Canopius US Insurance, Inc. v. Johnson et al

Filing 69

ORDER denying as moot 39 Motion to Dismiss for Lack of Jurisdiction; granting in part and denying in part 43 Motion for Leave to File; denying as moot 55 Motion for Summary Judgment. Signed by Honorable Susan O. Hickey on August 14, 2015. (mll)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
TEXARKANA DIVISION
CANOPIUS US INSURANCE, INC.,
formerly known as OMEGA US
INSURANCE, INC.

VS.

PLAINTIFF

CASE NO. 13-CV-4079

STEVE JOHNSON, et al.

DEFENDANTS
ORDER

Before the Court is Plaintiff’s Motion for Leave to File Amended Complaint. (ECF No.
43). Certain Defendants have filed a response. 1 (ECF No. 53). The Court finds this matter ripe
for consideration.
Plaintiff’s Complaint (ECF No. 1) seeks a declaration from the Court regarding
Plaintiff’s contractual obligations to defend and indemnify Defendant-Insureds Steve Johnson
and Donn Wolf in cases before this Court and Arkansas state courts. The underlying cases
referenced in the 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. 4:08-cv-4113; and
Ondrisek, et al. v. Kolbek, Case No, 4:09-cv-4100.
Since the filing of Plaintiff’s Complaint, the Kolbek case before this Court has been
dismissed. (Case No. 4:10-cv-4124, ECF Nos. 716 & 722). After the dismissal 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. 44, Exh. 7). When the case was re-filed, the defendants were limited to

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Certain Defendants are Claimants Seth Calagna, Amy Eddy, Nicole Farr, Summer Hagan, Desiree Kolbek,
Spencer Ondrisek, Jeanette Orlando, Jamie Rodriguez, and Pebbles Rodriguez.
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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.
On November 25, 2014, the Kolbek plaintiffs filed a second lawsuit in the Miller County
Circuit Court. This second lawsuit was against Plaintiff Canopius US Insurance, Inc., as well as
Canopius Capital Two Limited and American Western Home Insurance Company. The claims
were brought under Arkansas’s direct action statute codified at Ark. Code Ann. § 23-89-101.
This “Direct Action Lawsuit” seeks to hold these insurance carriers liable for the
$525,000,000.00 default judgment entered against Twenty First Century Holiness Tabernacle
Church (“TFC”) in the Kolbek state suit. 2 According to Plaintiff, the Direct Action Lawsuit is the
first demand by any party for coverage of TFC under any of Plaintiff’s insurance policies.
Plaintiff’s Motion for Leave to File Amended Complaint requests that Plaintiff be
permitted to amend its Complaint to (1) address the dismissal of the Kolbek federal suit; (2)
address the filing of the Kolbek state suit; (3) address the filing of the Direct Action Lawsuit; and
(4) add TFC as a defendant in this matter so that Plaintiff can seek a determination of whether it
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
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TFC is an alleged entity of Tony Alamo Christian Ministries. TFC was also a Defendant in the Kolbek federal suit.

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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 Plaintiff’s Motion for Leave to File Amended
Complaint (ECF No. 43) should be granted in part and denied in part. The Court grants
Plaintiff’s request to amend their Complaint to address the dismissal of the Kolbek federal suit
and the filing of 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. 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 Plaintiff to include this updated case
information in an amended complaint.
The Court denies Plaintiff’s request to amend its 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, 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 some Defendant-Insureds in this case—was filed in this Court by former church

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members in 2014. 3 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 Plaintiff is not
being permitted to amend its Complaint to seek a declaratory judgment on new coverage issues
arising in the Direct Action Lawsuit, Plaintiff is free to file a separate declaratory judgment
action to address these matters. 4
For the reasons stated above, the Court finds that Plaintiff’s Motion for Leave to File
Amended Complaint (ECF No. 43) is hereby GRANTED in part and DENIED in part.
Plaintiff must file its Amended Complaint within five (5) days of the entry of the order granting
leave to amend.
In light of the forthcoming Amended Complaint, the Court finds that the currently
pending Motion to Dismiss and Motion for Summary Judgment (ECF Nos. 39 & 55) 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
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.
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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Griffin, et al v. Alamo, et al, Case No. 4:14-cv-4065.

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

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