Midland National Life Insurance Company v. Chang

Filing 16

Memorandum and Order Denying without prejudice Midland's Motion for Default Judgment 10 . Midland must secure the Clerk's entry of default before it may pursue the Court's grant of default judgment. (Written Opinion). Signed by The Hon. Paul A. Magnuson on 11/05/2014. (LLM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Midland National Life Insurance Company,

Case No. 14-cv-883 (PAM/SER)

Plaintiff,
v.

MEMORANDUM AND ORDER

Mai Yang Chang,
Defendant.
___________________________________________________________
This matter is before the Court on Midland National Life Insurance Company’s
Motion for Default Judgment. For the reasons that follow, the Court denies the Motion.
BACKGROUND
On March 20, 2013, Midland issued a life insurance policy to Cher Vue for
$100,000. (Compl. (Docket No. 1) ¶ 6.) Vue named his wife, Mai Yang Chang, the
primary beneficiary. (Id. ¶ 13.) Vue died of cancer on July 14, 2013, and Chang
submitted a proof-of-death statement to claim the policy’s proceeds. (Id. ¶¶ 15-16.)
As Vue’s death fell within the policy’s two-year contestability period, Midland
investigated Chang’s claim. (Id. ¶¶ 14-15, 17.)

During the investigation, Midland

allegedly discovered that Vue misrepresented and omitted health and medical history
from his insurance application. (Id.) In particular, Vue applied for life insurance on
February 20, 2013, and answered on the application that he had not been diagnosed with
or advised to seek treatment for cancer, and was not seeking treatment for or taking
medication for cancer. (Id. ¶¶ 7-10.) But when he filed the application, according to
Midland, Vue had been initially diagnosed with a cancerous tumor behind his left eye,

had been advised to undergo an MRI and CT scan as well as a biopsy of the tumor, was
seeking treatment for the tumor at Mayo Clinic, and was taking medication to relieve the
pain caused by the tumor. (Id. ¶¶ 18-21.) This information contradicted Vue’s answers
on his application, and Midland allegedly relied on those answers in issuing the policy.
(Id. ¶¶ 12, 18-21.)
On February 14, 2014, Midland sent Chang a letter, declaring that given Vue’s
misrepresentations and omissions on the application, it owed her only the total premiums
paid, or $120.24. (Id. ¶ 27.) The letter included a check for that amount. (Id.)
Midland then sued Chang for rescission of the policy and a declaratory judgment
that its liability under the policy is limited to a refund of the premiums paid and that it has
satisfied that liability. (Id. ¶¶ 23-30.) Midland served Chang with the Complaint on June
4, 2014. (Wolter Aff. (Docket No. 12) ¶ 4.) Since then, Chang has neither appeared in
this case nor responded to the Complaint. (Id. ¶ 7.)
Midland now moves the Court to both enter default and grant default judgment
against Chang.
DISCUSSION
Midland has not satisfied the procedural prerequisites for default judgment.
Obtaining default judgment from the Court is a two-step process. See Fed. R. Civ. P. 55.
First, the moving party must “show[] by affidavit or otherwise” that the other party “has
failed to plead or otherwise defend” and have “the clerk . . . enter the party’s default.”
Fed. R. Civ. P. 55(a). Second, the moving party may then “apply to the court for a
default judgment.” Fed. R. Civ. P. 55(b)(2). The Eighth Circuit has emphasized that the
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Court may grant default judgment only after the Clerk has entered default. Johnson v.
Dayton Elec. Mfg. Co., 140 F.3d 781, 783 (8th Cir. 1998) (stating that “entry of default
under Rule 55(a) must precede grant of a default judgment under Rule 55(b)”). Midland
has not asked the Clerk to enter default, and the Clerk has not done so. That must occur
before the Court will entertain Midland’s request for default judgment.
CONCLUSION
Midland must secure the Clerk’s entry of default before it may pursue the Court’s
grant of default judgment. Accordingly, IT IS HEREBY ORDERED that Midland’s
Motion for Default Judgment (Docket No. 10) is DENIED without prejudice.

Dated: November 5, 2014

s/ Paul A. Magnuson
Paul A. Magnuson
United States District Court Judge

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