KENNETH J. MANSFIELD, Magistrate Judge.
Before this Court is Plaintiff PRAETORIAN INSURANCE COMPANY'S ("Praetorian") Motion for Default Judgment or, in the Alternative, for Summary Judgment Against Defendant THE ESTATE OF JOSHUA K. APO ("Estate"). Said Motion came on for hearing before Magistrate Judge Kenneth J. Mansfield on July 18, 2019 at 10:00 a.m., with Sheree Kon-Herrera appearing on behalf of Plaintiff Praetorian and Ward Jones appearing on behalf of Defendant KIHEI RENT A CAR, INC. dba KIHEI RENT A CAR ("Kihei"). Upon calling the case, Defendant Estate did not appear nor did any counsel appear on the Estate's behalf. Upon careful consideration of the Motion, the supporting memoranda, and the arguments of counsel and taking judicial notice of no appearance or communication from the Estate, the Court hereby finds and recommends that Praetorian's Motion be GRANTED.
The instant declaratory judgment action was brought by Praetorian for a judicial determination as to its defense and indemnity obligations, if any, to the Estate under the Praetorian Policy issued to Kihei for the claims in the civil action Cathlene Egbert and Jennifer Williams, Individually and as Co-Special Administrators of The Estate of Melissa M. Egbert, deceased, Corinne Weitzel and Rebecca Reither v. The Estate of Joshua Apo; Maui Police Department, County of Maui; Kawika Ornellas; James Burkett; Terence Gomez; et al., Civil No. 17-1-0240(2) (Motor Vehicle Tort) in the Circuit Court of the Second Circuit, State of Hawaii (the "Underlying Lawsuit"). See ECF No. 1-1.
On May 24, 2018, Plaintiffs Cathlene Egbert and Jennifer Williams, Individually and as Co-Special Administrators of The Estate of Melissa M. Egbert, deceased, Corinne Weitzel, and Rebecca Reither (collectively, "Egbert Plaintiffs") filed a First Amended Complaint against the Estate, Maui Police Department ("MPD"), and three MPD officers in the Underlying Lawsuit. See ECF No. 26-5, First Amended Complaint.
The First Amended Complaint asserts an action for damages against Defendants "for conduct that led to the October 29, 2016 motor vehicle collision on the Island of Maui, State of Hawaii, resulting in the death of MELISSA M. EGBERT." Id. at ¶1. The basis for the claim against the Estate includes the following pertinent allegations.
On or about October 29, 2016, MPD received a call complaining about an individual who appeared to be asleep in a silver 2011 Nissan Sentra that was partially parked on the driveway in front of the caller's residence. Id. at ¶22; see also Exhibits A and F to First Amended Complaint (dispatch transcript identifying LBZ-805). The person asleep in the vehicle was later identified as Joshua Apo. Id. at ¶28.
After the MPD officers woke Mr. Apo, he reversed the Nissan Sentra and collided into a MPD vehicle. Id. at ¶¶30, 35. After fleeing the residence, Joshua Apo led MPD officers on a high-speed pursuit. Id. at ¶¶44-76 (describing the high-speed pursuit lasting more than 4 minutes and covering approximately 5 miles). During the pursuit, Joshua Apo crossed a grassy median and turned left onto Kuihelani Highway, such that he was driving the Nissan Sentra in the wrong direction on the opposing side of traffic. Id. at ¶¶55-56. As Joshua Apo reached the vehicle driven by Melissa Egbert, the Nissan Sentra was traveling approximately 90 mph in the wrong direction of Kuihelani Highway. Id. at ¶¶61-69. The speed of the Nissan Sentra being driven by Joshua Apo at the time of impact was calculated at 93 mph. Id. at ¶69.
As the basis for a Negligence claim against the Estate, the First Amended Complaint alleges the following:
Id. at ¶¶98-101.
On or about October 9, 2016, JONATHAN MANIBOG ("Manibog") rented a 2011 Nissan Sentra, License Plate #LBZ805 from Kihei Rent A Car. See ECF No. 26-3 at Exhibit 1, Rental Agreement, and ECF No. 26-4 at Nos. 1 and 2. The Rental Agreement was for two days from October 9, 2016 to October 11, 2016. Id. The Rental Agreement lists the word "None" under the section for "Additional Drivers." See ECF No. 26-3 at Exhibit 1. The Rental Agreement signed by Manibog provided as follows —
Id. The terms and conditions on the reverse side of the Rental Agreement included but were not limited to the following —
Id. (emphasis added).
Id. (emphasis added).
On or about October 29, 2016, Manibog had not returned the 2011 Nissan Sentra, License Plate #LBZ805 or reported it stolen to Kihei Rent A Car. See ECF No. 26-4 at nos. 6-7. It is undisputed that Kihei Rent a Car did not enter into a rental agreement with Joshua Apo for the subject vehicle. Id. at no. 5. It is further undisputed that Joshua Apo was not a renter or an authorized driver or operator of the 2011 Nissan Sentra, License Plate #LBZ805. Id. at no. 8. In any event, on October 29, 2016, Joshua Apo was in possession of the rental car that was involved in the subject accident leading to the Underlying Lawsuit.
Praetorian issued Commercial Lines Policy No. TPA10057-05 to Kihei Rent A Car, Inc. dba Kihei Rent A Car for the policy period effective October 1, 2016 to October 1, 2017 ("Policy"). See ECF No. 26-2. Pursuant to the
Id. at pp. 37-38.
The terms of the Policy are subject to a number of other policy change endorsements. Pursuant to an
Id. at pp. 12-14.
Pursuant to a
Id. at p. 6.
Another
Id. at pp. 17-18.
On October 1, 2018, Praetorian filed its Complaint for Declaratory Judgment against the Estate and Kihei Rent A Car, Inc. See ECF No. 1. On October 9, 2018, the Complaint with Exhibits 1 and 2, Order Setting Rule 16 Scheduling Conference, and Summons were personally served on Derek T. Kamiya, Esq. on behalf of The Estate of Joshua K. Apo at 500 Ala Moana Boulevard, Five Waterfront, Suite 345, Honolulu, Hawai`i 96813. See ECF No. 10. Letters of Special Administration appointing Derek T. Kamiya, Esq. as Special Administrator for the Apo Estate had previously been filed on March 5, 2018 in a formal probate proceeding in the Second Circuit of the State of Hawai`i. See ECF No. 23-3.
Kihei Rent A Car appeared and filed an Answer in this Declaratory Judgment Lawsuit. See ECF No. 12. However, no answer or appearance has been made on behalf of the Estate.
Accordingly, on May 30, 2019, Praetorian filed its Request for Entry of Default against the Estate on the basis that the time had expired within which the Estate could have answered, moved, defended or responded to Praetorian's Complaint. See ECF No. 23. On May 31, 2019, the Clerk filed the Entry of Default as to the Estate, pursuant to Fed. R. Civ. P. 55(a). See ECF No. 24.
On June 4, 2019, Praetorian filed its Motion for Default Judgment or, in the Alternative, for Summary Judgment Against the Estate of Joshua K. Apo. See ECF No. 25. On June 13, 2019, Kihei Rent A Car filed a Statement of No Position as to Praetorian's Motion. See ECF No. 29.
As a result, no opposition has been filed to Praetorian's Motion for Default Judgment or the requested Declaratory Judgment that, under the Policy, Praetorian has no duty to defend or indemnify the Estate in the Underlying Lawsuit.
Upon careful consideration of the materials submitted by Praetorian, together with the instant Motion, this Court finds that the terms and conditions of the subject Praetorian Policy do not afford coverage for the claims alleged against the Estate in the Underlying Lawsuit. Accordingly, based on Praetorian's supporting documentation, the Estate's failure to respond to Praetorian's Complaint, the Entry of Default against the Estate, and the appropriateness of default judgment after consideration of the factors set forth in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1991), this Court hereby recommends that default judgment against the Estate be GRANTED.
Pursuant to the
However, even though the damages alleged in the Underlying Lawsuit were caused by a motor vehicle accident involving the use of a covered auto, it is undisputed that Joshua Apo does not constitute an "insured" under the Praetorian Policy. The Policy defines "insured" as "you" and/or the Named Insured Kihei Rent A Car, as well as the "rentee subject to all conditions set forth in this endorsement and any other person authorized by the `rental agreement' held by the rentee." See ECF No. 26-2 at 12-14. The Policy further defines "Rentee" as "a holder of a `rental agreement' with you [Kihei Rent A Car] which provides for the holder's use of an automobile for a period of less than one year." Id. Therefore the Praetorian Policy is unambiguous that only the Named Insured Kihei Rent A Car, or the "rentee" or "holder of a rental agreement" with Kihei Rent A Car qualifies as an "insured."
Based on these definitions, the Court finds that Joshua Apo does not qualify as a "rentee" or "insured," because he was not the holder of the rental agreement and because no additional drivers were listed and/or authorized on the Rental Agreement. Further, based on the undisputed fact that Joshua Apo does not fall within the express language of an "insured," the Court finds that the Praetorian Policy affords no coverage to Joshua Apo (or the Estate of Joshua Apo) for the claims in the Underlying Lawsuit.
The Endorsements and exclusions in the Praetorian Policy also preclude liability coverage to the Estate. First, the
Second, the
Third, the undisputed facts establish that the operation and use of the subject rental vehicle by Joshua Apo violated the terms, conditions, restrictions and limitations of the Rental Agreement on various possible bases. The Rental Agreement prohibited the vehicle from being used, operated or driven by any other person in any race, speed test or contest and prohibited the vehicle from being used for any illegal purpose. See ECF No. 26-3 at Exhibit 1. The Rental Agreement prohibited the vehicle from being used by any other person while under the influence of intoxicants or narcotics. Id. However, based on the allegations in the First Amended Complaint, Joshua Apo was driving the subject vehicle in the wrong direction on the highway "at a high rate of speed, far in excess of the posted speed limit, while being pursued by multiple MPD vehicles" and in a reckless manner while "under the influence of illegal drugs." See ECF No. 26-5 at ¶¶99-100.
In light of the applicability of this exclusion, the Court thus finds that no coverage is afforded to the Estate where all claims in the Underlying Lawsuit arise out of use by Joshua Apo of the subject vehicle in violation of the terms and conditions of the Rental Agreement.
This Court finds and recommends that the Praetorian's Motion be granted and that default judgment be entered against the Estate and in favor of Praetorian.
Pursuant to Fed. R. Civ. P. 55(b), default judgment may be entered when the court, exercising its discretion, determines that default judgment is appropriate in a particular case. The court may consider the following factors articulated in Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986):
Applying the above factors to the present case, the record shows that no answer or appearance has been made on behalf of the Estate notwithstanding proper service of the Complaint, Entry of Default, and the Motion for Default Judgment in this case. First, without default judgment, Praetorian would suffer prejudice, since it would be without recourse for a judicial determination on whether or not there is coverage under its Policy for the Estate. Second, the merits of Praetorian's substantive claim is supported by the undisputed facts and weighs in favor of default judgment. Third, Praetorian's Complaint for Declaratory Judgment sufficiently lays out the substantive basis for the declaratory relief sought. Fourth, because Praetorian seeks only declaratory relief, Praetorian is not seeking any monetary damages from the Estate or Kihei Rent A Car. Fifth, there is little possibility of a dispute concerning material facts, where the allegations in the Underlying Lawsuit's First Amended Complaint are taken as true for purposes of this motion. Sixth, several months have passed since Praetorian filed its Complaint for Declaratory Judgment, and no attempt has been made on behalf of the Estate to appear, plead, or otherwise defend this declaratory judgment lawsuit. As a result, there is no evidence that the Estate's default results from excusable neglect, but instead that this factor weighs in favor of default judgment. Finally, any further proceedings in this matter would be futile and a waste of resources, such that the judicial policy favoring a decision on the merits is not abrogated by the entry of default judgment against the Estate in this case.
For the foregoing reasons, this Court FINDS and RECOMMENDS that Plaintiff Praetorian Insurance Company's Motion for Default Judgment be GRANTED as to Defendant The Estate of Joshua K. Apo, and that the alternate relief for summary judgment be DENIED as moot.
IT IS SO FOUND AND RECOMMENDED.
