UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

SECURITY TITLE GUARANTEE CORPORATION OF BALTIMORE, Civil Action No. 18-1128 (CKK) Plaintiff,

v.

915 DECATUR ST NW, LLC,

Defendant.

MEMORANDUM OPINION (June 27, 2024)

Plaintiff The Security Title Guarantee Corporation of Baltimore (“Security Title” or

“Plaintiff”) filed a [1] Complaint against Defendant 915 Decatur St. NW, LLC (“Decatur” or

“Defendant”), seeking a determination by the Court that Security Title has no duty to defend or

indemnify Decatur, pursuant to a title insurance policy, for any underlying losses stemming from

a separate lawsuit. Although Decatur initially acquired counsel and participated in this lawsuit,

Decatur has remained unrepresented since January 2020, despite Court orders directing it to obtain

counsel. Accordingly, Plaintiff filed a [57] Request for Entry of Default and the Clerk of the Court

entered [58] Default against Decatur on March 6, 2024. Now pending before the Court is

Plaintiff’s [60] Motion for Default Judgment (“Motion” or “Pl.’s Mot. for Default J.”). Upon

consideration of Plaintiff’s submissions, the attachments thereto, 1 the relevant legal authorities,

and the record as a whole, the Court shall GRANT Plaintiff’s Motion for Default Judgment.

1 The Court’s consideration has focused on the following documents: • Plaintiff’s Complaint (“Compl.”), ECF No. 1; • Defendant’s Motion for Summary Judgment (“Def.’s Mot. Summ. J.”), ECF No. 22; • Plaintiff’s Renewed Motion for Summary Judgment (“Pl.’s Renewed Mot. Summ. J.”), ECF No. 54; and • Plaintiff’s Motion for Default Judgment (“Pl.’s Mot. for Default J.”), ECF No. 60.

1 I. BACKGROUND

In December 2016, Security Title provided Decatur with a title insurance policy (the

“Policy”) for the purchase of real property. See Compl. Ex. C at 1–10, ECF No. 1-3. The Policy

insured Decatur’s purchase of 2022 1st Street, NW, Washington, DC 20001, Lot 008, Square 3116

(the “Property”) from “a woman who [Defendant’s managing member] believed to be Ms. Bridget

Fordham.” Def.’s Mot. Summ. J. ¶¶ 4–6, 8–12, 2 ECF No. 22. The deed transferring the property

was purportedly signed by Ms. Fordham and notarized as of December 7, 2016, the date of the

deed. See id. Ex. A at 2. However, she was not present at the closing. Def.’s Mot. Summ. J. ¶ 15.

Upon completing the purchase, Decatur subsequently sold the property to Claremont Management,

LLC (“Claremont”) the next day (December 8, 2016). Id. Ex. B at 1–2. Both deeds were recorded

on December 15, 2016, only two minutes apart from each other. See id. Ex. A at 2; id. Ex. B at 2.

The title insurance policy lists the “Date of Settlement” as December 7, 2016, and the “Date of

Policy” as December 15, 2016. See Compl. Ex. C at 7.

In October 2017, Ms. Fordham filed suit against Decatur, Decatur’s managing member

Frank Olaitan, and Claremont in Superior Court of the District of Columbia for forging her name

to a deed and otherwise defrauding her. See generally Def.’s Mot. Summ. J. Ex. F (copy of Ms.

Fordham’s complaint). In that suit, Ms. Fordham alleged that her signature on the deed was forged

and that the conveyance to Decatur and subsequent conveyance to Claremont were fraudulent. See

id. At the outset of that lawsuit, Decatur requested that Security Title defend against Ms.

Fordham’s suit on behalf of Decatur, expressing that it was required under the Policy. See id.

Ex. I. Security Title denied this request and filed the Complaint in this case, seeking declaratory

relief that Decatur was not entitled to legal defense or indemnification against Ms. Fordham’s suit.

2 When the Court cites to specific paragraphs in Decatur’s Motion for Summary Judgment, it is citing specifically to paragraphs in the section entitled “Statement of Material Facts.”

2 See generally Compl. Decatur filed a motion for summary judgment, seeking declaratory relief

on the same matters. See generally Def.’s Mot. Summ. J. The Court refers the reader to its prior

memorandum opinion resolving the motions for summary judgment. See generally Sec. Title

Guarantee Corp. of Balt. v. 915 Decatur St. NW, LLC,

(D.D.C. 2019) (CKK).

As relevant here, the Court granted summary judgment in favor of Plaintiff, holding that Plaintiff

had no duty to defend Decatur in the underlying lawsuit.

at 20–21. But the Court denied

without prejudice both parties’ motions regarding Security Title’s duty to indemnify Decatur,

concluding that any such judgment would be premature because the underlying litigation with Ms.

Fordham had not concluded.

. Consequently, the Court stayed the matter of

indemnification until the underlying litigation concluded. See Order, ECF No. 30. Notably, the

sole remaining issue in this case is whether Security Title has a duty to indemnify Defendant’s

losses in the underlying lawsuit.

Of note, Decatur had been represented by counsel in earlier proceedings, however, said

counsel sought leave to withdraw in December 2019. See Mot. to Withdraw Appearance, ECF

No. 32. The Court granted counsel’s motion to withdraw in January 2020. See Order, ECF No. 35.

The Court ordered Decatur to secure new counsel, as corporate parties are required to be

represented by counsel and cannot proceed pro se. Id.; 2/28/2024 Minute Order; see also Partridge

v. Am. Hosp. Mgmt. Co.

(D.D.C. 2017) (RC). A review of the docket reveals

that Decatur has remained without counsel since January 2020.

In October 2023, Olaitan, principal of Decatur, pled guilty to violating

(wire fraud) in a separate proceeding in the U.S. District Court for the District of Columbia. Pl.’s

Status Rep. Ex. 2 at 1, ECF No. 53-2. Olaitan’s Statement of Offense demonstrates that he,

through his entity Decatur, committed fraud in order to obtain title to the Property. See Pl.’s Status

3 Rep. Ex. 1 ¶¶ 3, 9–11, ECF No. 53-1. As a result, the Court lifted the stay on the matter of

indemnification in this proceeding. 10/12/2023 Minute Order. Security Title then filed a renewed

motion for summary judgment. See ECF No. 54.

But because Decatur has remained unrepresented, Security Title then filed the request for

entry of default on March 5, 2024. See Req. for Entry of Default, ECF No. 57. The Clerk of the

Court entered default against Defendant on March 6, 2024. Entry of Default, ECF No. 58. On

March 28, 2024, Plaintiff filed the pending Motion for Default Judgment, requesting that the Court

to enter default judgment on the duty to indemnify against Defendant. See Pl.’s Mot. for Default

J. ¶ 4.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(a) provides that the clerk of the court “must enter [a]

party’s default” when a “party against whom a judgment for affirmative relief is sought has failed

to plead or otherwise defend.” Fed. R. Civ. P. 55(a). Once a default has been entered by the clerk,

a court may enter default judgment against that party pursuant to Rule 55(b). See Fed. R. Civ.

P. 55(b). To warrant default judgment, the defendant “must be considered a ‘totally unresponsive’

party, and its default plainly willful, reflected by its failure to respond to the summons and

complaint, the entry of default, or the motion for default judgment.” Int’l Painters & Allied Trade

Indus. Pension Fund v. Auxier Drywall, LLC,

(D.D.C. 2008) (ESH)

(citation omitted).

Default judgment is disfavored in this jurisdiction because courts prefer to resolve claims

on their merits. See Jackson v. Beech,

(D.C. Cir. 1980). However, default

judgments are available to “safeguard plaintiffs ‘when the adversary process has been halted

because of an essentially unresponsive party.’” Mwani v. bin Laden,

(D.C. Cir.

4 2005) (quoting Jackson,

). The “determination of whether default judgment is

appropriate is committed to the discretion of the trial court.” Auxier Drywall, LLC,

(citing Jackson,

). Default judgment may be entered against a corporate

defendant that is proceeding absent counsel, as corporate entities are not permitted to appear pro

se. See Motir Serv., Inc. v. Ekwuno,

(D.D.C. 2016) (BAH).

Upon entry of default by the clerk of the court, the “defaulting defendant is deemed to

admit every well-pleaded allegation in the complaint.” Int’l Painters & Allied Trade Indus.

Pension Fund v. R.W. Armine Drywall Co.,

(D.D.C. 2002) (RMU) (citation

omitted). The moving party is “entitled to all reasonable inferences from the evidence offered.”

(citing Au Bon Pain Corp. v. Artect., Inc.,

(2d Cir. 1981)).

III. DISCUSSION

In the present case, the Clerk of the Court entered default against Defendant, and therefore

the factual allegations in the Complaint are taken as true. 3 See R.W. Amrine Drywall,

. The Court finds that Plaintiff’s Complaint sufficiently alleges facts to support its claim

that it has no duty to indemnify Defendant’s losses in the underlying suit with Ms. Fordham.

A duty of indemnification arises if the insured is liable for claims that are covered by the

insurance policy. Sherman v. Ambassador Ins.,

(D.C. Cir. 1981)

(“[I]ndemnification under the policy is not due unless the insured actually loses on, or is made

liable for, claims that are covered by the policy.”). As a general matter, ripeness concerns can be

raised when a court makes a declaratory judgment on a duty to indemnify before there is a final

3 The Court notes that the Clerk’s entry of default was returned as undelivered. See ECF No. 61. The failure to deliver an entry of default does not preclude default judgment. See Chanel, Inc. v. Various John Does Nos. 1-300, No. 08- 413,

, at *1 (D.D.C. Mar. 31, 2009) (RCL) (default notices returned as undelivered do not affect the court’s ability to enter default as it is the party’s duty to keep the court informed of any changes of address); see also Fla. Physician’s Ins. v. Ehlers,

, 784 (11th Cir. 1993) (same); JTH Tax, Inc. v. Geraci, No. 2:14-cv-236,

, at *6 (E.D. Va. Oct. 2, 2014) (same).

5 judgment in the underlying claim. 4 Cf. Reno v. Cath. Soc. Servs., Inc.,

(1993)

(“Injunctive and declaratory judgment remedies . . . are discretionary, and courts traditionally have

been reluctant to apply them to administrative determinations unless these arise in the context of a

controversy ripe for judicial resolution.”) (internal quotation marks and alterations omitted)

(quoting Abbott Laboratories v. Gardner,

(1967)); Salus Corp. v. Cont’l Cas.

Co.,

(D.C. 1984) (“[P]rior to any proof of alleged wrongdoing by Salus and

without any judgment by a court upon the complaints against Salus seeking punitive damages, it

was premature and inappropriate for the [] court to make a pronouncement based upon a mere

prayer for punitive damages and that the appellee-insurers, as a matter of public policy, were

relieved from indemnifying Salus for any punitive damage awards arising out of the law suits.”).

While ripeness was a concern in the Court’s prior opinion, Sec. Title, 427 F. Supp. 3d at 27, this

concern is no longer applicable as explained below.

Although Decatur has not been found liable in the underlying claim in the Superior Court

case, Decatur’s principal, Frank Olaitan, was indicted and has since pled guilty to committing

fraud in the transaction at issue in the Superior Court case. 5 See Plea Agreement, United States v.

Olaitan, 21-cr-713 (D.D.C. Aug. 15, 2023), ECF No. 54; see also Pl.’s Renewed Mot. Summ. J.,

Ex. 1, ECF No. 54-3. Specifically, Olaitan admitted to “fraudulently us[ing] his corporate entity,

915 Decatur, to purport to purchase the First Street property from the true owner [] and to re-sell

the property thereafter to Company 1—all without [the true owner’s] knowledge or consent.” Pl.’s

4 The Court originally addressed these concerns in its Amended Memorandum Opinion and refers the reader to its previous legal analysis. See Sec. Title Guarantee Corp. of Balt. v. 915 Decatur St NW, LLC,

, 19– 20 (D.D.C. 2019) (CKK). 5 Decatur is bound by the fraudulent actions of Olaitan because Olaitan acted with Decatur’s actual authority when signing the deed to the Property on behalf of Decatur. Compl. Ex. D at 2; see Columbia Hosp. for Women Found., Inc. v. Bank of Tokyo-Mitsubishi Ltd.,

(D.D.C. 1997) (CKK) (“The law is clear that a corporation is bound by the acts of its officers so long as they act with either actual or apparent authority.”), aff’d,

(D.C. Cir. 1998).

6 Renewed Mot. Sum. J., Ex. 1 at ¶ 6, ECF No. 54-3. Olaitan’s guilty plea collaterally estops him

from relitigating issues essential to his conviction, including the allegations of fraud in the

underlying Superior Court case. See Emich Motors Corp. v. Gen. Motors Corp.,

,

568–69 (1951) (holding prior criminal convictions estop questions in civil matter “directly

determined” in the criminal prosecution); Alsco-Harvard Fraud Litig.,

(D.D.C. 1981) (LFO) (estopping defendants from relitigating issues of liability in civil claim

related to guilty pleas in criminal case). In light of Olaitan’s guilty plea and its application to this

case, the Court may now proceed with resolving the remaining issue: the duty to indemnify.

The Court concludes that Plaintiff has produced sufficient evidence that it has no duty to

indemnify Defendant’s losses in the underlying litigation because Defendant’s intentional and

fraudulent conduct are not covered by the Policy. Insurance policies are construed according to

contract principles and are therefore generally interpreted “in a manner consistent with ordinary

speech,” without the necessity of extrinsic evidence. Stevens v. United Gen. Title Ins.,

(D.C. 2002). The Policy here expressly provides that coverage is not required for, inter

alia, “[d]efects, liens, encumbrances, adverse claims, or other matters . . . created, suffered

assumed, or agreed to by the Insured Claimant[.]” Compl. Ex. C at 2. The language

“created . . . by the insured claimant” has generally “been defined to reflect conscious and

deliberate or intentional conduct.” Stevens,

(citations omitted). Olaitan’s guilty

plea of violating

(wire fraud) demonstrates that his conduct was deliberate and

intentional, as the statute requires the offender to knowingly and willingly enter into a scheme to

defraud. See United States v. Alston-Graves,

(D.C. Cir. 2006) (“The elements

of [

] [are] knowingly and willingly enter[ing] into a scheme to defraud . . . .”)

(emphasis added). Given the Policy’s exception that coverage is not provided for matters created

7 by the insured’s intentional and deliberate conduct, this intentional conduct relieves Plaintiff of

any duty to indemnify Defendant’s losses in the underlying litigation. See Stevens,

.

In sum, the Court finds that Plaintiff does not have a duty to indemnify Defendant’s losses

in the underlying litigation, as the claims are not covered by the Policy. Accordingly, default

judgment pursuant to Federal Rule of Civil Procedure 55(b) is warranted.

IV. CONCLUSION

For the foregoing reasons, the Court finds that Plaintiff has met all necessary preconditions

to obtain a default judgment against Defendant and that a default judgment is appropriate on this

record. The Court therefore GRANTS Plaintiff’s [60] Motion for Default Judgment and enters

default judgment against Defendant Decatur. An appropriate order accompanies this

Memorandum Opinion.

/s/ COLLEEN KOLLAR-KOTELLY United States District Judge

8