StarNet Insurance Company v. LA Marine Service LLC et al, No. 2:2016cv13511 - Document 60 (E.D. La. 2017)
Court Description: ORDER AND REASONS - plaintiff's motion 55 for entry of default is DENIED. Plaintiffs motion 29 to strike defendants' jury demand is GRANTED. Signed by Judge Sarah S. Vance on 7/21/17. (jjs)
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StarNet Insurance Company v. LA Marine Service LLC et al Doc. 60 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA STARNET INSURANCE COMPANY VERSUS CIVIL ACTION NO. 16-13511 LA MARINE SERVICE LLC AND LEONARD J OURDAN, J R SECTION “R” (3) ORD ER AN D REASON S Before the Court are plaintiff’s m otion for entry of default 1 and plaintiff’s motion to strike defendants’ jury dem and. 2 For the following reasons, the Court denies the motion for entry of default and grants the m otion to strike the jury dem and. I. BACKGROU N D This case arises out of the sinking of Defendant LA Marine Service LLC’s vessel, the M/ V CAPT. LJ . 3 Defendant Leonard J ourdan, J r. is the owner of LA Marine Service. 4 Plaintiff Starnet Insurance Com pany supplied 1 2 3 4 R. Doc. 55. R. Doc. 29. R. Doc. 1 at 2-3. Id. at 3. Dockets.Justia.com insurance to the defendants to cover losses or dam ages to the M/ V CAPT. LJ . 5 According to the com plaint, this insurance policy does not cover losses resulting from the vessel owner’s bad faith or neglect in perm itting a vessel to go to sea in an unseaworthy condition. 6 The M/ V CAPT. LJ was afloat on the navigable waters of the United States near Em pire, Louisiana, when it allegedly capsized and sank in clear weather and calm waters. 7 Plaintiff asserts that it investigated the incident and determ ined that the vessel’s sinking was caused by a lack of due diligence in failing to remedy unseaworthy conditions on the vessel. 8 Following its investigation, plaintiff issued a denial of coverage. 9 On August 2, 20 16, plaintiff filed a com plaint for declaratory judgment asking the Court to declare that it does not owe insurance coverage for losses arising out of the sinking of the M/ V CAPT. LJ . 10 The com plaint asserted that the Court has diversity jurisdiction under 28 U.S.C. § 1332 and adm iralty or m aritim e jurisdiction under 28 U.S.C. § 1333. 11 On Septem ber 19, 20 16, defendants filed an answer, affirm ative defenses, and a counterclaim for 5 6 7 8 9 10 11 Id. at 3-4. Id. at 4-5. Id. at 2-3. Id. at 6. R. Doc. 1 at 6. Id. at 1-7. Id. at 2. 2 declaratory judgment and other relief. 12 In their answer, defendants responded to the factual allegations in plaintiff’s com plaint and adm itted that the Court has subject-m atter jurisdiction. 13 Defendants requested “a trial by jury on all issues so triable.”14 On October 11, 20 16, plaintiff filed an am ended complaint designating all claim s as adm iralty or m aritim e claim s under Rules 9(h) and 38(e) of the Federal Rules of Civil Procedure. 15 The am ended com plaint reiterates all other allegations against the defendants and does not include any substantive changes to the factual allegations in the original com plaint. 16 Defendants did not respond to the am ended com plaint. Plaintiff now m oves for an entry of default 17 against defendants and separately asks the court to strike defendants’ jury demand. 18 12 13 14 15 16 17 18 R. Doc. 13. Id. Id. at 15. R. Doc. 19 at 1. Id. at 2. R. Doc. 55. R. Doc. 29 at 1-2. 3 II. D ISCU SSION A. En try o f D e fau lt Plaintiff argues that defendants’ failure to respond to its am ended com plaint warrants an entry of default under Rule 55(a) of the Federal Rules of Civil Procedure. 19 Defendants oppose this m otion and contend that they have sufficiently answered the factual allegations in plaintiff’s com plaint. 20 Defendants further argue that plaintiff’s adm iralty designation is a legal conclusion that does not require a response. 21 Rule 55(a) directs the clerk to enter a party’s default when the party “has failed to plead or otherwise defend.” Fed. R. Civ. P. 55(a). The clerk’s “authority to enter a default is not a lim itation on the power of the court to do so. But the court should exercise discretion in deciding whether or not to order a default.” Betz v. First Credit Services, Inc., 139 F.Supp.3d 451, 455 (D.D.C. 20 15) (quoting 10 A Wright & Miller, Federal Practice and Procedure, § 2682 (3d ed. 20 15)). The Fifth Circuit has held that “any doubt, should, as a general proposition, be resolved in favor of . . . securing a trial upon the m erits.” Davis v. Parkhill-Goodloe Co., 30 2 F.2d 489, 495 (5th Cir. 1962) (upholding a trial court’s refusal to direct the clerk to enter default). 19 20 21 R. Doc. 55-1 at 2. R. Doc. 56 at 2. Id. at 3. 4 Here, defendants filed an answer and responded to the factual and jurisdictional allegations in the original com plaint, including the plaintiff’s invocation of the Court’s adm iralty jurisdiction under 28 U.S.C. § 1333. 22 Although the am ended com plaint m ore explicitly designates plaintiff’s claim as an adm iralty claim under Rule 9(h) of the Federal Rules of Civil Procedure, the defendants’ failure to respond to that designation does not warrant an entry of default. The Court therefore denies entry of default. B. Ju ry D e m an d Plaintiff argues that defendants have no right to a trial by jury because plaintiff designated its claim as an adm iralty claim under Federal Rule of Civil Procedure 9(h). 23 Defendants have not responded to this m otion. The Court has adm iralty jurisdiction in this m atter. Plaintiff asserts that adm iralty jurisdiction is proper because plaintiff’s claim s involve the interpretation and application of a policy of m arine insurance and the sinking of a vessel on the navigable waters of the United States. 24 “A m arine insurance contract is indisputably a m arine contract within federal adm iralty jurisdiction.” N ew Ham pshire Ins. Co. v. Martech USA, Inc., 993 F.2d 1195, 1198 (5th Cir. 1993). If a claim is within the Court’s “adm iralty or maritim e 22 23 24 R. Doc. 13. R. Doc. 29 at 1-2. R. Doc. 1 at 2. 5 jurisdiction and also within the court’s subject-m atter jurisdiction on some other ground, the pleading may designate the claim as an adm iralty or m aritim e claim for purposes of Rules 14(c), 38(e), and 82.” Fed. R. Civ. P. 9(h). Rule 38(e), in turn, provides that the “rules do not create a right to a jury trial on issues in a claim that is an adm iralty or m aritim e claim under Rule 9(h).” Fed. R. Civ. P. 38(e). When a plaintiff designates its claim as an adm iralty claim under Rule 9(h), the defendant is not entitled to a jury trial. See Harrison v. Flota Mercante Gancolom biana, 577 F.2d 968, 987-88 (5th Cir. 1978) (trial court properly denied third-party defendant’s jury dem and where plaintiff specifically elected to pursue non-jury adm iralty claim under Rule 9(h)); see also Ham m v. Island Operating Co., Inc., 450 F. App’x 365, 369 (5th Cir. 20 11) (“In situations like [plaintiff’s], the election m ade available to the pleader pursuant to Rule 9(h) is dispositive.”) (internal citation om itted). Defendants have made no effort to establish why adm iralty jurisdiction is not proper or why they should be entitled to a jury trial. On the contrary, defendants explicitly assert that their counterclaim arises from the same transaction or occurrence as the plaintiff’s claim and that the counterclaim falls within the Court’s jurisdiction under 28 U.S.C. § 1333. 25 See Harrison, 25 R. Doc. 13 at 9. 6 577 F.2d at 987 (affirm ing denial of jury dem and where the “facts which established adm iralty jurisdiction for the plaintiff’s original claim ” also form the basis for defendant’s claim ). III. CON CLU SION For the foregoing reasons, plaintiff’s m otion for entry of default is DENIED. Plaintiff’s m otion to strike defendants’ jury demand is GRANTED. 21st New Orleans, Louisiana, this _ _ _ _ _ day of J uly, 20 17 _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 7
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