SELECTIVE INSURANCE COMPANY OF AMERICA v. MAZZUCA ENTERPRISES, INC. et al
OPINION. Signed by Judge Kevin McNulty on 4/26/2021. (qa, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
SELECTIVE INSURANCE COMPANY
Civ. No. 20-5516 (KM)(JBC)
MAZZUCA ENTERPRISES, INC, et al.
KEVIN MCNULTY, U.S.D.J.:
This matter comes before the Court on Plaintiff’s unopposed motion (DE
12) 1 for default judgment. Plaintiff initiated this action to recover losses
stemming from Defendants’ alleged breach of their contractual obligations
arising under an indemnity agreement. For the reasons provided herein, I will
grant Plaintiff’s motion.
a. Legal Standard
“[T]he entry of a default judgment is left primarily to the discretion of the
district court.” Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984) (citing
Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951)).
Because the entry of a default judgment prevents the resolution of claims on
the merits, “this court does not favor entry of defaults and default judgments.”
United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984).
Citations to the record will be abbreviated as follows. Citations to page numbers
refer to the page numbers assigned through the Electronic Court Filing system, unless
“DE” = Docket entry number in this case.
“Compl.” = Plaintiffs’ Complaint (DE 1)
Thus, before entering default judgment, the Court must determine whether the
“unchallenged facts constitute a legitimate cause of action” so that default
judgment would be permissible. DirecTV, Inc. v. Asher, 2006 WL 680533, at *1
(D.N.J. Mar. 14, 2006) (citing Wright, Miller, Kane, 10A Fed. Prac. & P. Civil 3d
§ 2688, at 58–59, 63).
“[D]efendants are deemed to have admitted the factual allegations of the
Complaint by virtue of their default, except those factual allegations related to
the amount of damages.” Doe v. Simone, 2013 WL 3772532, at *2 (D.N.J. July
17, 2013). While “courts must accept the plaintiff's well-pleaded factual
allegations as true,” they “need not accept the plaintiff's factual allegations
regarding damages as true.” Id. (citing Chanel, Inc. v. Gordashevsky, 558 F.
Supp. 2d 532, 536 (D.N.J. 2008)). Moreover, if a court finds evidentiary
support to be lacking, it may order or permit a plaintiff seeking default
judgment to provide additional evidence in support of the allegations. Doe,
2013 WL 3772532, at *2.
b. Prerequisites for Entry of Default Judgment
Before a court may enter default judgment against a defendant, the
plaintiff must have properly served the summons and complaint, and the
defendant must have failed to file an answer or otherwise respond to the
complaint within the time provided by the Federal Rules, which is twenty-one
days. See Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 18–19 (3d Cir.
1985); Fed. R. Civ. P. 12(a).
Plaintiff Selective Insurance Company of America initiated this action
against Defendants Mazzuca Enterprises, Inc. (“Mazzuca”); M-J Air Inc. a/k/a
M-J Air, Inc. (“M-J Air”); Joseph Mazzuca (“Joseph”); Georgia M. Mazzuca,
personal representative of the estate of Michael J. Mazzuca (“Estate of
Michael”), and Wanda Mazzuca (“Wanda”), (collectively “Defendants”). 2 (Compl.
at 1-2). The Summons and Complaint were served on June 26, 2020 as to
To avoid confusion, I will refer to these relatives by their first names. No
disrespect is intended.
Defendant Estate of Michael and on July 6, 2020 as to Defendants Mazzuca,
M-J Air, Joseph, and Wanda. (DEs 6-10). The time for Estate of Michael to
respond expired on July 17, 2020, and for the rest on July 27, 2020. (Id.) On
August 21, 2020, Plaintiff requested entry of default (DE 10), which was
entered by the clerk on August 24, 2020. Therefore, the prerequisites for
default judgment are present.
c. Three-Factor Analysis
After the prerequisites have been satisfied, a court must evaluate the
following three factors: “(1) whether the party subject to default has a
meritorious defense, (2) the prejudice suffered by the party seeking default, and
(3) the culpability of the party subject to default.” Doug Brady, Inc. v. N.J. Bldg.
Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008) (citing Emcasco
Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)).
i. Factor one: Existence of meritorious defense
As always, evaluation of the first factor is made difficult by Defendants’
failure to answer or to oppose the motion for default judgment. Nevertheless,
my independent review of the record does not suggest that Plaintiff’s claims are
legally flawed. See Doe, 2013 WL 3772532, at *5. Accepting the allegations in
the Complaint as true, Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir.
1990), I find that the Plaintiffs have stated a claim for relief against these
On July 2, 2010, Defendants each executed a General Agreement of
Indemnity (the “Indemnity Agreement”) in favor of Plaintiff for the issuance of
bonds on behalf of Mazzuca, as principal. (Id. ¶10).
Paragraph 3 of the Indemnity Agreement provides as follows:
The Indemnitors hereby jointly and severally covenant, promise
and agree to exonerate, indemnify and save harmless
[Selective](and any surety that [Selective] procures to execute any
Bond and any other surety with which [Selective] may act as cosurety on any Bond or other instrument) from and against any and
all liability, loss, cost, damage and expense of whatsoever kind or
nature, including, but not limited to, interest, court costs and
counsel, attorneys, consulting, accounting and other professional
and trade fees, whether incurred on a flat fee per claim,
percentage, time and material, hourly or other basis, (including the
cost of in-house professionals) which [Selective] may sustain,
incur, be put to or to which it may be exposed (1) by reason of
having executed any Bond or other instrument or any renewal,
modification, continuation, substitution or extension thereof, (2) by
reason of the failure of any one or more of the Indemnitors to
perform or comply with the promises, covenants and conditions of
this Agreement or,(3) in enforcing any of the promises, covenants
or conditions of this Agreement. The liability of the Indemnitors
shall extend to and include the amount of all payments, together
with interest thereon at the rate of prime as published in the Wall
Street Journal (or similar national financial publication should the
Wall Street Journal cease to public such rates) plus two points
from the date of such payments, made by [Selective] under
[Selective’s] belief that (1) [Selective] was or might be liable therefor
or (2) the payments were necessary or advisable to protect any of
[Selective’s] rights or to avoid or lessen [Selective’s] liability or
alleged liability. While [Selective] shall be under no obligation to
advance or loan money to any Indemnitor, the liability of the
Indemnitors shall also extend to any loans or advances, including
any interest thereon, made by or guaranteed by [Selective] for the
benefit of one of more of the Indemnitors, without any obligation
on [Selective’s] part to see to the application thereof. Payment by
reason of the aforesaid causes shall be made by the Indemnitors to
[Selective] at its Home Office in Branchville, New Jersey as soon as
liability exists or is asserted against [Selective], whether or not
[Selective] shall have made any payment therefor. Indemnitors
agree that the vouchers or other evidence of such payments sworn
to by a duly authorized representative of [Selective] shall be prima
facie evidence of the fact and extent of the liability of the
Indemnitors to [Selective].
(Id. ¶12) (alterations in original).
And Paragraph 7 of the Indemnity Agreement provides:
[Selective] shall have the right to adjust, settle or compromise any
claim, demand, suit or judgment upon any of the Bonds procured
or executed by it and [Selective’s] decision thereon shall be final
and binding upon the Indemnitors. [Selective] shall be entitled to
apply any collateral security by it under this Agreement or any
collateral security agreement between it and any of the
Indemnitors to the satisfaction of or in reimbursement of [Selective]
as a result of its satisfaction of any claim, demand, suit or
judgment upon any of the Bonds procured or executed by it and to
direct payment of or reimbursement to itself of interest, costs,
expenses and counsel and other professional or consulting fees
incurred by it as a result of its having executed or procured any
Bond. [Selective] shall at all times have the right but not the
obligation to retain the counsel and experts of its choice to defend
itself from any claim, lien, levy, liability, suit or judgment brought
against [Selective] on any Bond or against any job funds or
collateral security held by [Selective] or an Obligee on any Bond,
including retainages or to prosecute an action to preserve
[Selective’s] rights with respect to collateral security, contract
funds, trust funds or liens on any bonded project and the cost of
retaining such counsel and experts shall fall within the
Indemnitors’ obligation to indemnify, exonerate and hold [Selective]
(Id. ¶13) (alterations in original).
Thereafter, Plaintiff “issued various bonds on behalf of Mazzuca, as
principal, in favor of Oliver Township, as obligee.” (Id. ¶14). Those bonds
included Performance Bond No. B1088396 and an associated maintenance
bond (together, the “Bonds”). (Id.)
On December 19, 2019, Plaintiff issued a check in the amount of
$165,000 to Oliver Township to resolve the Township’s claims against the
Bonds. (Id. ¶15). Plaintiff then “incurred unreimbursed loss adjustment
expenses in connection with Oliver Township’s claims against the Bonds,
including but not limited to attorneys’ fees and costs and consultant fees and
costs.” (Id. ¶16).
Based on those alleged unreimbursed losses, the one-count Complaint
asserts a claim for contractual indemnification. (Id. ¶¶17-20). The Complaint
alleges that Defendants breached their joint and several contractual obligations
under the Indemnity Agreement “by failing to exonerate, indemnify and save
harmless” Plaintiff. (Id. ¶¶18-19). As a result of that breach, the Complaint
alleges, the following losses and expenses remain unsatisfied:
(1) “[A] net loss to date of no less than $165,000”;
(2) “[N]o less than $39,365.80 in legal fees and disbursements”;
(3) “[N]o less than $6,994.75 in consultants’ fees.”
(Id. ¶20). Added together, these losses total no less than $211,360.55. (They
have been supplemented by affidavit. See infra.)
The facts as alleged, I find, establish a cause of action for contractual
indemnification under the clear terms of the Indemnity Agreement. Paragraph
3 of the Agreement entitles Plaintiff to recover, inter alia, any and all costs
sustained “by reason of having executed any Bond.” (Compl. ¶12). Further,
Paragraph 7 provides that Plaintiff “shall have the right to adjust, settle or
compromise any claim, demand, suit or judgment upon any of the Bonds
procedure or executed by it.” (Id. ¶13). On December 19, 2019, Plaintiff issued
payment to Oliver Township to resolve Defendants’ claims against the Bonds.
(Id. ¶15) That settlement left Plaintiff with unreimbursed losses (Id. ¶16). Based
on those allegations, I find that Plaintiff has stated a valid cause of action
under the Indemnity Agreement.
ii. Factors two and three: Prejudice to Plaintiff and
The second and third factors also weigh in favor of default. Defendants
were properly served but failed to appear, defend or otherwise respond to the
Complaint. It is clear that the Plaintiff has been prejudiced by this dereliction
because it has been “prevented from prosecuting [its] case, engaging in
discovery, and seeking relief in the normal fashion.” See Teamsters Pension
Fund of Philadelphia & Vicinity v. Am. Helper, Inc., 2011 WL 4729023, at *4
(D.N.J. Oct. 5, 2011) (find that a defendant’s failure to answer prejudices the
plaintiff); see also Gowan v. Cont’l Airlines, Inc., 2012 WL 2838924, at *2
(D.N.J. Jul. 9, 2012) (“[Plaintiff[s] will suffer prejudice if the Court does not
enter default judgment as Plaintiff[s] [have] no other means of seeking damages
for the harm caused by Defendant.”). Absent any evidence to the contrary, “the
Defendant[s’] failure to answer evinces the Defendant’s culpability in [the]
default.” Teamsters Pension Fund of Philadelphia & Vicinity, 2011 WL 4729023
at *4. In this case, “there is nothing before the Court to show that the
Defendant[s’] failure to file an answer was not willfully negligent.” Id. (citing
Prudential Ins. Co. of America v. Taylor, 2009 WL 536043, at *1 (D.N.J. Feb. 27,
2009)) (finding that when there is no evidence that the defendant’s failure to
answer the complaint was due to something other than its own willful
negligence, the defendant’s conduct is culpable and default judgment is
Overall, then, the three factors support the entry of default judgment.
Therefore, I will grant the motion (DE 12) for default judgment.
The Complaint alleges damages of at least $211,360.55. (Compl. ¶20). In
support of that figure, Plaintiff has submitted documentation of the $165,000
check it issued to Oliver Township. (DE 1-3). Additionally, Plaintiff has
submitted the Affidavit of Jonathan L. Panico, which states that, as of February
9, 2021, Plaintiff has incurred at least $49,325.58 in attorneys’ fees and costs
and $7,519.75 in consultants’ fees and costs. (DE 12-1 ¶13). Based on that
more recent figure, judgment will be entered in the amount $221,845.33.
For the reasons set forth above, I will grant Plaintiff’s motion (DE 12) for
default judgment in the amount of $ 221,845.33.
An appropriate order follows.
Dated: April 26, 2021
/s/ Kevin McNulty
United States District Judge
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