Nationwide General Insurance Company v. MCJ Restaurant Group, LLC et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
NATIONWIDE GENERAL
INSURANCE COMPANY,
Plaintiff,
v.
MCJ RESTAURANT GROUP, LLC
d/b/a THE GASTHAUS,
Defendant.
Case No. 25-CV-01378-SPM
MEMORANDUM AND ORDER
Before 	this 	Court 	is 	a 	Motion 	for 	Default 	Judgment 	filed 	by 	Plaintiff
Nationwide General Insurance Company against Defendant MCJ Restaurant Group,
LLC d/b/a The Gasthaus. (Doc. 21). Having fully considered all of the issues
presented, Plaintiff’s Motion for Default Judgment is GRANTED.
R ELEVANT FACTUAL AND P ROCEDURAL B ACKGROUND
Plaintiff Nationwide filed the instant declaratory judgment action seeking a
declaration that it does not owe a duty to defend or indemnify Defendant MCJ with
respect to a lawsuit filed by Elizabeth Wright against MCJ in the Twentieth Judicial
Circuit for St. Clair County, Illinois. (See Doc. 21, p. 1 (citing Wright v. MCJ Rest.
Grp., LLC, No. 2025LA000186 (Ill. Cir. Ct.)); see also Doc. 1). In her state court case,
Wright alleges that she was sexually harassed and assaulted by her supervisor (an
owner of MCJ) on multiple occasions while she was employed by MCJ as a manager
for The Gasthaus. (See id.).
Nationwide filed its Complaint in this Court on July 16, 2025. (See Doc. 1).
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While MCJ and Wright were both initially named as Defendants, Nationwide and
Wright executed a Stipulation of Dismissal on October 27, 2025 in which she agreed
to be bound by the declaration, judgment, or final order of this Court in this case. (See
Doc. 17; see also Doc. 19). This Court dismissed all claims against Wright pursuant
to Federal Rule of Civil Procedure 41(a)(2) on October 27, 2025. (See Doc. 18; see also
Doc. 20). Although service of process was executed on MCJ on August 8, 2025, MCJ
did not file an answer or any other responsive pleading. (See Doc. 12). Nationwide
moved for entry of default against MCJ on September 9, 2025; the Clerk of Court
entered default on September 10, 2025. (See Docs. 13, 14). Nationwide filed the
instant motion on October 28, 2025. (Doc. 21).
A PPLICABLE LEGAL S TANDARDS
Federal Rule of Civil Procedure 55 covers the entry of default judgment, which
has two stages. VLM Food Trading Int’l, Inc. v. Ill. Trading Co., 811 F.3d 247, 255
(7th Cir. 2016) (quoting In re Catt, 368 F.3d 789, 793 (7th Cir. 2004)). First, “[w]hen
a party against whom a judgment for affirmative relief is sought has failed to plead
or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk
must enter the party’s default.” F ED. R. CIV. P. 55(a). The district court may then
enter judgment on default pursuant to Rule 55(b)(2). See Arwa Chiropractic, P.C. v.
Med-Care Diabetic & Med. Supplies, Inc., 961 F.3d 942, 948 (7th Cir. 2020) (citing
F ED. R. C IV. P. 55(b)(2)). “When a court enters a default judgment as to liability, it
must accept as true all factual allegations in the complaint, except those regarding
the amount of damages.” Id. (citing F ED. R. CIV. P. 8(b)(6); Quincy Bioscience, LLC v.
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Ellishbooks, 957 F.3d 725, 725 (7th Cir. 2020) (affirming entry of default judgment)).
A NALYSIS
The applicable Businessowners Policy was issued to Mackenzie Rohr and was
effective from March 7, 2023 to March 7, 2024, yet was cancelled effective November
11, 2023. (Doc. 21, p. 3). The policy included “‘employees’ . . . other than either your
‘executive officers’ . . . or your managers . . . , but only for acts within the scope of
their employment by you or while performing duties related to the conduct of your
business.” (Id., p. 6 (quoting id., Ex. B)). An “occurrence” was defined as “an accident,
including continuous or repeated exposure to substantially the same general harmful
conditions.” (Id. (quoting id., Ex. B)). Coverages included bodily injury and property
damage liability with specific exclusions. (Id., pp 4–6 (quoting id., Ex. B)). Both
expected and intended injuries were excluded from coverage, as were any injuries
that were “sustained by a different person, entity, real property, or personal property
than that initially expected or intended.” (Id., p. 5 (quoting id., Ex. B); see also id., pp.
4–5 (quoting id., Ex. B)). Bodily injury due to “[e]mployment-related practices,
policies, acts or omissions, such as coercion, demotion, evaluation, reassignment,
discipline, defamation, harassment, humiliation or discrimination directed at that
person” were also excluded. (Id., p. 6 (citing id., Ex. B)).
In the pending Motion, Nationwide argues that MCJ does not have a duty to
defend MCJ because it is not named as an insured on the applicable policy and that
Wright’s allegations in her lawsuit fall within various policy exclusions. (See Doc. 21).
Specifically, Nationwide insists that MCJ is not an insured on the policy, since Rohr
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(an individual) was the only insured listed. (Id., p. 8). Nationwide also argues that
the policy’s Employer’s Liability exclusion, Employment Practices exclusion, Bodily
Injury to Any Insured exclusion, and Laws exclusion all bar coverage. (Id., pp. 8–11).
They also argue that “to the extent the underlying lawsuit alleges that MCJ was
aware of and assisted or encouraged Nelson’s conduct, the underlying lawsuit does
not allege an ‘occurrence’ as required to trigger coverage under the Policy, and the
Expected or Intended Injury exclusion would apply to bar coverage.” (Id., p. 12 (citing
W. Am. Ins. Co. v. Vago, 553 N.E.2d 1181, 1185 (Ill. App. Ct. 1990))).
Considering the above, it is clear that Plaintiff Nationwide has provided
evidence proving that (1) MCJ was not a named insured on the policy and (2) that the
conduct at issue in Wright’s lawsuit falls under the various exclusions in the policy.
(See Doc. 21). “It is well-settled that the court has authority to enter declaratory
default judgments as well as default judgments for monetary damages.” Tygris Asset
Fin., Inc. v. Szollas, No. 09 C 4488, 2010 WL 2266432, at *6 (N.D. Ill. June 7, 2010)
(citing Owners Ins. Co. v. Complete Mech. Servs., Inc., No. 08 C 4201, 2008 WL
4821654, at *1–2 (N.D. Ill. Oct. 31, 2008)). It is therefore appropriate for this Court
to enter a default judgment.
C ONCLUSION
Accordingly, Plaintiff Nationwide General Insurance Company’s Motion for
Default Judgment is GRANTED. Default Judgment will be entered via a separate
order.
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IT IS SO ORDERED.
DATED: November 19, 2025
s/ Stephen P. McGlynn
STEPHEN P. McGLYNN
U.S. District Judge
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