Hudson Specialty Insurance Company v. Talex Enterprises, LLC et al

Filing 243

ORDER granting in part and denying in part 200 Motion for Partial Summary Judgment. The Motion for Partial Summary Judgment Payment of Faraway, LLC [ECF 200] is granted, in part. Hudson Specialty may issue loss payment(s) totaling $660,000.0 0 to Faraway pursuant to the Talex Policys Business and Personal Property Coverage Form; such payment(s) will exhaust the Forms limit of insurance applicable to the JPAC building; but such payment(s) will not result in a waiver of nor otherwise prejudice Hudson Specialtys claim to have the Talex Policy declared void ab initio Signed by District Judge David C. Bramlette, III on 08/23/2019 (sl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
HUDSON SPECIALITY INSURANCE COMPANY
V.

PLAINTIFF/
COUNTER-DEFENDANT
CASE NO. 5:17cv137-DCB-MTP

TALEX ENTERPRISES, LLC; JUBILEE PERFORMING
ARTS CENTER, INC.; TERRANCE L. ALEXANDER; the
BOARD OF MAYOR AND SELECTMEN
OF MCCOMB, MISSISSIPPI, et al.

DEFENDANTS/
COUNTER-PLAINTIFFS

AGREED ORDER GRANTING, IN PART, MOTION FOR PARTIAL SUMMARY
JUDGMENT – PAYMENT OF FARAWAY, LLC [ECF 200]
This matter is before the Court on the Motion for Partial Summary Judgment
– Payment of Faraway, LLC [ECF 200] filed by Plaintiff/Counter-Defendant Hudson
Specialty Insurance Company. The Court has reviewed the submissions in support of
and opposition to the Motion and is advised of agreed resolutions between Hudson
Specialty and Defendants/Counter-Plaintiffs Talex Enterprises, LLC, Jubilee
Performing Arts Center, Inc., Terrance L. Alexander, the Board of Mayor and
Selectmen of McComb, Mississippi, and Faraway, LLC. The Court is thus prepared
to rule and finds that the Motion should be granted, in part, with any remaining
aspects of the Motion to be dealt with by separate order or at trial.
In its Motion, Hudson Specialty requested that the Court make declarations,
as a matter(s) of law, to support a loss payment(s) to Faraway under the Business
and Personal Property Coverage Form of Hudson Specialty Policy No. HBD 10027329
(the “Talex Policy”) without prejudice to Hudson Specialty’s claim that the policy

should otherwise be declared void ab initio. While the Court will not make the specific
declarations requested in the Motion, it will make such declarations as are warranted
under the undisputed material facts supporting the parties’ agreed resolutions.
The following material facts are not in dispute. Hudson Specialty issued the
Talex Policy on July 20, 2017. The Talex Policy’s Business and Personal Property
Coverage Form insured, inter alia, a building located at 230-232 Main Street in
McComb, Mississippi (the “JPAC building”) that, at the time of the Talex Policy’s
issuance, was owned by Talex subject to a Promissory Note and Deed of Trust held
by Faraway. The Business and Personal Property Coverage Form identifies Talex as
the “Named Insured” and Faraway as the “Mortgageholder” for the JPAC building.
This Form provides a limit of insurance of $660,000.00 for loss of and/or damage to
the JPAC building, subject to its other terms and conditions, including those for
coverage and loss payment. On July 23, 2017, the JPAC building’s roof partially
collapsed, resulting in more than $660,000.00 in damage to the JPAC building. Based
upon remaining principal, chargeable interest, and attorney’s fees due under the
Promissory Note, Faraway claims an interest in the JPAC building in the amount of
$660,000.00. Faraway demands that Hudson Specialty pay the Business and
Personal Property Coverage Form’s full limit of insurance as to the JPAC building,
asserting that the collapse resulted, at least in part, from what Hudson Specialty
agrees would be a “Covered Cause of Loss.” Discovery did not yield any evidence of
knowledge or conduct by or attributable to Faraway which waived or jeopardized any
rights it may exercise under the Form; and the parties now agree that Faraway is

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entitled to loss payment(s) which will exhaust this particular limit of insurance.
Those material facts being undisputed, the Court observes that Hudson
Specialty’s primary claim in this action is for the Court to declare the Talex Policy 1
void ab initio. However, as Hudson Specialty and the parties agree, the terms of the
Talex Policy’s Business and Personal Property Coverage Form and Miss. Code Ann.
§ 83-13-9 grant Faraway an independent right to loss payment for covered property
damage (up to the amount of Faraway’s interest in the JPAC building, subject to the
limit of insurance). As they also agree, Faraway’s independent right to loss payment
may not be voided solely upon the alleged knowledge or conduct of another; nor would
payment to Faraway result in a waiver of or otherwise prejudice Hudson Specialty’s
claim for rescission of the Talex Policy. Despite prior arguments, the parties now
agree that Faraway is entitled to a loss payment(s) totaling $660,000.00 and the effect
of said payment(s) would be to exhaust the Business and Personal Property Coverage
Form’s $660,000.00 limit of insurance for covered property damage to the JPAC
building.
The Court thus declares, as a matter of law, that Hudson Specialty may issue
loss payment(s) totaling $660,000.00 to Faraway pursuant to the Talex Policy’s
Business and Personal Property Coverage Form and that such payment(s) will
exhaust the Form’s limit of insurance applicable to the JPAC building. The Court
further declares, as a matter of law that such payment(s) will not result in a waiver

Hudson Specialty also asks for the Court to declare a separate policy (Hudson Specialty
Policy No. HBD 10019191 (the “2017 Alexander Policy”) void ab initio; but that policy is not
at issue in this Motion.
1

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of nor otherwise prejudice Hudson Specialty’s claim to have the Talex Policy declared
void ab initio. The Court passes on making further declarations at this time; and any
further declarations await review of other pending motions.
IT IS THEREFORE ORDERED AND ADJUDGED that the Motion for Partial
Summary Judgment – Payment of Faraway, LLC [ECF 200] is granted, in part; and
it is hereby declared that: Hudson Specialty may issue loss payment(s) totaling
$660,000.00 to Faraway pursuant to the Talex Policy’s Business and Personal
Property Coverage Form; such payment(s) will exhaust the Form’s limit of insurance
applicable to the JPAC building; but such payment(s) will not result in a waiver of
nor otherwise prejudice Hudson Specialty’s claim to have the Talex Policy declared
void ab initio.
SO ORDERED AND ADJUDGED this the 23rd day of August, 2019.

_____/s/ David Bramlette_____________________
UNITED STATES DISTRICT COURT JUDGE

SUBMITTED BY:
s/T.L. “Smith” Boykin, III
W. WRIGHT HILL, JR. (9560)
T. L. “SMITH” BOYKIN, III (101256)
Counsel for Hudson Specialty Insurance Company

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