United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
Xinis United States District Judge
Memorandum Opinion and Order address Plaintiff Liberty
Insurance Corporation's Motion for Default Judgment, ECF
No. 9. Defendant Tracee D. Barnes has not filed a response,
and the time for doing so has passed. See Loc. R.
105.2.a. Pursuant to Local Rule 105.6, a hearing is not
necessary. For the reasons stated herein, Plaintiff's
Motion for Default Judgment is GRANTED.
Liberty Insurance Corporation (“Liberty”) is a
corporation organized under the laws of the State of
Illinois, with its principal place of business in the
Commonwealth of Massachusetts. ECF No. 1 at ¶ 1.
Defendant Tracee D. Barnes (“Barnes”) is a
citizen of the State of Maryland residing in Prince
George's County, Maryland. Id. at ¶ 2. In
2008, Barnes purchased a house located at 2807 Lawina Road,
Baltimore City, Maryland 21216 (“the Property”).
Id. at ¶ 6.
about August 25, 2011, Defendant submitted an application for
homeowners' insurance to Plaintiff. Id. at
¶ 7. Barnes represented on the application that the
Property was her primary residence, and that no home day care
or other business was conducted at the Property. ECF No. 1 at
¶¶ 8-10. Relying on these representations, Liberty
issued Barnes a homeowner's insurance policy for the
Property (“Contract”) on August 26, 2011.
Id. at ¶ 11. Thereafter, Barnes and Liberty
renewed the Contract every year, including August 26, 2016
through August 26, 2017, without any substantive changes
regarding the Property's status as Barnes' residence.
Id.; see also ECF No. 1-1. At all relevant
times, the Contract provided coverage only for the
“[i]nsured location” identified in the
application as the Insured's “residence
premises.” Id. at ¶ 17; see also
ECF No. 1-2 at 16.
March 3, 2017, the Property was severely damaged by fire.
Id. at ¶¶ 12, 20. Barnes subsequently
submitted an insurance claim to Liberty for property damages.
Id. at ¶ 13. While investigating Barnes'
claims, Liberty learned for the first time that Barnes'
primary residence was not the Property, but 8643 Johnson
Avenue, Glenarden, Prince George's County, Maryland
20706. Id. at ¶ 15. Liberty also learned that
from approximately 2008 and through the date of the fire,
Barnes leased the Property to her business, Kozy Kottage, and
used it as an assisted living facility. Id. at
filed its Complaint to this Court on July 24, 2017, asserting
diversity of citizenship jurisdiction. 28 U.S.C. § 1332.
Barnes was timely served on October 5, 2017 at her home in
Prince George's County. See ECF No. 6. Barnes
did not answer the Complaint or otherwise respond, and on
November 13, 2017, the Clerk issued an Order of Default
pursuant to Rule 55 of the Federal Rules of Civil Procedure.
ECF No. 8. Plaintiff moved for default judgment on January 8,
2018. ECF No. 9. Liberty requests a declaration that the
Property was not Barnes' “[r]esidence premises,
” as required by the Contract, and therefore Liberty is
not liable for any claims arising out of the March 3, 2017
fire. See ECF Nos. 1 & 9.
Rule of Civil Procedure 55(b) governs the entry of default
judgments, which may be entered “[i]f the
plaintiff's claim is for a sum certain or a sum that can
be made certain by computation, ” and the defendant is
in default for failing to appear. Fed.R.Civ.P. 55(b)(1). For
“all other cases, ” in which the sum is neither
certain nor ascertainable through computation, Rule 55(b)(2)
provides. “[T]he party must apply to the court for a
default judgment . . . . The court may conduct hearings or
make referrals-preserving any federal statutory right to a
jury trial- when, to enter or effectuate judgment, it needs
to: (A) conduct an accounting; (B) determine the amount of
damages; (C) establish the truth of any allegation by
evidence; or (D) investigate any other matter.” The
entry of default judgment is a matter within the discretion
of the Court. SEC v. Lawbaugh, 359 F.Supp.2d 418,
421 (D. Md. 2005) (citing Dow v. Jones, 232
F.Supp.2d 491, 494 (D. Md. 2002)).
“the Fourth Circuit has a ‘strong policy that
cases be decided on the merits, '” Disney
Enters. v. Delane, 446 F.Supp.2d 402, 405 (D. Md. 2006)
(quoting United States v. Shaffer Equip. Co., 11
F.3d 450, 453 (4th Cir. 1993)), “default judgment is
available when the ‘adversary process has been halted
because of an essentially unresponsive party.' ”
Id. (quoting Lawbaugh, 359 F.Supp.2d at
421). Default judgment is proper when a defendant is
unresponsive. See Park Corp. v. Lexington Ins. Co.,
812 F.2d 894, 896 (4th Cir. 1987) (upholding a default
judgment awarded where the defendant lost its summons and did
not respond within the proper period); Disney
Enters., 446 F.Supp.2d at 405-06 (finding appropriate
the entry of default judgment where the defendant had been
properly served with the complaint and did not respond,
despite repeated attempts to contact him).
considering a motion for default judgment, the Court takes as
true all well-pleaded factual allegations in the complaint,
other than those pertaining to damages. Fed.R.Civ.P. 8(b)(6);
Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780
(4th Cir. 2001) (“The defendant, by his default, admits
the plaintiff's well-pleaded allegations of fact, is
concluded on those facts by the judgment, and is barred from
contesting on appeal the facts thus established.”
(citation and internal quotation marks omitted));
see Fed. R. Civ. P. 8(b)(6) (“An
allegation-other than one relating to the amount of
damages-is admitted if a responsive pleading is required and
the allegation is not denied.”).
Fourth Circuit, district courts analyzing default judgments
have applied the standards articulated by the United States
Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662
(2009), and Bell Atlantic Corp. v. Twombly, 550 U.S.
544 (2007), to determine whether allegations within the
complaint are “well-pleaded.” See, e.g.,
Balt. Line Handling Co. v. Brophy, 771 F.Supp.2d 531,
544 (D.Md. 2011); Russell v. Railey, No.
DKC-08-2468, 2012 WL 1190972 at *2-*3 (D. Md. Apr. 9, 2012);
U.S. v. Nazarian, No. DKC-10-2962, 2011 WL 5149832
at *2-*3 (D. Md. Oct. 27, 2011). Where a complaint offers
only “labels and conclusions” or “naked
assertion[s] devoid of further factual enhancement, ”
the allegations therein are not well-pleaded and, consistent
with the Court's discretion to grant default judgment,
relief should be denied. See, e.g., Balt. Line Handling
Co., 771 F.Supp.2d at 544 (internal quotation marks
omitted) (“The record lacks any specific allegations of
fact that ‘show' why those conclusions are
federal court sitting in diversity must apply the law of the
state in which the court is located, including the forum
state's choice of law rules. Colgan Air, Inc. v.
Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir.2007).
For insurance contract disputes, Maryland follows the
principle of lex loci contractus, which applies the
law of where the contract was consummated. Allstate Ins.
Co. v. Hart, 327 Md. 526, 611 (1992). For choice of law
purposes, an insurance contract is made where “the last
act is performed which makes the agreement a binding
contract. Typically, this is where the policy is delivered
and the premiums are paid.” Perini/Tompkins Joint
Venture v. Ace American Ins. Co., 738 F.3d 95, 100 (4th
Cir. 2013) (quoting Sting Sec., Inc. v. First Mercury
Syndicate, Inc., 791 ...