United States District Court, S.D. Indiana, Indianapolis Division
ENTRY ON MOTION FOR DEFAULT JUDGMENT AGAINST
DEFENDANT STEPHANIE SWINNEY
WALTON PRATT, JUDGE UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff Firemen's
Insurance Company of Washington, D.C.'s
(“FIC”) Motion for Default Judgment as to
Defendant Stephanie Swinney (“Swinney”)
(Filing No. 17). In this action, FIC seeks a
declaratory judgment that it has and had no duty to defend or
indemnify Swinney for any judgment or settlement entered in
an underlying lawsuit entitled Russell Jacobs v.
Stephanie Swinney and Pure Beverage Company, Case No.
55D03-1612-CT001903, currently pending in Morgan County,
Indiana Superior Court (the “Morgan County
Lawsuit”). (Filing No. 17 at 1.) Swinney has
failed to answer or otherwise respond to the Motion for
Default Judgment, however, the Defendant Russell Jacobs
(“Jacobs”) has filed Responses in Opposition
(Filing No. 20; Filing No. 24). For reasons
explained below, the Court grants FIC's
Motion for Default Judgment against Swinney.
Morgan County Lawsuit surrounds a collision between Jacobs
and Swinney while Swinney was driving a Pure Beverage Company
van (the “Pure Beverage van”). (Filing No.
1-1 at 2.) At the time of the accident, Swinney
was living with her fiancé, Danny Scott
(“Scott”), who was an employee of Pure Beverage.
FIC alleges that Swinney did not have Pure Beverage's
permission to use the Pure Beverage Van on the date of the
collision, that Swinney does not qualify as a
“permissive user” of the Pure Beverage Van, and
therefore, does not qualify as an “insured” under
their insurance agreement. Jacobs filed the Morgan County
Lawsuit against Swinney and Pure Beverage Company
(“Pure Beverage”) on December 5, 2016, seeking
damages for injuries sustained during the collision. FIC is
Pure Beverage's insurer and Jacobs contends, by the FIC
Policy, it has a duty to defend Pure Beverage (or its
interest) against the Morgan County Lawsuit.
filed a Complaint for Declaratory Judgment in this Court on
February 22, 2017. (Filing No. 1.) In its Complaint,
FIC alleges that for Swinney to qualify as an insured under
the FIC Policy, Swinney must have been using the Pure
Beverage Van with “[Pure Beverage Company's]
permission.” Id. at 6. FIC asks the Court to
determine and adjudicate the rights and liabilities of the
parties with respect to the FIC Policy; to find and declare
that Swinney does not qualify as an insured under the FIC
Policy; and declare that FIC has and had no duty under the
FIC Policy to defend Swinney in the Underlying Action, or to
indemnify Swinney for any judgment or settlement entered in
the Underlying Action. Id. at 7.
summons and Complaint were served on Swinney on April 11,
2017, by a process server and on April 19, 2017, by U.S.
Mail. Id. at 2. Service was properly effectuated.
(Filing No. 17-1). Pursuant to Federal Rule of Civil
Procedure 12(a)(1)(A)(i), Swinney's appearance and
responsive pleading to FIC's Complaint were due by May
10, 2017. Id. Swinney failed to appear or file a
responsive pleading within the twenty-one (21) day time frame
allowed. FIC filed a Motion for Clerk's Entry of Default
against Swinney and on July 12, 2017, the Clerk of this Court
granted FIC's Motion, pursuant to Fed.R.Civ.P. 55(a)
(Filing No. 16). On August 18, 2017, FIC filed its
Motion for Default Judgment against Swinney. (Filing No.
filed a Response opposing FIC's Motion and asked the
Court to stay ruling on the default judgment for 90 days
until he had an opportunity depose Swinney. (Filing No.
20 at 1.) Swinney appeared for deposition on September
20, 2017. Jacobs filed an additional Response in Opposition
on October 2, 2017, and attached as an exhibit the 55-page
transcript of Swinney's deposition testimony. (Filing
No. 24; Filing No. 24-1). Swinney has not filed
an Answer or otherwise appeared in this case; however during
her deposition she disputed the fact that she did not have
permission to use the Pure Beverage Van. (Filing No. 24-1
STANDARD OF REVIEW
a default judgment entails two steps. First, the party
seeking a default judgment must file a motion for entry of
default with the Clerk of Court by demonstrating that the
opposing party has failed to answer or otherwise respond to
the complaint. Fed.R.Civ.P. 55(a). Second, the moving party
must seek entry of a default judgment against the defaulting
party. Fed.R.Civ.P. 55(b). Because this action seeks a
declaratory judgment, FIC “must apply to the court for
a default judgment.” Fed.R.Civ.P. 55(b)(2).
55(b) requires FIC to establish the following for the grant
of a default judgment: (1) when and against what parties the
default was entered, (2) the pleading as to which default was
entered, (3) that the defaulting parties are neither infants
nor incompetent, (4) that the defendants are not in military
services, and (5) that notice has been served on the
defaulting party. UMG Recordings, Inc. v. Stewart,
461 F.Supp.2d 837, 841 (S.D. Ill. 2006).
the Seventh Circuit generally favors a trial on the merits,
it does not disfavor default judgments. J & J Sports
Prods., Inc. v. Kotsopoulos, No. 1:13-CV-346-SLC, 2015
WL 5730343, *3 (N.D. Ind. 2015). Typically, courts grant
relief from default in the case of “excusable
neglect.” Johnson v. Gudmundsson, 35 F.3d
1104, 1117 (7th Cir. 1994). Entry of default judgment is
appropriate if the defaulting party has exhibited a
“willful refusal to litigate the case properly.”
Davis v. Hutchins, 321 F.3d 641, 646 (7th Cir.
from the entry of a default prior to a default judgment being
entered is evaluated under Rule 55(c). JMB Mfg., Inc. v.
Child Craft, LLC, 799 F.3d 780, 792 (7th Cir. 2015).
Under this rule, the court exercises discretion under a
somewhat more lenient standard than if judgment had actually
been entered. Id. “A party seeking to vacate
an entry of default prior to the entry of final judgment must
show: (1) good cause for the default; (2) quick action to
correct it; and (3) a meritorious defense to the
complaint.” Cracco v. Vitran Exp., Inc., 559
F.3d 625, 630 (7th Cir. 2009).
establishes good cause by showing that “it did not
willfully ignore the pending litigation but, rather, failed
to respond to the summons and complaint through
inadvertence.” Cracco, 559 F.3d at 631. Good
cause does not necessarily require a good excuse for the
defendant's lapse. JMB, 799 F.3d at 793. Good
cause is found with an honest mistake, not as the result of
willful misconduct, carelessness or negligence. C.K.S.
Engineers, Inc. v. White Mountain Gypsum Co., 726 F.2d
1202, 1205 (7th Cir. 1984).
meritorious defense is supported by a legal and factual
basis, raising serious doubt about the appropriateness of
entering a default judgment. Richards v.
O'Daniel, No. 3:11-CV-63-RLY, 2012 WL 695820, *3
(S.D. Ind. 2012). “A defense is meritorious if it is
good at law so as to give the fact finder some determination
to make. However, a defendant must allege more than ... bare