Transamerica Premier Life Insurance Company v. Sherlock et al

Filing 28

ORDER granting 20 Motion for Entry of Default Judgment. Signed by Honorable J Michelle Childs on 5/12/2017.(asni, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
AIKEN DIVISION
Transamerica Premier Life Insurance
Company,
Plaintiff,
vs.
Mary Carroll, Hannah Sherlock, and
Johnny Sherlock,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No.: 1:16-cv-02533-JMC

ORDER FOR DEFAULT JUDGMENT
AS TO ALL DEFENDANTS

This matter is before the court on the Plaintiff Transamerica Premier Life Insurance
Company’s (“Plaintiff”) motion for default judgment against Defendants Mary Carroll, Hannah
Sherlock, and Johnny Sherlock. For the reasons set forth below, the court GRANTS Plaintiff’s
motion.
I.

Introduction
Plaintiff filed this declaratory judgment action on July 13, 2016, seeking a declaration by

the court that a life insurance policy on the life of Rose Ann Sherlock (“the Policy”) is null and
void and of no force and effect. Plaintiff further requests that the court declare that Plaintiff has
no obligation to pay the death benefit under the Policy and that it be allowed to retain the premiums
paid on the Policy.
A. Jurisdiction and Venue
The court has subject matter jurisdiction over Plaintiff's claims pursuant to 28 U.S.C.
§ 1332 based on diversity of citizenship of the parties. Additionally, this action is brought pursuant
to the provisions of the Uniform Declaratory Judgment Act, as codified in 28 U.S.C. §§ 2201-

2202, and Federal Rule of Civil Procedure 57.
B. Process and Service on Defendants Mary Carroll, Hannah Sherlock, and Johnny
Sherlock
The Complaint was served on Defendant Mary Carroll by delivering a Summons and
Complaint to her residence at 115 Ceferino Drive, North Augusta, South Carolina, 29860, on July
18, 2016. Defendant Mary Carroll accepted service. (ECF No. 9-1.)
Process was also served on Defendant Hannah Sherlock by delivering the Summons and
Complaint to her personally at her residence at 1352 Shannon Drive, North Augusta, South
Carolina 29860, on July 18, 2016. (ECF No. 10-1.)
Defendant Johnny Sherlock received service of process by delivery of a Summons and
Complaint to his residence at 1115 Edgefield Road, North Augusta, South Carolina, 29860, on
August 11, 2016. The wife of Defendant Johnny Sherlock, Ms. Catherine Sherlock, accepted
service. (ECF No. 16-1.) Service on Defendant Johnny Sherlock was also attempted by certified
mail, restricted delivery, return receipt requested on August 5, 2016 (ECF No. 16-2), and by FedEx
on August 12, 2016. (ECF No. 16-3.) The Court finds that service on August 11, 2016 is sufficient
and that, counting from that date, Defendant Johnny Sherlock is in default.
C. Dismissal of Remaining Defendants
On September 16, 2016, Plaintiff voluntarily dismissed Defendants The Estate of Rose
Ann Sherlock, Tommy G. Riley, and Lisa Sherlock from this matter pursuant to Rule
41(a)(1)(A)(i) of the Federal Rules of Civil Procedure. (ECF No. 21.) The Plaintiff determined
that the presence of these Defendants is no longer necessary.
D. Grounds for Entry of Default
Defendants Mary Carroll, Hannah Sherlock, and Johnny Sherlock have not timely filed an
answer or other pleading, as reflected in the Affidavits of Default filed on August 11, 2016, and
2

September 7, 2016. (ECF Nos. 9, 10, 17.) The Clerk of Court properly entered default as to
Defendants Mary Carroll and Hannah Sherlock on August 11, 2016, (ECF Nos. 12, 13) and
Defendant Johnny Sherlock on September 7, 2016 (ECF No. 18).
II.

Findings of Fact
When a defendant is in default for failure to respond to the complaint, the court should

accept the facts pled in the complaint. See Fed. R. Civ. P. 8(b)(6); see also DIRECT TV, Inc. v.
Rawlins, 523 F.3d 318, 322 n.2 (4th Cir. 2009). “A defendant in default concedes the factual
allegations of the complaint.” Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.
2001). Having reviewed Plaintiff’s Complaint, Answers to Local Rule 26.01 Interrogatories,
Acceptance of Service Forms, Requests for Entry of Default, Motion for Entry of Default
Judgment, as well as all supporting and supplemental information provided, the court makes the
following factual findings.
Plaintiff through its predecessor, issued a Policy on the life of Rose Ann Sherlock.1 The
Policy lapsed for nonpayment of premiums on November 7, 2009. Defendant Hannah Sherlock,
who claimed to be the Policy owner at that time, was informed of the lapse. Thereafter, Plaintiff
received a reinstatement form purportedly bearing the signatures of Rose Ann Sherlock and
Defendant Hannah Sherlock, dated February 9, 2010. The facts alleged in the Complaint establish
that the attempt to reinstate the policy was made without the participation or knowledge of the
insured Rose Ann Sherlock. Because that information was not known to Plaintiff at the time, the
Policy was reinstated in its records, but it was ineffective because the reinstatement requirements
under the Policy were not satisfied, particularly that the insured know and consent to the

1

The Complaint contains a detailed recitation of the facts.
3

reinstatement; nor did the individuals attempting to reinstate the Policy have an insurable interest
in the life of Rose Ann Sherlock.
Subsequently, Plaintiff states that Defendant Hannah Sherlock mailed a change of
beneficiary form dated April 15, 2014 to Plaintiff indicating that the beneficiaries of the Policy
should be changed to Defendants Hannah Sherlock and Johnny Sherlock. By letter dated January
6, 2016, Plaintiff informed Defendant Hannah Sherlock that the premiums for the Policy would
increase from $860.60 per quarter to $8,433.10 per quarter because the 10 years of level premiums
guaranteed under the Policy were complete. The effective date of this premium change was on
March 7, 2016.
Rose Ann Sherlock died on February 2, 2016. Shortly thereafter, Plaintiff received claim
forms from Defendants Hannah Sherlock and Johnny Sherlock claiming benefits under the Policy
and asserting that they were her cousin and nephew, respectively. On or about March 28, 2016,
Plaintiff received a fax communication from Mary Sherlock indicating that the Policy had been
procured by fraud, that Rose Ann Sherlock had not given Defendant Hannah Sherlock permission
to procure the Policy, that Rose Ann Sherlock was unaware of the Policy, and that Hannah
Sherlock was not related to Rose Ann Sherlock. Plaintiff has not paid any death benefits under
this Policy and brought this action for declaratory judgment seeking a declaration that the Policy
is null and void and of no force and effect.
III.

Conclusions of Law
The Complaint in the present case sufficiently pleads that the Policy lapsed for nonpayment

of premiums in November 2009, that the individuals seeking to reinstate the Policy lacked an
insurable interest in the life of Rose Ann Sherlock, and that the Policy requirement that the insured

4

provide medical and personal history information and consent to the reinstatement of the Policy
were not met. Therefore, the Policy lapsed and the attempt to reinstate it is ineffective.
Because Defendants Mary Carroll, Hannah Sherlock, and Johnny Sherlock are in default,
they are deemed to have admitted the allegations contained in Plaintiff’s Complaint. Those
allegations include the fact that Defendants Hannah Sherlock and Johnny Sherlock had no
insurable interest in Rose Ann Sherlock, that the Policy lapsed for nonpayment of premiums, and
that Rose Ann Sherlock was not aware of nor did she authorize reinstatement of the Policy insuring
her life. The court finds that it is appropriate to enter judgment against Defendants Mary Carroll,
Hannah Sherlock, and Johnny Sherlock and in favor of Plaintiff declaring that the Policy is null
and void and without force and effect.
Accordingly, judgment is entered in favor of Plaintiff Transamerica Premier Life Insurance
Company against Defendants Mary Carroll, Hannah Sherlock, and Johnny Sherlock, declaring that
the Policy is null and void and of no force and effect and that Plaintiff has no obligation to pay the
death benefit under the Policy nor any other obligation under the Policy, and that Plaintiff is
entitled to retain all amounts paid as premiums for the Policy.
IT IS SO ORDERED.

Columbia, South Carolina
May 12, 2017

_______________________________________
J. Michelle Childs
United States District Court

5