FILED
                                                                      United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                         Tenth Circuit

                             FOR THE TENTH CIRCUIT                          August 29, 2018
                         _________________________________
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court
 VIKING INSURANCE COMPANY OF
 WISCONSIN,

           Plaintiff Counter Defendant -
           Appellee,
                                                             No. 17-8074
 v.                                                (D.C. No. 1:15-CV-00151-SWS)
                                                              (D. Wyo.)
 SHERYL LEANN BAIZE, individually
 and as legal guardian of Luke Bradford
 Smith; JIM SMITH, individually,

           Defendants Counterclaimants -
           Appellants,

 and

 MILES SUMNER,

           Defendant Cross Defendant.
                        _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before BACHARACH, PHILLIPS, and McHUGH, Circuit Judges.
               _________________________________




       *
        After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
      Sheryl Baize, as legal guardian for her son Luke Smith, appeals the district

court’s entry of default and default judgment in favor of Viking Insurance Co. on

Viking’s claim for declaratory relief. Ms. Baize and Jim Smith (Luke’s father) also

appeal the grant of summary judgment in Viking’s favor on their counterclaims

arising from Viking’s actions in attempting to settle an insurance claim. We have

jurisdiction under 28 U.S.C. § 1291 and affirm.

I.    BACKGROUND

      Luke was a passenger in a pick-up being driven in southern Wyoming by

Miles Sumner. Mr. Sumner fell asleep at the wheel, woke suddenly and

overcorrected, causing the pick-up to veer off the highway and roll over. Luke was

ejected and sustained severe injuries. Due to Luke’s comatose state, Ms. Baize was

appointed his legal guardian.

      Viking had issued an automobile insurance policy (Policy) to Mr. Sumner.

Viking attempted to offer Luke or his parents the Policy’s limit of $25,000 per person

under the provision for bodily injury. Ms. Baize, through counsel, asserted she

was entitled to an additional $25,000 pursuant to the Policy’s provision for

underinsured-motorist coverage. The parties were unable to agree, so Viking filed

the underlying interpleader action naming Luke and Mr. Sumner as defendants.1 The

parties filed various pleadings and motions, including Ms. Baize’s challenge to

personal jurisdiction and her later acceptance of service of process. The parties



      1
          Mr. Sumner is not a party to this appeal.
                                            2
eventually stipulated that Viking would file an amended petition to include the

appropriate parties and reflect the correct case caption. After Viking did so, the

defendants failed to file a timely responsive pleading, so the court clerk entered a

default against Ms. Baize, as Luke’s guardian, who then moved to set aside the

default under Federal Rules of Civil Procedure 55(c) and 60(b). The district court

denied the motion, evaluated Viking’s position on the merits, and entered a default

judgment on Viking’s interpleader claim. Accordingly, the court ordered Viking to

pay the $25,000 insurance proceeds into the court registry, and then ordered the court

clerk to release the $25,000 to Ms. Baize, as Luke’s guardian. This proceeding did

not resolve the pending counterclaims that had been filed by Ms. Baize and

Mr. Smith in their individual capacities.

      Viking filed a motion for summary judgment on the pending counterclaims,

which the district court granted. Final judgment was entered on September 11, 2017.

Ms. Baize, individually and as Luke’s guardian, and Mr. Smith filed a timely notice

of appeal.

II.   JURISDICTION

      Ms. Baize and Mr. Smith contend that the federal courts do not have

subject-matter jurisdiction over this case, even though their district-court filings

asserted that the court had jurisdiction. We have an independent obligation to

consider our own jurisdiction. City of Colo. Springs v. Climax Molybdenum Co.,

, 1078-79 (10th Cir. 2009). The diversity-jurisdiction statute applies.

“Under 28 U.S.C. § 1332, a party must show that complete diversity of citizenship

                                            3
exists between the adverse parties and that the amount in controversy exceeds

$75,000.” Symes v. Harris, 

, 758 (10th Cir. 2006). Here, complete

diversity of citizenship is undisputed, but Ms. Baize and Mr. Smith claim the amount

in controversy does not exceed $75,000.

      In the amended petition for interpleader and declaratory relief, Viking asserted

that Luke was entitled to $25,000 under the Policy’s bodily-injury coverage

provision. Luke’s guardian claimed entitlement to an additional $25,000 under the

Policy’s underinsured-motorist coverage. In addition, Ms. Baize and Mr. Smith filed

counterclaims on their own behalf against Viking for negligence, breach of contract,

intentional and negligent infliction of emotional distress, knowing and reckless denial

of claims without reasonable basis, and breach of the obligation of good faith and fair

dealing. Although Ms. Baize and Mr. Smith did not initially make a specific

monetary claim, they later characterized their counterclaims as compulsory and

alleging an “amount in controversy in excess of $75,000,” Aplt. App. at 198.

      “The amount in controversy is ordinarily determined by the allegations of the

complaint. . . .” Laughlin v. Kmart Corp., 

, 873 (10th Cir. 1995),

abrogated on other grounds by Dart Cherokee Basin Operating Co. v. Owens,

(2014). But defendants’ counterclaims, which were compulsory, see

Fed. R. Civ. P. 13(a)(1), and for damages in excess of $75,000, “would provide a

sufficient independent basis for federal jurisdiction.” Geoffrey E. Macpherson, Ltd.

v. Brinecell, Inc., 

, 1245 n.2 (10th Cir. 1996); see also 14AA Charles A.

Wright et al., Federal Practice and Procedure § 3706 (4th ed.) (presenting the

                                           4
argument when a plaintiff’s complaint lacks the necessary jurisdictional amount, a

defendant’s compulsory counterclaim may supply the jurisdictional amount for

plaintiff’s claim without either party being disadvantaged thereby). Consequently,

the federal courts have jurisdiction over this matter.

III.   ENTRY OF DEFAULT AND DEFAULT JUDGMENT

       Ms. Baize, as Luke’s guardian, asserts that the district court erred in entering

default and a default judgment on Luke’s claim of entitlement to the Policy’s

underinsured-motorist coverage. The district court chronicled the procedural

progression of the case, including (1) Ms. Baize and Mr. Smith filed counterclaims,

even though they were not yet named as parties; (2) they initially brought claims

against other insurance companies, who also were not parties; and (3) the parties

stipulated to amend the caption to name Ms. Baize as Luke’s guardian and to include

Ms. Baize and Mr. Smith as parties. Viking then amended its petition to reflect the

correct parties and served Ms. Baize, as Luke’s guardian, with the amended petition.

       On July 8, 2016, over a month after a responsive pleading was due, Viking’s

counsel emailed defendants’ counsel notifying them that no answer had been filed

and requesting them to file an answer by July 15, 2016. On July 12, 2016,

defendants’ counsel responded, stating that the failure to file an answer “was indeed

an oversight,” and stating that an answer would be filed. Aplee. Supp. App. at 130.

No answer was filed as of July 19, 2016, four days past the agreed-upon deadline, so

Viking’s counsel moved for entry of default, which the court clerk entered the next

day. Viking also moved for a default judgment. On July 21, 2016, Ms. Baize,

                                            5
individually and as Luke’s guardian, and Mr. Smith filed an amended answer and

counterclaims, and on July 27, 2016, they moved to vacate the clerk’s entry of

default. The district court denied the request to vacate the default and, after

determining that the Policy did not provide underinsured-motorist coverage for Luke

and that Luke had not presented any potentially meritorious defenses to Viking’s

claim, entered a default judgment in favor of Viking.

      “We review a district court’s entry of default judgment for an abuse of

discretion.” Tripodi v. Welch, 

, 764 (10th Cir. 2016). Accordingly, “we

will not overturn the court’s decision without a clear showing that it manifests a clear

error of judgment.” 

internal quotation marks omitted). By

defaulting, the defendant relieves the plaintiff “from having to prove the complaint’s

factual allegations.” 

But “even in default, a defendant is not prohibited

from challenging the legal sufficiency of the admitted factual allegations. The

judgment must be supported by a sufficient basis in the pleadings.” 

court must make three determinations to set aside a default

judgment under Rule 60(b): “(1) the moving party’s culpable conduct did not cause

the default; (2) the moving party has a meritorious defense; and (3) the non-moving

party will not be prejudiced by setting aside the judgment.” United States v. Timbers

Pres., 

, 454 (10th Cir. 1993), abrogated on other grounds by Degen v.

United States, 

(1996).




                                            6
       A.    Entry of default

       Ms. Baize, acting as Luke’s guardian, argues that the default should have been

set aside because Wyoming seeks to avoid technical defects and Fed. R. Civ. P. 55(c)

allows the court to set aside a default for “good cause.” She complains that Viking

failed to notify three of her four attorneys, and waited only two business days after

reminding her attorney that an answer was past due before requesting entry of

default. She contends that the failure to file an answer to the amended petition was

justified because the amended petition was substantively the same as the original

petition.

       The district court determined that Ms. Baize failed to demonstrate good

cause for setting aside the default considering that (1) the answer to the amended

complaint was over a month late; (2) Viking’s counsel put her counsel on notice;

(3) Ms. Baize’s counsel should have realized that some action was required,

particularly because the case had not progressed for over two months and her

responsive pleading affirmatively sought relief by including crossclaims and

counterclaims; and (4) even if Ms. Baize’s counsel believed no response was due, he

stated an intention to file a responsive pleading and indicated that his failure to do so

in a timely fashion was an oversight.

       The court acknowledged Ms. Baize’s citation to M & A Constr. Corp. v. Akzo

Nobel Coatings, Inc., 

, 455 (Wyo. 1997), wherein the Wyoming

Supreme Court concluded that the defendant’s failure to file an answer to the

amended complaint was the result of mistake and excusable neglect because the

                                            7
defendant had otherwise defended the case by filing a motion for summary judgment

and believed the only change to the amended complaint was the plaintiff’s name. But

the district court found this case to be factually distinguishable given (1) Ms. Baize’s

initial challenge to personal jurisdiction; (2) her later acceptance of service of the

amended petition; (3) the delay between acceptance of service and Viking’s counsel’s

notice that no answer to the amended petition had been filed; (4) Ms. Baize’s

counsel’s response that the failure to file was an oversight, rather than a

misunderstanding; and (5) Viking’s counsel’s further notice that an answer was

overdue.

      We conclude that the district court did not abuse its discretion in denying

Ms. Baize’s request to set aside the default. The court’s reasoning does not show a

clear error of judgment. And as the district court noted, although default judgment is

disfavored, it is available as a sanction for late filings. See Vanasse v. Ramsay,

, 1000 (Wyo. 1993). Moreover, the default judgment remedy protects

the diligent party against “interminable delay and continued uncertainty [and serves

as] a deterrent to those parties who choose delay as part of their litigative strategy.”

marks omitted). The district court found Ms. Baize’s default

to be “the result of counsel’s unexplained and inexcusable culpable conduct.” Aplt.

App. at 169. The Supreme Court has long held that litigants are to be held

accountable for the acts and omissions of their attorneys. Link v. Wabash R. Co.,

, 633-34 (1962).



                                            8
      B.     Default Judgment

      We turn to Ms. Baize’s challenge to the default judgment to determine whether

it is supported by a sufficient basis in the pleadings. See 

.

The overarching issue is whether Luke was entitled to a $25,000 payment under the

underinsured-motorist provision. There is no dispute that he was entitled to the

$25,000 coverage under the provision for bodily injury. We apply Wyoming state

law to this diversity action concerning an insurance contract made in Wyoming that

was to be performed there. Wyo. Farm Bureau Mut. Ins. Co. v. State Farm Mut.

Auto. Ins. Co., 

, 992 (10th Cir. 1972).

      The underinsured-motorist provision provides, as relevant here:

      We will pay damages for bodily injury which an insured person is
      legally entitled to recover from the owner or operator of an
      underinsured motor vehicle. The bodily injury must be caused by a
      car accident and result from the ownership, maintenance or use of an
      underinsured motor vehicle.
                                           ***

      As used in this Part,

      (1) “Insured Person” means:
      (A) You.
      (B) Any other person occupying your insured car with your
      permission.
      (C) Any person for damages that person is entitled to recover because of
      bodily injury to you or another occupant of your car.

                                               ***

      (3) “Underinsured motor vehicle” means a motor vehicle which is
      insured by a liability bond or a policy at the time of the accident


                                           9
       providing bodily injury liability insufficient to compensate fully an
       insured person.
       (4) “Underinsured motor vehicle” does not mean a vehicle:
              (A) Owned by or furnished or available for the regular use of you
       or a relative to the extent that the limits of liability for this coverage
       exceed the minimum limits of bodily injury liability specified in the
       Wyoming Safety Responsibility Act.
                                             ***

Aplt. App. at 80.

       The Policy also includes the following anti-stacking provision:

       Any amounts payable to an insured person will be reduced by:
             (1) Any payments made by or on behalf of the owner of operator of
                the underinsured motor vehicle, or any other person or
                organization which may be legally liable.
             (2) Any amount paid or payable for the same expenses under Part I –
                Liability Coverage, Part II – Medical Payments Coverage or Part
                III – Uninsured Motorist Coverage.
             (3) Any payments made or payable because of bodily injury under
                any workers’ compensation law or disability benefits law or
                similar law.

       The Policy refers to “you” as Mr. Sumner and “we” as Viking. See 

(defining “we” as the insurance company and “you” as the insured). The

liability-coverage provision and the underinsured-motorist provision each have a

$25,000 per person limit and $50,000 per accident limit.

       The Policy does not provide underinsured-motorist coverage to Luke because

it expressly states that it is not applicable to a vehicle owned by Mr. Sumner. Here,

the single-car accident involved a vehicle owned by “you,” meaning Mr. Sumner.

                                           10
In addition, under the anti-stacking provision, even if Luke were entitled to a $25,000

underinsured-motorist payment, such payment would be reduced by the $25,000

bodily-injury coverage.

      Ms. Baize argues that the Policy’s provisions concerning underinsured motor

vehicles are confusing and ambiguous.2 First, she contends that the definition of an

underinsured motor vehicle is confusing because the definition is stated in the

negative: “does not mean a vehicle . . . ,” Aplt. App. at 80 (emphasis added). We

disagree. The statement of what the Policy does not cover does not render the policy

language ambiguous.

      Ms. Baize further takes issue with an allegation in the original petition that

“[t]he limit of the [underinsured-motorist coverage] is equal to and does not exceed

the minimum limits of the Wyoming Safety Responsibility Act [Act].” Aplt.

Opening Br. at 26 (quoting Aplt. App. at 15) (emphasis omitted); see also Aplt. App.

at 72 (amended petition including identical language). She points out that the Policy

limits the coverage “to the extent that the limits of liability for this coverage exceed

the minimum limits” specified in the Act. 

(emphasis added). Thus, she



      2
         Viking contends that Ms. Baize and Mr. Smith did not present these
arguments to the district court and therefore they should not be considered for the
first time on appeal. See Tele-Commc’ns, Inc. v. CIR, 

, 1232 (10th Cir.
1997). But as Ms. Baize and Mr. Smith point out, the district court resolved the issue
of Policy interpretation sua sponte when deciding that a default judgment was
appropriate. Consequently, we will consider these legal arguments. See Daigle v.
Shell Oil Co., 

, 1539 (10th Cir. 1992) (stating reviewing court may
depart from the general waiver rule, particularly when presented with a strictly legal
question).
                                           11
argues that because “equal to” does not mean “exceeds,” the Policy is confusing. But

the allegation in the complaint does not change the plain language of the Policy and

therefore does not make it ambiguous.

      Ms. Baize also contends that the Policy’s anti-stacking provision does not

apply because Mr. Sumner paid for both uninsured and underinsured motor vehicle

coverage. She attempts to invoke the “rule that where a [policyholder] has paid

separate premiums for separate policies containing underinsured motorists limits,

underinsured motorists coverage will be stacked unless the policies contain clear and

unambiguous anti-stacking provisions.” Mena v. Safeco Ins. Co., 

,

1163 (10th Cir. 2005) (citing Aaron v. State Farm Mut. Auto. Ins. Co., 

,

932-33 (Wyo. 2001)). But Mr. Sumner’s payment for both uninsured and

underinsured coverage does not bring this case within the Aaron rule because the rule

applies to inter-policy stacking cases, and not necessarily to intra-policy stacking

provisions. Here, only one policy is involved. Even though the Policy covers two

vehicles owned by Mr. Sumner and “breaks down the total premium by vehicle, and

then within each vehicle by form of coverage,” the inter-policy anti-stacking rule

does not apply. Id.; see Aplt. App. at 20 (identifying vehicles covered by the Policy

and premiums attributed to each type of coverage). Therefore, “we will defer to the

language of the insurance policy itself to determine if it permits intra-policy

stacking.” 

(internal quotation marks omitted).

      Ms. Baize argues that the anti-stacking provision is ambiguous and is “not

even labeled as such.” Aplt. Opening Br. at 32. She cites no authority for a

                                           12
requirement that an anti-stacking provision be so labeled, and she has not

demonstrated that under the applicable “tenets of insurance agreement construction

established by the Wyoming Supreme Court,” 

, the Policy

permits intra-policy stacking. We agree with the district court that the “intra-policy

anti-stacking provision expressly reduces the amount recoverable by [Luke].”

Aplt. App. at 168.

      We further agree with the district court that Ms. Baize failed to present a

meritorious defense to Viking’s claim that it owed no more than $25,000 to Luke

under the Policy. Ms. Baize does not challenge the district court’s ruling that her

affirmative defenses were without merit, so she has waived any challenge. See

COPE v. Kan. State Bd. of Educ., 

, 1223 (10th Cir. 2016) (“Appellants

do not raise this argument in their opening brief, and so it is waived.”). We affirm

the entry of default and default judgment against Ms. Baize, as Luke’s guardian, and

in favor of Viking.

IV.   SUMMARY JUDGMENT

      Ms. Baize and Mr. Smith appeal the entry of summary judgment on their

counterclaims brought in their individual capacities for negligence and breach of the

obligation of good faith and fair dealing. Their opening brief does not challenge the

summary judgment on their counterclaims for breach of contract, intentional and

negligent infliction of emotional distress, and knowing and reckless denial of claims

without reasonable basis, so they have waived any challenge to those counterclaims.

See 

diversity action is governed by [Wyoming’s] substantive . . . law, but we

are governed by federal law in determining the propriety of the district court’s grant

of summary judgment.” Eck v. Parke, Davis & Co., 

, 1016 (10th Cir.

2001). We review de novo the entry of summary judgment and draw all reasonable

inferences in the nonmovants’ favor. 

and Mr. Smith alleged that Viking was negligent in investigating the

accident and in informing them of the benefits available to Luke under the Policy.

They further alleged that Viking violated its obligation to deal with them fairly and in

good faith because in attempting to settle Luke’s claim following the accident,

Viking’s representatives misrepresented the benefits available and harassed

Ms. Baize and Mr. Smith in order to get them to settle.

      To maintain a negligence claim, Ms. Baize and Mr. Smith must show, among

other things, that Viking owed them a duty to conform to a specified standard of care.

RB, Jr. ex rel. Brown v. Big Horn Cty. Sch. Dist. No. 3, 

, ⁋ 13, 

, 546-47 (Wyo. 2017). The existence of such a duty is a question of law, “and

absent a duty, there is no liability.” Killian v. Caza Drilling, Inc., 

, ⁋ 18,

, 979 (Wyo. 2006) (internal quotation marks omitted). An insurer owes

no duty of good faith and fair dealing to a third-party claimant, such as Ms. Baize and

Mr. Smith. Herrig v. Herrig, 

, 491 (Wyo. 1992).

      On appeal, Ms. Baize and Mr. Smith conflate their claims of negligence and

breach of the obligation of good faith. They argue that Viking owed them a duty of

care because they were acting on behalf of their disabled son. But they brought their

                                           14
counterclaims in their individual capacities, not on behalf of Luke, so they have not

established they were owed a duty under either theory.

      Nevertheless, they assert that “[i]n Wyoming, a duty may arise . . . ‘when the

relationship of the parties is such that the law imposes an obligation on the defendant

to act reasonably for the protection of the plaintiff.’” Aplt. Opening Br. at 22

(quoting Killian, 

, at ⁋ 

). In Killian, the Wyoming

Supreme Court discussed the factors to be considered in deciding “whether to adopt a

particular tort duty.” 

, at ⁋ 

. Ms. Baize and Mr. Smith

do not attempt to show that Viking owed them a tort duty and we decline to consider

whether Wyoming would recognize any such duty.

      Ms. Baize and Mr. Smith’s reliance on McCullough v. Golden Rule Ins. Co.,

(1990), is misplaced. There, the Wyoming Supreme Court

“recognize[d] the existence of the independent tort for violation of a duty of good

faith and fair dealing in insurance policy application by the carrier to its 

(emphasis added). Ms. Baize and Mr. Smith did not apply for or

enter into an insurance contract with Viking. Therefore, Viking did not owe them a

duty of good faith and fair dealing.3




      3
        Ms. Baize and Mr. Smith claim that the Policy and the police report of the
accident were not properly authenticated, and thus were inadmissible. But even if the
documents were inaccurate or even false, that would not change the outcome because
Viking owed no duty to Ms. Baize or Mr. Smith. They also argue that the district
court failed to construe the facts in their favor, but they have identified no such facts.
                                           15
         Ms. Baize and Mr. Smith argue that Viking is liable to them for its claims

settlement practices under the Wyoming Unfair Trade Practices Act, Wyo. Stat.

§ 26-13-124. But the Act does not provide a private cause of action for unfair claim

settlement practices. See Julian v. N.H. Ins. Co., 

, 1533 (D. Wyo.

1988).

         Ms. Baize and Mr. Smith further complain that the district court entered

summary judgment before any discovery was completed. The record reflects,

however, that they did not request discovery or comply with Fed. R. Civ. P. 56(d).

“To obtain relief under Rule 56(d), the movant must submit an affidavit

(1) identifying the probable facts that are unavailable, (2) stating why these facts

cannot be presented without additional time, (3) identifying past steps to obtain

evidence of these facts, and (4) stating how additional time would allow for rebuttal

of the adversary’s argument for summary judgment.” Cerveny v. Aventis, Inc.,

, 1100 (10th Cir. 2017). Thus, the district court did not abuse its

discretion by entering summary judgment without discovery. See 

court’s refusal to allow discovery for abuse of discretion).

V.       ERIE DOCTRINE

         Finally, relying on Erie R.R. Co. v. Tompkins, 

(1938), Ms. Baize

and Mr. Smith contend that the district court “failed to follow both the [S]tate of

Wyoming’s legislative enactments and the holdings of the Wyoming Supreme Court

in reaching its decisions.” Aplt. Opening Br. at 34. As discussed above, the district

court correctly applied Wyoming law.

                                            16
VI.   CONCLUSION

      We AFFIRM the district court’s judgment in favor of Viking.


                                        Entered for the Court


                                        Carolyn B. McHugh
                                        Circuit Judge




                                       17