BANKERS LIFE AND CASUALTY COMPANY v. MALLIN (2025)

ORDER ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

Re: Dkt. No. 55

The Court has reviewed de novo Magistrate Judge Thomas S. Hixon's Report and Recommendation Re: Motion for Default Judgment (Dkt. No. 55, (“R&R”)) and the materials cited in the R&R. Judge Hixon recommended (1) granting Defendant Maria Pucciarelli's motion for default judgment against Defendant Nicole Mallin; (2) finding that Ms. Mallin, by failing to appear or respond after being properly served, has forfeited any claim to the proceeds of Alexander Mallin's life insurance policy, and that Pucciarelli is the sole and proper recipient of the policy proceeds; (3) releasing and disbursing to Ms. Pucciarelli's counsel of record the disputed proceeds in the amount of $511,337.39 plus accrued interest, which the Court previously ordered to be deposited in the Court Registry Investment System Disputed Ownership Fund (Dkt. No. 51), in accordance with payment instructions to be provided by counsel; and (4) awarding attorney's fees to Pucciarelli in the amount of $125,000 (25% of the $500,000 policy proceeds). (Dkt. No. 55.) No party filed an objection to the R&R. The Court finds the R&R correct, well-reasoned, and thorough, and adopts it in every respect. Accordingly, Pucciarelli's motion for default judgment (Dkt. No. 45) is GRANTED. A separate judgment will be issued.

IT IS SO ORDERED.

REPORT & RECOMMENDATION RE: MOTION FOR DEFAULT JUDGMENT

Re: ECF No. 45

I. INTRODUCTION

Plaintiff Bankers Life and Casualty Company filed this statutory interpleader action to resolve potential conflicting claims to benefits under a life insurance policy issued to Alexander Mallin, who is now deceased. The defendants named in the action are Nicole Mallin, who was Alexander's wife when the policy was purchased, and Maria Pucciarelli, Alexander's fiancée. Ms. Pucciarelli has filed a counterclaim against Bankers Life and a crossclaim against Ms. Mallin, and she now moves for default judgment against Ms. Mallin. ECF No. 45. Bankers Life has filed a Notice of Joinder in Ms. Pucciarelli's motion. ECF No. 50. Ms. Mallin has neither opposed the motion nor appeared in this case. The undersigned finds this matter suitable for disposition without oral argument and VACATES the September 25, 2025 hearing. Civ. L.R. 7-1(b). For the reasons stated below, the undersigned RECOMMENDS the District Court GRANT the motion.

II. BACKGROUND

A. Allegations in Bankers Life's Complaint

On November 14, 2005, Bankers Life issued Equity Indexed Flexible Premium Adjustable Life Insurance Policy No. ***6901 in the amount of $500,000.00 (the “Policy”) to Alexander Mallin. Compl. ¶ 8 & Ex. A, ECF No. 1. In the application, Mr. Mallin designated Nicole Mallin as the primary beneficiary. Id. ¶ 9. On or about May 29, 2024, Bankers Life received a Life and Annuity Policy of Information Form (the “Change Form”) purportedly signed by both Mallins and designating Ms. Pucciarelli as the primary beneficiary and their minor children as co-contingent beneficiaries. Id. ¶ 10 & Ex. B. By letter dated May 30, 2024, Bankers Life acknowledged the Change Form and notified Mr. Mallin that the change had been made. Id. ¶ 11 & Ex. C.

Mr. Mallin passed away on September 3, 2024. Id. ¶ 12. No probate estate was opened following his death. Id. ¶ 13. A dissolution proceeding between the Mallins was initiated on or about January 20, 2023, in the Sonoma County Superior Court as Case No. SFL093868 and was still pending at the time of his death. Id. ¶ 14. The Policy was paid up and in full force and effect at and before the time of Mr. Mallin's death and, under the terms of the Policy, the death benefit became due and payable to the rightful beneficiary(ies). Id. ¶ 15. Bankers Life concedes liability for the death benefit of the Policy in the amount of $500,000.00. Id.

By letter dated October 3, 2024, Ms. Pucciarelli notified Bankers Life of Mr. Mallin's death and submitted a Life Insurance Claim Form seeking payment of the disputed proceeds. Id. ¶ 16 & Ex. D. By letter dated November 22, 2024, Bankers Life notified Ms. Pucciarelli that her claim could not be processed until it received a copy of the complete divorce degree with property settlement agreement between the Mallins. Id. ¶ 17 & Ex. E.

On or about January 30, 2025, Ms. Mallin contacted Bankers Life disputing the validity of the Change Form, believing that she is the sole beneficiary of the Policy. Id. ¶ 18. Bankers Life has not received any other claims for benefits under the Policy. Id. ¶ 19. In light of the foregoing, Bankers Life cannot determine factually or legally who is rightfully entitled to the disputed proceeds or how they should be paid. Id. ¶ 20.

B. Allegations in Ms. Pucciarelli's Counterclaim and Crossclaim

Ms. Pucciarelli filed her Answer, Counterclaim and Crossclaim on April 11, 2025. ECF No. 15. She states she is Mr. Mallin's fiancée. Id. ¶ 1.¹ In May 2024 Mr. Mallin made the decision to ask Ms. Pucciarelli to marry him and change the primary beneficiary of the Policy from Ms. Mallin to her. Id. ¶ 3d-e. He contacted Bankers Life that month to effectuate the change of beneficiary and was advised that he could not change the beneficiary because the Mallins were residents of California, a community property state. Id. ¶ 3f-g. Because the Mallins had not completed their divorce proceedings, it would be necessary for Ms. Mallin to sign a form consenting to the change of beneficiary and waiving any community property interest in the Policy. Id. ¶ 3g. Bankers Life provided Mr. Mallin the form that he and Ms. Mallin needed to sign for Bankers Life to effectuate the change. Id. ¶ 3h. When Mr. Mallin asked Ms. Mallin to execute the form, she agreed, expressing her appreciation for all Ms. Pucciarelli had done over the last year to provide care and a safe home environment for her children. Id. ¶ 3i. Ms. Mallin signed the form on May 17, 2024. Id. ¶ 3j. Bankers Life did not require any proof, such as notarization, that Ms. Mallin had signed the change form. Id. ¶ 3k.

After Mr. Mallin's death, Ms. Mallin contacted Bankers Life, fraudulently misrepresenting she had not signed the change form, and that she remained the policy beneficiary. Id. ¶ 3y. Any doubts regarding Ms. Pucciarelli's entitlement to the policy proceeds “stem from Nicole's fraudulent misrepresentation denying that she had signed the change form, and/or from Bankers Life failure to take reasonable means during Alexander's lifetime to establish that Nicole had signed the change form as represented.” Id. ¶ 3aa. Ms. Pucciarelli brings crossclaims against Ms. Mallin for fraudulent misrepresentation and interference with contractual relations. Id. ¶¶ 13-24. Ms. Pucciarelli also brings counterclaims against Bankers Life for breach of contract and insurance bad faith. Id. ¶¶ 4-12.

C. Procedural Background

On March 10, 2025, Bankers Life filed this interpleader action. ECF No. 1. On May 8 it moved for leave to deposit $511,337.39 in disputed proceeds with the Court, ECF No. 23, which the Court granted, ECF No. 51.

On April 11, 2025, Ms. Pucciarelli filed her Answer, Counterclaim, and Crossclaim. ECF No. 15. She served Ms. Mallin on April 29, 2025, at her residence located at 1716 Weaverly Drive, Petaluma, California 94954-3732, by leaving the papers with a co-occupant, followed by first class mailing to the same address on April 30, 2025. Rowe Decl. ¶ 2 & Ex. 1; ECF No. 41-3. Ms. Pucciarelli's counsel subsequently communicated directly with Ms. Mallin, granting her an extension of time until June 17, 2025, to respond. Id. ¶¶ 2-3. After Ms. Mallin failed to respond or otherwise appear, Ms. Pucciarelli requested entry of default. ECF No. 41. On July 11, 2025, the Clerk of Court entered Ms. Mallin's default. ECF No. 43. That same day, the Clerk also entered default against Ms. Mallin as to Bankers Life's interpleader complaint. ECF No. 42.

Ms. Pucciarelli filed the present motion on August 15, 2025.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) permits a court, following default by a defendant, to enter default judgment in a case. “The district court's decision whether to enter default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).

At the default judgment stage, the factual allegations of the complaint, except those concerning damages, “together with other competent evidence submitted” are deemed admitted by the non-responding parties. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1000 (N.D. Cal. 2001); see also Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002) (“With respect to the determination of liability and the default judgment itself, the general rule is that well-pled allegations in the complaint regarding liability are deemed true.”). “However, a defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (citation and quotation omitted). Therefore, “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)); accord DIRECTV, 503 F.3d at 854. Further, the scope of relief is limited by Federal Rule of Civil Procedure 54(c), which states that a “default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.”

In determining whether default judgment is appropriate, the Ninth Circuit has enumerated the following factors for courts to consider:

(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

IV. DISCUSSION

A. Jurisdiction and Service of Process

In considering whether to enter default judgment, a district court must first determine whether it has jurisdiction over the subject matter and the parties to the case. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). “[T]he district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (considering subject matter jurisdiction on a 12(b)(1) motion).

1. Subject Matter Jurisdiction

“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). As such, “federal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction.” Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011); Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004) (noting that district courts are “obligated to consider sua sponte whether [they] have subject matter jurisdiction”). There are two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 28 U.S.C. § 1331 and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court has federal question jurisdiction in “all civil actions arising under the Constitution, laws, or treaties of the United States.” Id. at § 1331. A cause of action “arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law.” Hansen v. Blue Cross of Cal., 891 F.2d 1384, 1386 (9th Cir. 1989). A district court has diversity jurisdiction “where the matter in controversy exceeds the sum or value of $75,000 ․ and is between citizens of different states, or citizens of a State and citizens or subjects of a foreign state.” Id.

Interpleader is a procedural device that allows the stakeholder of a sum of money to sue all those who may assert conflicting claims and force them to litigate their competing claims. Cripps, 980 F.2d at 1265. The primary purpose of interpleader is “to protect stakeholders from multiple liability as well as from the expense of multiple litigation.” Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1033 (9th Cir. 2000). Federal law authorizes two forms of interpleader actions. Federal Rule of Civil Procedure 22 permits interpleader where a plaintiff may be exposed to double or multiple liability and where subject matter jurisdiction is established under the general statutes governing federal jurisdiction. Fed. R. Civ. Proc. 22(a)(1); Aetna Life Ins. Co., 223 F.3d at 1033. Alternatively, the federal interpleader statute grants district courts original jurisdiction over interpleader actions in which two or more adverse claimants of diverse citizenship claim entitlement to money or property held by the plaintiff. 28 U.S.C. § 1335; see also Morongo Band of Mission Indians v. California State Bd. of Equalization, 858 F.2d 1376, 1381–82 (9th Cir. 1988) (discussing statutory and rule interpleader).

Bankers Life brings its interpleader action pursuant to Rule 22 and 28 U.S.C. § 1332. A Rule 22 interpleader action requires either diversity jurisdiction or federal question jurisdiction. For diversity, “there must be diversity between the stakeholder on one hand and the claimants on the other.” Lee v. W. Coast Life Ins. Co., 688 F.3d 1004, 1007 n.1 (9th Cir. 2012); Transamerica Life Ins. Co. v. Rabadi, 2017 WL 3184168, at *4 (C.D. Cal. July 24, 2017) (“The court looks to diversity between the plaintiff-stakeholder and the claimant-defendants, regardless whether claimant-defendants are citizens of the same state.”) (citing Travelers Ins. Co. v. First Nat'l Bank of Shreveport, 675 F.2d 633, n.9 (5th Cir. 1982)). As Bankers Life is a citizen of Illinois and Ms. Mallin and Ms. Pucciarelli are both residents of California, see Compl ¶¶ 1-3, Answer ¶¶ 1-3, and its claim is related to disputed life insurance proceeds in the sum of $500,000, see Compl. ¶ 5, Answer 15 ¶ 5, subject matter jurisdiction over Bankers Life's claim is proper.

Because Ms. Pucciarelli's state law crossclaims against Ms. Mallin arise out of the “same transaction or occurrence” as Bankers Life's claims, the Court also has supplemental jurisdiction over them. See Fed. R. Civ. P. 13(g); 28 U.S.C. § 1367(a); Trs. of Constr. Indus. & Laborers Health & Welfare Tr. v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925 (9th Cir. 2003) (“Nonfederal claims are part of the same ‘case’ as federal claims when they ‘derive from a common nucleus of operative fact’ and are such that a plaintiff ‘would ordinarily be expected to try them in one judicial proceeding.’ ”) (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966)); Ionian Corp. v. Country Mut. Ins. Co., 2012 WL 707072, at *3 (D. Or. Mar. 5, 2012) (The “property that is the subject matter of the original action filed by Ionian against Country Mutual is the insurance proceeds deposited with the Court payable under the policy as a result of the fire. Thus, under Rule 13(g), this Court has subject matter jurisdiction to resolve all of the crossclaims that involve entitlement to any part of the insurance proceeds.”) (cleaned up)

2. Personal Jurisdiction

a. Basis for Personal Jurisdiction

To enter default judgment, the Court must have a basis for the exercise of personal jurisdiction over the defendants in default. In re Tuli, 172 F.3d at 712. “Without a proper basis for [personal] jurisdiction, or in the absence of proper service of process, the district court has no power to render any judgment against the defendant's person or property unless the defendant has consented to jurisdiction or waived the lack of process.” S.E.C. v. Ross, 504 F.3d 1130, 1138–39 (9th Cir. 2007). Traditional bases for conferring a court with personal jurisdiction include a defendant's consent to jurisdiction, personal service of the defendant within the forum state, or a defendant's citizenship or domicile in the forum state. J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880 (2011). Here, Ms. Mallin is a resident of California and was served here, and the claims arise out of her activities in California. As such, the Court has personal jurisdiction over her.

b. Service of Process

Personal jurisdiction also requires notice that is “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). “A federal court does not have jurisdiction over a defendant unless the defendant has been served properly under [Federal Rule of Civil Procedure 4].” Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988).

Rule 4(e) provides that “an individual ․ may be served in a judicial district of the United States by ․ following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located.” California law allows for substitute service by leaving a copy of the summons and complaint with a person at least 18 years of age at a defendant's mailing address, and by thereafter mailing a copy of the summons and complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Cal. Civ. Proc. Code § 415.20. Accordingly, service upon Ms. Mallin was proper. See Rowe Decl. ¶ 2 & Ex. 1.

B. Eitel Factors

Applying the seven Eitel factors, the undersigned finds default judgment is warranted in favor of Plaintiff.

1. The Possibility of Prejudice

The first factor the Court considers is the possibility of prejudice if a default judgment is not entered. Eitel, 782 F.2d at 1471–72. This factor weighs in favor of default judgment “when a defendant has failed to appear or defend against a suit, and the plaintiffs could not otherwise seek relief.” Vietnam Reform Party v. Viet Tan - Vietnam Reform Party, 416 F. Supp. 3d 948, 962 (N.D. Cal. 2019) (citations omitted); IO Grp., Inc. v. Jordon, 708 F. Supp. 2d 989, 997 (N.D. Cal. 2010) (prejudice exists where denying the requested default judgment would leave the plaintiff without a proper remedy). Because Ms. Mallin has made no appearance in this action, Ms. Pucciarelli would be prejudiced absent a default judgment because there would be no remedy.

2. Substantive Claims and the Sufficiency of the Complaint 2

The second and third Eitel factors focus on the merits of the substantive claims and the sufficiency of the complaint. Eitel, 782 F.2d at 1471–72. “These two factors are often analyzed together and require courts to consider whether a plaintiff has ‘state[d] a claim on which [it] may recover.’ ” Vietnam Reform Party, 416 F. Supp. 3d at 962 (quoting PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002)). “Of all the Eitel factors, courts often consider the second and third factors to be ‘the most important.’ ” Id. (quoting Sanrio, Inc. v. Jay Yoon, 2012 WL 610451, at *4 (N.D. Cal. Feb. 24, 2012)).

a. Interpleader

Bankers Life alleges it is an innocent stakeholder subject to conflicting claims to the proceeds from Ms. Mallin and Ms. Pucciarelli, meaning it cannot pay Ms. Mallin or Ms. Pucciarelli without justifiable fear of multiple liability and multiple lawsuits. Compl. ¶¶ 21-22. Taking these facts as true, Bankers Life has identified competing claims to the policy benefits, and interpleader is the proper method for resolving such claims. See W. Conf. of Teamsters Pension Plan v. Jennings, 2011 WL 2609858, at *5 (N.D. Cal. June 6, 2011), report and recommendation adopted, 2011 WL 2609860 (N.D. Cal. July 1, 2011) (“The primary test for determining the propriety of interpleading the adverse claimants and discharging the stakeholder (the so-called ‘first stage’ of interpleader) is whether the stakeholder legitimately fears multiple vexation directed against a single fund.”) (citation omitted). Further, although Ms. Mallin has a potential claim to the proceeds, she has failed to answer the complaint or otherwise appear in this case. “As a general rule, after properly effecting service of process in an interpleader action, a named interpleader defendant who fails to answer the interpleader complaint and assert a claim to the res forfeits any claim of entitlement that might have been asserted.” W. Progressive, LLC v. Robles, 2015 WL 8028364, at *3 (N.D. Cal. Dec. 7, 2015) (quoting Trs. of ILWU-PMA Pension Plan v. Coates, 2013 WL 556800, at *4 (N.D. Cal. Feb. 12, 2013)). As such, the Court may enter default judgment as to Bankers Life's interpleader claim in favor of Ms. Pucciarelli and against Ms. Mallin. See Standard Ins. Co. v. Asuncion, 43 F. Supp. 3d 1154, 1156 (W.D. Wash. 2014) (“The Court may accordingly, in its discretion, grant default judgment against the non-appearing interpleader defendants where the only remaining claimants demonstrate their entitlement to the funds and do not dispute the respective distributions.”) (citing Cripps, 980 F.2d at 1267 (appearing claimants must demonstrate entitlement to benefits)).

b. Fraudulent Misrepresentation

The elements of fraudulent misrepresentation are the same as the elements for a fraud claim. Yamauchi v. Cotterman, 84 F. Supp. 3d 993, 1018 (N.D. Cal. 2015). Under California law, the elements of a claim for fraud are: (1) a misrepresentation or omission of a fact that should have been disclosed; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage. See Lazar v. Superior Court, 12 Cal. 4th 631, 638 (1996). Under Federal Rule of Civil Procedure 9(b), “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Thus, “ ‘[a] plaintiff must set forth more than the neutral facts necessary to identify the transaction[;] [t]he plaintiff must set forth what is false or misleading about a statement, and why it is false.’ ” Yamauchi, 84 F. Supp. 3d at 1018 (quoting Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)) (internal quotations and citation omitted). Typically, this means the plaintiff must allege “the who, what, when, where, and how” of the misconduct charged. Id. The purpose of Rule 9(b) is to give defendants notice of the specific fraudulent conduct against which they must defend. Bly–Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001).

Ms. Pucciarelli alleges that, despite willingly and voluntarily signing the requisite forms necessary for her to waive any interest in the Policy, Ms. Mallin contacted Bankers Life after Mr. Mallin's death and fraudulently misrepresented that she had not signed the change form and therefore remained the Policy beneficiary. She alleges Ms. Mallin intended to disrupt Bankers Life's performance of the contract by denying she executed the form. As a result, when Ms. Pucciarelli notified Bankers Life of Mr. Mallin's death and submitted a Life Insurance Claim Form seeking the proceeds of the Policy, Bankers Life declined to pay the death benefits. Based on these allegations, Ms. Pucciarelli has satisfied each element of fraud under California law, and she is therefore entitled to default judgment on this claim.

3. The Sum of Money at Stake in the Action

Under the fourth Eitel factor, “the Court must consider the amount of money at stake in relation to the seriousness of Defendant's conduct.” Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F. Supp. 2d 1038, 1050 (N.D. Cal. 2010) (citation and quotation marks omitted). When the amount at stake is substantial or unreasonable in light of the allegations in the complaint, default judgment is disfavored. See Eitel, 782 F.2d at 1472 (affirming the denial of default judgment where the plaintiff sought $3 million in damages and the parties disputed material facts in the pleadings). “However, when the sum of money at stake is tailored to the specific misconduct of the defendant, default judgment may be appropriate.” Yelp Inc. v. Catron, 70 F. Supp. 3d 1082, 1100 (N.D. Cal. 2014).

As to the amount due under the Policy, “in interpleader actions, the sum of money at stake is typically a neutral factor when the interpleading party is not seeking damages.” United States of Am. for the use of Terry Bedford Concrete Constr., Inc. v. Argonaut Ins. Co., 2024 WL 199273, at *5 (E.D. Cal. Jan. 18, 2024), report and recommendation adopted sub nom. United States v. Argonaut Ins. Co., 2024 WL 526985 (E.D. Cal. Feb. 9, 2024) (citing Dang v. Pontier, 2020 WL 5521133, at *4 (S.D. Cal. Jul. 22, 2020) and Farmers New World Life Ins. Co. v. Adams, 2014 WL 4715521, at *4 (D. Mont. Sep. 22, 2014) (“Even if the sum of money at issue in an interpleader action is substantial, this factor is typically neutral because the interpleading party is not asserting an interest in the money or seeking damages.”)). As Bankers Life does not seek damages, this factor is neutral as to the interpleader claim.

Ms. Pucciarelli also seeks attorney's fees under the “tort of another” doctrine. Mot. at 9. The contingency fee agreement with her counsel obligates Ms. Pucciarelli to pay attorneys’ fees equal to 25% of her recovery, plus costs. Pucciarelli Decl. ¶ 3 & Ex. 1, ECF No. 45-4; Rozelle Decl. ¶ 4, ECF No. 45-5; Kantor Decl. ¶ 7, ECF No. 45-2. Based on the $500,000 value of the Policy, the attorneys’ fees owed under the agreement total $125,000, plus recoverable costs. As these fees were directly and proximately caused by Ms. Mallin's fraudulent misrepresentation, the undersigned finds the amount is tailored to the specific misconduct alleged, and this factor therefore favors default judgment.³

4. The Possibility of Dispute Concerning Material Facts

The fifth Eitel factor examines the likelihood of dispute between the parties regarding the material facts surrounding the case. Eitel, 782 F.2d at 1471–72. However, upon entry of default, the defendant is “deemed to have admitted all well-pleaded factual allegations” in the complaint. DIRECTV, Inc., 503 F.3d at 851 (citing Fed. R. Civ. P. 55(a)). Moreover, as outlined above, Bankers Life and Ms. Pucciarelli provided the Court with well-pleaded allegations supporting their claims. Accordingly, this factor weighs in favor of default judgment.

5. Whether Default was Due to Excusable Neglect

The sixth Eitel factor examines whether the defendant's failure to respond to the complaint was the result of excusable neglect. Eitel, 782 F.2d at 1471–72. Here, both Bankers Life and Ms. Pucciarelli provided adequate notice of their claims, yet Ms. Mallin made no appearance and failed to respond to the present motion. See S.E.C. v. Internet Sols. for Bus. Inc., 509 F.3d 1161, 1166 (9th Cir. 2007) (“A signed return of service constitutes prima facie evidence of valid service which can be overcome only by strong and convincing evidence.”) (simplified). Further, there is nothing in the record suggesting this failure is based on excusable neglect. See Shanghai Automation Instrument Co., 194 F. Supp. 2d at 1005 (default after proper service was not excusable neglect). Thus, this factor supports default judgment.

6. Policy Favoring Deciding a Case on its Merits

The last Eitel factor examines whether the policy of deciding a case based on the merits precludes entry of default judgment. Eitel, 782 F.2d at 1472. In Eitel, the Ninth Circuit admonished that “[c]ases should be decided upon their merits whenever reasonably possible.” Id. “The existence of Federal Rule of Civil Procedure 55(b), however, shows that this policy is not dispositive.” McMillan Data Commc'ns, Inc. v. AmeriCom Automation Servs., Inc., 2015 WL 4380965, at *11 (N.D. Cal. July 16, 2015) (citing Kloepping v. Fireman's Fund, 1996 WL 75314, at *3 (N.D. Cal. Feb. 13, 1996)). Further, “deciding the case on the merits is impossible where a party refuses to participate.” Vietnam Reform Party, 416 F. Supp. 3d at 970. Thus, because Ms. Mallin made no effort to respond to communication attempts by Bankers Life and Ms. Pucciarelli and in no way participated in the proceedings, “[t]his factor thus weighs against, but does not preclude, entry of default judgment.” Id.

7. Summary of the Eitel Factors

In sum, the majority of the Eitel factors weigh in favor of granting default judgment. Accordingly, the undersigned RECOMMENDS the District Court GRANT Ms. Pucciarelli's motion and enter default judgment against Ms. Mallin.

C. Relief Sought

The Court next turns to the relief sought by Plaintiff. Once liability is established, the plaintiff must then establish that the requested relief is appropriate. Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). A “default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c).

1. Damages

The moving party has the burden to “prove up” the amount of damages. United States v. Sundberg, 2011 WL 3667458, at *6 (N.D. Cal. Aug. 22, 2011) (citation omitted). Where the amount of damages “is liquidated or capable of ascertainment from definite figures contained in documentary evidence or detailed affidavits, the Court may enter default judgment without a hearing on damages.” Id. (internal quotation marks and citation omitted); see also Pope v. United States, 323 U.S. 1, 12 (1944) (“It is a familiar practice and an exercise of judicial power for a court upon default, by taking evidence when necessary or by computation from facts of record, to fix the amount which the plaintiff is lawfully entitled to recover and to give judgment accordingly.”). As Bankers Life concedes liability for the death benefit of the Policy in the amount of $500,000, see Compl. ¶ 15, default judgment in Ms. Pucciarelli's favor is appropriate in the amount of $511,337.39 (the amount deposited by Bankers Life), plus any further accrued interest.

2. Attorneys’ Fees and Costs

Ms. Pucciarelli seeks attorney's fees under the “tort of another” doctrine based on her fraudulent misrepresentation claim. Mot. at 9. Under California law, each party is required to pay her own attorney's fees in the absence of contrary statute or contract. Cal. Civ. Proc. Code § 1021. However, “ ‘a person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person’ is entitled to recover attorney's fees from those parties who caused the suit to be brought.” Washington v. Baenziger, 673 F. Supp. 1478, 1484 (N.D. Cal. 1987) (quoting Prentice v. N. Am. Title Guar. Corp., 59 Cal. 2d 618, 620 (1963)). As Ms. Pucciarelli is entitled to default judgment on her claim for fraudulent misrepresentation against Ms. Mallin, she is also entitled to attorney's fees under the tort of another doctrine. See id. (“Plaintiff pleads that, because of the fraudulent misrepresentations and omissions of certain defendants, he has been required to bring this action to rescind the tortiously-induced purchase of investment units against other defendants. These allegations state a claim for relief under the third party tort exception.”) (internal citation omitted).

The contingency fee agreement with her counsel obligates Ms. Pucciarelli to pay attorney's fees equal to 25% of her recovery, plus costs. Pucciarelli Decl. ¶ 3 & Ex. 1; Rozelle Decl. ¶ 4; Kantor Decl. ¶ 7. Based on the $500,000 value of the Policy, the attorney's fees owed under the agreement total $125,000, plus recoverable costs. Accordingly, the undersigned recommends the Court award Ms. Pucciarelli $125,000 in attorney's fees.

As part of her motion, Ms. Pucciarelli also seeks “recoverable costs to be determined by the Court,” Mot. at 9, but she provided no evidence of any such costs. Accordingly, the undersigned recommends the Court deny her motion as to costs.

V. CONCLUSION

For the reasons stated above, the undersigned RECOMMENDS the District Court GRANT Ms. Pucciarelli's Motion for Default Judgment and enter judgment against Ms. Mallin. The undersigned FURTHER RECOMMENDS the Court find as follows:

1) Ms. Mallin, by failing to appear or respond after being properly served, has forfeited any claim to the Policy proceeds.

2) Ms. Pucciarelli is the sole and proper recipient of the Policy proceeds.

3) The Clerk of Court shall release and disburse to Ms. Pucciarelli's counsel of record the disputed proceeds in the amount of $511,337.39 plus accrued interest, which the Court previously ordered be deposited in the Court Registry Investment System Disputed Ownership Fund (see ECF No. 51), in accordance with payment instructions to be provided by counsel.

The undersigned FURTHER RECOMMENDS the Court awards attorney's fees to Ms. Pucciarelli in the amount of $125,000, calculated pursuant to her March 28, 2025 contingency fee agreement with Kantor & Kantor, LLP (25% of the $500,000 policy proceeds).

Ms. Pucciarelli shall serve a copy of this Report and Recommendation upon Ms. Mallin and file proof of service thereafter. Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b)(2), a party may serve and file any objections within 14 days after being served. Failure to file objections within the specified time may waive the right to appeal the district court's order.

IT IS SO RECOMMENDED.

FOOTNOTES

1.   Paragraph citations reference Ms. Pucciarelli's counterclaims and crossclaims, which begin on page 4.

3.   As discussed below, Ms. Pucciarelli seeks attorney's fees under the “tort of another” doctrine.

RITA F. LIN, United States District Judge