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

Filing 267

ORDER granting in part and denying in part 241 Motion in Limine. Signed by District Judge David C. Bramlette, III on 3/20/2020 (sl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION

HUDSON SPECIALTY INSURANCE COMPANY

PLAINTIFF/
COUNTER-DEFENDANT

V.

CIV NO: 5:17-cv-00137-DCB-MTP

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

DEFENDANTS/

OF MCCOMB, MISSISSIPPI, et al.

COUNTER-CLAIMANTS
Order

Before the Court is Plaintiff/Counter-Defendant, Hudson
Specialty Insurance Company (“Hudson”)’s Motion in Limine [ECF
No. 241] seeking a court order limiting the “true facts”
exception to “facts reduced to a sworn or otherwise competent
summary judgment form that was presented to or available to
Hudson Specialty before Defendants/Counter-Plaintiffs executed
the Contract of Assignment of Chose in Action on December 22,
2017.” McComb disputes this limitation.
The limitation that Hudson seeks would prevent the
introduction of depositions taken in the underlying action when
evaluating the issue of whether the “true facts” exception
applies. See [ECF No. 176](providing that discovery is due by
May 22, 2019). Courts in this District and in State court have
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entertained evidence provided by a defendant during his or her
deposition to determine whether an insurer had a duty to defend
under the “true facts” exception. See Acceptance Ins. Co. v.
Powe, 403 F.Supp.2d 552 (S.D. Miss. 2005)(using depositions of
the insured’s employees to determine whether the “true facts”
exception constitutes an occurrence); Auto Ins. Co. of Harford
v. Lipscomb, 75 So.3d 557, 559–60 (Miss. 2011). Similarly,
Courts have considered an affidavit submitted by the insured in
opposition to summary judgment when determining if the “true
facts” exception applies. Nationwide Mut. Fire Ins. Co. v.
Knight, No. 1:07cv1082, 2008 WL 4286507, at 5–6 (S.D. Miss.
Sept. 16, 2008)(“Because Knight has submitted an affidavit that
plainly contradicts the complaints’ allegations, the Court must
determine whether Knight’s affidavit has produced ‘true facts’
under Mississippi law.”). Therefore, it is hereby ordered that
Hudson’s request to limit the “true facts” exception to facts
reduced to a sworn or otherwise competent summary judgment form
presented to or available to Hudson before December 22, 2017 is
denied.
Hudson moves to exclude reference to the contents of prior
or subsequently proposed (but not filed) versions of the
Complaint, alleging that they are not relevant to a “true facts”
analysis and would create a danger of unfair prejudice and/or
jury confusion. Hudson states that McComb’s First Amended
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Complaint and Mayor Whitney Rawlings’ Amended Affidavit in
Support of Application for Attachment in Chancery (“Amended
Affidavit”) constitute the operative pleadings in the underlying
state court action. Mayor Rawlings’ Amended Affidavit is not
attached to the First Amended Complaint but is included as an
attachment to McComb’s Proposed, but not filed, Second Amended
Complaint [ECF No. 1-6] which Hudson has moved to exclude.
Hudson alleges that operative pleading – the first amended
Complaint – has incorporated the affidavit of Mayor Rawlings by
reference. The First Amended Complaint states:
“In support of its application for an Order of
attachment, the Plaintiff will provide to the Court
the Affidavit of Whitney Rawlings, the Mayor of the
City of McComb, whose Affidavit contains the
following…”
Rule 10 of the Federal Rules of Civil Procedure addresses
the required form of pleadings. Rule 10(c) states:
“(c) Adoption by Reference; Exhibits. A statement in a
pleading may be adopted by reference elsewhere in the
same pleading or in any other pleading or motion. A
copy of a written instrument that is an exhibit to a
pleading is a part of the pleading for all purposes.”
A party may incorporate parts of a prior pleading by referring
to them in a new pleading. See Commentary to Rule 10(emphasis
added). The commentary to Rule 10 explains that “Rule 10 only
permits the incorporation of contents from pleadings. Rule 10
does not authorize parties to incorporate by reference the

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contents of earlier motions or other papers.” However, the
commentary also notes:
Documents “referenced” but not attached. Technically,
only an “exhibit” to a pleading becomes part of the
pleading under Rule 10(c). However, when ruling on
motions to dismiss under Rule 12(b)(6) or motions for
judgment on the pleadings under Rule 12(c), courts can
also consider documents that the plaintiff refers to
and relies on if they are central to the plaintiff's
complaint and there is no dispute about their
authenticity. “Referenced” documents may be matters of
public record, submitted either as an attachment to
the defendant's answer or as an attachment to a
pleadings motion. It is not enough that the plaintiff
knows of or even possesses a document; the plaintiff
must rely on the document in its complaint in order
for the court to consider it to be part of the
pleadings.
The amended affidavit was signed on October 20, 2017, after the
First Amended Complaint was signed. [ECF No. 1-5](showing the
Complaint was signed on September 11, 2017). The First Amended
Complaint could not have relied on a document that was created
after the First Amended Complaint was filed. Therefore, the
Amended Affidavit, which was attached to a document that was not
filed in the state court proceeding, and was not relied upon in
the creation of the First Amended Complaint, cannot be a part of
the operative pleadings in the state court action.
As to the original Complaint filed in state court, McComb
acknowledges that an amended Complaint supersedes and renders an
original pleading inoperative. However, McComb claims that the
original Complaint is relevant because Hudson denied Talex’s
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request for a defense in the underlying state action based on
the allegations of McComb’s original pleading. Ordinarily, the
duty to defend is determined by examining the latest, and only
the latest, amended pleadings. Rhodes v. Chicago Ins. Co., 719
F.2d 116, 119 (5th Cir. 1983). If there is an issue as to
whether the duty to defend arose under the original or the first
amended Complaint, the district court must examine both versions
of the Complaint to determine under which version the duty
arose. Id. at 119–20. Energy Res., LLC v. Petroleum Sols. Int'l,
LLC, No. CIV.A. H:08-656 (S.D. Tex. Aug. 17, 2011).
The Court agrees that the original Complaint is relevant to
the issue of whether some allegation within the underlying
Complaint triggered Hudson’s duty to defend, an integral
component of this lawsuit. Therefore, the Court hereby denies
Hudson’s request to exclude reference to McComb’s original
Complaint in the Chancery Court of Pike County, Mississippi.
Hudson also moves to exclude any reference to the Proposed
Second Amended Complaint in the state court action. The Northern
District of Mississippi has considered the question of whether a
court should consider a proposed amended complaint in the state
court action when determining whether the insurer had a duty to
defend. The court found that the Defendant “cites no authority
which would support the proposition that the allegations of the

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complaint rule is inapplicable based on the existence of a
proposed amended complaint which has not been filed.” Wesco Ins.
Co. v. Archer Landscape Group, LLC, No. 1:16-cv-165-DMB-DAS,
2018 WL 6112411, at *5 (N.D. Miss. Nov. 21, 2018). The Northern
District did not examine the proposed amended complaint but
relied on the governing state court complaint. Id. The Court
hereby orders the exclusion of any reference to the non-filed
proposed second amended complaint. As to the affidavit signed by
Mayor Rawlings and other issues, as well, these may be proper
for cross examination.
Moreover, Hudson moves to exclude any evidence of and
testimony regarding settlement demands, offers, negotiations,
and agreements. Defendants/Counter-Claimants concede that such
evidence or testimony should be excluded, and the Court,
therefore, hereby so orders.
Hudson moves to exclude evidence or testimony regarding Dr.
Terrance Alexander (“Dr. Alexander”)’s personal circumstances.
Hudson specifically references the passing of Dr. Alexander’s
wife, financial circumstances of Dr. Alexander, and/or the
impact that Hudson’s positions (on rescission and/or coverage),
investigation, and/or assertion of claims has had on Dr.
Alexander. Defendants/Counter-Claimants partially oppose this
request, and state “[Hudson’s] request for the exclusion of all

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personal and family matters relating to Dr. Alexander is too
broad and should be denied. It is common in trials for a party
or witness to share their background information with the jury
even though the information is not particularly relevant to any
party’s claims or defense.” [ECF No. 246] at 1–2. The Court will
monitor the testimony regarding Dr. Alexander and will sustain
such objections to evidence that the Court determines to be
irrelevant.
Hudson moves to exclude evidence that the subject collapse
was caused by any act or omission attributable to Talex
Enterprises, LLC (“Talex”), Jubilee Performing Arts Center, Inc.
(“Jubilee”), and/or Dr. Alexander. If this was agreed to at the
August 2, 2019 Settlement Conference, this evidence is hereby
excluded.
Hudson moves to prevent Defendant/Counter-Plaintiff Board
of Mayor and Selectmen of McComb, Mississippi (“McComb”) from
contradicting its sworn discovery response in which it denied
that any act or omission attributable to Talex, Jubilee, and/or
Dr. Alexander caused or contributed to McComb’s damages.
Therefore, Hudson requests that the Court prevent McComb from
contradicting the aforementioned discovery answers by
identifying or inferring that any act or omission attributable
to Talex, Jubilee, or Dr. Alexander caused or contributed to

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McComb’s claimed damages. In its response, McComb states that is
has “no intention of introducing evidence in contradiction to
their sworn discovery responses.” [ECF No. 246] at 3. The Court,
therefore, hereby so orders.
SO ORDERED this the 20th day of March, 2020.

/s/ David Bramlette__________
UNITED STATES DISTRICT JUDGE

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