Markel American Insurance Company v. Metcor, Ltd. ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
MARKEL AMERICAN INSURANCE )
COMPANY, )
)
Plaintiff and Counterclaim )
Defendant, )
)
v. ) Civ. No. 14-cv-1899 (KBJ)
)
METCOR LTD., )
)
Defendant, Counterclaim )
Plaintiff, and Third-Party )
Plaintiff, )
)
v. )
)
DENCHO MARINE, INC., )
)
Third-Party Defendant. )
)
MEMORANDUM OPINION REGARDING
REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE
Markel American Insurance Company (“Markel”) filed the instant action against
Metcor, Ltd. (“Metcor”) seeking declaratory relief with respect to an insurance policy
that Markel issued to Metcor covering an 80-foot sailboat. (Compl., ECF No. 1.)
Specifically, Markel’s complaint requested a declaration “that it is not required to
provide insurance coverage for damage to the canting keel assembly of Metcor’s 2005
80-foot Dencho Andrews sloop DONNYBROOK[,]” because either a manufacturer’s
defect or a whale collision caused the damages, neither of which is covered under the
policy. (Id. at 1.) 1 On December 10, 2014, Metcor filed its answer, as well as a breach
1
Page number herein refer to those that the Court’s electronic case-filing system automatically
assigns.
of contract counterclaim based on Markel’s refusal to provide coverage for the damaged
DONNYBROOK. (See Ans. & Countercl. of Metcor, ECF No. 10.) Two days later, on
December 12, 2014, Metcor filed a third-party complaint against Dencho Marine, Inc.
(“Dencho”), alleging that Dencho negligently manufactured the DONNYBROOK. (See
Metcor’s Third-Party Compl. Against Third-Party Def. Dencho, ECF No. 12.) Markel
and Metcor have since settled the disputes between them; therefore, all that remains of
this matter is Metcor’s third-party complaint against Dencho. (See Stip. of Dismissal
with Prejudice of All Claims Between Markel & Metcor, ECF No. 25.)
Metcor served its third-party complaint on Dencho on December 22, 2014 (see
Proof of Service, ECF No. 16), and on March 26, 2015, after Dencho failed to respond
to the third-party complaint, the Clerk of the Court entered a default against Dencho
(see Clerk’s Entry of Default, ECF No. 19). Metcor filed a motion for default judgment
on December 23, 2015 (see Metcor’s Mot. for Entry of Default J. against Third-Party
Def. Dencho, ECF No. 26), which was automatically stayed after Dencho filed for
Chapter 7 bankruptcy (see Notice of Bankr. Ct.’s Granting of Metcor’s Mot. for Relief
from Automatic Stay, ECF No. 27, at 1). The presiding Bankruptcy Judge subsequently
granted relief from the automatic stay and “authorized [Dencho] to participate in the
litigation proceedings of the default judgment requested by [Metcor].” (Third-Party
Def.’s Notification to the Court, ECF No. 28, at 1; see also id. at 3 (“The Court granted
Metcor’s motion for relief from the automatic stay which will enable the parties to
litigate the merits of the third party lawsuit in district court.”).) On August 30, 2018,
this Court referred Metcor’s motion for a default judgment against Dencho to a
Magistrate Judge, and the matter was randomly assigned to Magistrate Judge G.
Michael Harvey. (See Minute Order of Aug. 30, 2018; Minute Entry of Aug. 30, 2018.)
2
On November 8, 2018, Magistrate Judge Harvey ordered Metcor to show cause
why its motion for a default judgment should not be denied for lack of personal
jurisdiction. (See Order to Show Cause, ECF No. 34, at 2–3.) Noting that “[i]n default
judgment proceedings, the plaintiff bears the burden of making a prima facie showing
of the Court’s personal jurisdiction over the defendant” (id. at 2 (citation omitted)),
Magistrate Judge Harvey found that Metcor had not satisfied that burden because
“Dencho is a California corporation with its principal place of business in Long Beach,
CA[, and] Metcor has not alleged any facts to suggest that Dencho is subject to the
Court’s personal jurisdiction under D.C.’s long-arm statute, or that Dencho has
sufficient minimum contacts with the District of Columbia so as to satisfy due process.”
(Id. at 3.) Metcor did not respond to Magistrate Judge Harvey’s show cause order by
the established deadline (November 21, 2018).
Before this Court at present is the Report and Recommendation that Magistrate
Judge Harvey filed on December 10, 2018, in regard to Metcor’s motion for default
judgment. (See R. & R., ECF No. 35.) 2 The Report and Recommendation reflects
Magistrate Judge Harvey’s considered opinion that Metcor’s motion for default
judgment should be denied for lack of personal jurisdiction, given that “Metcor’s
submissions to the Court to date do not satisfy its burden of establishing this Court’s
personal jurisdiction over Dencho.” (Id. at 1.) The R&R also informs the parties that
either party may file written objections, and advises that the “failure to file timely
objections to the findings and recommendations set forth in this report may waive [the
party’s] right of appeal from an order of the District Court that adopts such findings and
2
The Report and Recommendation is attached hereto as Appendix A.
3
recommendations.” (Id. at 2 (citing Thomas v. Arn, 474 U.S. 140 (1985)).) Under this
Court’s local rules, any party who objects to a report and recommendation of a
Magistrate Judge must file a written objection with the Clerk of the Court within 14
days of the party’s receipt of the report, and any such written objection must specify the
portions of the findings and recommendations to which each objection is made and the
basis for each such objection. See LCvR 73.2(b). To date, no such objections have
been filed.
Magistrate Judge Harvey has thoroughly considered the issues related to personal
jurisdiction that are implicated in this action, and neither party has filed any objection.
Therefore, this Court will ADOPT the attached Report and Recommendation’s findings
and conclusions and, as set forth in the accompanying Order, Metcor’s motion for
default judgment will be DENIED. In addition, Metcor’s third-party complaint against
Dencho will be DISMISSED without prejudice, and the Clerk will be instructed to
close this matter.
DATE: January 31, 2019 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
4
APPENDIX A
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
MARKEL AMERICAN INSURANCE )
COMPANY )
)
Plaintiff )
)
v. ) Case No. 14-cv-1899 (KBJ/GMH)
)
METCOR, LTD., )
)
Defendant/ )
Third-Party Plaintiff )
)
v. )
)
DENCHO MARINE, INC. )
)
Third-Party )
Defendant. )
____________________________________)
REPORT AND RECOMMENDATION
This matter was referred to the undersigned for a Report and Recommendation on the mo-
tion of third-party Plaintiff, Metcor, Ltd. (“Metcor”) for default judgment against third-party De-
fendant, Dencho Marine, Inc. (“Dencho”). On November 8, 2018, the undersigned ordered Metcor
to show cause why its motion for default judgment should not be denied for lack of personal juris-
diction. ECF No. 34. As explained in that order, the undersigned finds that Metcor’s submissions
to the Court to date do not satisfy its burden of establishing the Court’s personal jurisdiction over
Dencho. ECF No. 34 at 3. Metcor was given until November 21, 2018 to file its response. To
date, it has filed nothing. Accordingly, for the reasons stated in the November 8, 2018 show cause
APPENDIX A
order, the undersigned finds that Metcor has failed to establish this Court’s jurisdiction over Den-
cho. The undersigned therefore RECOMMENDS that the Court DENY Metcor’s Motion for
Default Judgment.
* * * * *
The parties are hereby advised that under the provisions of Local Rule 72.3(b) of the United
States District Court for the District of Columbia, any party who objects to the Report and Rec-
ommendation must file a written objection thereto with the Clerk of this Court within 14 days of
the party’s receipt of this Report and Recommendation. The written objections must specifically
identify the portion of the report and/or recommendation to which objection is made, and the basis
for such objections. The parties are further advised that failure to file timely objections to the
findings and recommendations set forth in this report may waive their right of appeal from an order
of the District Court that adopts such findings and recommendations. See Thomas v. Arn, 474 U.S.
140 (1985).
Digitally signed by G.
Michael Harvey
Date: 2018.12.10
Date: December 10, 2018 ______________________________
16:44:45 -05'00'
G. MICHAEL HARVEY
United States Magistrate Judge
2