American Empire Surplus Lines Insurance Company v. JJSL Development, Inc., 2:14-cv-05353

American Empire filed suit on Sept. 12, 2014, alleging JJSL failed to pay premiums under a commercial general liability policy covering Dec. 15, 2012–Dec. 15, 2013.
After protracted discovery noncompliance by JJSL (failure to produce documents and answer interrogatories), American Empire moved under Fed. R. Civ. P. 37 to strike JJSL’s answer, enter default judgment, and recover attorneys’ fees.
Magistrate Judge Peggy Kuo issued an R&R on Feb. 13, 2017 recommending full grant of the Rule 37 motion; parties were given 14 days to object and received notice.
No timely objections were filed; the district court reviewed the R&R and found no clear error.
The court determined the complaint plausibly pleaded breach of contract (failure to pay premium) and entered default judgment for the sum certain sought: $156,542.86 (premium calculation, NY surplus lines tax, and stamping fee).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to strike defendant’s answer and enter default judgment for discovery noncompliance under Rule 37	Move to strike answer, enter default, and recover fees due to repeated failure to comply with discovery	Argued through counsel inability to obtain needed materials from client (no substantive opposition to sanctions against client)	Court adopted R&R and struck answer/entered default judgment for JJSL due to prolonged discovery refusal
Whether plaintiff’s claim is plausibly pleaded so default judgment may enter	Complaint alleges breach of insurance contract, unpaid premium, and damages	(Implicit) Default alone insufficient without plausibly pleaded claim	Court found breach of contract plausibly alleged and liability established nunc pro tunc to March 28, 2016
Whether damages are sufficiently proven to permit entry of judgment without further inquest	Sought a sum certain ($156,542.86) supported by policy, audit endorsement, and calculation methodology	(Implicit) Defendant offered no contest to amount	Court awarded the requested $156,542.86, finding damages calculated with reasonable certainty
Whether attorney’s fees should be awarded under Rule 37	Sought fees associated with moving for sanctions	No timely opposition to fees against client; counsel disclaimed opposition to sanctions only as to counsel personally	R&R recommended awarding fees; court adopted R&R (award of fees implied as part of grant)

Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010) (standard for district court review of magistrate judge R&R)
Taizhou Zhongneng Imp. & Exp. Co. v. Koutsobinas, [citation="09 Fed. App'x. 54"] (2d Cir. 2013) (court must assess whether complaint plausibly pleads claim before entering default judgment)
Wausau Bus. Ins. Co. v. Sentosa Care LLC, 10 F. Supp. 3d 444 (S.D.N.Y. 2014) (elements of breach of contract claim in insurance context)
Credit Lyonnais Secs. (USA) v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (standard for damages calculation with reasonable certainty)