United States District Court, D. Colorado
ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT
CHRISTINE M. ARGUELLO, UNITED STATES DISTRICT JUDGE
matter is before the Court upon Plaintiff Philadelphia
Indemnity Insurance Company's Motion for Default Judgment
as Against William Asperi. (Doc. # 15.) For the reasons that
follow, default judgment shall be entered against Defendant
November 14, 2014, Defendant completed a Professional
Liability Insurance Application and submitted it to
Plaintiff. (Doc. # 1 at 2.) As part of the application,
Plaintiff made a number of false representations, including
that he had never been convicted of a misdemeanor or a
felony. Based on the information in the application,
Plaintiff issued an Allied Healthcare Providers Professional
and Supplemental Liability Insurance Policy (the
“Policy”), which was effective from November 14,
2014, to November 14, 2015. The terms of the Policy provide,
We will pay on your behalf those sums that you become legally
obligated to pay as damages because of a professional
incident that takes place in the coverage territory and
occurs during the policy period. The professional incident
must result from the practice of the profession shown in the
(Doc. # 1-2 at 3.) The Declarations list Defendant's
profession as a “Master Level Psychologist.” The
Policy ended on November 14, 2015, and did not renew.
20, 2017, Tabatha Goodrich filed a complaint against
Defendant in Denver County District Court, case number
2017CV32255 (the “underlying lawsuit”). In the
underlying lawsuit, Ms. Goodrich indicated that beginning in
January 2015, she had been treated by Defendant, who claimed
to be a “Registered Psychotherapist in the State of
Colorado [and] held himself out as having knowledge and skill
in the field of neuropsychology and psychology.” (Doc.
# 15-2 at 2.) However, Defendant's registration was based
on Defendant's submission of “false, misleading,
incomplete and fraudulent information in his Application for
Registration with the Colorado State Board, specifically with
regard to his physical and mental condition and his criminal
record, which the Board relied on when it approved the
Application on October 3, 2014.” (Doc. # 1 at 7.)
Defendant made similar representations when he submitted his
insurance application to Plaintiff the next month. Defendant
was suspended from the practice of psychotherapy on September
fraudulently obtained credentials allowed him to provide
mental health services to Ms. Goodrich. During the course of
their treatment relationship, Defendant began a romantic
relationship with Ms. Goodrich. Defendant “promised
[Ms. Goodrich] that if she stayed with him, she would be able
to live a normal life.” (Doc. # 1 at 5.) Additionally,
Defendant spent substantial time psychoanalyzing Ms.
Goodrich, “telling her that he was trying to find out
what was wrong with her, ” and he eventually diagnosed
Ms. Goodrich with Borderline Personality Disorder. Ms.
Goodrich subsequently became pregnant as a result of her
relationship with Defendant. Defendant's conduct gave
rise to the underlying lawsuit in which Ms. Goodrich sued
Defendant for multiple claims including negligence.
was provided notice of the underlying lawsuit on August 11,
2017, and Plaintiff is currently providing a defense to
Defendant pursuant to a reservation of rights. Plaintiff
initiated the instant action seeking declaratory relief with
respect to the validity of the Policy and argues that the
Policy should be declared void because Defendant made
material misrepresentations in the application on which the
Policy was based.
personally served Defendant with a summons and copy of the
Complaint on November 16, 2018. (Doc. # 9.) Defendant did not
answer or otherwise appear. The clerk then entered default on
December 11, 2018, and Plaintiff filed this motion for
default judgment on January 4, 2019. (Doc. ## 11, 15.)
STANDARD OF REVIEW
to the Federal Rules of Civil Procedure, the court shall
enter a default judgment against a party that has failed to
plead or otherwise defend an action brought against it.
Fed.R.Civ.P. 55(b)(2). Default judgment may be entered by the
clerk of court if the claim is for “a sum certain,
” Fed.R.Civ.P. 55(b)(1), in all other cases, as here,
“the party must apply to the court for a default
judgment.” Fed.R.Civ.P. 55(b)(2). “[D]efault
judgment must normally be viewed as available only when the
adversary process has been halted because of an essentially
unresponsive party. In that instance, the diligent party must
be protected lest he be faced with interminable delay and
continued uncertainty as to his rights. The default judgment
remedy serves as such a protection.” In re
Rains, 946 F.2d 731, 732-33 (10th Cir. 1991) (internal
quotation marks and citation omitted).
default amounts to an admission of liability, and all
well-pleaded allegations in the complaint pertaining to
liability are deemed true. See Greyhound Exhibitgroup,
Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d
Cir. 1992) (internal citation omitted); Lyons P'ship,
L.P. v. D&L Amusement & Entm't, Inc., 702
F.Supp.2d 104, 109 (E.D.N.Y. 2010). It “remains for the
court to consider whether the unchallenged facts constitute a
legitimate cause of action, since a party in default does not
admit conclusions of law.” Leider v. Ralfe,
No. 01 Civ. 3137 (HB) (FM), 2004 WL 1773330, at *7 (S.D.N.Y.
July 30, 2004) (quoting In re Indus. Diamonds Antitrust
Litig., 119 F.Supp.2d 418, 420 (S.D.N.Y. 2000)).
addition to, or in lieu of, damages and costs, courts are
empowered to grant declaratory relief following default.
Continental Ins. Co. v. Huff Enters. Inc., No.
07-cv-3821 (NGG), 2009 WL 3756630, at *3 (E.D.N.Y. Nov. 6,
2009). Under the Declaratory Judgment Act, 28 U.S.C.
§§ 2201-2202, the Court may enter a judgment
declaring “the rights and other legal relations of any
interested party seeking such declaration . . . .” 28
U.S.C. § 2201. Declaratory relief is appropriate
“(i) where the judgment will serve a useful purpose in
clarifying and settling the legal relations in issue, or (ii)
when it will terminate and afford relief from the
uncertainty, insecurity and controversy giving rise to the
proceedings.” Universal Acupuncture Pain Servs.,
P.C. v. State Farm Mut. Auto. Ins. Co., 196 F.Supp.2d
378, 384 (S.D.N.Y. 2002) (quoting Md. Cas. Co. v.
Rosen, 445 F.2d 1012, 1014 (2d Cir. 1971)). In the
context of a default judgment, a plaintiff “must . . .
establish that on the law it is entitled to the relief it
requests, given the facts as established by the
default.” PHL Variable Ins. Co. v. Bimbo, No.
17-CV-1290 (FB) (ST), 2018 WL 4691222, at *2 ...