United States District Court, N.D. Alabama, Southern Division
DAVID PROCTOR, UNITED STATES DISTRICT JUDGE.
matter is before the court on the Motion for the Court to
Enter Default Judgment against Defendants Dennis H. Williams
and Dennis H. Williams d/b/a The Williams Team Remodeling
under Fed.R.Civ.P. 55(b)(2), filed by Plaintiff Maxum
Indemnity Company (“Plaintiff” or
“Maxum”) on December 13, 2017. (Doc. # 36).
Following the Clerk's Entries of Default against Dennis
H. Williams and Dennis H. Williams d/b/a The Williams Team
Remodeling (collectively, with Dennis H. Williams,
“Williams” or the “Williams
Defendants”) on September 2, 2016 (Docs. # 18, 19),
Plaintiff now seeks a Rule 55(b) default judgment declaring
that there is no insurance coverage for the Williams
Defendants for the claims asserted by CMR Properties, Inc.
(“CMR Properties”) against Williams in an
underlying action pending in the Circuit Court of Jefferson
County, Alabama. (Doc. # 36). For the reasons outlined below,
the Motion (Doc. # 36) is due to be granted.
The Underlying State Court Action
15, 2016, Plaintiff filed a Complaint for Declaratory
Judgment against Defendants CMR Properties and the Williams
Defendants. (Doc. # 1). In the Complaint, Plaintiff explained
that CMR Properties is the plaintiff in an underlying lawsuit
in the Circuit Court of Jefferson County, Alabama, against
Williams (the “underlying action”). (Doc. # 1-1);
see also CMR Properties, Inc. v. Dennis H. Williams, an
individual d/b/a The Williams Team Remodeling,
CV-2016-900828. In the underlying action, CMR alleges that
Williams entered into two construction contracts with CMR
Properties, and CMR Properties made payments to Williams for
work that was never performed. (Docs. # 1 at ¶ 7-10;
1-1). In the state court action, CMR Properties asserts
claims against Williams for (1) fraud and misrepresentation,
(2) suppression of material facts, (3) deceit, (4) unjust
enrichment, (5) breach of contract, and (6) negligence.
(Docs. # 1 at ¶ 6; 1-1). Maxum has now asked this court
to declare that the Williams Defendants are owed no coverage
for the claims asserted by CMR Properties in the underlying
action. (Doc. # 1 at ¶ E).
The Insurance Policy
issued a Commercial General Liability Policy Number
BDG-3010917-01 to Williams for the policy period of July 17,
2015 to July 17, 2016. (Id. at ¶ 16). The
insurance policy had exclusions for the insured's knowing
violation of rights of another, material published with
knowledge of falsity, and breach of contract, among other
events. (Id. at p. 6-15). Additionally, the
insurance policy required that the insured report all claims
immediately and provide Maxum notice of a claim “as
soon as practicable.” (Id. at p. 10, 14).
Maxum alleges that Williams has no coverage for the claims
asserted by CMR Properties in the underlying action for the
i. Williams did not provide notice of the claims asserted by
CMR Properties “as soon as practicable.” Maxum
received no notice of the disputes with CMR Properties until
Maxum received notice that a lawsuit had been filed by CMR
Properties through a March 15, 2016 Acord Form.
ii. Maxum did not receive notice of Williams' efforts to
settle CMR Properties' claims, and Williams failed to
obtain Maxum's consent prior to these attempts to settle
iii. Williams failed to cooperate with Maxum during its
investigation of the CMR Properties' claims.
iv. CMR Properties' claims against Williams do not amount
to a covered “occurrence” under the insurance
v. There is no coverage for CMR Properties' claims under
the insurance policy related to coverage for personal and
advertising injury in that no covered offense is alleged.
vi. Even if covered claims were alleged by CMR Properties,
exclusions in the policy preclude coverage for the claims.
vii. There is no coverage for claims related to events that
occurred prior to the inception of the policy ...