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New Hampshire Insurance Co. v. Royster

United States District Court, E.D. North Carolina, Western Division

April 12, 2017

NEW HAMPSHIRE INSURANCE COMPANY, Plaintiff,
v.
FREDDIE ROYSTER, ADMINSTRATOR OF THE ESTATE OF ERIC ROYSTER Defendant.

          ORDER

          TERRENCE W. BOYLE UNITED STATES DISTRICT JUDGE

         This matter is before the court on the plaintiffs motion for default judgment [DE 12] and the memorandum filed in support of the motion for default judgment [DE 14]. For the reasons discussed below, Plaintiffs motion is granted.

         BACKGROUND

         Plaintiff New Hampshire Insurance Company ("New Hampshire") initiated this declaratory judgment action against defendant Freddie Royster, Administrator of the Estate of Eric Royster, on March 9, 2016. New Hampshire seeks a declaratory judgment that the commercial automobile insurance policy New Hampshire issued to Newesco, Inc. affords no coverage to the defendant with respect to an accident that occurred on December 2, 2014. This case is brought pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. §2201, et seq. and Rule 57 of the Federal Rules of Civil Procedure. The record shows that New Hampshire served defendant with process pursuant to Rule 4 of the Federal Rules of Civil Procedure on May 6, 2016. [DE 8]. Defendant did not file a responsive pleading to the complaint, and the Clerk of Court entered an entry of default against defendant on July 11, 2016. [DE 10]. The motion for entry of default was served on defendant by U.S. Mail.

         New Hampshire now moves for default judgment as against defendant. This motion for default judgment was filed on December 23, 2016 and also served on defendant by U.S. Mail. Defendant has not appeared or defended this action in any way.

         DISCUSSION

         Pursuant to 28 U.S.C. § 1332, this Court has original jurisdiction over matters where the amount in controversy exceeds the value of $75, 000 and is between citizens of different States. 28 U.S.C. § 1332(a). In the present case, the plaintiff is a citizen of Illinois and New York. Defendant is a citizen of North Carolina. Accordingly, there is complete diversity of citizenship between the parties. In declaratory judgment actions, the amount in controversy is measured by the value of the object of the litigation. Francis v. Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013). The amount in controversy in the present matter is the value of the demand made by defendant for UM benefits under the New Hampshire Policy, specifically $1 million. Because this demand exceeds the jurisdictional amount required under 28 U.S.C. § 1332(a), this Court has subject matter jurisdiction over this declaratory judgment action.

         This Court has personal jurisdiction over defendant. Rule 4 of the Federal Rules of Civil Procedure allows an individual to be served by leaving a copy of the Summons and Complaint at the individual's residence with someone of suitable age and discretion who resides there. Fed.R.Civ.P. 4(e)(2)(B). On May 6, 2016, C.R. Williams, Deputy Sheriff of Harnett County, North Carolina, left the Summons and Complaint with Zeala Royster, a person of suitable age and discretion who resided at the same residence as the defendant. [DE 8]. Accordingly, this Court as personal jurisdiction over defendant.

         The Federal Declaratory Judgment Act allows a federal court to declare the rights, obligations and liabilities of parties to a contract. 28 U.S.C. § 2201. It is well established that a declaration of parties' rights under an insurance policy is an appropriate subject for a declaratory judgment action. United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 494 (4th Cir. 1998). A federal court cannot refuse to entertain a declaratory judgment action that is properly within its jurisdiction unless there is good cause. Nautilus Ins. Co. v. Winchester Homes, 15 F.3d 371, 375 (4th Cir. 1994).

         Upon default, the well-pleaded facts alleged in the complaint are deemed admitted. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001). Based on the plaintiffs complaint, the following facts are established.

         Eric Royster was a long-distance truck driver who lived in Harnett County, North Carolina. He entered into a Contractor Agreement and Lease to transport household goods and other items throughout the United States for Atlas Van Lines. To carry out his duties and responsibilities under the Contractor Agreement and Lease, Mr. Royster was assigned to drive a 1995 Peterbilt Tractor ("95 Peterbilt Tractor"). The 95 Peterbilt Tractor was licensed and registered in the State of Indiana.

         Prior to December 2, 2014, Mr. Royster was requested to haul a load of household goods from North Carolina to California. As Mr. Royster was driving the 95 Peterbilt Tractor westbound on IH-20 near Waskom, Harrison County, Texas, the trailer connected to the 95 Peterbilt Tractor caught fire. Upon discovering the fire, Mr. Royster pulled the 95 Peterbilt Tractor and attached trailer to the side of the westbound lanes of IH-20 to disconnect the trailer from the 95 Peterbilt Tractor.

         After disconnecting the trailer from the 95 Peterbilt Tractor, Mr. Royster left the vehicle parked on the side of the westbound lanes of travel on IH-20, crossed a grass median, and walked to the side of the eastbound lanes of travel on Interstate 80. At that same time, George Allen Edwards was driving a pickup truck in the eastbound lanes of travel on 1-80. Mr. Edwards' vehicle struck Mr. Royster as Mr. Royster was walking or standing along the side of the eastbound lanes of travel on 1-80, resulting in Mr. Royster's death. Mr. Royster was located away from the 95 Peterbilt Tractor when he was struck by Mr. Edwards' vehicle. At the time of the accident, Mr. Edwards was not covered under any automobile liability policy.

         New Hampshire issued a commercial automobile insurance policy to Newesco, Inc., Policy No. 01-CA-019049744-0, with effective dates of December 31, 2013 through December 31, 2014 ("New Hampshire Policy"). Newesco, Inc. specifically rejected uninsured motorist ("UM") coverage for all vehicles covered under the New Hampshire Policy that are registered in Indiana. The rejection of UM coverage was made pursuant to a valid Indiana Notice Uninsured and Underinsured Motorist Coverage form, Form No. 62589 (9/10), which was signed by Newesco on February 14, 2014 and made effective from the inception of the New Hampshire Policy on December 31, 2013 forward. An endorsement was added to the New Hampshire Policy which ...


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