United States District Court, E.D. New York
MEMORANDUM AND ORDER
I. LOCKE, United States Magistrate Judge.
before the Court is Plaintiff Philadelphia Indemnity
Insurance Company's (“PIIA” or
“Plaintiff”) motion for default judgment against
Defendant Professional Security Associates, Inc.
(“PSA”). See Docket Entry
(“DE”) . By way of Complaint filed on
December 2, 2016 (the “Complaint”), PIIA
commenced this diversity action against Defendants PSA,
Edward Colvell (“Colvell”), and FoFo's Toy,
Inc. d/b/a The Emporium (“FoFo's”) pursuant
to 28 U.S.C. § 2201 and Rule 57 of the Federal Rules of
Civil Procedure seeking, among other things, a declaratory
judgment that it has no duty to defend or indemnify its
insured, PSA, in connection with claims made in the lawsuit
captioned Edward J. Colvell v. Fofo's Toy, Inc. d/b/a
The Emporium, Index No. 060853/2014 (N.Y. Sup. Ct.) (the
“Underlying Action”). See DE .
Colvell filed an Answer on December 23, 2016, see DE
, but both PSA and FoFo's failed to timely answer or
otherwise respond to the Complaint. On April 12, 2017, at
Plaintiff's request, the Clerk of the Court entered
Certificates of Default against PSA and FoFo's.
See DEs , . PIIA then filed the instant
motion for default judgment against PSA on July 6, 2017.
See DE . For the reasons set forth herein,
Plaintiff's motion is denied without prejudice to renewal
pending the outcome of the case against Colvell.
BACKGROUND AND PROCEDURAL HISTORY 
The PIIC Policy
issued a Commercial General Liability Policy to PSA bearing
policy number PHPK957183 (the “Policy”) for the
period of December 14, 2012 through December 14, 2013.
See Declaration of Edward Fogarty (“Pl.'s
Decl.”), Exhibit (“Ex.”) B, DE [23-2]. The
Policy provides coverage for losses resulting from personal
bodily injury with a limit of $1 million per occurrence.
Id. Among other conditions, the Policy prescribes a
number of “[d]uties” on the part of an insured
“[i]n [t]he [e]vent [o]f [o]ccurrence, [o]ffense,
[c]laim [o]r [s]uit[, ]” including requirements that
the insured promptly notify PIIC of any claim or suit,
provide Plaintiff with necessary documentation, and cooperate
with PIIC in connection with defending the claim or suit.
See Id. Section IV.
The Underlying Action
about April 2, 2013, PSA's chief executive officer, Phil
Fogarty (“Fogarty”), informed Plaintiff via email
of a potential lawsuit arising from bodily injuries allegedly
sustained by Colvell on March 17, 2013 while PSA was
performing security services at The Emporium, a nightclub
owned by FoFo's. See Pl.'s Decl., Ex. C.
Immediately after learning of the possible suit, PIIC began
to investigate the alleged incident. See Complaint
¶ 22. On multiple occasions throughout 2013, Plaintiff
conferred with Fogarty in an effort to obtain additional
information concerning the incident and determine whether a
lawsuit had in fact been filed against PSA. See Id.
¶ 23. In mid- to late-2013, however, PSA ceased
communicating with PIIC entirely. See Id. ¶ 27.
Between September 2013 and February 2014, Plaintiff made
numerous attempts to contact PSA via both telephone and
email, all of which went unanswered. See Id. ¶
commenced the Underlying Action against FoFo's and PSA in
the Supreme Court of the State of New York, County of
Suffolk, on February 10, 2014. See E-Filed Verified
Complaint, Pl.'s Decl., Ex. A, DE [23-1] (the
“Underlying Action Complaint”). Colvell alleges
in the Underlying Action Complaint that security officers
employed by PSA detained, assaulted, battered, and falsely
arrested him while he was lawfully present at The Emporium.
See Id. ¶¶ 31-22. Colvell claims he
sustained bodily injury and emotional harm as a result of the
officers' conduct. See Id. ¶¶ 33, 41.
served with a summons and the Underlying Action Complaint
through the Secretary of State of the State of New York on or
about March 21, 2014 and via mail on May 15, 2014. See
Id. ¶¶ 31, 32. Following service, however, PSA
did not advise Plaintiff that suit had actually been filed
against it; rather, PIIA learned of Colvell's claims
against PSA from its own search of the court docket. See
Id. ¶¶ 33, 34. On May 27, 2014, Plaintiff
again contacted Fogarty to inform him that claims had been
asserted against PSA and to discuss representation of PSA in
connection with the lawsuit. See Id. ¶ 35;
Pl.'s Decl., Ex. D. PIIC then retained counsel to
represent PSA in the Underlying Action subject to a
reservation of rights. See Complaint ¶ 36.
about July 9, 2014, counsel for PSA visited the company's
last known address and informed Plaintiff that this location
was an empty storefront with unopened mail present dating
back to May 31, 2014. See Id. ¶ 37. Thereafter,
counsel located Fogarty's wife, Christine Fogarty, who
stated that PSA had moved from its original address but,
apparently, provided no further information. See Id.
¶ 38. PIIC also retained a private investigator in an
attempt to locate PSA and Fogarty and to obtain their
cooperation in connection with the Underlying Action, but
such efforts were unsuccessful. See Id. ¶ 39.
letters dated October 7, 2014 and September 8, 2015,
Plaintiff once again requested PSA's cooperation,
informed PSA that its continued absence was prejudicing
PIIC's ability to defend the Underlying Action, and
warned PSA that Plaintiff would be forced to disclaim
coverage for the incident at issue under the Policy unless
PSA contacted PIIA. See Id. ¶ 40; Pl.'s
Decl., Ex. E. In addition, Plaintiff informed PSA that the
court would strike PSA's pleadings if no discovery was
produced and that this would prejudice Plaintiff's
ability to defend the Underlying Action. See
Complaint ¶ 41.
light of PSA's continued failure to respond or cooperate,
on or about September 22, 2015, PIIA sent a letter to PSA
explaining, among other things, that Plaintiff was
disclaiming coverage for the Underlying Action under the
Policy and informing PSA that PIIA would no longer pay for
its defense. See Complaint ¶¶ 43, 44;
Pl.'s Decl., Ex. F. On December 17, 2015, Justice Joseph
A. Santorelli granted an application filed by counsel
assigned to defend PSA in the Underlying Action requesting
leave to withdraw. See Declaration of Zachary M.
Beriloff, DE , Ex. 1. Subsequently, on September 29,
2016, Justice Gerard W. Asher entered an Order striking
PSA's Answer in the Underlying Action. See id.,
The Instant Declaratory Judgment Action
filed its Complaint in this matter on December 2, 2016
seeking, among other things, a declaratory judgment that it
has no duty to defend or indemnify PSA in the Underlying
Action. See DE . PIIA effectuated service of the
Summons and Complaint upon PSA on December 21, 2016 after
delivering a copy of such pleadings to the Secretary of State
of the State of New York, affixing copies to the door of
PSA's last known business address, and sending a copy to
PSA via first class mail. See DE ; Pl.'s
Decl., Exs. H-J. After PSA failed to timely answer ...