Kemper Independence Ins. Co. v. Boyer
2:22-cv-01458-MCE-DB
E.D. Cal.Jun 15, 2023Background:
- Kemper Independence issued Boyer a personal auto policy (with a Watercraft Liability endorsement listing no watercraft) and a homeowners policy (boat endorsement did not list Boyer’s houseboat).
- On Aug. 16, 2020 Boyer’s houseboat broke loose on Lake McClure; a metal piece struck Raymond Mendoza, causing loss of sight in one eye; Mendoza sued Boyer in an underlying action.
- Kemper sued for a declaratory judgment (filed Aug. 17, 2022) seeking a declaration that it has no duty to defend or indemnify Boyer in the underlying suit because the houseboat is not covered.
- Boyer was served but did not appear; the Clerk entered default on Oct. 17, 2022; Kemper moved for default judgment and served the motion; Boyer did not oppose or appear at the Feb. 17, 2023 hearing.
- The magistrate judge reviewed the policies, concluded the houseboat was not listed and thus not covered, and found the Eitel factors supported default judgment.
- The magistrate recommended entry of default judgment declaring Kemper has no duty to defend or indemnify Boyer and that the action be closed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriateness of default judgment | Eitel factors favor default because Boyer failed to appear and plaintiff would be prejudiced without relief | No response or argument presented by Boyer | Recommended grant of default judgment against Boyer |
| Duty to defend under the policies | Houseboat not listed on either policy endorsement; plain policy language excludes coverage so no duty to defend or indemnify | No opposition presented | Court found no potential for coverage; no duty to defend or indemnify |
| Governing law and jurisdiction | Diversity jurisdiction invoked; California law governs insurer’s duty to defend | No opposition presented | California law applies; declaratory relief appropriate to resolve duty issue |
| Scope of relief requested | Seeks only declaratory judgment, no monetary damages | No opposition presented | Judgment limited to declaratory relief; case to be closed |
Key Cases Cited
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (factors governing entry of default judgment)
- Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319 (7th Cir. 1983) (treatment of factual allegations after default; liquidated damages rule)
- Horace Mann Ins. Co. v. Barbara B., 4 Cal.4th 1076 (Cal. 1993) (duty to defend assessed by comparing complaint to policy terms)
- Scottsdale Ins. Co. v. MV Transp., 36 Cal.4th 643 (Cal. 2005) (insurer’s duty to defend arises if complaint alleges any potentially covered claim)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due process standards for notice)
- TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) (default consequence: well-pleaded allegations taken as true)