United States District Court, District of Columbia
D. BATES, United States District Judge
Hartford Fire Insurance Co. (Hartford) files this motion for
default judgment under Federal Rule of Civil Procedure
55(b)(2) against Vista Contracting, Inc., in this breach of
contract case. After Vista Contracting failed to appear or in
any way respond to plaintiff's complaint, the clerk
entered default under Federal Rule of Civil Procedure 55(a).
Given that Vista has not appeared or given any indication
that it intends to defend against this suit, the Court will
grant plaintiff's motion and award damages in the amount
of $131, 233.06.
following facts are according to Hartford's complaint,
and are taken as true for the purposes of liability. See
Thomson v. Wooster, 114 U.S. 104, 111 (1885)
(plaintiff's claims taken as true after entry of
default); City of New York v. Mickalis Pawn Shop,
LLC, 645 F.3d 114, 137 (2d Cir. 2011) (same). Hartford
is an insurance company that underwrote surety bonds for
Vista, a general contractor. Compl. [ECF No. 1] ¶ 4.
Vista and its owner, Stjepan Sostaric, and his then-spouse,
Nancy Sostaric, each entered into General Indemnity
Agreements with Hartford in exchange for the surety bonds.
Id. ¶¶ 6-7. The Indemnity Agreements
required that the indemnitors (that is, Vista, Stjepan, and
Nancy) “indemnify, exonerate and hold Hartford harmless
from and against all Loss, claims, demands, liabilities,
suits and causes of action which are in any way related to
any Underwriting activities, Bonds or this Agreement.”
Gen. Indem. Agreement [ECF No. 1-1] ¶ 5; Compl. ¶
13. The Agreement defines “Loss” as
all manner of losses, costs, expenses or fees of any kind . .
. which are paid . . . by Hartford as a result of or in any
way relating to the entering into and enforcement of this
Agreement or the Underwriting of any Bonds. Loss shall
include, without limitation, any and all expenditure relating
to Hartford's financial investigations, claim
investigations, claim payments, payments to discharge
liability and Bond related litigation of any nature[.]
Gen. Indem. Agreement ¶ 1(e). The Agreement also states
that all indemnitors are jointly and severally liable.
Id. ¶ 14.
is incorporated in Connecticut, with its principal place of
business there as well. Compl. ¶ 4. Vista is
incorporated in the District of Columbia, with its principal
place of business in Virginia. Id. ¶ 5. Stjepan
is a resident of Virginia. Id. ¶ 6. Nancy is a
resident of the District of Columbia. Id. ¶ 7.
was awarded one construction contract with the Bureau of
Engraving and Printing and another with Virginia Railway
Express. Id. ¶¶ 19, 21. Hartford furnished
Vista with performance bonds for both of these contracts.
Id. At the time the complaint was first filed in
February 2016, Hartford had incurred $111, 389 in losses
related to the bonds on those projects, and estimated it
would incur another $76, 979. Id. ¶¶ 58,
59. Hartford failed in its attempts to collect this amount
from the indemnitors, and therefore initiated this action.
Id. ¶¶ 48-53.
complaint was filed and properly served on the defendants in
February 2016. Stjepan timely answered the complaint and
continues to defend against these claims. See
Stjepan's Ans. [ECF No. 5]. Nancy filed an answer and
informed the Court and plaintiff of her ongoing bankruptcy
proceedings. See Nancy's Ans. [ECF No. 10].
Vista, however, did not answer the complaint or otherwise
communicate with plaintiff or the Court. Hartford then moved
for entry of default by the clerk under Rule 55(a) and entry
of default judgment by the court under 55(b)(2). See
Default Mot. [ECF No. 9]. The clerk entered default on April
5, 2016. See Entry of Default [ECF No. 11].
August 2016, Hartford filed a supplemental brief in support
of its motion for default judgment, updating Vista's
liability amount: Hartford states that Vista is liable for
$131, 233.06 plus interest and attorney's fees.
See Supp. to Default Mot. [ECF No. 15] ¶ 13.
Hartford states that it has “paid $343, 109.63 to
resolve various claims made on the payment bonds”
issued for the two construction projects. Id. ¶
12(b). It recovered $250, 701.34 in contract payment to
offset that amount. Id. ¶ 12(c). Hartford
asserts that it further incurred $7, 321.12 in legal expenses
regarding a suit from another company on one of Vista's
projects, and $31, 503.66 in legal expenses pursuing recovery
from the indemnitors, as of July 31, 2016. Id.
¶ 12(d), (e). Thus, according to Hartford, Vista is
liable for $131, 233.06 plus interest and attorney's fees
since that date. Id. ¶ 13.
Rule of Civil Procedure 55(a) provides that a clerk of the
court must enter default when “a party against whom
judgment for affirmative relief is sought has failed to plead
or otherwise defend, and that failure is shown by affidavit
or otherwise.” Fed.R.Civ.P. 55(a). After the clerk has
entered default, the court may enter a default judgment under
Rule 55(b)(2). Although default judgments are disfavored,
they are appropriate when a party has entirely failed to
defend against a complaint. See Jackson v. Beech,
636 F.2d 831, 835-36 (D.C. Cir. 1980). “The
determination of whether default judgment is appropriate is
committed to the discretion of the trial court.”
Int'l Painters & Allied Trades Indus. Pension
Fund v. Auxier Drywall, LLC, 531 F.Supp.2d 56, 57
(D.D.C. 2008) (citing Jackson, 636 F.2d at 836).
Once default is entered by the clerk, the court assumes that
all allegations in the well-pleaded complaint are true for
the purpose of determining whether to enter default judgment.
See Thomson, 114 U.S. at 111; Mickalis Pawn
Shop, LLC, 645 F.3d at 137.
Vista has been entirely unresponsive to the complaint. It has
not filed any answer in court, nor has it informally reached
out to the plaintiff. Cf. H.F. Livermore Corp. v.
Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691
(D.C. Cir. 1970) (per curiam) (discussing the
additional notice requirements that might be applicable to a
defendant who does not respond to a complaint but who does
communicate with the plaintiff indicating an intent to defend
against the suit). Moreover, the allegations of the
complaint, if taken as true, are sufficient to establish
Vista's liability. Hartford alleges that Vista was
contractually obligated to indemnify Hartford against any
claims on the bonds, and that Vista failed to do so after
Hartford made a proper request. See generally Compl.
Hence, default ...