103 F.4th 1121
5th Cir.2024Background
- SKAV, L.L.C. owns a hotel in Louisiana and purchased a surplus lines insurance policy from Independent Specialty Insurance Company.
- The hotel sustained damage during Hurricane Laura in August 2020, prompting SKAV to submit a claim under the policy.
- The insurance policy included a broad arbitration clause requiring all disputes to be settled by arbitration.
- SKAV sued Independent Specialty alleging failure to timely and adequately pay the claim; mediation was unsuccessful.
- Independent Specialty moved to compel arbitration based on the policy clause; the district court denied the motion, siding with precedent that Louisiana law voids such clauses.
- Independent Specialty appealed to the Fifth Circuit, presenting a question of state law: Whether La. R.S. § 22:868 permits arbitration clauses in surplus lines insurance contracts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 22:868 voids arbitration clauses in surplus lines insurance contracts | Arbitration clauses deprive Louisiana courts of jurisdiction, thus barred by § 22:868(A)(2) | Arbitration clause is a type of forum/venue selection clause, permitted by § 22:868(D) | Arbitration clause is void; § 22:868(A)(2) maintains anti-arbitration stance even post-2020 amendment |
| Whether 2020 amendment to § 22:868 allows arbitration clauses for surplus lines insurers | Amendment addresses forum/venue only—not jurisdiction or arbitration | Amendment's allowance of forum/venue selection includes arbitration | Amendment does not overturn anti-arbitration interpretation; no clear authorization for arbitration |
| Whether broad arbitration clause compels threshold questions of arbitrability | No valid agreement to arbitrate exists due to statute | Broad clause should delegate arbitrability issues to the arbitrator | No valid arbitration agreement exists under statute, so court cannot compel arbitration of any issue |
Key Cases Cited
- Safety Nat'l Cas. Corp. v. Certain Underwriters at Lloyds, London, 587 F.3d 714 (5th Cir. 2009) (federal precedent acknowledging Louisiana courts' interpretation of anti-arbitration policy)
- Creekstone Juban I, L.L.C. v. XL Insurance America, Inc., 282 So. 3d 1042 (La. 2019) (forum- and venue-selection clauses are permitted, but do not deprive courts of jurisdiction under § 22:868)
- Doucet v. Dental Health Plans Mgmt. Corp., 412 So. 2d 1383 (La. 1982) (arbitration clauses in insurance contracts unenforceable under Louisiana law)
- Macaluso v. Watson, 171 So. 2d 755 (La. App. 4 Cir. 1965) (arbitration agreements in insurance contracts deprive state courts of jurisdiction)