# McDermott v. United Property and Casualty Insurance Co.

> District Court, E.D. Louisiana · March 7, 2023

URL: https://www.frixlaw.com/law-library/cases/10189035

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** March 7, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10189035

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ADAM MCDERMOTT et al. CIVIL ACTION
VERSUS CASE NO. 23-542

UNITED PROPERTY AND CASUALTY INSURANCE CO. SECTION: “G”

ORDER
On March 2, 2023, Defendant United Property and Casualty Insurance Co. (“Defendant”)
filed a “Notice of Filing Consent Order of Liquidation, Notice of Automatic and Permanent Stay.”1
In the notice, Defendant informs the Court that Defendant has recently been declared insolvent
and placed into liquidation.2

The Fifth Circuit has recognized that “insolvent insurers are subject to the comprehensive
oversight of state administrative agencies and courts” and “[f]ederal law consigns to the states the
primary responsibility for regulating the insurance industry.”3 Accordingly, the Fifth Circuit has
held that “allowing a creditor or claimant to proceed against an insolvent insurer in federal court
while a state insolvency proceeding is pending would usurp [the state’s] control over the
liquidation proceeding by allowing [the claimant] to preempt others in the distribution of [the
insurance company’s] assets.”4 Such a statutory scheme exists in Louisiana. Under Louisiana law,

1 Rec. Doc. 7.
2 Id. at 1.
3 Clark v. Fitzgibbons, 105 F.3d 1049, 1051 (5th Cir. 1997) (citing the McCarran–Ferguson Act).
4 Id. (internal citation and quotation omitted).
1
proceedings in which the insolvent insurer 1s a party or is obligated to defend a party in any
court in this state shall be stayed for six months.”°
In light of Louisiana’s comprehensive statutory scheme for regulating insolvent insurers
and Fifth Circuit precedent admonishing courts to avoid interfering with state administrative
processes involving insolvent insurers, the Court exercises its discretion to stay the claims pending
against Defendant for a period of six months.® Accordingly,
IT IS HEREBY ORDERED that the above-captioned action is STAYED AND
ADMINISTRATIVELY CLOSED for a period of six months. The case shall be reopened upon
a motion of a party at the conclusion of the six-month period.
NEW ORLEANS, LOUISIANA, this 6th” day of March, 2023.

NANNETTE JOLI TE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

5 La. Rev. Stat. § 22:2068(A).
® See Landis v. North American Co., 299 U.S. 248, 254 (1936).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10189035. Public record. Not legal advice.