USAA General Indemnity Company v. McCullough et al

Filing 26

ORDER granting 21 Motion for Default Judgment as to defendant Adrian C. Chandler. Signed by Honorable J Michelle Childs on 4/26/2017.(asni, )

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
ORANGEBURG DIVISION
USAA General Indemnity Company,

)
)
Plaintiff,
)
)
v.
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)
Jarok Mccullough, Adrian C. Chandler,
)
and Glendrella Green,
)
)
)
)
Defendants.
)
__________________________________________)

Civil Action No.: 5:16-cv-03110-JMC

ORDER OF DEFAULT
JUDGMENT AS TO DEFENDANT
ADRIAN C. CHANDLER

This matter is before the court by way of a motion by USAA General Indemnity Company,
(“Plaintiff”) for default judgment as to Defendant Adrian C. Chandler, pursuant to Fed. R. Civ. P.
55(b)(2). (ECF No. 21.)
On September 14, 2016, Plaintiff filed a Complaint against Jarok Mccullough, Adrian C.
Chandler, and Glendrella Green (“Defendants”), seeking a declaration that the automobile liability
policy (“Policy”) issued to Defendant Chandler be declared void as to the underlying vehicle in
the automobile accident based on the lack of insurable interest on behalf of Defendant Chandler
or in the alternative to declare the Policy void ab initio based on the material misrepresentations
of Defendant Chandler. (ECF No. 1 at 5.) Furthermore, Plaintiff requests that the court declare
that the Policy does not provide any coverage for any outstanding known or unknown claims for
Defendants as a result of the underlying vehicle in the automobile accident since the onset of the
Policy, and that Plaintiff has no duty to defend or indemnify Defendant McCullough or to provide
underinsured motorist coverage. Id. Although Defendant Chandler was properly served with the
Complaint (ECF No. 2), he has not answered or filed any responsive pleading. Pursuant to

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Plaintiff's request, the Clerk of Court filed an entry of default against Defendant Chandler, and
Plaintiff then moved for a default judgment. (ECF Nos. 20 and 21.)
I.

Introduction
Plaintiff filed a Complaint against Defendants on September 14, 2016. The action seeks a

declaratory judgment against Defendants that the Policy issued to Defendant Chandler be declared
void as to the underlying vehicle in the automobile accident based on the lack of insurable interest
on behalf of Defendant Chandler or in the alternative to declare the Policy void ab initio based on
the material misrepresentations of Defendant Chandler. Furthermore, Plaintiff requests that the
court declare that the Policy does not provide any coverage for any outstanding known or unknown
claims for Defendants as a result of the underlying vehicle in the automobile accident since the
onset of the Policy, and that Plaintiff has no duty to defend or indemnify Defendant McCullough
or to provide underinsured motorist coverage.
A.

Jurisdiction and Venue

The court has subject matter jurisdiction on Plaintiff's claims pursuant to 28 U.S.C. § 1332
based on diversity of citizenship. The court has personal jurisdiction on Defendants because
Plaintiff’s principal place of business is located in Texas, and Defendants are citizens of the State
of South Carolina, and the value of the Policy in this matter exceeds the sum of $75,000.
Furthermore, venue in this district is proper under 28 U.S.C. § 1391 because all of the Defendants
are citizens of the State of South Carolina.
B.

Process and Service

The Summons and Complaint was served on Defendant Chandler on September 14, 2016.
(ECF No. 2.)

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C.

Grounds for Entry of Default
Defendant Chandler did not file an answer or other pleading, timely or otherwise, as

reflected by a Request for Entry of Default Judgment and Plaintiff's Motion for Default Judgment
as to Defendant Chandler. (ECF Nos. 19 and 20.) The Clerk of Court properly filed an entry of
default as to Defendant Chandler on December 21, 2016. (ECF No. 20.)
D.

Motion for Default Judgment

On January 4, 2017, Plaintiff filed a Motion for Default Judgment, a copy of which it also
served upon Defendant Chandler by mail on said date.
II.

Findings of Fact
Having reviewed Plaintiff's Complaint, Request for Entry of Default, Motion for Default

Judgment, as well as all supporting and supplemental information provided, the court accepts
Plaintiff's well-pled factual allegations as true and makes the following factual findings. See
DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.1 (4th Cir. 2009) (accepting plaintiff's allegations
against defaulting defendant as true, noting a defaulting defendant "admits the plaintiff's wellpleaded allegations of fact, is concluded on those facts by the judgment, and is barred from
contesting on appeal the facts thus established.") (quoting Ryan v. Homecomings Fin. Network,
253 F.3d 778, 780 (4th Cir. 2001)). As alleged in Plaintiff’s Complaint, Plaintiff states that it was
not aware of the true facts at the time Defendant Chandler applied for the Policy and had it been
aware of the true facts, it would not have issued coverage under the Policy for the underlying
vehicle in the automobile accident. . (ECF No. 1 at 4.) Plaintiff believes that Defendant Chandler
intended to deceive it by making material misrepresentations. Id. First, Plaintiff asserts that
Defendant Chandler was aware at the time of application for the Policy that he was not the
registered owner of the underlying vehicle in the automobile accident, and was aware at the time

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of application for the Policy that the underlying vehicle in the automobile accident listed on the
Policy was not garaged at 1677 Johnson Street, Orangeburg, South Carolina. Id. Second, Plaintiff
further asserts that Defendant Chandler was aware at the time of application for the Policy that
Defendant Jarok McCullough was the registered owner and operator of the underlying vehicle in
the automobile accident listed on the Policy. Id. Third, Plaintiff contends that Defendant Chandler
was aware at the time of application that he did not own or operate the underlying vehicle in the
automobile accident. Id.
III.

Analysis
Having found the facts set forth in Plaintiff's Complaint as deemed admitted by default, the

court must ensure the Complaint sets forth a proper claim before entering default judgment. See
GlobalSanta Fe Corp. v. Globalsantafe.com, 250 F. Supp. 2d 610, 612 n.3 (E.D. Va. 2003)
(considering facts and evaluating Plaintiff's claims prior to entry of default judgment in copyright
action). The court considers whether Plaintiff has set forth claims for which relief can be granted
pursuant to the standard of Fed. R. Civ. P. 12(b)(6).
A.

Declaratory Judgment Action

In its Motion for Default Judgment, Plaintiff submits that he has met the principal criteria
necessary to be awarded a declaratory judgment. “A declaratory judgment action is appropriate
when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue,
and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy
giving rise to the proceeding.” Penn-America Ins. Co. v. Coffey, 368 F.3d 409, 412 (4th Cir. 2004).
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

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complaint.” Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001). Plaintiff
requests a declaratory judgment action as to coverage under the Policy issued to Defendant
Chandler. Plaintiff states that Defendant Chandler listed the vehicle involved in the underlying
automobile accident as a registered vehicle on Plaintiff’s insurance policy. However, at all times
relevant to the case, Defendant McCullough was the registered owner. When the automobile
accident occurred as stated in the Complaint, Defendant Green was a passenger in Defendant
McCullough’s car and sustained injuries. (ECF No. 21-1 at 2.)
Accordingly, this court finds that it is appropriate to enter judgment declaring that the
Policy does not provide any coverage for any outstanding known or unknown claims as to
Defendant Chandler as a result of the underlying vehicle in the automobile accident since the onset
of the Policy.
IV. Conclusion
Based on the foregoing, and upon consideration of the Summons and Complaint, and the
Motion for Default Judgment by Plaintiff (ECF No. 21), the court finds that Defendant Chandler
is in default in this matter.
Accordingly, the court enters judgment in favor of Plaintiff USAA General Indemnity
Company against Defendant Chandler, declaring that the Policy does not provide any coverage
for any outstanding known or unknown claims for Defendant Chandler as a result of the
underlying vehicle in the automobile accident since the onset of the Policy. Defendant Chandler
is ENJOINED from taking any action contrary to the declarations stated above.

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IT IS SO ORDERED.

Columbia, South Carolina
April 26, 2017

_______________________________________
J. Michelle Childs
United States District Court

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