scheduling Order by modifying the dispositive motion
cutoff and trial dates. For the reasons discussed below, this Court will grant
Plaintiff’s Motions.

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II. FACTUAL BACKGROUND
On or about August 18, 2016, Defendant Joshua Vath was driving a
Chevrolet Malibu that he rear-ended into Defendant Carolyn Witchner’s car. Dkt.
No. 1, pg. 3 (Pg. ID 3). The Chevrolet Malibu was owned by Vath’s mother,
Kimberly Rogier. Id. at pg. 4 (Pg. ID 4). After the accident, Witchner sought NoFault benefits for the injuries that she sustained in the accident. Id. at pg. 3 (Pg. ID
3). Plaintiff Citizens Insurance Company of the Midwest insured the Chevrolet
Malibu under the insured Rogier. Id. at pg. 4 (Pg. ID 4). Plaintiff’s insurance
policy states that it does not provide “coverage for any insured who has made
fraudulent statements or engaged in fraudulent conduct in obtaining or maintaining
this policy or in connection with any accident or loss for which coverage is sought
under this policy.” Id. at pg. 7 (Pg. ID 7). Vath was never listed as an insured on
the policy. See id. Rogier never informed Plaintiff that her son, Vath, was the
primary operator of the Chevrolet Malibu. Id. at pg. 5 (Pg. ID 5). Rogier also did
not inform Plaintiff that the Chevrolet Malibu was not garaged at the location
stated on the insurance policy—the car was garaged at Vath’s residence and not
Rogier’s residence. Id. On June 1, 2017, Plaintiff wrote Rogier that her failures to
disclose were material misrepresentations because the issuance of the policy would
have been different had Rogier made all required disclosures. See Dkt. No. 1-9, pg.
3 (Pg. ID 130). Plaintiff stated in the letter that it was rescinding the policy,

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effective June 2, 2013. Id. Plaintiff refunded Rogier $22,987—the amount of
Rogier’s insurance policy premiums for the period of June 2, 2013 through
September 9, 2016. Id.
Plaintiff filed the present action on September 14, 2017. Dkt. No. 1. Plaintiff
alleged that Defendant’s misrepresentations entitle it to void the insurance policy
with Rogier and not pay claims for No-Fault benefits. Id. at pg. 6 (Pg. ID 6).
Plaintiff claimed that it is entitled to a declaration that it is not responsible for
payment of past, present, and future No-Fault benefits incurred by and/or on behalf
of Defendant Witchner. Id. at pg. 9 (Pg. ID 9). Plaintiff also argued it is entitled to
a determination that it is not under an obligation to Defendant Vath or Rogier
should litigation arise out of the ownership/operation of the Chevrolet Malibu. Id.
Service was effected on Defendant Rogier on September 19, 2017. Dkt. No.
11. Service was effected on Defendant Vath on October 5, 2017. Dkt. No. 9.
Neither party filed an answer to Plaintiff’s complaint. On December 4, 2017,
Plaintiff requested an entry of default as to Rogier and Vath. Dkt. Nos 18, 19. The
clerk entered default against Rogier and Vath on December 4, 2017. Dkt. Nos. 20,
21. On April 2, 2018, Plaintiff filed its Motions for Default Judgment against
Rogier and Vath. Dkt. Nos. 27, 28. On May 7, 2018, Defendant Witchner filed
responses to the default motions past the filing deadline. Dkt. Nos. 37, 38. Plaintiff
filed a reply on May 11, 2018, arguing that Witchner lacks standing to object to the
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entry of default judgments against Rogier and Vath. Dkt. No. 39 Plaintiff and
Third Party Defendants Hylant Group, Inc. and Kristin Osentoski filed a Motion
for Modification of Scheduling Order on April 13, 2018. No response was filed to
the request to modify the scheduling order.
III. LEGAL STANDARD
Pursuant to Fed. R. Civ. P. 55(a), “[w]hen a party against whom a judgment
for affirmative relief is sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”
Fed. R. Civ. P. 55(a). A default judgment is governed by Fed. R. Civ. P. 55(b)(2).
“An entry of default and a default judgment are distinct concepts which must be
treated separately.” Northland Ins. Co. v. Cailu Title Corp., 204 F.R.D. 327, 330
(W.D. Mich. 2000); see also Ramada Franchise Sys. Inc., 220 F.R.D. 303, 305
(N.D. Ohio 2004) (“Entry of a default . . . is a prerequisite to entry of a default
judgment under Rule 55(b).”). Upon entry of default, the well-pleaded allegations
of the complaint relating to a defendant’s liability are taken as true, with the
exception of the allegations as to the amount of damages. See Kelley v. Carr, 567
F. Supp. 831, 840 (W.D. Mich. 1983).
IV. DISCUSSION
Plaintiff asserts that it is entitled to default judgment against Defendants
Rogier and Vath for failure to respond to its complaint. Plaintiff argues that
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Defendant Witchner does not have standing to object to the default motions
pending against Rogier and Vath. Further, in its complaint, Plaintiff asserts that it
is entitled to relief because Rogier made material misrepresentations on her
insurance policy. Dkt. No. 1, pg. 6 (Pg. ID 6). Rogier failed to disclose that her
son, Defendant Vath, was an operator of the Chevrolet Malibu, and failed to
disclose the correct location of where the car was garaged. Id. Defendants assert
that any non-disclosures were not material. Dkt. No. 37, pg. 12 (Pg. ID 440).
Federal Rule of Civil Procedure states that “[w]hen a party against whom a
default judgment . . . is sought has failed to plead or otherwise defend . . . the clerk
must enter the party’s default.” Fed. R. Civ. P. 55(a). In this case, the parties
against whom the default judgment is sought—Rogier and Vath—failed to respond
in this action. Therefore, default judgment is appropriate against them.
Plaintiffs were also entitled to void its insurance policy with Rogier. Under
Michigan law, the insurer is entitled to rescind an insurance policy if there is a
material misrepresentation made in an application for No-Fault insurance. AutoOwners Ins. Co. v. Johnson, 530 N.W.2d 485, 487 (Mich. Ct. App. 1995). A
misrepresentation is material if communication of it would have “substantially
increase[ed] the chances of loss insured against so as to bring about a rejection of
the risk or the charging of an increased premium.” Oade v. Jackson Nat’l Life Ins.
Co. of Mich., 632 N.W.2d 126, 131 (Mich. 2001).
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Here, Plaintiff brought evidence to show that the policy it issued to Rogier
would have changed if Rogier had made all the required disclosures. In its letter
sent to Rogier on June 1, 2017, Plaintiff stated that the misrepresentations made
impacted the policy that it gave to Rogier. Dkt. No. 1-9, pg. 3 (Pg. ID 130).
Additionally, Plaintiff stated that it was rescinding the policy and issued a refund
to Rogier. Id. The letter stated that acceptance of the refund was an
acknowledgment of the rescission. Id. There is no evidence that Rogier rejected the
refund.
In conclusion, this Court will grant Plaintiff’s Motion and enter default as to
Defendants Rogier and Vath. Further, this Court holds that Plaintiff was entitled to
rescind its insurance policy with Rogier. Plaintiff is not under obligation to pay
No-Fault benefits incurred by and/or on behalf of Defendant Witchner.
Lastly, Plaintiff requests an extension of the dispositive motion deadline and
trial date to give the Third Party Defendants more time to engage in discovery.
Dkt. No. 32, pg. 4 (Pg. ID 416). Federal Rule of Civil Procedure 16(b)(4) states
that “[a] schedule may be modified only for good cause and with the judge’s
consent.” In this case, the Court finds that good cause exists to modify the
scheduling order and will grant Plaintiff’s Motion for Modification of Scheduling
Order.

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V. CONCLUSION
For the reasons discussed herein, this Court will grant Plaintiff’s Motions.
Default judgment is granted against Defendants Kimberly Rogier and Joshua Vath.
This Court will also modify the scheduling order. The Court will enter an updated
scheduling order after the issuance of this Opinion and Order.
SO ORDERED.
Dated:

May 17, 2018
s/Gershwin A. Drain
HON. GERSHWIN A. DRAIN
United States District Court Judge

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