Canopius Capital Two Limited et al v. Jeanne Estates Apartments, Inc. et al

Filing 135

ORDER denying as moot 103 Motion for Summary Judgment; denying as moot 106 Motion to Dismiss; denying as moot 108 Motion for Leave to File; granting in part and denying in part 119 Motion for Leave to File; denying as moot 124 Motion to Dismiss for Lack of Jurisdiction. Signed by Honorable Susan O. Hickey on August 14, 2015. (mll)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
TEXARKANA DIVISION
CANOPIUS CAPITAL TWO LIMITED, et al

VS.

PLAINTIFFS

CASE NO. 11-CV-4070

JEANNE ESTATES APARTMENTS, INC.,
et al

DEFENDANTS

ORDER
Before the Court are Plaintiffs’ 1 Motions for Leave to File Third Amended Complaint.
(ECF Nos. 108 & 119). Certain Defendants 2 have responded to the motions. (ECF No. 123).
Plaintiffs have filed a reply.

(ECF Nos. 126-127).

The Court finds this matter ripe for

consideration.
The Second Amended Complaint (ECF No. 56) seeks a declaration from the Court
regarding Plaintiffs’ contractual obligations to defend and indemnify Defendant-Insureds Cherry
Hill Printing, Steve Johnson, Steve Johnson d/b/a The Cooker, Don Wolf, and Jeanne Estates
Apartments in cases before this Court and Arkansas state courts. The underlying cases referenced
in the Second Amended Complaint are: Kolbek, et al. v. Twenty First Century Holiness
Tabernacle Church, et al., Case No. 4:10-cv-4124; Ondrisek, et al. v. Hoffman, Case No. 4:08cv-4113; Ondrisek, et al. v. Kolbek, Case No, 4:09-cv-4100; and Coie v. Alamo, et al., No. CV2009-1854(V), Circuit Court of Sebastian County, Arkansas.
Since the filing of Plaintiffs’ Second Amended Complaint, the Kolbek case before this
Court has been dismissed. (Case No. 4:10-cv-4124, ECF Nos. 716 & 722). After the dismissal
1

Plaintiffs are Canopius Capital Two Limited, Atrium 5 Limited, American Modern Select Insurance Company, and
Great Lakes Reinsurance (UK) PLC.

2

The responding Defendants are Seth Calagna, Amy Eddy, Nicole Farr, Summer Hagan, Desiree Kolbek, Spencer
Ondrisek, Jeanette Orlando, Jamie Rodriguez, and Pebbles Rodriguez.

of the federal suit, the Kolbek plaintiffs re-filed many of their claims in the Miller County Circuit
Court on January 14, 2014, Kolbek v. Twenty First Century Holiness Tabernacle Church, Inc.,
Case No. 46CV-14-8-2. (ECF No. 121, Exh. 6). When the case was re-filed, the defendants
were limited to Tony Alamo, Jeanne Estates Apartments, Inc., and Twenty First Century
Holiness Tabernacle Church. The factual allegations in the state suit mirror the allegations made
in the dismissed federal suit, and the Kolbek plaintiffs make the same claims for negligence,
negligent entrustment, negligent hiring, supervision and retention, false imprisonment, invasion
of privacy, defamation, joint-venture liability, and outrage.
Plaintiffs’ first Motion for Leave to File Third Amended Complaint (ECF No. 108) was
filed in October 2014.

The motion requested that Plaintiffs be permitted to amend their

Complaint to address the dismissal of the Kolbek federal suit and the filing of the Kolbek state
suit. Before the Court ruled on the motion to amend, there was a further development in state
court. On November 25, 2014, the Kolbek Plaintiffs filed a lawsuit against Canopius Capital
Two Limited, as well as American Western Home Insurance Company and Canopius US
Insurance, Inc., in Miller County, Arkansas. This new lawsuit was brought under Arkansas’s
direct action statute codified at Ark. Code Ann. § 23-89-101. This “Direct Action Lawsuit” seeks
to hold Canopius Capital Two Limited, and the other two carriers, liable for the $525,000,000.00
default judgment entered against Twenty First Century Holiness Tabernacle Church (“TFC”) in
the Kolbek state suit. 3 According to Plaintiffs, the Direct Action Lawsuit is the first demand by
any party for coverage of TFC under any of Plaintiffs’ insurance policies.
In response to the Direct Action Lawsuit being filed, Plaintiffs filed a new motion for
leave to amend. Plaintiffs’ second Motion for Leave to File Third Amended Complaint (ECF
No. 119) requests that they be permitted to amend their complaint to address the Kolbek state suit
3

TFC is an alleged entity of Tony Alamo Christian Ministries. TFC was also a Defendant in the Kolbek federal suit.

2

as well as the newly filed Direct Action Lawsuit. Plaintiffs’ second motion further requests the
addition of TFC as a defendant in this matter so that they can seek a determination of whether
any Plaintiff is obligated to defend or indemnify TFC with respect to the default judgment
entered against TFC in the Kolbek state suit.
Rule 15 of the Federal Rules of Civil Procedure provides that, unless a party seeks to
amend within 21 days of serving a pleading, that party “may amend its pleading only with the
opposing party’s written consent or the court’s leave.” When a party seeks the court’s permission
to amend, leave to amend “shall be freely given when justice so requires.” Doe v. Cassel, 403
F.3d 986, 990 (8th Cir. 2005). The justifications for denying a motion to amend are limited to
“undue delay, bad faith, or dilatory motive, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the non-moving party, or futility of the amendment.” Id.
at 991.
Upon consideration, the Court finds that Plaintiffs’ second Motion for Leave to File Third
Amended Complaint (ECF No. 119) should be granted in part and denied in part. The Court
grants Plaintiffs’ request to amend their Complaint to address the Kolbek state suit.

The

dismissed Kolbek federal suit and the Kolbek state suit are virtually identical in terms of the
claims that are being made and the underlying allegations that allegedly give rise to a duty to
defend and indemnify. 4 No additional issues or parties would be added by the amendment.
Accordingly, there will be no prejudice to any party or any undue delay in the proceedings by
allowing Plaintiffs to include this updated case information in an amended complaint.

4

The Court notes that Jeanne Estates is the only Defendant-Insured in this case that is named in the Kolbek state
action. Other Defendant-Insureds in this case argue that there is no longer a justiciable controversy as to Plaintiffs’
claims against them because, while they were named as defendants in the Kolbek federal suit, they were not named
in the Kolbek state suit. The present Order takes no stance on this issue.

3

The Court denies Plaintiffs’ request to amend their Complaint to address the newly filed
Direct Action Lawsuit and add TFC as a defendant. The Court recognizes that the Direct Action
Lawsuit implicates some of the same issues present in this case and the Kolbek state suit.
However, because this case has been ongoing for over four years in its current iteration, the
Court finds that the addition of a new, underlying suit and the addition of a new defendant would
be unduly prejudicial to the other parties in this case and would cause an unnecessary delay in
the disposition of this action. Civil lawsuits involving Tony Alamo Christian Ministries have
been consistently filed in this Court and state courts for the past five years. In fact, a new case
against various individuals and entities involved with the ministry—including DefendantInsureds in this case—was filed in this Court by former church members in 2014. 5 In fairness to
the parties and in furtherance of disposing of these cases in a timely manner, the Court feels it is
necessary to draw the line somewhere. While Plaintiffs are not being permitted to amend their
Complaint to seek a declaratory judgment on new coverage issues arising in the Direct Action
Lawsuit, Plaintiffs are free to file a separate declaratory judgment action to address these
matters. 6
For the reasons stated above, the Court finds that Plaintiffs’ second Motion for Leave to
File Third Amended Complaint (ECF No. 119) is hereby GRANTED in part and DENIED in
part. Plaintiffs must file a Third Amended Complaint within five (5) days of the entry of the
order granting leave to amend.

Plaintiffs’ first Motion for Leave to File Third Amended

Complaint (ECF No. 108) is hereby DENIED AS MOOT.

5

Griffin, et al v. Alamo, et al, Case No. 4:14-cv-4065.

6

While Plaintiffs may file a new declaratory judgment action regarding their coverage obligations to TFC, it appears
to the Court that these issues could potentially be resolved by the Direct Action Lawsuit.

4

In light of the forthcoming Third Amended Complaint, the Court finds that the currently
pending Motions to Dismiss and Motion for Summary Judgment (ECF Nos. 103, 106, & 124)
should be DENIED AS MOOT. Updated motions must be refiled on or before September 18,
2015.

The motions should specifically address the allegations as they are set out in the

forthcoming Third Amended Complaint. Where applicable, the motions should acknowledge
and address the rulings this Court has made in related declaratory judgment actions. Nautilus
Insurance Company v. Sharon Alamo, et al, Case No. 4:11-cv-4054; Catalina London Limited
vs. Jeanne Estates Apartments, Inc., Case No. 4:11-cv-4091.
The trial of this matter is currently set for November 30, 2015. (ECF No. 134). The
Court finds that a continuance is necessary in order to allow Plaintiffs to complete service upon
all Defendants and to allow the parties to refile and brief dispositive motions. The trial of this
matter is hereby continued and will be set at a later date. All deadlines in the Final Scheduling
Order (ECF No. 102) that have not already passed should be adjusted accordingly.
IT IS SO ORDERED, this 14th day of August, 2015.
/s/ Susan O. Hickey
Susan O. Hickey
United States District Judge

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