United States District Court, D. New Mexico
AIG Property Casualty Company, Commerce & Industry Insurance Company, Granite State Insurance Company, Plaintiffs,
M&J Dumptruck & Backhoe Services, Inc. Defendant.
MEMORANDUM OPINION AND ORDER STRIKING DEFENDANT'S
“RESPONSE”AND GRANTING DEFAULT JUDGMENT AND
DAMAGES OF SUM CERTAIN AGAINST DEFENDANT
MATTER comes before the Court upon Plaintiffs' Motion for
Default Judgment Against Defendant, filed February 21, 2018
(Doc. 9). Having reviewed the parties'
pleadings and the applicable law, the Court finds that
Plaintiffs' motion for default judgment is well taken
and, therefore, is granted and judgment shall be entered in
favor of Plaintiffs' for actual damages and interest.
collectively issued a workers' compensation insurance
policy to Defendant for three separate policy periods: (1)
from December 10, 2013 to December 10, 2014 (“First
Policy Period”); (2) from December 10, 2014 to December
10, 2015 (“Second Policy Period”); and (3) from
December 10, 2015 to December 10, 2016 (“Third Policy
Period”). See Compl., 9, 21 & 32.
Plaintiffs allege that Defendant now owes premiums in the
amount of $357, 426.00. Their attempts to resolve this
dispute without litigation have been unsuccessful, and
Defendant has not responded to several demand letters sent by
Plaintiffs before the filing of this lawsuit.
mandates a two-step process for a default judgment. First, a
party must obtain a Clerk's entry of default. Second, the
party must request a default judgment.” Gomes v.
Williams, 420 F.2d 1364, 1366 (10th Cir. 1970) (citing
Fed.R.Civ.P. 55(a) & (b)). Once a defendant is found to
be in default, a court must “t[ake] as true all factual
allegations in the complaint, except those pertaining to the
amount of damages.” Archer v. Eiland, 64 F.
App'x 676, 679 (10th Cir. 2003). A court is not required
to accept the plaintiff's legal conclusions or factual
allegations when assessing damages and must ensure that there
is a legal basis for the damages specified in the default
judgment. Klapprott v. United States, 335 U.S. 601,
611-12 (1949). A court may set an evidentiary hearing to
determine the amount of damages if such amount is not
“for a sum certain or a sum that can be made certain by
computation.” Fed.R.Civ.P. 55(b)(1).
filed this lawsuit on November 6, 2017, and served Defendant
with a copy of the Complaint and Summons on November 11,
2017. Defendant filed a “Response to Summons” on
December 7, 2017-three days late under the federal procedural
rules. See Fed.R.Civ. P. 12(a)(1)(A)(i). Based on
the untimeliness of the response, as well as Defendant's
violation of this Court's local rule requiring a
corporation or business entity to be represented by an
attorney in order to appear in this Court, see
D.N.M.LR-Civ. 83.7, Plaintiffs requested that the Clerk of
Court enter default against Defendant on December 12, 2017
(Doc. 6). The Clerk's Entry of default
was entered on January 3, 2018 (Doc. 7).
seek default judgment against Defendant (1) in the amount of
$357, 426.00 in actual damages (representing the premium
amounts owed under the policy); (2) prejudgment interest at
the rate of 15% per year; and (3) postjudgment interest at
the statutory rate until the judgment is paid in full.
Defendant's Response Shall be Stricken
filed a pleading self-styled as a “Response to Summons
in a Civil Action” which states that M&J is no
longer in business, having been “closed down . . . by
the IRS and the State of New Mexico.” Doc. 6. It can
also be easily construed as an admission of liability, as it
states that the owners are unemployed and “have no
means to pay any of M&J's debts.” Id.
However, the Court will not consider this as a responsive
pleading because of Defendant's failure to comply with
this Court's local rule requiring it to be represented by
an attorney. See D.N.M. LR-Civ.83.7; see also
Rowland v. California Men's Colony, Unit II Men's
Advisory Council, 506 U.S. 194, 201-02 (1993)
(recognizing that the law has been well established for the
better part of two centuries that a corporation may appear in
the federal courts only through licensed counsel).
Defendant's “response” (Doc. 6) is therefore
Plaintiffs Are Entitled to Default Judgment and Claim of Sum
result of Defendant's failure to obtain representation by
an attorney and the Court's striking of the response,
Defendant has effectively failed to appear for purposes of
Rule 55 and Plaintiff is therefore entitled to default
Fed.R.Civ.P. 55(b)(1), judgment can be entered for a
“sum certain” or a “sum that can be made
certain by computation” where a defendant has been
defaulted for a failure to appear. KPS & Assocs.,
Inc. v. Designs By FMC, Inc., 318 F.3d 1, 20 (1st Cir.
2003). To be a “sum certain” there must be no
doubt as to the amount that must be awarded. Franchise
Holding II, LLC. v. Huntington Rests. Group,
Inc., 375 F.3d 922, 928-29 (9th Cir.2004). Thus,
“a court may enter a default judgment without a hearing
only if the amount claimed is a liquidated sum or one capable
of mathematical calculation.” Hunt v. Inter-Globe
Energy, Inc., 770 F.2d 145, 148 (10th Cir.1985). In this
case, Plaintiff claims an amount of damages which can be
readily ascertained under the terms of the policy based on a
calculation of premiums owed by Defendant. See, e.g.,
Rummel v. Lexington Ins. Co., 123 N.M. 752, 758 (1997)
(insurance contracts are construed by the same principles
which govern the interpretation of all contracts);
Farmers Alliance Mutual Ins. Co. v. Bakke et al.,
619 F.3d 867, 8858th Cir. 2010 (obligation of liability
insuror is contractual and is to be determined by
the terms of the policy) (emphasis added).
seek an award of actual damages of $357, 426.00, which is the
amount of premiums owed under ...