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

Filing 79

ORDER denying as moot 62 Motion to Dismiss; denying as moot 69 Motion for Leave to File Amended Counterclaim; granting 76 Motion for Leave to File First Amended Counterclaim. Signed by Honorable David C. Bramlette, III on May 21, 2018. (JBR)

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

PLAINTIFF
CAUSE NO. 5:17-CV-137-DCB-MTP

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

DEFENDANTS

ORDER AND OPINION
Counterclaimant Faraway, LLC moves the Court for an order
withdrawing its proposed amended counterclaim and the motion for
leave to amend associated with it, and granting it leave to file
a revised first amended counterclaim. [Doc. 76]
Background
This insurance-coverage dispute requires the Court to decide
Hudson Specialty Insurance Company’s duties to its insureds, Talex
Enterprises, LLC (“Talex”) and Terrance Alexander, under insurance
policies covering property located at 220-230 Main Street, McComb,
Mississippi (the “Main Street Building”).
The Main Street Building collapsed in July 2017, damaging
nearby buildings and disrupting downtown McComb traffic. In August

2017,

the

City

of

McComb

(the

“City”)

sued

the

Main

Street

Building’s owner —— Talex —— in Pike County Chancery Court, seeking
damages on negligence and public nuisance theories.
In response to the City’s state-court suit, Talex requested
a defense from, and initiated a property coverage claim with,
Hudson

Specialty

Insurance

Company

(“Hudson”)

under

policies

HBD10027329 and HBD10019191 (collectively, the “Policies”).
Hudson denied coverage and filed this declaratory judgment
action in November 2017. See Doc. 1. Hudson asks the Court to
rescind the Policies due to misrepresentations it says Talex or
Alexander made during policy-renewal negotiations. Hudson asks, in
the alternative, for a declaration that the Policies do not cover
the claims the City asserts against Talex and Alexander in the
state-court action.
In addition to Talex, Alexander, and the City, Hudson’s
Complaint names as Defendants seventeen individuals and entities
with an interest in the Main Street Building or a potential claim
against Talex and Alexander arising from that building’s collapse.
Faraway is one of these Defendants.
Faraway holds a mortgage on the Main Street Building. See
Doc. 57-2, p. 1. That mortgage is recorded in a deed of trust,
which is a first lien against the Main Street Building. Faraway
originally counterclaimed against Hudson in February 2018, seeking
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compensatory and punitive damages for breach of contract, tortious
breach of contract, and gross negligence. See Doc. 57. Faraway now
moves

the

Court

Counterclaim

to

for

an

allege

order

claims

permitting
against

it

Hudson

to
for

amend
breach

its
of

contract, tortious breach of contract, gross negligence, and an
equitable lien. See Doc. 76-1. Faraway’s Motion is unopposed.
Faraway’s proposed amended counterclaim alleges that Section
83-1-19 of the Mississippi Code creates an implied insurance
contract

between

it

and

Hudson.

And

that

implied

insurance

contract, Faraway continues, requires Hudson to pay it for the
balance

of

its

mortgage

on

the

Main

Street

Building,

notwithstanding any alleged misconduct by Talex or Alexander.
I
The Court must grant leave to amend “freely” when justice so
requires. FED. R. CIV. P. 15(a)(2). Denial of a motion for leave to
amend requires a “substantial reason.” Jones v. Robinson Property
Grp., L.P., 427 F.3d 987, 994 (5th Cir. 2005). The Court gathers
no reason, much less a “substantial” one, to deny Faraway’s Motion.

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Accordingly,
IT IS ORDERED that Faraway, LLC’s Motion to Withdraw First
Amended

Counterclaim

and

Substitute

Subsequent

First

Amended

Counterclaim [Doc. 76] is GRANTED.
FURTHER ORDERED that Faraway, LLC’s Motion for Leave to File
First Amended Counterclaim [Doc. 69] is DENIED AS MOOT.
FURTHER ORDERED that Hudson Specialty Insurance Company’s
Motion to Dismiss [Doc. 62] Faraway, LLC’s Original Counterclaim
is DENIED AS MOOT.
SO ORDERED, this the 21st day of May, 2018.

/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE

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