General Insurance Company of America v. Nunez ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 GENERAL INSURANCE COMPANY OF No. 1:21-cv-00150-JLT-BAM AMERICA, 12 ORDER ADOPTING FINDINGS AND Plaintiff, RECOMMENDATIONS IN PART 13 v. GRANTING MOTION FOR DEFAULT 14 JUDGMENT IN THE FORM OF A RITA IRENE NUNEZ, MELCHOR DECLARATION AGAINST DEFENDANTS 15 TATIA, ISAAC QUIROZ, PAUL LOPEZ, RITA IRENE NUNEZ, MELCHOR TATIA, VERONICA LOPEZ, and DOES 1 to 10, AND ISAAC QUIROZ REGARDING DUTY 16 TO DEFEND AND INDEMNIFY Defendants. 17 DENYING WITHOUT PREJUDICE MOTION FOR DEFAULT JUDGMENT IN THE FORM 18 OF A DECLARATION REGARDING ATTORNEY’S FEES AND COSTS 19 INCURRED IN UNDERLYING ACTION 20 (Docs. 26, 32) 21 General Insurance Company of America filed this action against Rita Irene Nunez, 22 Melchor Tatia, Isaac Quiroz, Paul Lopez, and Veronica Lopez. (Doc. 1.) Plaintiff issued a 23 homeowner’s insurance policy to Nunez, who resides with her husband, Tatia, and her son, 24 Quiroz (collectively “the Insured Defendants”). (See id. ¶ 11.) The remaining Defendants, Paul 25 and Veronica Lopez, have asserted liability claims against Defendants Nunez, Tatia, and Quiroz 26 on the basis that, on May 29, 2020, Quiroz supplied a controlled substance, fentanyl, to Paul and 27 Veronica Lopez’s son, resulting in his death (the “Underlying Claim”). (See id. at ¶ 17.) 28 Plaintiff filed a motion for default judgment against the Insured Defendants. (Doc. 26.) 1 The assigned magistrate judge issued findings and recommendations recommending that the 2 motion be granted. (Doc. 32.) Those findings and recommendations were served on the parties 3 and contained notice that objections thereto were to be filed within 14 days. (Id.) No party has 4 objected, and the time in which to do so has passed. In accordance with the provisions of 28 5 U.S.C. § 636(b)(1)(B) and Local Rule 304, this Court has conducted a de novo review of this 6 case. Having carefully reviewed the entire file, the Court finds the findings and recommendations 7 to be supported by the record and proper analysis in part. 8 The motion for default judgment requests a declaration that Plaintiff owes no duty to 9 defend or indemnify to the Insured Defendants. (Doc. 26 at 2.) The Court agrees with the findings 10 and recommendations that the Underlying Claim does not fall within the insuring agreement. The 11 Court also agrees that the factors set forth in Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 12 1986), favor entry of default judgment in the form of declaratory judgments that Plaintiff has no 13 duty to defend or indemnify the Insured Defendants for any litigation brought against it arising 14 out of or related to the Underlying Claim. 15 The motion for default judgment also seeks a declaration that the Insured Defendants are 16 obligated to reimburse Plaintiff all defense fees and costs it has incurred in providing the Insured 17 Defendants a defense in connection with the Underlying Claim. (Doc. 26 at 2.) The findings and 18 recommendations correctly explain that California law allows insurers to be reimbursed for 19 attorney’s fees and other expenses paid in defending insureds against claims for which there was 20 no obligation to defend. (Doc. 32 at 8.) However, the present record does not sufficiently support 21 issuance of the requested declaration because Plaintiff has presented no evidence regarding the 22 actual or estimated amount of fees and costs incurred in connection with its defense of the 23 Underlying Claim. As one district court explained in rejecting an analogous request for 24 reimbursement made alongside requests for declaratory relief: “The moving party has the burden 25 to ‘prove up’ the amount of damages.” United Specialty Ins. Co. v. Ghazaryan, No. CV 20-04262 26 PA (PDX), 2020 WL 6784522, at *3 (C.D. Cal. Sept. 28, 2020).1 The lack of record evidence on 27 1 In Ghazaryan, the court was faced with a direct request for reimbursement of fees and costs. 28 1 | the issue deprives the Court of the ability to apply the Eite/ factors to this aspect of the motion for 2 | default judgment, as one of those factors is “the sum of money at stake in the action.” Eitel, 782 3 | F.2d at 1472. For this reason, the request for a declaration regarding reimbursement of fees and 4 | costs will be DENIED without prejudice. Accordingly, 5 1. The findings and recommendations issued on April 12, 2022 (Doc. 32) are adopted in 6 part. 7 2. Plaintiff's motion for default judgment against Defendants Rita Irene Nunez, Melchor 8 Tatia, and Isaac Quiroz (Doc. 26) is GRANTED IN PART; 9 3. Default judgment shall be entered in favor of Plaintiff and against Defendants Rita 10 Irene Nunez, Melchor Tatia, and Isaac Quiroz as follows. 11 a. The Court DECLARES that Plaintiff has no duty, and never had a duty, to 12 defend the Insured Defendants against the underlying third-party liability 13 claims, 14 b. The Court FURTHER DECLARES that Plaintiff has no duty, and never had 15 a duty, to indemnify the Insured Defendants in the underlying claim. 16 4. The remaining aspects of the motion for default judgment are DENIED WITHOUT 17 PREJUDICE. 18 19 IT IS SO ORDERED. 29 | Dated: _ April 27, 2022 Charis [Tourn TED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 | reimbursement of fees and costs. This is a distinction without a difference, as granting Plaintiffs 28 request for a declaration presumably would have the practical effect of approving a future request for fees and costs, else the request inappropriately seeks an advisory opinion.