Horton Homes, Inc. v. Bandy et al

Filing 199

ORDERED that the 133 Motion in Limine is CONDITIONALLY GRANTED as further set out in order. Signed by Hon. Chief Judge Mark E. Fuller on 4/29/09. (sl, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION H O R T O N HOMES, INC., P L A IN T IF F , v. L A R U E BANDY, et al., D EFEN D A N TS. ) ) ) ) ) ) ) ) )

CASE NO.: 2:07-cv-506-MEF (W O - Do Not Publish)

ORDER T h is cause is before the Court on Plaintiff Horton Homes, Inc.'s Motion (i) in Limine to Exclude Evidence Related to Alter Ego After July 10, 2001, or (ii) in the Alterative, for a Ruling Pursuant to Fed. R. Evid. 104(a) on the Time Period of Evidence That Can Be A d m itte d With Respect to Defendants' Alter Ego Defense (Doc. # 133). The Court has c a re f u lly considered the motions in support of and in opposition to the motion. H&S Homes, LLC ("H&S") operated sales lots for certain manufactured housing. H & S entered into a contract with each of the Defendants by which Defendants purchased a manufactured home. These sales contracts included arbitration agreements requiring the a rb itra tio n of claims related to the homes. Plaintiff Horton Homes, Inc. ("Horton Homes") m a n u f ac tu re d the homes Defendants purchased, but did not sign the contracts containing a rb itra tio n provisions. Defendants contend that they have several claims against H&S and H o rto n Homes, and consequently, they have sought arbitration against both H&S and Horton

H o m e s.1 Consequently, Horton Homes brought this suit seeking declaratory and injunctive re lie f . Specifically, Horton Homes contends that as it is not a party to the arbitration a g re e m e n ts it cannot be compelled to allow Defendants to arbitrate claims against it or to h a v e Defendants collect any arbitration award from it. Defendants contend that Horton H o m e s is subject to the arbitration agreements because it is the alter ego of H&S Homes. T h is is the sole issue in this case.2 In the instant motion in limine, Horton Homes contends that due to the nature of the c la im at issue, that is whether a non-signatory to an agreement to arbitrate can be bound by th e terms of that agreement the only relevant time period is the date, or in this case dates, of th e execution of the agreement to arbitrate. Defendants wish to offer evidence regarding e v e n ts which occurred after the date on which the last agreement was reached. Based on the record before the Court, the Court is persuaded that the relevant time p e rio d for the determination of an alter ego claim for purposes of this case is the time of the tr a n s a c tio n for which alter ego liability on the contract is sought. Accordingly, because H o r to n Homes seeks a determination that it is not bound by the arbitration clauses in the c o n tra c ts between H&S and Defendants executed during the period up through July 10, 2001,
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At least one of the Defendants has prevailed in an arbitration and received an a rb itr a tio n award against both H&S and Horton. Importantly, Defendants have no counterclaims against Horton Homes. For e x a m p le , this is not a case in which the holder of a judgment or arbitration award has filed s u it against a corporation claiming that it is the alter ego of the judgment debtor or the re c ip ie n t of fraudulently conveyed funds from the judgment debtor. The relevant time frame f o r the alter ego determination might well be different in a case such as that. 2
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th a t is the only time period relevant to the alter ego determination in this action. Indeed, in th e Court's view, the jury will be called upon to decide whether Horton Homes was the alter e g o of H&S on the dates on which each Defendant entered into an agreement with H&S. T h u s , there will be no judicial determination in this case as to whether Horton Homes ever la te r became the alter ego of H&S at any time after July 10, 2001.3 F o r good cause shown, it is hereby ORDERED that the motion in limine is C O N D IT IO N A L L Y GRANTED.4 It is further ORDERED that the Defendants shall not m a k e any reference to any events or admit any evidence of any events after July 10, 2001, w ith o u t first being granted leave by this Court upon a showing that the Court believes that th e information has been made relevant and admissible and upon the Court's finding that it is more probative than prejudicial. DONE this the 29th day of April, 2009. /s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE

In reaching this conclusion, the Court has considered and rejected Defendants' a rg u m e n ts, including their erroneous contention that judicial estoppel somehow limits P la in tif f from taking its current position and their conspiracy analogy.
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The alternative request for relief is DENIED as MOOT. 3