421 F. App'x 384
5th Cir.2011Background
- SUA Insurance filed a declaratory-judgment action in January 2010 seeking a ruling that its CGL policy does not require defense or indemnity for ongoing state-court litigation involving Buras.
- Buras was served with the summons and complaint in April 2010 but did not file an answer.
- SUA moved for the clerk to enter default under Rule 55(a) in June 2010, which the clerk granted.
- SUA then moved for default judgment under Rule 55(b)(2); Buras did not respond and the district court granted the default judgment favoring SUA.
- The district court’s default judgment declared that SUA has no duty to defend or indemnify Buras in the underlying state-court case.
- The court applied an abuse-of-discretion standard with three factors: prejudice to SUA, merits of Buras’s defense, and Buras’s culpability; all factors favored upholding the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the default judgment was properly entered | SUA: prejudice from continued defense costs and lack of defense by Buras justify entry. | Buras: (1) lacked notice of a hearing; (2) entitled to counsel; (3) SUA cannot escape defense obligations due to insurance role. | Yes; default judgment affirmed. |
| Was Buras properly notified and did Rule 55(b)(2) require a hearing | SUA: proper service gave notice and no hearing required. | Buras: he did not receive a hearing. | Notification proper; no hearing required. |
| Does a civil-insurance-dispute defendant have a right to appointed counsel at hearings | SUA: no right to appointment; defense proceeding pro se is at own peril. | Buras: entitled to representation at hearings pertaining to him. | No right to appointed counsel; pro se status permissible. |
Key Cases Cited
- Rogers v. Hartford Life & Accident Co., 167 F.3d 933 (5th Cir. 1999) (abuse-of-discretion standard for default judgments; three-factor test)
- First Financial Group of Texas, 659 F.2d 660 (5th Cir. 1981) (no required evidentiary hearing before Rule 55(b)(2) default judgment)
- Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167 (2d Cir. 2001) (direct appealability of default judgments under 28 U.S.C. § 1291)
- Florida Physician’s Ins. Co. v. Ehlers, 8 F.3d 780 (11th Cir. 1993) (notice of motion and service sufficiency; substantial notice suffices)