MeeMic Insurance Company, as subrogee of Jon A. and Amy L. Ebright v. Vertical Partners West, LLC

Filing 46

OPINION and ORDER Granting Plaintiff's 41 Motion for Default Judgment Against Defendant Yuntong Power Co. Signed by District Judge Judith E. Levy. (SBur)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Meemic Insurance Company,
Plaintiff,

Case No. 18-cv-11603
Judith E. Levy
United States District Judge

v.
Vertical Partners West, LLC, et al,

Mag. Judge Anthony P. Patti
Defendants.
________________________________/
OPINION AND ORDER GRANTING PLAINTIFF’S MOTION FOR
DEFAULT JUDGMENT AGAINST DEFENDANT YUNTONG
POWER CO. [41]
This is a products liability, consumer protection, and breach of
warranty action arising out of a house fire in Brighton, Michigan. (ECF
No. 1, PageID.12-14.) Plaintiff Meemic Insurance Company (“Meemic”)
initially filed this action on April 27, 2018, in the 44th Circuit Court of
Michigan. (Id. at PageID.10.) Defendant Vertical Partners West LLC
later removed the case to this Court on May 22, 2018. (Id. at PageID.1.)
After Meemic added Yuntong Power Co. (“Yuntong”) as a defendant on
September 11, 2018 and attempted unsuccessfully to obtain confirmation
of service for the subsequent twelve months, it now moves for default

judgment against Yuntong. (See ECF No. 41.) For the reasons stated
below, this motion is GRANTED.
I.

Background
Plaintiff Meemic is a Michigan property and casualty insurer. (Id.

at PageID.10.) Meemic alleges that, on July 15, 2016, a fire significantly
damaged a home in Brighton, Michigan. (Id. at PageID.11.) Having
insured this home and having paid the claim related to the loss, Meemic
became subrogated to the homeowners’ rights. (Id. at PageID.11.)
Meemic alleges that a subsequent investigation of the home determined
that an RC battery started the fire. (Id.) A further investigation revealed
that the battery was sold by Defendant Vertical Partners and
manufactured by Defendant Yuntong. (ECF No. 9, PageID.58-59.)
Yuntong is a Chinese corporation with corporate headquarters located in
Guangdong, China. (Id. at PageID.57.) Meemic amended its complaint to
include Yuntong on September 10, 2018, (Id. at PageID.1), and a
summons for Yuntong was issued the following day. (ECF No. 10.)
On May 10, 2019, Meemic informed the Court that it attempted to
serve Yuntong by mailing through UPS duplicate copies of English and
Chinese translations of the summons, complaint, and service request to
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the Chinese Ministry of Justice (“Chinese Ministry”). (ECF No. 36,
PageID.175.) Meemic represented that UPS delivered the summons to
the Chinese Ministry on September 26, 2018. (Id.) Receiving nothing in
response, Meemic subsequently mailed and emailed the Chinese
Ministry in February and March of 2019 to request updates. (Id.)
On July 26, 2019, Meemic filed a motion for default judgment as to
Yuntong. (ECF No. 38.) Meemic represented that the Chinese Ministry
had emailed Meemic in March 2019 to note that Meemic’s service had
been “received,” “registered,” and “transferred to the Supreme Court for
further process.” (Id. at PageID.190-191.) The Ministry also informed
Meemic that the average service time took approximately ten months.
(Id.) On July 19, 2019, Meemic emailed the Ministry to note that the ten
months had passed since the initial service date. Though Meemic
received an automatic out-of-office email in response, it did not receive,
and has still not received, a substantive reply. (Id.)
This Court denied Meemic’s July 26, 2019 motion because Meemic
had not received a clerk’s entry of default pursuant to Federal Rule of
Civil Procedure 55(a) and Local Rule 55.1. (See ECF No. 40.) Meemic
renewed its motion on September 5, 2019 and then requested a clerk’s
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entry of default on September 9, 2019, which the clerk entered the
following day. (ECF Nos. 41, 44-45.) Having received the clerk’s entry of
default, this Court now considers Meemic’s September 5, 2019 motion for
default judgment against Yuntong.
II.

Default Judgment
Default judgment is governed by Federal Rule of Civil Procedure

55. “When 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 may be entered by the clerk when a
plaintiff’s claim is for a sum certain—or a sum that may be made
certain—and the defendant is neither a minor nor incompetent. Fed. R.
Civ. P. 55(b)(1). In all other cases, the Court may conduct an accounting,
determine the amount of damages, establish the truth of any allegations
by evidence, or investigate any other matter. Fed. R. Civ. P. 55(b)(2).
Determining whether to grant default judgment is within the sound
discretion of the district court. See Antoine v. Atlas Turner, Inc., 66 F.3d
105, 108 (6th Cir. 1995).

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Because Yuntong is a Chinese corporation with its principal place
of business in China, the Hague Convention also applies in determining
proper service of process. Volkswagenwerk Aktiengesellschaft v. Schlunk,
486 U.S. 694, 705 (1988) (“[C]ompliance with the Convention is
mandatory in all cases to which it applies.”). The Hague Convention is a
multilateral treaty created to “provide a simpler way to serve process
abroad, to assure that defendants sued in foreign jurisdictions would
receive actual and timely notice of suit.” Id. at 698; Convention Done at
the Hague, Nov. 15, 1965, 20 U.S.T. 362, T.I.A.S. No. 6638 [hereinafter
“THE HAGUE CONVENTION”]. The Hague Convention requires each
signatory to establish a “central authority” to regulate processes for
receiving and distributing requests for service of documents from other
countries. Schlunk, 486 U.S. at 698. China and the United States are
both signatories to the Hague Convention and adhere to the Convention
rules governing international service of process. See Cucuz v. Rosta Int’l,
Ltd., No. 2:15-cv-10479, 2016 WL 4177230, at *2-3 (E.D. Mich. Aug. 8,
2016).
Article III of the Hague Convention requires plaintiffs to forward
requests for service of process to the central authority of the defendant’s
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home country—in China, this is the Chinese Ministry of Justice. THE
HAGUE CONVENTION. Article IV then requires the Chinese Ministry to
either serve the document itself or arrange to have it served under local
law. Id. Here, Meemic complied with Article III’s requirements. Meemic
served upon the Chinese Ministry duplicate copies of both Chinese and
English translations of the summons and complaint. (ECF No. 41,
PageID.298-301). By taking this step, Meemic met the Hague
Convention’s requirements to serve process upon Yuntong.
Under Article VI, the Chinese Ministry should have then completed
a certificate stating whether Meemic’s documents were served and, if not,
the reason for lack of service. THE HAGUE CONVENTION. Alternatively, if
Meemic’s request was noncompliant with the Hague Convention’s
requirements, the Chinese Ministry should have “promptly inform[ed]”
Meemic of its “objections to the request.” Id. at Article IV. Though the
Chinese Ministry informed Meemic in March 2019 that service requests
take approximately ten months to process, more than a year has now
passed since the Chinese Ministry initially received Meemic’s summons.
(See ECF No. 41, PageID.299, 303 (affirming through affidavit and UPS
receipt that UPS delivered the summons to the Chinese Ministry in
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September 2018 and received a confirmation signature from “CHOP”)).
To date, the Chinese Ministry has failed to provide the required
certificate and has failed to substantively respond to Meemic’s follow-up
requests. (See id. at PageID.294.)
The Hague Convention permits default judgment against a foreign
party once three elements are satisfied, even if the foreign party did not
actually receive a copy of the summons and complaint. THE HAGUE
CONVENTION, Article XIV. Those elements are:
a) The document was transmitted by one of the methods
provided for in this Convention;
b) A period of time not less than six months, considered adequate
by the judge in the particular case, has elapsed since the date
of the transmission of the document; and
c) No certificate of any kind has been received, even though
every reasonable effort has been made to obtain it through the
competent authorities of the State addressed.
Id. Here, Meemic properly transmitted its pleadings to the Chinese
Ministry in September 2018 and received proof of transmission through
UPS. After multiple attempts by Meemic to follow up, the Chinese
Ministry confirmed receipt in March 2019. Now, more than twelve
months after the date of service transmission, the Chinese Ministry has
not provided to Meemic a certificate of service—or failing that, a notice
of noncompliance—within the meaning of the Hague Convention. See
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THE HAGUE CONVENTION, Articles IV, VI. It appears that Meemic has
made “every reasonable effort” to serve Yuntong, to no avail. This Court
accordingly finds that the Hague Convention’s requirements for default
judgment are satisfied.
Having determined that default is proper under Federal Rule of
Civil Procedure 55(a) and the Hague Convention, this Court turns now
to Rule 55(b) to determine the appropriate entry of judgment. “Even
when a default judgment is warranted based on a party’s failure to
defend, the allegations in the complaint with respect to the amount of
damages are not deemed true. The district court must instead conduct an
inquiry in order to ascertian the amount of damages with reasonable
certainty.” Vesligaj v. Peterson, 331 F. Appx. 351, 355 (6th Cir. 2009). To
ascertain damages where there is a sum uncertain, Rule 55(b)(2) allows
the district court to conduct an evidentiary hearing or to request an
affidavit computing damages. Id. at 354-55 (districts courts may, but are
not required to, conduct a hearing to determine sums uncertain); Meyer
v. City of Cincinnati, Nos. 90-3679, 90-3805, 1991 WL 165584, at *3 (6th
Cir. Aug. 27, 1991); SGA Global, LLC v. Surface Coatings, Co., No. 0710332, 2007 WL 3284006 (E.D. Mich. Oct. 31, 2007) (awarding damages
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based upon documentary proof such as spreadsheets, evidence of pricing,
and shipping charges in support of plaintiff’s claimed damages).
Here, Meemic did not attach an affidavit computing damages to
either its motion before the Court or to its request for a clerk’s default
entry. (See ECF Nos. 41, 44.) Further, Meemic’s complaint did not include
an accounting of damages as to each defendant, but instead requested
only “judgment against Defendants in an amount greater than $75,000,
plus interests, costs, attorney fees” as to each count. (ECF No. 16,
PageID.100-105.) As such, though this default judgment determines that
Yuntong is liable to Meemic, this Court must still conduct an inquiry into
the sum-uncertain damages. Vesligaj, 331 F. Appx. at 355.
Accordingly, Plaintiff Meemic Insurance Co.’s motion for default
judgment against Defendant Yuntong Power Co., Ltd. (ECF No. 41) is
GRANTED. Pursuant to Federal Rule of Civil Procedure 55(b)(2)(A)-(B),
Plaintiff Meemic Insurance Co. is ordered to provide an affidavit
computing damages by October 28, 2019.
IT IS SO ORDERED.
Dated: October 6, 2019
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
United States District Judge
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