Richards Clearview City Center, LLC and Richard's Canal Street Property, LLC Versus Starr Surplus Lines Insurance Company

RICHARDS CLEARVIEW CITY CENTER, NO. 24-C-104
LLC AND RICHARD'S CANAL STREET
PROPERTY, LLC FIFTH CIRCUIT

VERSUS COURT OF APPEAL

STARR SURPLUS LINES INSURANCE STATE OF LOUISIANA
COMPANY

ON APPLICATION FOR SUPERVISORY REVIEW FROM THE
TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 845-870, DIVISION "O"
HONORABLE DANYELLE M. TAYLOR, JUDGE PRESIDING

June 05, 2024

TIMOTHY S. MARCEL
JUDGE

Panel composed of Judges Susan M. Chehardy,
Scott U. Schlegel, and Timothy S. Marcel

WRIT DENIED
TSM
SMC

CONCURS WITH REASONS
SUS

COUNSEL FOR PLAINTIFF/RESPONDENT,
RICHARDS CLEARVIEW CITY CENTER, LLC AND RICHARD'S CANAL
STREET PROPERTY, LLC
Richard P. Voorhies, III
William A. Barousse

COUNSEL FOR DEFENDANT/RELATOR,
STARR SURPLUS LINES INSURANCE COMPANY
H. Alton Johnson, III
Kevin W. Welsh
Lee Ann C. Thigpen

MARCEL, J.

In this case arising from first-party insurance claims on properties damaged

during Hurricane Ida, defendant-relator Starr Surplus Lines Insurance Company

(“Starr”) seeks supervisory review of the January 17, 2024 trial court judgment

denying its declinatory exception of improper venue. For the following reasons,

we affirm the judgment of the trial court.

BACKGROUND AND PROCEDURAL HISTORY1

On August 29, 2021, wind and water from Hurricane Ida caused significant

damage to properties located at 3201 Houma Boulevard and 4230 Veterans

Memorial Boulevard in Metairie, Louisiana owned by plaintiffs Richard's

Clearview City Center, LLC and Canal Street Property, LLC, (“Richards”). At

that time, the properties were subject to a surplus lines policy of insurance (no.

SLSTPTY11510021) issued by Starr, that specifically provided $20,000,000.00 in

coverage for damages caused by hurricanes, wind, and named storms for a twelve

month term from August 1, 2021 to August 1, 2022.

Richards reported their losses to Starr on January 21, 2022, and submitted a

proof of loss totaling $1,241,806.70 for both properties to Starr on February 4,

2022. Starr inspected the damaged properties on March 3, 2022, and subsequently

issued loss payments for damage to the 4230 Veterans Memorial Boulevard

property in the amount of $5,147.00. No loss payments were issued for the alleged

damage at 3201 Houma Boulevard.

Richards instituted legal action against Starr in the 24th Judicial District

Court for the Parish of Jefferson (“the District Court”) on August 25, 2023 with the

filing of a Petition for Damages and Jury Demand seeking to recover policy

1
This case and its companion, 24-C-114, involve multiple properties located in Metairie, Louisiana,
owned by affiliate companies that were all damaged by Hurricane Ida. While the facts and background of
these cases contain slight differences, they both present the same legal issue to be resolved: the
enforceability of a forum selection clause in a surplus line insurance policy. Though the policies at issue
in each case are separate, they are both issued by Starr and contain identical language on the forum
selection clause. Our analysis in both cases is substantively the same.

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proceeds for property damage under the insurance contract, as well as damages,

penalties, and attorney’s fees for breach of contract and bad faith investigation and

claims handling under La. R.S. 22:1892 and 22:1973.

On September 27, 2023, Starr filed and was granted a Notice of Removal to

the United States District Court for the Eastern District of Louisiana (“the Federal

Court”), invoking that court’s jurisdiction on the grounds of diversity of

citizenship.2 Following the removal, on October 10, 2023, Starr filed its Answer

and Affirmative Defenses in the federal court. In its twenty-ninth affirmative

defense therein, Starr asserts the action must be transferred to a court within the

state of New York pursuant to the mandatory forum selection clause contained in

the surplus line policy. Starr additionally asserts that Richards’ claims are subject

to New York law based upon the choice of law clause also contained in the policy.

That clause states:

e. Choice of Law and Choice of Venue:

No suit, action, or proceeding regarding this POLICY for the recovery of
any claim shall be sustainable in any court of law or equity unless the
Insured shall have fully complied with all the requirements of this POLICY.
The COMPANY agrees that any suit, action, or proceeding against it for
recovery of any claim under this POLICY shall not be barred if commenced
within the time prescribed in the statute of the State of New York. Any suit,
action, or proceeding against the COMPANY must be brought solely and
exclusively in a New York state court or a federal district court sitting within
the State of New York. The laws of the State of New York shall solely and
exclusively be used and applied in any such suit, action, or proceeding,
without regard to choice of law or conflict of law principles.

On October 17, 2023, Richards filed a Motion to Remand for Lack of

Subject Matter Jurisdiction. Starr’s response reported no opposition to the remand.

The Federal Court issued an order remanding the case to the 24th Judicial District

Court on October 26, 2023.

2
According to its application to act as a surplus lines insurer in the State of Louisiana, Starr is domiciled
in the State of Illinois.

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In the District Court, Starr filed a declinatory exception of improper venue

together with a memorandum in support on November 7, 2023, citing the policy’s

forum selection clause. Richards opposed the exception by arguing the forum

selection clause is prohibited by statutes contained in the Louisiana Insurance

Code, and, alternatively, that the forum selection clause violates public policy.

At the January 17, 2024 hearing on the exception, the trial court rendered

judgment in open court denying the exception of improper venue upon a finding

that the forum selection clause is a mechanism used by Starr to escape enforcement

of Louisiana law which it had agreed to follow. Starr’s timely filed application for

supervisory review of that judgment followed.

In its writ application, Starr raises the following assignment of error:

The District Court erred when it failed to enforce the Policy’s New York

forum selection clause notwithstanding the plain language of La. R.S. 22:868(D),

which authorizes surplus lines insurers to include “forum or venue selection

clause[s]” in surplus lines policies.

This writ and its companion present a res nova issue for this Court: whether

forum selection clauses in a surplus lines insurance contract, like the one contained

in the Starr policy, are forbidden or permissible under Louisiana law. This we

consider in our discussion below, beginning with a general overview of the law on

forum selection clauses and the Louisiana Insurance Code, before proceeding to

interpretation of the relevant statutes and final determination on the question.

STANDARD OF REVIEW

Venue is a question of law. Seghers v. LaPlace Equip. Co., Inc., 13-350

(La. App. 5 Cir. 2/12/14), 136 So.3d 64. Appellate review regarding questions of

law is simply a review of whether the trial court was legally correct or legally

incorrect. Yount v. Handshoe, 14-919, (La. App. 5 Cir. 5/28/15), 171 So.3d 381,

384. On legal issues, the appellate court gives no special weight to the findings of

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the trial court, but exercises its constitutional duty to review questions of law de

novo and renders judgment on the record. Id.

DISCUSSION

Forum Selection Clauses in General

A forum selection clause is a contract provision that mandates a particular

state, county, parish, or court as the proper venue in which the parties to an action

must litigate any future disputes regarding their contractual relationship. Fidelak v.

Holmes European Motors, L.L.C., 13-0691 (La. 12/10/13), 130 So.3d 851, 853. In

its review of a service contract, the Louisiana Supreme Court held that forum

selection clauses are generally enforceable and are not per se violative of public

policy in Louisiana. Shelter Mut. Ins. Co. v. Rimkus Consulting Grp., Inc. of

Louisiana, 13-1977 (La. 7/1/14), 148 So.3d 871, 878. More recently, the

Louisiana Supreme Court upheld the forum selection clause in a commercial

property and casualty insurance contract, stating forum selection clauses are

favored because the elimination of uncertainties relative to the location of litigation

by agreement in advance on an acceptable forum to both parties is an indispensable

element of trade, commerce, and contracting. Creekstone Juban I, L.L.C. v. XL Ins.

Am., Inc., 18-0748 (La. 5/8/19), 282 So.3d 1042, 1048. In Creekstone Juban I, the

Supreme Court reemphasized that forum selection clauses are unenforceable and

against public policy in very limited circumstances. Id.

Insurance Contracts and the Louisiana Insurance Code

An insurance policy is a contract, and as such, is the law between the parties.

See, e.g., Muse v. Metro. Life Ins. Co., 193 La. 605, 192 So. 72 (1939); Landry v.

Progressive Sec. Ins. Co., 21-621 (La. 1/28/22), 347 So.3d 712. An insurer is

entitled to impose contractual limitations on its liability and reasonable conditions

on its obligations. Id. However, provisions of an insurance contract which violate

statute or public policy are unenforceable. Id. “The insurance policy is a special

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contract in the sense that it is usually in a printed form furnished by the insurer and

certain policy terms may be required by statute or governed by judicially

recognized considerations of public policy.” 15 La. Civ. L. Treatise, Insurance

Law & Practice § 1:4 (4th ed.), Interpretation of insurance policies.

The underwriting of insurance policies is a commercial activity uniquely

affected with the public interest, and for this reason the Louisiana Legislature

enacted the Louisiana Insurance Code for the purpose of regulating the insurance

industry in all its phases. La. R.S. 22:2; see Hammett v. Fire Ass'n of Philadelphia,

157 So. 323, 328 (La. App. 2 Cir. 11/2/34), aff'd, 181 La. 694, 160 So. 302 (1935).

The laws of this state relative to the insurance industry, and the relationship of

insurers to their insureds and other interested parties, are contained in the twenty-

two chapters of the Insurance Code. See Theriot v. Midland Risk Ins. Co., 95-2895

(La. 5/20/97), 694 So.2d 184, 189.

Engagement in the business of insurance in Louisiana must be in conformity

with the Insurance Code. La. R.S. 22:12. The power to execute and enforce

provisions of the Insurance Code is vested in the Louisiana Commissioner of

Insurance. La. R.S. 22:2. The Insurance Code’s regulatory scheme requires an

“insurer” to be authorized to transact insurance business and defines the types of

insurance which may be sold. La. R.S. 22:12. An “insurer” is defined as “every

person engaged in the business of making contracts of insurance, other than a

fraternal benefit society.” La. R.S. 22:46(14). Insurers must be qualified by the

Louisiana Insurance Commissioner for the type of insurance it offers for sale. La.

R.S. 22:12.

Surplus lines insurers are one of more than a dozen types of insurers

specifically regulated by the Insurance Code. La. R.S. 22:48(14). Surplus lines

property and casualty insurance, the type of policy at issue in this case, is

distinguishable from other types of insurance under the Insurance Code. Under

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Louisiana’s statutory scheme, the vast majority of insurance policies offered in this

state must be through insurers that are “admitted” in Louisiana as insurers

“authorized” by the Insurance Commissioner. However, recognizing that some

consumers have insurable interests for which authorized insurers do not offer

coverage, the Insurance Code provides for issuance of surplus lines insurance

policies. See Enterprise Leasing Co. of New Orleans v. Simmons, 644 So.2d 1297,

1299-1300 (La. App. 4 Cir. 1995) (citing Gray & Co. v. Stiles, 221 So.2d 832, 833-

834 (La. App. 1st Cir. 1969). Surplus lines insurers must receive “approved

unauthorized” status by the Commissioner of Insurance and are permitted to offer

and issue policies only through a licensed surplus lines broker.3 To achieve

“approved unauthorized” status, surplus lines carriers must demonstrate financial

soundness and meet other consumer protection requirements mandated by the

Insurance Code and/or the Commissioner of Insurance.4 Unlike property and

casualty insurance provided by approved authorized insurers, surplus lines

property and casualty insurance policies are generally not subject to the same

regulation of their policy terms and conditions and are not required to obtain

approval from the Commissioner of the policy forms and rates.

Forum Selection Clauses and Louisiana Revised Statute 22:868

Following the Louisiana Supreme Court’s 2019 decision in Creekstone

Juban I, supra, the Louisiana Legislature amended5 the part of the Louisiana

Insurance Code concerning limitations on actions, La. R.S. 22:868, to state, in part:

A. No insurance contract delivered or issued for delivery in this state and
covering subjects located, resident, or to be performed in this state, or any
group health and accident policy insuring a resident of this state regardless
of where made or delivered, shall contain any condition, stipulation, or
agreement either:

3
See La. R.S. 22:432.
4
See La. R.S. 22:431-46.
5
See 2020 Act No. 307 (S.B. 156), effective August 1, 2020. The language stated herein reflects the
current law and the law in effect at the time the parties contracted.

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(1) Requiring it to be construed according to the laws of any other state or
country except as necessary to meet the requirements of the motor
vehicle responsibility laws of such other state or country.
(2) Depriving the courts of this state of the jurisdiction or venue of action
against the insurer.
…
C. Any such condition, stipulation, or agreement in violation of this Section
shall be void, but such voiding shall not affect the validity of the other
provisions of the contract.

D. The provisions of Subsection A of this Section shall not prohibit a forum
or venue selection clause in a policy form that is not subject to approval
by the Department of Insurance.

(Emphasis supplied.)

By this language, La. R.S. 22:868(A) specifically prohibits choice of law

provisions and forum selection clauses in Louisiana insurance policies as null and

void. Defendant Starr claims that Subsection D of 868 “authorizes” surplus lines

insurers to include forum or venue selection clauses. We disagree with Starr’s

proposed interpretation of this statute.

Interpretation of legislation is primarily the search for the legislative intent;

the starting point is the language itself. Cat's Meow, Inc. v. City of New Orleans,

98-0601 (La. 10/20/98), 720 So.2d 1186, 1198. See also La. R.S. 24:177(B)(1).

When a law is clear and unambiguous, and its application does not lead to absurd

consequences, it shall be applied as written, with no further interpretation made in

search of the legislative intent. La. C.C. art. 9. When the words of a law are

ambiguous, their meaning must be sought by examining the context in which they

occur and the text of the law as a whole. La. C.C. art. 12. When analyzing

legislative history, it is presumed the Legislature's actions in crafting a law were

knowing and intentional, and the Legislature is presumed to have enacted each

statute with deliberation and with full knowledge of all existing laws on the same

subject. Louisiana Safety Ass'n of Timbermen Self-Insurers Fund v. Louisiana Ins.

Guar. Ass'n, 09-0023, (La. 6/26/09), 17 So.3d 350, 356; Theriot v. Midland Risk

Ins. Co., 95-2895, (La. 5/20/97), 694 So.2d 184, 186.

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The assertion that Subsection D of La. R.S. 22:868 “authorizes” surplus line

insurers to include forum selection clauses, as Starr claims, is an incorrect and

incomplete reading of the statute. We observe first that the statute itself makes no

express reference to surplus lines insurers. Only by referencing other provisions in

the Insurance Code can one understand which policy forms are or are not subject to

approval from the Department.6 In addition, Starr’s claim ignores the first half of

Subsection D that states “the provisions of Subsection A of this Section shall not

prohibit a forum or venue selection clause.” The plain, unambiguous meaning of

this language is that Subsection D of La. R.S. 22:868 creates an exception to the

general and broad prohibition on forum selection clauses in Louisiana insurance

policies stated in Subsection A. The language of Subsection D does not expressly

authorize the use of forum selection clauses in all surplus lines policies, rather, it

creates an exception to the limits on such clauses stated in Subsection A of La.

R.S. 22:868.

Regulations Particular to Surplus Lines Insurance

The analysis of whether the forum selection clause in the Starr surplus lines

insurance policy is permissible under Louisiana law does not stop at La. R.S.

22:868, but requires us to review the rest of the Louisiana Insurance Code for

relevant and applicable provisions. Statutes particular to surplus lines insurers are

found in Chapter 2, entitled “Requirements for Insurers and Other Risk Bearing

Entities,” Part I entitled “Kinds of Insurers”, Subpart O, entitled “Surplus Lines.”

La. R.S. 22:431, et seq. Louisiana Revised Statute 22:431 directs that liberal

construction and application must be given to statutes concerning surplus lines

insurance to promote six illustrative underlying purposes. Identified as underlying

purposes of these statutes include:

6
Specifically, La. R.S. 22:446(A) provides that the Commissioner of Insurance shall not require surplus
lines insurers to file or seek approval of their forms for property insurance.

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(1) Protecting persons seeking insurance in this state.
(2) Facilitating the placement of surplus lines insurance with
reputable and financially sound unauthorized insurers
under the provisions of this Subpart.
(3) Establishing a system of regulation that permits orderly
access to surplus lines insurance in this state and
encourages authorized insurers to make new and
innovative types of insurance available to consumers in
this state.
(4) Providing a system through which persons may purchase
insurance from approved unauthorized insurers or eligible
unauthorized insurers pursuant to this Subpart.
(5) Protecting the revenues of this state.
(6) Providing a system pursuant to this Subpart that subjects
unauthorized insurance activities in this state to the
jurisdiction of the commissioner of insurance and state and
federal courts in suits by or on behalf of the state.

See La. R.S. 22:431.

One of the statutes that we are legally mandated to liberally construe and

apply concerns the venue for suits against surplus lines insurers. Louisiana

Revised Statute 22:442(A) states:

An unauthorized insurer shall be sued, upon any cause of action
arising in this state under any contract issued by it as a surplus lines
contract, pursuant to this Subpart, in the district court of the parish in
which the cause of action arose.

Richards argues that the Legislature’s use of the word “shall” makes the

application of La. R.S. 22:442(A) mandatory. We agree. As used in statutes, the

word “shall” is mandatory. Warren v. HDI Glob. Ins. Co., 21-570 (La. App. 5 Cir.

5/16/22), 341 So.3d 1249, 1257, writ denied, 22-938 (La. 11/1/22), 349 So.3d 10,

and 22-1002 (La. 11/1/22), 349 So.3d 5 (citing McGlothlin v. Christus St. Patrick

Hospital, 10-2775 (La. 7/1/11), 65 So.3d 1218, 1228).

While the language of La. R.S. 22:442(A) has never before been interpreted

in reported jurisprudence, the Louisiana Supreme Court has given meaning to the

phrase “shall be sued” that is contained in other statutes. In Black v. St. Tammany

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Par. Hosp., 08-2670 (La. 11/6/09), 25 So. 3d 711, 718–19, the Supreme Court

examined the phrase “shall be sued” as contained in La. R.S. 13:5104(B) and

46:1063. “Shall be sued,” the Court found, is the legislative expression of venue

applicable to all actions involving hospital service districts, which supersedes the

general venue provisions of the Louisiana Code of Civil Procedure. Id. Similarly,

the language of La. R.S. 22:442(A) clearly and unambiguously sets forth the

exclusive venue for actions against surplus lines insurers for all causes of action

arising in this state under a surplus lines insurance contract. There are no

exceptions to this mandatory provision stated anywhere in the Louisiana Insurance

Code.7

The Petition filed in this case is a first party claim for insurance coverage

under a surplus lines policy for alleged damage to immovable properties located in

Jefferson Parish, Louisiana. As such, the exclusive venue for this action is in the

24th Judicial District Court. In light of La. R.S. 22:442(A), we therefore declare

the forum selection clause contained in the Starr surplus lines insurance policy

null, void, and unenforceable.8

Purported Conflict between Louisiana Revised Statutes 22:868 and 22:442

Starr argues that La. R.S. 22:868 and 22:442 may be harmonized by reading

La. R.S. 22:442(A) as establishing the default venue in Louisiana for actions

against surplus lines insurers while La. R.S. 22:868(D) authorizes a surplus lines

insurer and insured to contractually agree to a non-Louisiana venue for litigation.

Alternatively, Starr argues that if there is a conflict between 22:442(A) and

22:868(D), then the latter must prevail based on its characterization of the latter

7
In addition to identifying the venue for legal action arising from a cause of action in this state under a
surplus lines contract, La. R.S. 22:442 also prescribes service of process against and jurisdiction over
surplus lines insurers. Under paragraph B, the legislature designates the Louisiana Secretary of State as
the agent for service of process for surplus lines insurers. La. R.S. 22:442(B). Further, service of process
upon the Louisiana Secretary of State confers the court in which the legal action is filed with personal
jurisdiction over the surplus lines insurer. La. R.S. 22:442(B).
8
See La. C.C. art. 7, (“Persons may not by their juridical acts derogate from laws enacted for the
protection of the public interest. Any act in derogation of such laws is an absolute nullity.”)

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being the more specific statute on the subject matter with the former being more

general. Both of these arguments are without merit.

First, Starr’s claim that La. R.S. 22:442(A) merely presents a default venue

is contradicted by the express use of the words “shall be sued” in that statute. As

noted above, this language is mandatory, and has been used by the Legislature to

express its intent to provide exclusive venue for particular actions. Had the

Legislature intended the provision to be a default, it could have used the more

permissive “may” to indicate that actions in other venues would be allowed.

Furthermore, as noted above, the language of La. R.S. 22:868(D) does not

expressly authorize a surplus lines insurer and insured to contractually agree to a

non-Louisiana venue for litigation. The language of Subsection D is not an

authorization, but rather a specific exception to the general prohibition on forum

selection clauses in Louisiana insurance policies stated in La. R.S. 22:868(A).

Addressing Starr’s alternative argument, we disagree with Starr’s

characterization of La. R.S. 22:868(D) as the more specific statute that must

prevail. It is a well-settled rule of statutory construction that when interpreting

potentially conflicting statutes, the statute specifically directed to the matter at

issue prevails over a statute more general in character, unless there is legislative

intent or expression regarding which statute is to control, such as the phrase

“notwithstanding any other provision of law to the contrary.” Salathe v. Par. of

Jefferson through Dep't of Sewerage, 19-427 (La. App. 5 Cir. 7/15/20), 300 So.3d

460, 468, writ denied, 20-01027 (La. 11/4/20), 303 So.3d 642. In its statutory

enactment identifying the court in which legal action is to be brought arising from

a surplus lines insurance policy, the Louisiana Legislature did not include such

language. The language of La. R.S. 22:442 is plain, clear, and unambiguous.

The declinatory exception of improper venue raises the question of where a

legal action is to properly be brought. La. C.C.P. art. 925. La. R.S. 22:442

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specifically addresses the venue where actions shall be brought against surplus

lines insurers. In contrast, La. R.S. 22:868 states a general prohibition on forum

selection clauses in Louisiana insurance policies. There is no indication that the

Legislature intended the additional language of La. R.S. 22:868(D) to supersede,

alter, or repeal the mandatory venue provisions for surplus lines insurers of La.

R.S. 22:442(A). On the contrary, as noted above, the express language of La. R.S.

22:868(D) makes it clear that it is an exception to the rule stated in La. R.S.

22:868(A), not to any other statute. Starr’s argument is without merit.

CONCLUSION

Upon de novo review of relator’s declinatory exception of improper venue,

we find that the forum selection clause stated in the Starr surplus lines insurance

policy no. SLSTPTY11510021 that requires any suit, action, or proceeding against

Starr to be brought solely and exclusively in a New York state court or a federal

district court sitting within the State of New York to be null, void, and

unenforceable under La. R.S. 22:442(A) which mandates all causes of action

arising under any contract issued by an unauthorized insurer as a surplus lines

contract be brought in the district court of the parish in which the cause of action

arose. Louisiana Revised Statute 22:868(D), which provides an exception to the

general prohibition on forum selection clauses in Louisiana insurance policies

stated in La. R.S. 22:868(A), does not supersede, alter, or repeal the mandatory

venue provisions for surplus lines insurers stated in La. R.S. 22:442. Accordingly,

the ruling of the trial court is affirmed and this writ is denied.

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RICHARDS CLEARVIEW CITY NO. 24-C-104
CENTER, LLC AND RICHARD'S
CANAL STREET PROPERTY, LLC FIFTH CIRCUIT

VERSUS COURT OF APPEAL

STARR SURPLUS LINES INSURANCE STATE OF LOUISIANA
COMPANY

SCHLEGEL, J., CONCURS WITH REASONS

I concur with the majority’s decision to deny Starr’s declinatory

exception of improper venue but for different reasons.

The seminal decision by the Louisiana Supreme Court in Shelter

Mutual Ins. Co. v. Rimkus Consulting Group, Inc. of Louisiana, 13-1977

(La. 7/1/14), 148 So.3d 871, 878, held that forum selection clauses in

contracts are generally enforceable and are not per se violative of public

policy in Louisiana.

We hold that [forum selection] clauses should be enforced in
Louisiana unless the resisting party can ‘clearly show that
enforcement would be unreasonable and unjust, or that the clause
was invalid for such reasons as fraud or overreaching.... [or that]
enforcement would contravene a strong public policy of the forum
in which suit is brought, whether declared by statute or by judicial
decision.’

Id. at 881 (citation omitted.)

Additionally, in Creekstone Juban I, L.L.C. v. XL Ins. Am., Inc., 18-

0748 (La. 5/8/19), 282 So.3d 1042, 1048, the Louisiana Supreme Court

determined that La. R.S. 22:868 “does not indicate that Louisiana has a

strong public policy against forum-selection clauses in insurance

contracts.”

After Creekstone, the Louisiana legislature amended La. R.S.

22:868 in 2020 in two important respects. The legislature added the

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words “or venue” to La. R.S. 22:868(A)(2) and added a new section (D),

which provides: “[t]he provisions of Subsection A of this Section shall

not prohibit a forum or venue selection clause in a policy form that is not

subject to approval by the Department of Insurance.”

Consequently, the current version of La. R.S. 22:868 provides in

pertinent part:

A. No insurance contract delivered or issued for delivery in
this state and covering subjects located, resident, or to be performed
in this state, or any group health and accident policy insuring a
resident of this state regardless of where made or delivered, shall
contain any condition, stipulation, or agreement either:
(1) Requiring it to be construed according to the laws
of any other state or country except as necessary to meet the
requirements of the motor vehicle financial responsibility
laws of such other state or country.
(2) Depriving the courts of this state of the jurisdiction
or venue of action against the insurer.
***
C. Any such condition, stipulation, or agreement in violation
of this Section shall be void, but such voiding shall not affect the
validity of the other provisions of the contract.
D. The provisions of Subsection A of this Section shall not
prohibit a forum or venue selection clause in a policy form that is
not subject to approval by the Department of Insurance.

Also relevant to the analysis are the provisions of La. R.S.

22:446(A), which provide that “[t]he commissioner [of insurance] shall

not require surplus lines insurers to file or seek approval of their forms

and rates for property and casualty insurance except as provided in R.S.

22:1456(B)(2) relative to public carrier vehicles.” (Emphasis added).

Thus, in light of the amendment to La. R.S. 22:868, I would find

that surplus lines insurers fall under the exception created by the

legislature under section D as they are not required to have their forms

approved by the Insurance Commissioner. Accordingly, surplus lines

insurers, like Starr, are generally permitted to include forum selection

clauses in their policies. However, as noted in Shelter Mutual, forum

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selection clauses should be enforced, unless, as in this case, the clause

would contravene a strong public policy of the forum in which suit is

brought, as declared by statute. Shelter Mut. Ins. Co., 148 So. 3d at 881.

The insurance policy issued by Starr contains more than a forum

selection clause though. It also includes a choice of law provision. The

combined “Choice of Law and Choice of Venue” provision of the subject

policy states:

No suit, action, or proceeding regarding this POLICY for the
recovery of any claim shall be sustainable in any court of law or
equity unless the Insured shall have fully complied with all the
requirements of this POLICY. The COMPANY agrees that any suit,
action, or proceeding against it for recovery of any claim under this
POLICY shall not be barred if commenced within the time
prescribed in the statutes of the State of New York. Any suit, action,
or proceeding against the COMPANY must be brought solely and
exclusively in a New York state court or a federal district court
sitting within the State of New York. The laws of the State of New
York shall solely and exclusively be used and applied in any such
suit, action, or proceeding, without regard to choice of law or
conflict of law principles. (Emphasis added).

This language creates a dilemma for the Court because the record in

this case indicates that if this case is transferred to New York, Starr will

argue in the New York courts that New York law applies.1 And it appears

from the decision rendered in Louisiana Revitalization Fund LLC v. Starr

Surplus Lines Insurance Co., No. 23CV1006VSBVF, 2024 WL 1337617

(S.D.N.Y. Mar. 27, 2024)(Figueredo, Mag. J., Report and

Recommendation) that the New York courts would apply New York law

to the subject contract, which would be in direct violation of Louisiana’s

strong, public policy against choice of law provisions in insurance

contracts as set forth in La. R.S. 22:868(A)(1).

1
Counsel for Starr admitted this during oral argument in the district court. Additionally, Starr’s
writ application states: “Starr reserves the right to assert that New York law applies to this
dispute under the choice-of-law clause.” Further, Starr’s answer asserts as a 30th affirmative
defense that “[t]he Policy contains a New York choice of law provision. Plaintiffs’ claims fail
under New York law, which the Policy requires be applied in this action.”

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In the Louisiana Revitalization Fund case, the same defendant,

Starr, and even some of the same attorneys who represent Starr, were

involved. Moreover, the case had the same choice of law provision,

involved property damage in Metairie, Louisiana resulting from Hurricane

Ida and was initially filed in the 24th Judicial District Court before being

removed to the Eastern District of Louisiana. The Eastern District then

transferred the case to the United States District Court for the Southern

District of New York based upon the forum selection clause in the

contract just like Starr is requesting here. The plaintiffs filed a motion for

partial summary judgment asking for a determination that Louisiana law

apply because La. R.S. 22:868 prohibits choice of law provisions that

apply the laws of other states. After conducting an extensive choice-of-

law and conflict-of-law analysis though, the Magistrate Judge concluded

that New York Court of Appeals precedent required application of New

York law given the parties’ choice-of-law provision in the policy.

It stands to reason then that the same analysis in Louisiana

Revitalization Fund will occur in the case at bar if this Court grants Starr’s

exception and transfers this case to New York. As the trial court noted

during oral argument in this case:

And [plaintiff’s counsel is] right you have an out-of-state company
who agrees to abide by Louisiana laws and comes here to write
insurance and then when there’s a claim made they expect the
property owner to go to fight it in New York, using New York laws
when that was really not the deal that was made when they started
writing insurance here.

Whether New York or Louisiana law applies in this case makes a

difference to plaintiffs. If New York law applies, then plaintiffs will not be

able to assert their claims regarding Starr’s alleged bad faith under La. R.S.

22:1973 and 22:1892.

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For all of the above reasons, while I concur in the result, I do not

agree with the majority’s opinion that La. R.S. 22:868 and 22:442(A)

specifically prohibit forum selection clauses in Louisiana insurance policies

from surplus lines insurers.

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24-C-104

SUSAN M. CHEHARDY CURTIS B. PURSELL

CHIEF JUDGE CLERK OF COURT

SUSAN S. BUCHHOLZ
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
STEPHEN J. WINDHORST LINDA M. WISEMAN
JOHN J. MOLAISON, JR.
FIRST DEPUTY CLERK
SCOTT U. SCHLEGEL
TIMOTHY S. MARCEL FIFTH CIRCUIT
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IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
JUNE 5, 2024 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES NOT
REPRESENTED BY COUNSEL, AS LISTED BELOW:

24-C-104
E-NOTIFIED
24TH JUDICIAL DISTRICT COURT (CLERK)
HONORABLE DANYELLE M. TAYLOR (DISTRICT JUDGE)
RICHARD P. VOORHIES, III (RESPONDENT) WILLIAM A. BAROUSSE (RESPONDENT) KEVIN W. WELSH (RELATOR)
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