United States District Court, D. Hawaii
UNITED STATES FIRE INSURANCE COMPANY, a foreign corporation, Plaintiff,
SIU'S ELECTRIC CORP., ROMEO RAMIRO and DOES 1-10, Defendants.
FUKUNAGA MATAYOSHI CHING & KON-HERRERA, LLP WESLEY H. H.
CHING 2896 SHEREE KON-HERRERA 6927 JENNIFER C. CLARK 4497
ATTORNEYS FOR PLAINTIFF UNITED STATES FIRE INSURANCE COMPANY
FINDINGS AND RECOMMENDATION GRANTING PLAINTIFF UNITED
STATES FIRE INSURANCE COMPANY'S MOTION FOR DEFAULT
JUDGMENT ONLY AS TO ROMEO RAMIRO
KENNETH J. MANSFIELD UNITED STATES MAGISTRATE JUDGE.
this Court is Plaintiff UNITED STATES FIRE INSURANCE
COMPANY'S (“U.S. Fire”) Motion for Default
Judgment. Said Motion came on for hearing on November 29,
2018 at 10:00 a.m., with Jennifer C. Clark appearing on
behalf of Plaintiff U.S. Fire and Bradford F.K. Bliss
appearing on behalf of Defendant Siu's Electric Corp
(“Siu's Electric”). Upon calling the case,
Defendant Romeo Ramiro (“Ramiro”) did not appear
nor did any counsel appear on his behalf. Upon careful
consideration of the Motion, the supporting memoranda, and
the arguments of counsel the Court hereby finds and
recommends that U.S. Fire's Motion be GRANTED only as to
instant declaratory judgment action was brought by U.S. Fire
in order to obtain a judicial determination as to its defense
and indemnity obligations, if any, to Ramiro under the U.S.
Fire Policy issued to Siu's Electric for the claims
brought against Ramiro in the civil action Renee Malacas,
et al, v. Siu's Electric Corp., et al., in the
Circuit Court of the First Circuit, State of Hawaii, Civil
No. 17-1-1967-12 GWBC, (the “Underlying
Lawsuit”). See ECF No. 1-1.
The Underlying Lawsuit
December 1, 2017, Plaintiffs Renee Malacas and Carolina Lau
(collectively “Malacas” or “Underlying
Plaintiffs”) filed the Underlying Lawsuit against
Defendants Siu's Electric and Romy Romero (sic), alleging
that on or about December 18, 2015, the Malacas and their son
were invited guests to Siu's Electric's Christmas
party located on Siu's Electric's property. ECF No.
1-1. Toward the end of the Christmas Party, Ramiro mixed some
acetylene from an unsecured storage area with some gasoline
in a trash bag. At the same time, the Malacas and their son
were assisting in the cleanup in close proximity to Ramiro.
The Malacas were unaware that Ramiro was holding the trash
bag with the mixture of acetylene and gasoline. The trash bag
held by Ramiro exploded (“the explosion”) without
warning with a loud sound. Id.
Underlying Lawsuit alleges that prior to the explosion,
Siu's Electric knew or should have known that Ramiro was
mixing gasoline and acetylene. The Underlying Lawsuit also
alleges that prior to the explosion, Siu's Electric knew
or should have known that Ramiro needed to be strictly
supervised because Ramiro had previously acted
inappropriately and/or negligently. The Underlying Lawsuit
also alleges that prior to the explosion, Siu's Electric
had the ability and opportunity to supervise, restrict, and
control Defendant Ramiro's conduct at the Christmas Party
so as not to cause an unreasonable risk of harm to guests
such as the Malacas. The Underlying Lawsuit also alleges that
prior to the explosion, Ramiro was warned several times by
other Siu's Electric supervisors and employees not to mix
gasoline and acetylene as he had previously done.
Underlying Lawsuit alleges that the explosion was the
proximate cause of Underlying Plaintiffs' bodily
injuries, severe emotional distress, medical and other
expenses and other damages. The Underlying Lawsuit contains
five counts against Underlying Defendants Siu's Electric
and Ramiro including negligence, gross negligence, strict
liability, and liability of Siu's Electric based on the
doctrine of respondeat superior. The Underlying
Lawsuit prays for general and special damages, punitive
damages, pre-judgment interest, attorneys' fees and
costs, and for such other and further relief as the Court may
deem just and proper. Id.
Electric tendered the defense of Siu's Electric and
Ramiro for the Underlying Lawsuit to U.S. Fire, which is
providing a defense to both Defendants subject to a
reservation of its rights. See ECF No. 1.
Procedural History of the Declaratory Judgment
15, 2018, U.S. Fire filed its Complaint for Declaratory
Judgment against Defendants Siu's Electric and Ramiro.
Id. On July 18, 2018, the Summons and Complaint were
personally served on Ramiro at his residence. ECF No. 8. On
July 26, 2018, the Summons and Complaint were personally
served on Gary Siu, Vice President and Agent of Siu's
Electric at Siu's Electric Corp's address. ECF No. 9.
August 31, 2018, U.S. Fire filed its Request for Entry of
Default against Siu's Electric and Ramiro on the basis
that the time had expired within which Siu's Electric and
Ramiro could have answered, moved, defended or responded to
U.S. Fire's Complaint, as provided in Fed.R.Civ.P.
12(a)(1)(A). Fed.R.Civ.P. 12 provides in relevant part:
(a) Time to Serve a Responsive Pleading.
(1) In General. Unless another
time is specified by this rule or a federal
statute, the time for serving a responsive
pleading is as follows:
(A) A defendant must serve an
(i) within 21 days after being served with
the summons and complaint;
(b) How to Present Defenses. Every defense
to a claim for relief in any pleading must be asserted in the
responsive pleading if one is required. But a party may
assert the following defenses by motion:
(1) lack of subject-matter jurisdiction;
(2) lack of personal jurisdiction;
(3) improper venue;
(4) insufficient process;
(5) insufficient service of process;
(6) failure to state a claim upon which
relief can be granted; and
(7) failure to join a party under Rule 19.
A motion asserting any of these defenses must be made before
pleading if a responsive pleading is allowed. ***
Rule 12(a) or (b), above, an answer or a motion must have
been filed, respectively, by Siu's Electric Corp. and
Ramiro within 21 days after the Summons and Complaint were
served. For Ramiro, the time to file an answer or to file a
Rule 12(b) motion to dismiss the Complaint was 21 days after
service on July 18, 2018, or August 2, 2018. For Siu's
Electric, the time to file an answer or to file a Rule 12(b)
motion to dismiss the Complaint was 21 days after service on
July 26, 2018, or August 16, 2018. No answer, responsive
pleading, other defense or response was filed by either
Siu's Electric or Ramiro by those dates. In addition,
neither Siu's Electric nor Ramiro had requested any
extension to the Federal Rules of Civil Procedure's
August 31, 2018, the Clerk filed the Entry of Default as to
Siu's Electric and Ramiro, pursuant to Fed.R.Civ.P.
55(a). ECF No. 14. After U.S. Fire filed its Motion for
Default Judgment against Siu's Electric and Ramiro,
counsel for Siu's Electric Corp. contacted counsel for
U.S. Fire. ECF No. 25, 25-1. In a spirit of cooperation, U.S.
Fire and its named insured on the Policy,  Siu's
Electric, agreed to stipulate to set aside the Entry of
Default as to Siu's Electric in this case. Id.
The Stipulation to Set Aside Entry of Default as to Siu's
Electric. (“Stipulation”) was approved by the
Court on November 13, 2018. ECF No. 24.
result of the Stipulation, U.S. Fire no longer seeks a
Default Judgment against Defendant Siu's Electric Corp.
However, U.S. Fire still seeks a Default Judgment against
Defendant Ramiro and a Declaratory Judgment that, under the
Policy, U.S. Fire owes no duty to defend or indemnify
Defendant Ramiro in the Underlying Lawsuit.
November 8, 2018, Siu's Electric filed a “Statement
of Position as to Plaintiff United States Fire Insurance
Company's Motion for Default Judgment filed October 15,
2018” (“Statement”). ECF No. 23. In that
Statement, Siu's Electric articulates that it
“takes no position” with respect to U.S.
Fire's Motion for Default Judgment “to the extent
that U.S. Fire's motion is strictly limited to a
determination of [U.S. Fire's] duty to defend and
indemnify Defendant Ramiro, and does not seek any ruling from
this Court concerning U.S. Fire's duty under its policy
to defend or indemnify Siu's for the claims alleged in
the Underlying Lawsuit[.]” As a result, no opposition
has been filed to U.S. Fire's Motion for Default Judgment
as to Defendant Ramiro or the requested Declaratory Judgment
that, under the Policy, U.S. Fire has no duty to defend or
indemnify Ramiro in the Underlying Lawsuit.
THE U.S. FIRE POLICY
Electric was issued U.S. Fire Policy No. 503826528 for the
policy period 2/27/15 to 2/27/16 (the “Policy”).
ECF No. 1-2. The Policy's Commercial General Liability
Coverage Part (“CGL Part”) provides a General
Aggregate Limit of $2, 000, 000, a $1, 000, 000 Each
Occurrence Limit for Bodily Injury and Property Damage and a
$500.00 deductible per occurrence. The CGL ...