United States District Court, W.D. North Carolina, Asheville Division
MARTIN REIDINGER UNITED STATES DISTRICT JUDGE
MATTER is before the Court on the Plaintiff's
Motion for Default Judgment [Doc. 13].
case arises out of a life insurance policy issued by the
Plaintiff Banner Life Insurance Company (“Banner
Life”). By the present action, Banner Life seeks a
declaratory judgment that the policy is void due to
misstatements and omissions made by the insured on a
reinstatement application. [Doc. 1]. Alternatively, Banner
Life seeks a declaration that the acceptance by the
designated beneficiary, William Holland
(“Holland”), of a check in the amount of the paid
premiums constituted an accord and satisfaction of any claim
that the beneficiary might have had against Banner Life.
Life served Holland with a Summons and a copy of the
Complaint on September 11, 2017. [Doc. 5]. On September 26,
2017, Holland's lawyer filed an unopposed Motion for
Extension of Time to File Defensive Pleadings to
Plaintiff's Complaint. [Doc. 4]. The Court granted the
motion three days later, extending Holland's time to
respond to the Complaint to and including October 23, 2017.
however, never filed a response to the Complaint. On February
15, 2018, Banner Life moved for the entry of default against
Holland. [Doc. 10]. On March 2, 2018, the Clerk of Court
entered a default against Holland. [Doc. 12]. Banner Life now
seeks a default judgment against Holland. [Doc. 13].
STANDARD OF REVIEW
of the Federal Rules of Civil Procedure provides for the
entry of a default when “a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend.” Fed.R.Civ.P. 55(a). Once a
defendant has been defaulted, the plaintiff may then seek a
default judgment. If the plaintiff's claim is for a sum
certain or can be made certain by computation, the Clerk of
Court may enter the default judgment. Fed.R.Civ.P. 55(b)(1).
In all other cases, the plaintiff must apply to the Court for
a default judgment. Fed.R.Civ.P. 55(b)(2).
defendant, by his default, admits the plaintiff's
well-pleaded allegations of fact . . . .” Ryan v.
Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.
2001) (quoting Nishimatsu Constr. Co., Ltd. v. Houston
Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). A
defendant, however, “is not held . . . to admit
conclusions of law.” Ryan, 253 F.3d at 780
(quoting Nishimatsu, 515 F.2d at 1206). The Court
therefore must determine whether the facts as alleged state a
claim. Global Santa Fe Corp. v. Global santafe.com,
250 F.Supp.2d 610, 612 n.3 (E.D. Va. 2003).
PLAINTIFF'S FACTUAL ALLEGATIONS
well-pleaded factual allegations of the Plaintiff's
Complaint having been deemed admitted by virtue of the
Defendant's default, the following is a summary of the
about November 18, 2008, Banner Life issued a $500, 000,
30-year, term life insurance policy to the Insured,
insuring the Insured's life (the “Policy”).
[Doc. 1 at ¶ 10]. The Policy was issued at Banner
Life's “preferred plus non-tobacco” rate.
[Id. at ¶ 11]. The Policy later lapsed and was
terminated as a result of the Insured's failure to pay
the premium due by April 30, 2016, in a timely manner.
[Id. at ¶ 14].
to reinstate the Policy, the Insured submitted an Application
for Reinstatement to Banner Life (the “Reinstatement
Application”). [Id. at ¶ 15]. The
Reinstatement Application asked the Insured to provide
certain information and answer a series of questions about
his health during the time period between the submission of
the original application for insurance and the submission of
the Reinstatement Application. [Id. at ¶ 17].
The Insured completed the Reinstatement Application and
submitted it to Banner Life. [Id. at ¶ 22].
After receiving the Reinstatement Application, Banner Life
conducted a standard prescription search to see if any
medicines had been prescribed for the Insured. [Id.
at ¶ 23]. The investigation revealed that the Insured
had been prescribed a medication that he had not disclosed on
the Reinstatement Application, so Banner Life requested that
the Insured update the application by providing certain
additional information. [Id. at ¶ 25]. The
Insured revised the Reinstatement Application and
re-submitted it to Banner Life. [Id. at ¶¶
basis of the Insured's representations in the
Reinstatement Application and in reliance on the Insured
being completely candid, honest, and open in disclosing
information in response to the questions on the application,
Banner Life reinstated the Policy, with its “preferred
plus non-tobacco” rate. [Id. at ¶ 31].
Banner Life sent the ...