Homesite Insurance Company of the Midwest v. Frost et al

Filing 29

ORDER granting 10 Motion for Default Judgment; granting 18 Motion for Summary Judgment. This case is CLOSED. Signed by Judge Dana L. Christensen on 9/8/2020. Copy mailed to Frost. (ASG)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
HOMESITE INSURANCE
COMPANY OF THE MIDWEST,

CV 20–00024–M–DLC

Plaintiff,

ORDER

vs.
KEVIN R. FROST and SHERRI
FROST,
Defendants.

Before the Court is Plaintiff Homesite Insurance Company of the Midwest’s
(“Homesite”) Motion for Summary Judgment. (Doc. 18.) Homesite moves for
summary judgment on its claim against Defendant Kevin R. Frost (“Mr. Frost”)
seeking declarations that: (1) the insurance policy at issue does not provide for a
defense or coverage for the claims asserted by Sherri Frost (“Ms. Frost”) against
Mr. Frost in a civil lawsuit filed on February 2, 2018 (“the Underlying Lawsuit”);
and (2) Homesite is entitled to recoup its fees and costs incurred in the defense of
Mr. Frost in the Underlying Lawsuit. (Id. at 2.) For the reasons stated herein,
Homesite’s motion is granted. Additionally, because this Order resolves
Homesite’s claims against Mr. Frost, the Court grants Homesite’s Motion for Entry
of Default Judgment against Ms. Frost. (Docs. 10, 15.)
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BACKGROUND
The following facts are undisputed.1 Prior to the events giving rise to this
proceeding, Mr. Frost and Ms. Frost were involved in a contested dissolution of
marriage proceeding. (Doc. 20-5 at 1.) On the morning of February 9, 2016, while
these dissolution proceedings remained ongoing, Mr. Frost engaged in a series of
acts against Ms. Frost that formed the basis of several criminal charges. (Id. at 1–
2.) During these criminal proceedings, Mr. Frost pled guilty to one count of
Aggravated Kidnapping in violation of Montana Code Annotated § 45-5-303 and
one count of Partner Family Member Assault in violation of Montana Code
Annotated § 45-5-206. (Doc. 20-4 at 3–4.)
At the plea hearing, Mr. Frost admitted on the record that on February 9,
2016, he “purposely and knowingly” restrained Ms. Frost “by holding her in a
place of isolation and forcing her into [his] vehicle, causing her great apprehension
of serious bodily injury and an extreme amount of stress.” (Id. at 5–6.) Mr. Frost
further admitted that “during this process [he] actually physically grabbed [Ms.
Frost]” and twisted her arm in the process of placing her in his vehicle. (Id. at 6.)
For these offenses, Mr. Frost was sentenced to, inter alia, a term of 30 years with
The Court notes at the outset that in accordance with Local Rule 56.1(a) Homesite filed a
Statement of Undisputed Facts along with its motion. (Doc. 20.) Despite being provided with a
notice in accordance with Local Rule 56.2 warning Mr. Frost that he was required to file a
Statement of Disputed Facts, Mr. Frost failed to do so. (Doc. 21.) As such, Mr. Frost’s failure to
file a Statement of Disputed Facts is “deemed an admission that no material facts are in dispute.”
L.R. 56.1(d).
1

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the Montana Department of Corrections with 25 years suspended. (Doc. 20-5 at
3.) As of the date of this order, Mr. Frost remains incarcerated.
In the wake of Mr. Frost’s criminal proceeding, Ms. Frost initiated the
Underlying Lawsuit against him and others stemming from the February 9, 2016
incident. (See generally Doc. 20-1.) In the Underlying Lawsuit, Ms. Frost asserts
nine claims against Mr. Frost, including: (1) negligence; (2) false imprisonment;
(3) assault; (4) battery; (5) negligent infliction of emotional distress; (6) intentional
infliction of emotional distress; (7) actual malice; (8) gross negligence; and (9)
destruction of or tampering with a communication device. (Doc. 20-1 at 28–33.)2
In addition, Ms. Frost seeks an award of punitive damages. (Id. at 33.)
Notably, these claims are entirely based on Mr. Frost’s actions on February
9, 2016. (Id. at 4–8, 28–33.) Specifically, Ms. Frost contends that, on February 9,
2016, Mr. Frost took control of her vehicle and “transported her against her will”,
before physically removing her and transferring her to another vehicle. (Id. at 4.)
Ms. Frost alleges that Mr. Frost intentionally restrained, kidnapped, and
imprisoned her, while also “damaging, destroying, and/or withholding” her cell
phone in order to prevent her from contacting “emergency officials.” (Id. at 29,

2

Homesite maintains that Ms. Frost has leveled only five claims against Mr. Frost in the
Underlying Lawsuit, including false imprisonment, assault, battery, intentional infliction of
emotional distress, and negligence. (Doc. 19 at 2.) But this assertion is contradicted by the very
complaint Homesite attaches to its Statement of Undisputed Facts. (Doc. 20-1 at 28–33.)

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31–33.)
After being made aware of, but prior to formal service of the Underlying
Lawsuit, Mr. Frost tendered a claim to his insurer, Homesite, seeking defense and
indemnity under a homeowner’s policy issued by 21st Century Insurance and
underwritten by Homesite (“the Policy”). (Doc. 20-6 at 2; see also Doc. 20-8.) On
October 11, 2018, Homesite sent Mr. Frost a letter notifying him that it was
tendering a defense as to the Underlying Lawsuit subject to a complete reservation
of rights. (Doc. 20-7 at 2.) This included explicit reservation of the right “to
recoup defense fees and costs incurred . . . should a court determine that no
coverage exists under the policy.” (Id.). Additionally, Homesite explained its
position that coverage was not available under the Policy because: (1) the actions
giving rise to a claim did not fall within the meaning of an “occurrence” as defined
by the Policy; and (2) coverage was precluded under applicable law and several of
the Policy’s exclusionary provisions. (Id. at 2–6.)
The Policy lists Mr. Frost as a named insured and provides property damage
coverage for a property located in Corvallis, Montana. (Doc. 20-8 at 4.)
Additionally, the Policy provides Mr. Frost with $500,000 in personal liability
coverage for claims made or suits brought against himself “because of a ‘bodily
injury’ . . . caused by an ‘occurrence’ to which this coverage applies.” (Doc. 20-8
at 1, 4, 33.) Additionally, the Policy obligates Homesite to provide Mr. Frost with
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a defense against such claims. (Id. at 33.) The Policy defines “occurrence” as “an
accident, including continuous or repeated exposure to substantially the same
general harmful conditions which results, during the policy period, in” bodily
injury. (Id. at 23.) The Policy specifically excludes from personal liability
coverage “bodily injury . . . [w]hich is expected or intended by the insured” or that
arises out of the use of a motor vehicle. (Id. at 34.) The Policy does not provide
for coverage in the event of an award of punitive damages.
Mr. Frost subsequently accepted the defense offered by Homesite. (Doc. 206 at 2.) After Homesite procured defense counsel for Mr. Frost, an answer to Ms.
Frost’s complaint was filed. (Id. at 3; see generally Doc. 20-3.) In his answer, Mr.
Frost admits that on February 9, 2016 he “took control of [Ms. Frost’s] vehicle and
transported her against her will” to another vehicle. (Doc. 20-3 at 4.)
Additionally, Mr. Frost admits he “detained and/or restrained [Ms. Frost] in a
motor vehicle.” (Id. at 21.) Homesite subsequently filed this lawsuit against Mr.
Frost and Ms. Frost, seeking declarations from this Court that: (1) the Policy
afforded Mr. Frost no coverage for the claims asserted by Ms. Frost; and (2)
Homesite is entitled to recoup the fees and costs incurred in defending Mr. Frost
against Ms. Frost’s lawsuit. (Doc. 1.)
STANDARD
Homesite is entitled to summary judgment if it can demonstrate “that there is
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no genuine issue as to any material fact and [it] is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). Material facts are those which may affect the
outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute as to a material fact is genuine if there is sufficient evidence for a
reasonable fact-finder to return a verdict for the nonmoving party. Id. If the
moving party meets its initial responsibility, the burden then shifts to the opposing
party to establish that a genuine issue of fact exists. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586 (1986). In meeting this burden, conclusory
assertions are insufficient, and “non-speculative evidence of specific facts” is
required. Cafasso v. General Dynamics C4 Sys., Inc., 637 F.3d 1047, 1061 (9th
Cir. 2011).
DISCUSSION
I.

Homesite’s Motion for Summary Judgment

Because this Court is exercising diversity jurisdiction, the law of Montana
applies. Stanford Ranch, Inc. v. Maryland Cas. Co., 89 F.3d 618, 624 (9th Cir.
1996). This renders Montana’s choice of law rules binding on the Court. Johnson
v. Wells Fargo Home Mortg., Inc., 635 F.3d 401, 420 n.16 (9th Cir. 2011). In the
absence of a choice of law provision within an insurance contract, this Court
applies Montana Code Annotated § 28-3-102 to determine what law governs the
contract’s interpretation. Tidyman’s Mgmt. Servs. Inc. v. Davis, 330 P.3d 1139,
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1149 (Mont. 2014). Under this statute, an insurance contract is “to be interpreted
according to the law and usage of the place it is to be performed or, if it does not
indicate a place of performance, according to the law and usage of the place where
it is made.” Mont. Code Ann. § 28-3-102. Thus, which state’s law governs the
interpretation of the Policy depends on its anticipated places of performance, and,
if none, the state in which the Policy was made.
The Parties seemingly presume that Montana’s substantive law governs the
interpretation of the Policy. Homesite asserts that because the Policy was “issued
for delivery” in Montana and the underlying torts complained of by Ms. Frost
occurred in this State, Montana substantive law governs this dispute. (Doc. 19 at
10.) Mr. Frost provides no contrary argument. (Doc. 22.) But, as noted above, the
law governing the interpretation of the Policy depends not on the place of its
issuance or the locality of any underlying torts, but rather on its anticipated place
of performance or, as a last resort, the place in which it was made.
The Policy provides a variety of coverages, including: (1) $355,000 in
coverage for damages sustained to a dwelling located in Corvallis, Montana; (2)
$35,500 in coverage for damages to “other structures” contained on the real
property located in Corvallis, Montana; (3) $177,500 in coverage for damages
caused to Mr. Frost’s personal property while he is “anywhere in the world”; (4)
$71,000 in coverage for loss of use of the dwelling located in Corvallis, Montana;
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and (5) $500,000 in personal liability coverage for covered suits brought against
Mr. Frost. (Doc. 20-8 at 4.) The Policy contains no choice of law provision, nor
does its terms purport to limit the geographical scope of coverage.
Indeed, the Policy insures real property located within Montana and provides
Mr. Frost with property damage and personal liability coverage for claims arising
anywhere in the world, including Montana. As such, this Court concludes that
Montana is an anticipated place of performance under the Policy. Mont. Code
Ann. § 28-3-102; Mitchell v. State Farm Ins. Co., 68 P.3d 703, 709 (Mont. 2003)
(holding “the place of performance is also the place where an insured is entitled to
receive benefits . . . .”). This conclusion is underscored by the fact that events
giving rise to the Underlying Suit occurred in Montana and Mr. Frost sought to
obtain benefits under the Policy here. Consequently, applying Montana’s choice of
law principles to the Policy, the Court finds that Montana’s substantive law shall
govern its interpretation of the relevant provisions.
A.

The Undisputed Material Facts Entitle Homesite to
Summary Judgment on the Issue of Coverage for the Events
Complained of in the Underlying Lawsuit.

Interpretation of the Policy presents a question of law resolvable by this
Court. Steadele v. Colony Ins. Co., 260 P.3d 145, 149 (Mont. 2011). In doing so,
this Court applies general principles of contract law and construes the Policy
“strictly against the insurer and in favor of the insured.” Id. The Policy’s terms
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are interpreted according to “their usual, common sense meaning as viewed from
the perspective of a reasonable consumer of insurance products.” Allstate Ins. Co.
v. Wagner-Ellsworth, 188 P.3d 1042, 1046 (Mont. 2008).
In examining the reach of a Policy’s coverage, the focus rests on “the acts
giving rise to the” claim rather than a complaint’s “legal theories or conclusory
language.” Town of Geraldine v. Montana Mun. Ins. Auth., 198 P.3d 796, 800–01
(Mont. 2008); see also New Hampshire Ins. Grp. v. Strecker, 798 P.2d 130, 132
(Mont. 1990). Accordingly, mere inclusion of a negligence claim in a complaint is
insufficient to pull such claims within the scope of coverage. Strecker, 798 P.2d at
132. Likewise, this Court is mindful not to relegate its interpretative task to a
singular determination of whether the acts in question were intentional. The
Montana Supreme Court has held on multiple occasions that intentional acts may
nonetheless constitute an “occurrence” under policy language nearly identical to
that at issue here. See, e.g., Northwest Nat. Cas. Co. v. Phalen, 597 P.2d 720, 726
(Mont. 1979); Millers Mut. Ins. Co. v. Strainer, 663 P.2d 338, 340–42 (Mont.
1983), abrogated by Sherner v. Conoco, Inc., 995 P.2d 990 (Mont. 2000). Thus,
whether Mr. Frost’s actions were intentional is relevant, but not determinative to
this Court’s coverage analysis.
Instead, when analyzing whether an action constitutes an “occurrence”
within the meaning of personal liability coverage, this Court focuses on whether
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the acts in question resulted in an “unexpected happening . . . without intention or
design on part of the insured.” Safeco Ins. Co. v. Liss, 16 P.3d 399, 406 (Mont.
2000). This means it is the results of acts, not the acts themselves, that govern
whether something is an “occurrence,” and thus afforded coverage under a
personal liability policy. Id. (noting that the intentional “unsafe use or mishandling
of firearms are an all too frequent ‘occurrence’ in” Montana, and nonetheless may
remain an “insurable event unless otherwise expressly excluded under an insured’s
personal liability policy”).
Additionally, when an insurance policy contains a personal liability
exclusion for acts expected or intended by the insured, Montana law instructs this
Court to apply a two-prong test, first inquiring whether the acts in question were
intentional before second ascertaining “whether the consequence[s] or resulting
harm[s] stemming from the act [were] intended or expected from the actor’s
standpoint.” Employers Mut. Cas. Co. v. Fisher Builders, Inc., 371 P.3d 375, 379
(Mont. 2016). This second inquiry involves an objective determination, thus
preventing claimants from pulling their acts within coverage by simple assertion
that the resulting harms of which the victim complains were unexpected. Id. 379–
80.
Four prior cases have helped delineate the bounds of personal liability
coverage under Montana law and are particularly relevant to this case. First, in
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1985, the Montana Supreme Court upheld the district court’s grant of summary
judgment to an insurer on the basis that the intentional punching of another person
was not “intended or expected from” the insured’s standpoint. Mutual Serv. Cas.
Ins. Co. v. McGehee, 711 P.2d 386 (Mont. 1985). In so holding, the Court
concluded that the “undisputed facts show . . . McGehee . . . intentionally struck
appellant in the face” and that “McGehee’s insurance policy with respondent does
not provide coverage for bodily injuries intended or expected from McGehee’s
standpoint.” Id. at 827. The Court likewise found that “it is irrelevant for the
purposes of this insurance exclusion that the assailant causes an injury different in
character or magnitude from the harm he subjectively intended.” Id. at 828.
Second, in 1990, the Montana Supreme Court upheld the district court’s
grant of summary judgment to an insurer on the basis that the insured’s intentional
sexual abuse of his daughter did not constitute an occurrence, despite his assertion
that he did not intend to injure his daughter. Strecker, 798 P.2d at 131–32. In so
holding, the Court found that the insured “pleaded guilty to three counts of felony
sexual assault of a minor” and concluded “it would fly in the face of reason to
hold” the insured intended no harm by his actions. Id. at 131–32. Additionally,
the Court found the insured’s “subjective intent to cause harm” irrelevant. Id. at
132.
Third, in 1992, the Montana Supreme Court upheld the district court’s grant
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of summary judgment to an insurer on the basis that the insured’s deliberate
kicking, hitting, and biting of other persons fell within the policy’s intended or
expected exclusion. American States Ins. v. Willoughby, 836 P.2d 37, 41 (1992).
Relevant to the Court’s analysis was that the insured “pled guilty to three counts of
misdemeanor assault” for his actions, thus establishing that such acts were
“intentional and not accidental.” Id. at 40. The Court found the insured’s action to
be “by their very nature” evidence of an intent to injure, thus placing them within
the expected or intended exclusion of the policy. Id. at 41.
Finally, in 1994, the Montana Supreme Court found that an insured’s hitting
of another person in the face fell within the policy’s expected or intended act
exclusion. Smith v. State Farm Ins. Cos., 870 P.2d 74, 76 (Mont. 1994). The
Court found the insured’s plea of guilty to misdemeanor assault charges in the
wake of the accident compelling evidence of an intentional act. Id. at 75–76.
Additionally, the Court found that the insured’s “conduct of hitting Kinsey with his
fist, by its nature, evinces an intent to injure,” thus placing outside of the policy’s
scope of coverage. Id. at 76.
Notably, in McGehee, Willoughby, and Smith, the Court additionally
expressed its view that permitting coverage to extend to the intentional criminality
at issue would likely violate public policy. McGehee, 711 P.2d at 828 (collecting
authority that “to require coverage in a situation such as the one at bar . . . is a
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violation of public policy”); Willoughby, 836 P.2d at 40 (noting that permitting
criminal actions to form the basis of policy coverage would “vitiate[e] the purpose
of insurance”); Smith, 870 P.2d at 76 (holding that “[p]ublic policy forbids
indemnifying willful wrongdoing and there is no insurance coverage for striking
someone in the face”). These statements were fortified by the Court later, when it
forcefully held “that in Montana there is an unmistakable public policy against . . .
indemnification” for criminal acts. Liss, 16 P.3d at 405.
Additionally, under Montana law, an insurance policy does not cover an
award of punitive damages unless its express terms so provide. Mont. Code
Ann. § 33-15-317(1). Because the Policy does not expressly provide for coverage
in the event of an award of punitive damages, this claim in the Underlying Lawsuit
does not fall within the scope of coverage. Turning to the nine claims leveled
against Mr. Frost in the Underlying Lawsuit, it is the opinion of this Court that the
undisputed material facts provide for only one conclusion—the Policy does not
provide coverage.
In support of its quest for summary judgment, Homesite argues that: (1) the
acts which form the basis of the Underlying Complaint do not constitute an
“occurrence” within the meaning of the Policy; (2) even if such acts did constitute
an “occurrence,” applicable law and the Policy’s exclusions prohibit coverage.
(Doc. 19 at 13–23.) The Court agrees.
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The acts of which Ms. Frost complains in the Underlying Lawsuit are
precisely the intentional acts which gave rise to the criminal charges for which Mr.
Frost is currently incarcerated. Indeed, Mr. Frost plead guilty to charges of
Aggravated Kidnapping and Partner Family Member Assault. (Doc. 20-4 at 3–4;
Doc. 20-5 at 2–3.) In doing so, he admitted to purposely and knowingly
restraining Ms. Frost “by holding her in a place of isolation and forcing her into
[his] vehicle, causing her great apprehension of serious bodily injury and an
extreme amount of stress.” (Doc. 20-4 at 5–6.) Mr. Frost additionally admitted to
grabbing Ms. Frost and twisting her arm. (Id. at 6.) In short, the undisputed
material facts establish that Mr. Frost’s actions on February 6, 2016 were
intentional.
The Court likewise finds that the resulting harms of which Ms. Frost
complains were not accidental, and thus do not form the basis of an “occurrence”
within the meaning of the Policy. Here, as in Strecker, the Court concludes “it
would fly in the face of reason” to conclude that when Mr. Frost intentionally
restrained Ms. Frost, grabbed her, twisted her arm, and forced her into a vehicle,
that he did not intend to harm her. Strecker, 798 P.2d at 132. Nothing about the
acts complained of, or the resulting harms to Ms. Frost, were accidental. As such,
they do not constitute an “occurrence” giving rise to personal liability coverage
under the Policy.
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Additionally, this finding of intentionality satisfies the first prong of the test
established by Montana law for the application of an “intended or expected”
exclusion to personal liability coverage. Mr. Frost attempts to create a genuine
issue of material fact by asserting that he subjectively lacked the intent to cause
Ms. Frost physical or emotional harm, arguing instead that any such harm was the
result of negligence. (Doc. 12 at 1.) But, as noted above, the inquiry is not what
Mr. Frost subjectively intended but rather what an objective examination reveals
about his intent.
Applying this standard, the Court finds that here, as in McGehee, Strecker,
Willoughby, and Smith, Mr. Frost’s intentional restraining of Ms. Frost, along with
his physically grabbing her and twisting her arm to force her into a vehicle
objectively reveals an intent to cause the harm of which she now complains in the
Underlying Lawsuit. As such, the Court finds the second prong of the test
established by Montana law for the application of an “intended or expected”
exclusion to personal liability coverage is satisfied in this case. Thus, even if the
acts complained of constituted an “occurrence,” the Policy’s exclusion of personal
liability coverage for injuries “expected or intended by” Mr. Frost, precludes
coverage in this case.
The Court additionally recognizes that, in essence, Mr. Frost seeks to
insulate himself from the consequences of his criminal activity through the
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Policy’s personal liability coverage. But, as noted above, if the Policy provided
Mr. Frost with indemnification for his criminal acts, Montana’s public policy
would be violated. Liss, 16 P.3d at 405. In any event, as the Court concludes, the
Policy provides no such coverage here.
Because the Court has determined that the acts complained of in the
Underlying Lawsuit do not constitute an “occurrence” and that coverage is
precluded by the Policy’s expected or intended exclusion, it declines to address
Homesite’s argument that coverage would likewise be precluded under the
Policy’s automobile exclusion. (Doc. 24 at 11.)
B.

The Undisputed Material Facts Entitle Homesite to
Summary Judgment on the Issue of its Duty to Defend Mr.
Frost in the Underlying Lawsuit.

The language of an insurance policy determines whether an insurer has a
duty to defend their insured in a specific case. Grimsrud v. Hagel, 119 P.3d 47, 53
(Mont. 2005). “If there is no coverage under the terms of the policy based on the
facts contained in the complaint, there is no duty to defend.” Id. Because this
Court has determined that the acts complained of in the Underlying Complaint do
not fall within the scope of the Policy’s coverage, Homesite has no duty to defend.
C.

The Undisputed Material Facts Entitle Homesite to
Summary Judgment on the Issue of its Right to Recoup the
Amounts Expended in Defending Mr. Frost in the
Underlying Lawsuit.

Under Montana law, an insurer is entitled to recoup costs expended on an
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insured’s behalf for the defense of uncovered claims if it timely and explicitly
reserves its right to recoup such costs. Travelers Cas. & Sur. Co. v. Ribi
Immunochem Research, Inc., 108 P.3d 469, 480 (Mont. 2005). This is
accomplished by providing the insured with notice prior to the tendering of costs in
support of the defense. Id. Homesite contends that its has fully complied with
these requirements. (Doc. 19 at 24–25; Doc. 24 at 11–12.) Mr. Frost, for his part,
argues against recoupment on the grounds that he provided prompt notice to
Homesite of the claims asserted in the Underlying Lawsuit. (Doc. 22 at 4.) Mr.
Frost’s argument is unpersuasive, and the Court will grant Homesite summary
judgment on this issue.
The undisputed material facts reveal that after Mr. Frost provided Homesite
with a copy of the Underlying Lawsuit, it responded with precisely the sort of
reservation of rights letter contemplated by Ribi. (Doc. 20-7.). Indeed, this letter
explicitly notified Mr. Frost that a defense was being tendered subject to
Homesite’s reservation of the right “to recoup defense fees and costs incurred . . .
should a court determine that no coverage exists under the policy.” (Id. at 2.)
With respect to timeliness, Homesite only provided a defense after notifying Mr.
Frost of the reservations attached to the defense. (Id. at 6; Doc. 20-6 at 2–3.) Mr.
Frost specifically accepted the defense offered by Homesite, subject to the
reservations contained in its letter. (Doc. 20-6 at 2.) In short, the undisputed
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material facts demonstrate Homesite did exactly what it was supposed to do in
order to reserve its right to recoup defense costs expended on Mr. Frost’s behalf in
the Underlying Lawsuit. Accordingly, summary judgment on this issue is
warranted.
II.

Homesite’s Motion for Entry of Default Judgment

On April 7, 2020 Homesite moved for entry of default judgment as to Ms.
Frost. (Doc. 10.) This Court reserved ruling on Homesite’s motion (Doc. 10) until
the claims against Mr. Frost were resolved. (Doc 15.) Ultimately, the decision of
whether to enter a default judgment under Rule 55(b) of the Federal Rules of Civil
Procedure remains within this Court’s discretion. Aldabe v. Aldabe, 616 F.2d
1089, 1092 (9th Cir. 1980). In exercising this discretion, this Court considers a
variety of factors, including: (1) the possibility of prejudice to the plaintiff; (2) the
merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the
sum of money at stake in the action; (5) the possibility of a dispute concerning
material facts; (6) whether the default was due to excusable neglect; and (7) the
strong policy underlying the Federal Rules of Civil Procedure favoring decisions
on the merits. Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). Upon
weighing these factors, the Court finds an entry of default judgment against Ms.
Frost appropriate.
The first factor weighs strongly in Homesite’s favor. Because Ms. Frost has
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failed to answer Homesite’s Complaint (Doc. 1) or otherwise appear and defend
against this action, the Court’s failure to grant Homesite’s motion (Doc. 10) would
effectively leave it without a remedy. This the Court will not do. With respect to
factors two and three, the Court finds their analysis only supports the entry of
default judgment against Ms. Frost. Not only is Homesite’s complaint (Doc. 1)
sufficient to state a claim, but, as analyzed above, its claims are sufficiently
meritorious to warrant the grant of summary judgment.
As to the fourth factor—the amount of money at stake—the Court finds that
this factor also weighs in Homesite’s favor. While Homesite does not seek an
award of damages in this action, it does seek absolution from its duty to expend
monetary sums in defending Mr. Frost in the Underlying Lawsuit. As noted by
Homesite, these expenses continue to accrue, and it intends to recoup these sums
from Mr. Frost. As such, given the expenses associated with defending Mr. Frost
in the underlying lawsuit, this factor weighs in Homesite’s favor.
The fifth and sixth factors—possible factual disputes and excusable
neglect—also favor entering default judgment. Because Ms. Frost did not answer
Homesite’s Complaint, no facts are in dispute. See PepsiCo, Inc. v. California Sec.
Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). In addition, as discussed in
the foregoing section, the Court finds no disputed material facts precluding the
entry of summary judgment in this action. Additionally, because Ms. Frost was
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properly served nearly six months ago, it is unlikely that her failure to answer or
otherwise appear results from excusable neglect. (Doc. 4.)
The final factor, the policy favoring a decision on the merits, generally
weighs against entering default judgment. Eitel, 782 F.2d at 1472. Yet “the mere
existence of [Rule] 55(b), . . . indicates that this preference, standing alone, is not
dispositive.” PepsiCo, Inc., 238 F. Supp. 2d at 1177 (internal quotation marks
omitted). Ms. Frosts’ failure to answer or otherwise appear makes any other
disposition impractical. Having weighed each of the factors, the Court finds that
default judgment is appropriate.
Accordingly, IT IS ORDERED that Homesite’s Motion for Summary
Judgment (Doc. 18) is GRANTED.
IT IS FURTHER ORDERED that Homesite’s Motion for Entry of Default
Judgment (Doc. 10) is GRANTED.
IT IS FURTHER ORDERED that default judgment is entered in favor of
Homesite and against Ms. Frost on Homesite’s claim for declaratory relief as
follows: (1) the Policy does not provide coverage for the claims asserted by Ms.
Frost against Mr. Frost in the Underlying Lawsuit; and (2) Homesite is entitled to
recoup the fees and costs incurred in defending Mr. Frost in the Underlying
Lawsuit.
The clerk of court is directed to enter judgment by separate document and
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Case 9:20-cv-00024-DLC Document 29 Filed 09/08/20 Page 21 of 21

close the case file.
DATED this 8th day of September, 2020.

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