First Mercury Insurance Company, Inc. v. Schnabel Roofing of Long Island, Inc. et al

Filing 16

MEMORANDUM AND ORDER granting 13 Motion for Default Judgment; granting 15 Motion to Amend/Correct/Supplement. Plaintiff's motion to amend the caption is GRANTED. The Clerk of the Court is directed to change the name of Defendant "VLMP , LLC" to "58 VLIMP, LLC." Plaintiff's motion for a default judgment is also GRANTED IN ITS ENTIRETY. The Clerk of the Court is directed to issue Plaintiff a declaratory judgment in its favor against each Defendant. Plaintiff is directed to serve a copy of this Order upon each Defendant. The Clerk of the Court is directed to mark this matter as CLOSED. SO ORDERED by Judge Joanna Seybert on 3/11/11. (Valle, Christine)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ---------------------------------------X FIRST MERCURY INSURANCE COMPANY INC., Plaintiff, -againstSCHNABEL ROOFING OF LONG ISLAND, INC., 58 VLIMP, LLC, STEPHEN PHILLIPS,

MEMORANDUM & ORDER 10-CV-4398 (JS)(AKT)

Defendants. ---------------------------------------X APPEARANCES: For Plaintiff: Michael J. DiSantis, Esq. Wen-Shin Cheng, Esq. Tressler LLP 233 Sx Wacker Drive, Suite 2200 Chicago, IL 60606 Barry T. Bassis, Esq. Tressler, LLP One Penn Plaza, Suite 4701 New York, NY 10119 For Defendants: No appearances.

SEYBERT, District Judge: Pending before the Court are Plaintiff's motions: (i) to correct the caption to name 58 VLIMP, LLC as a Defendant instead of VLMP, LLC; and (ii) for a default judgment against all Defendants, including 58 VLIMP, LLC. reasons, Plaintiff's motions are GRANTED. BACKGROUND This is a declaratory judgment action brought by an insurer, Plaintiff First Mercury Insurance Company ("First For the following

Mercury"), against its insured, Defendant Schnabel Roofing of Long Island, Inc. ("Scnabel"), asserting that First Mercury does not have a duty to defend or indemnify Schnabel in a pending state court proceeding. Defendants "VLMP, Inc." and Steven

Phillips are nominal Defendants and necessary parties, because they are the claimants in the underlying suit against Schnabel. DISCUSSION I. Motion to Amend First Mercury's motion to amend seeks to correct the caption to name 58 VLIMP, LLC as a Defendant instead of VLMP, LLC. First Mercury originally named VLMP, LLC as a Defendant

because that supposed entity is the listed claimant in the state case. However, First Mercury since learned that this entity was

incorrectly named in the state case, and is actually named 58 VLIMP, LLC. from In 58 this regard, LLC's First state Mercury court has secured an

Affidavit

VLIMP,

attorney,

Irving

Like, attesting to the entity's proper name.

Based on this

information, the Court GRANTS First Mercury's motion to amend the caption. Additionally, the fact that First Mercury innocently, but incorrectly, named the wrong entity does not delay or slow the default judgment motion. Attorney Like has sworn that his

client, a nominal Defendant only, "was properly served with the summons and complaint," and does 2 not "dispute[] that [it]

received proper notice and service of process in this action."1 Consequently, the Court construes the default judgment motion as one brought against 58 VLIMP, LLC. II. Default Judgment Motion A. Applicable Standard A default constitutes an admission of all well-pled factual allegations in the complaint, and the allegations as they pertain to liability are deemed true. Joe Hand Promotions,

Inc. v. El Norteno Rest. Corp., 06-CV-1878, 2007 WL 2891016, at *2 (E.D.N.Y. 2007). allegations liability. in A default judgment entered on the well-pled complaint establishes a defendant's

the

See Garden City Boxing Club, Inc. v. Morales, 05-CVThe only question provided adequate

0064, 2005 WL 2476264, at *3 (E.D.N.Y. 2005). remaining, then, is whether Plaintiff has

support for the relief it seeks. In determining whether to grant a default judgment, the Court is guided by the same factors which apply to a motion to set aside entry of a default. See Enron Oil Corp. v.

Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993).

These factors are:

(1) whether the default was willful; (2) whether ignoring the
1

The Court wishes to thank Attorney Like for his willingness to submit an Affidavit confirming these facts, and which also confirms that diversity jurisdiction is proper, because 58 VLIMP LLC has only a sole member, who is a Florida citizen. The Court appreciates the courtesy Attorney Like has extended both First Mercury and the Court, given his client's strategic decision to default as a nominal Defendant. 3

default

would

prejudice

the

adversary; Id.

and

(3)

whether

a

meritorious defense is presented. B.

Plaintiff is Entitled to a Default Judgment As to the first factor, the failure of Defendants to

respond to the Complaint sufficiently demonstrates willfulness. See Gesualdi v. MMK Trucking, Inc., 09-CV-1484, 2010 WL 3619569, at *3 (E.D.N.Y. Aug. 24, 2010). Plaintiff has submitted

affidavits of service to the Clerk of the Court demonstrating that, on October 5, 2010, it served the Summons and Complaint upon each Defendant. See Docket No. 3. Moreover, with respect

to the nominal Defendants, 58 VLIMP, LLC and Steven Phillips, Attorney Lake's affidavit confirms that they timely received

service of the Summons and Complaint, and do not dispute "proper notice and service of process in this action." Yet, as noted

above, none of the Defendants have answered or responded in any way to the Complaint, nor did any of them request an extension of time to respond. Therefore, the record establishes that the

Defendants have acting willfully, in failing to respond to the Complaint. Next, the Court must consider whether Plaintiff would be prejudiced if its default judgment motion would be denied. Denying this motion would prejudice Plaintiff "as there are no additional steps available to secure relief in this Court."

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Bridge Oil Ltd. v. Emerald Reefer Lines, LLC, 06-CV-14226, 2008 WL 5560868, at * 2 (S.D.N.Y. 2008). Finally, the Court must consider whether each

Defendant has a meritorious defense.

The Court is unable to

make a determination, because no Defendant has presented such a defense presented defendant to the Court. "[w]here, in Hence, as here, the where the no defense has been that the

and, is

court

determines of

default,

factual

allegations

complaint, except those relating to the amount of damages, will be taken as true." 622, 623 (S.D.N.Y. Chen v. Jenna Lane, Inc., 30 F. Supp. 2d 1998) (internal citations and quotations

omitted).

The Complaint, the allegations of which are deemed

admitted by each Defendant in light of its default, asserts a valid declaratory judgment claim. Specifically, the Complaint

properly alleges that First Mercury owes no duty to defend or indemnify relate to its insured, Scnabel, because or the claimed that damages

losses,

conditions,

defects

pre-existed

Schnabel's insurance agreement with First Mercury, and thus fall within contractual coverage exclusions. As all three factors have been met, a default judgment is warranted. is GRANTED. Consequently, Plaintiff's default judgment motion

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CONCLUSION Plaintiff's motion to amend the caption is GRANTED. The Clerk of the Court is directed to change the name of

Defendant "VLMP, LLC" to "58 VLIMP, LLC." Plaintiff's motion for a default judgment is also

GRANTED IN ITS ENTIRETY.

The Clerk of the Court is directed to

issue Plaintiff a declaratory judgment in its favor against each Defendant. Plaintiff is directed to serve a copy of this Order upon each Defendant. The Clerk of the Court is directed to mark this matter as CLOSED. SO ORDERED.

/s/JOANNA SEYBERT_______ Joanna Seybert, U.S.D.J. Dated: March 11 , 2011 Central Islip, New York

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