# Ten G, LLC v. Certain Underwriters at Lloyd's London

> District Court, E.D. Louisiana · July 25, 2023

URL: https://www.frixlaw.com/law-library/cases/10189701

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** July 25, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10189701

## How later opinions describe it (automated extraction)

- holding that release of all contractual rights against insurer did not include statutory bad faith claim

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

TEN G, LLC CIVIL ACTION

VERSUS NO. 22-4426

CERTAIN UNDERWRITERS AT SECTION: D(5)
LLOYD’S LONDON, ET AL.

ORDER AND REASONS
Before the Court is Defendant’s Motion to Compel Arbitration and Dismiss
Claims or Alternatively Stay Litigation Pending Arbitration, filed by Certain
Underwriters at Lloyd’s, London severally subscribing to Certificate No. AMR-63312-
03, Indian Harbor Insurance Company, QBE Specialty Insurance Company,
Steadfast Insurance Company, General Security Indemnity Company of Arizona,
United Specialty Insurance Company, Lexington Insurance Company, HDI Global
Specialty SE, Old Republic Union Insurance Company, GeoVera Specialty Insurance
Company, and Transverse Specialty Insurance Company (collectively,
“Defendants”).1 Ten G, LLC (“Ten G”), opposes the Motion,2 and Defendants have
filed a Reply.3 The Court also allowed Ten G to filed a Sur-Reply brief.4
After careful consideration of the parties’ memoranda, the record, and the
applicable law, the Motion is GRANTED in part and DENIED in part.
I. FACTUAL AND PROCEDURAL BACKGROUND
This case arises from alleged damage to property owned by Ten G that occurred

1 R. Doc. 10.
2 R. Doc. 12.
3 R. Doc. 19.
4 R. Doc. 21.
when Hurricane Ida made landfall in Louisiana on or about August 29, 2021.
Defendants, which include both foreign and domestic insurers, had issued a policy of
insurance bearing policy number 840883, to Ten G for its commercial property located

in Reserve, Louisiana.5 That policy was in effect on August 29, 2021.6 Ten G alleges
that it reported the damage by filing a claim and that Defendants sent an adjuster to
inspect the property on September 6, 2021.7 Ten G asserts that Defendants also had
an engineer inspect the property on September 21, 2021.8 According to Ten G,
Defendants provided an initial statement of loss on December 4, 2021, indicating that
it would cost $2,666,164.37 to repair the property.9 Ten G alleges that it submitted
a demand for payment on February 2, 2022 and submitted an estimate from Strategic

Claim Consultants, valuing the damage sustained in the amount of $3,749,864.53.10
Ten G claims that Defendants issued a check on February 11, 2022 in the amount of
$1,775,864.53 for the property damage, which was the first payment issued by
Defendants. Ten G points out that this was done “158 days following the initial
inspection of the Property by Defendants’ chosen adjuster.”11
On or about September 21, 2022, Ten G filed a Petition for Damages against

Defendants in the 40th Judicial District Court for the Parish of St. John the Baptist,
Louisiana, asserting that Defendants failed to adequately adjust, investigate, and
timely pay its insurance claim by severely undervaluing the damages sustained by a

5 R. Doc. 10-1 at p. 2; R. Doc. 12 at p. 2.
6 R. Doc. 10-1 at p. 2; R. Doc. 12 at p. 2.
7 R. Doc. 1-1 at ¶ 9.
8 Id.
9 Id. at ¶ 10.
10 Id. at ¶ 11.
11 Id. at ¶ 12.
covered event.12 Ten G alleges that Defendants’ actions in adjusting its claim and
failing to timely compensate Ten G for the covered losses sustained to the property
were arbitrary, capricious, and/or without probable cause under La. R.S. 22:1892 and

La. R.S. 22:1973.13 As such, Ten G seeks damages, including bad faith penalties
under §§ 1892 and 1973, attorney’s fees and costs, and “[a]ny and all other relief that
the Court deems just and proper.”14
Defendants removed the matter to this Court on November 7, 2022 pursuant
to 28 U.S.C. §§ 1441 and 1446 on the grounds that there is a valid arbitration
agreement in the insurance policy in dispute that falls under the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (hereafter, “the

Convention”).15 Defendants contend that the Court has original jurisdiction over this
case based upon 9 U.S.C. §§ 202, 203, and 205.16 Defendants assert that the
insurance policy contains an arbitration clause that states, “All matters in difference
between the Insured and the Companies (hereinafter referred to as ‘the parties’) in
relation to this insurance, including its formation and validity, and whether arising
during or after the period of insurance, shall be referred to an Arbitration Tribunal

in the manner hereinafter set out.”17 The arbitration clause also specifies that, “The
Arbitration Tribunal may not award exemplary, punitive, multiple, consequential, or
other damages of a similar nature.”18 Defendants assert in the Notice of Removal

12 Id. at ¶ 13.
13 Id. at ¶¶ 14-15.
14 Id. at ¶¶ 15-17.
15 R. Doc. 1 at ¶ I (citing 9 U.S.C. § 201, et seq.).
16 R. Doc. 1 at ¶ I.
17 Id. at ¶ III (quoting R. Doc. 1-2 at p. 24).
18 R. Doc. 1 at ¶ III (quoting R. Doc. 1-2 at p. 24).
that they invoked their right to arbitrate all matters in dispute with Ten G by letter
dated March 4, 2022.19
Defendants filed the instant Motion on February 1, 2023, seeking to compel

arbitration and dismiss Ten G’s claims or, alternatively, to stay litigation pending
arbitration pursuant to the Convention.20 Defendants assert that the arbitration
clause in Ten G’s policy is triggered because the parties dispute Ten G’s Hurricane
Ida-related claim under the policy.21 Although arbitration agreements in domestic
insurance policies usually are not enforceable in Louisiana, Defendants argue that
Louisiana law does not negate the arbitration clause in this case because it involves
an international commercial relationship subject to the Convention.22 Defendants

contend that arbitration should be compelled under the Convention if the following
four requirements are met: (1) there is an agreement in writing to arbitrate the
dispute; (2) the agreement provides for arbitration in the territory of a Convention
signatory; (3) the agreement arises out of a commercial legal relationship; and (4) a
party to the agreement is not an American citizen.23 Defendants claim that there can
be no dispute that all four requirements are met in this case because there is a written

agreement to arbitrate, it requires arbitration in New York, which is within the
territory of the United States, a Convention signatory, the arbitration agreement
arises out of a commercial relationship, and at least two of the parties are not United

19 R. Doc. 1 at ¶ III.
20 R. Doc. 10.
21 R. Doc. 10-1 at p. 4.
22 Id. (citing La. R.S. 22:868).
23 R. Doc. 10-1 at pp. 4-5 (quoting Francisco v. STOLT ACHIEVEMENT MT, 293 F.3d 270, 273 (5th
Cir. 2002)) (internal quotation marks omitted).
States citizens.24
Defendants further assert that the insurance policy contains a broad
delegation clause that includes Ten G’s extra-contractual claims, and that such a

broad delegation clause creates a “presumption of arbitrability” and constitutes “clear
and unmistakable evidence” that it covers all matters in the agreement.25
Defendants claim that both this Court and the Fifth Circuit have held that identical
or substantially similar policy language requires arbitration of all disputes between
the parties.26 Defendants then assert that while they are entitled to a stay pending
arbitration,27 if the claims involved are arbitrable, a court may dismiss the action
instead of staying it.28 Defendants argue that because all of Ten G’s claims are

subject to arbitration, “the weight of authority supports dismissal.”29 As such,
Defendants assert that the Convention requires arbitration of all of Ten G’s claims
and that this Court should dismiss the case in favor of arbitration.30
Ten G does not dispute that the Convention compels arbitration for its property
coverage dispute and contractual claims, but argues that the Motion should be denied

24 R. Doc. 10-1 at p. 5. Elsewhere in the Motion, Defendants assert that, “Certain Underwriters at
Lloyd’s, London severally subscribing to Certificate No. AMR-63312-03 are foreign insurers domiciled
in the United Kingdom with their principal place of business in London, England. HDI Global
Specialty SE (“HDI”) is a foreign insurer domiciled in Germany with its principal place of business in
Hanover, Germany.” Id. at p. 2.
25 Id. at p. 5 (citing Sedco, Inc. v. Petroleos Mexicanos Mexican Nat’l Oil Co., 767 F.2d 1140, 1144-45
(5th Cir. 1985) and quoting Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co., 921 F.3d
522, 538 (5th Cir. 2019)).
26 R. Doc. 10-1 at pp. 5-6 (citing authority).
27 Id. (citing 9 U.S.C. §§ 3, 4).
28 R. Doc. 10-1 at p. 6 (citing Green Tree Fin. Corp.-Ala. V. Randolph, 531 U.S. 79, 86-87, 121 S.Ct. 513,
148 L.Ed.2d 373 (2000); Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992)).
29 R. Doc. 10-1 at p. 6 (citing McDonnel Grp., LLC v. Great Lakes Ins. SE, UK Branch, 923 F.3d, 427,
431 (5th Cir. 2019)).
30 R. Doc. 10-1 at p. 7.
because its claims for bad faith penalties under Louisiana law clearly fall outside the
scope of the arbitration clause, which states that, “The Arbitration Tribunal may not
award exemplary, punitive, multiple, or other damages of a similar nature.”31 Ten G

asserts that the language of the arbitration clause “evidences a clear intent to exclude
the instant claims from arbitration.”32 Ten G claims that bad faith, punitive claims
and damages do not arise from the insurance contract, but from the insurer’s violation
of statutory duties.33 Ten G also asserts that Defendants waived their rights to
remove bad faith claims based upon the foregoing exclusionary language in the
arbitration clause.34 Relying upon the Fifth Circuit’s decision in Ensco Int’l, Inc. v.
Certain Underwriters at Lloyd’s, Ten G argues that while the arbitration clause does

not specifically include the word “waiver,” the foregoing language “clearly operates
as a waiver of the insurers’ right to remove bad faith claims by the expressed
limitation on the Tribunal’s jurisdiction over bad faith type damages.”35 Ten G
asserts that Defendants ignore this provision of the arbitration clause in their Motion.
Ten G argues that the Motion should be denied because Defendants have clearly and
unambiguously waived their right to remove Ten G’s bad faith claims to arbitration.36

In response, Defendants first assert that Ten G’s argument that it has not
asserted any breach of contract claims contradicts the allegations in its state court
Petition, wherein Ten G alleges that Defendants failed to adequately adjust,

31 R. Doc. 12 at pp. 1-2.
32 Id. at p. 4.
33 Id. at p. 5 (citing Johno v. Doe, 2015-0737 (La. App. 4 Cir. 3/9/16), 187 So.3d 581, 585).
34 R. Doc. 12 at pp. 6-8.
35 Id. at pp. 7-8 (citing Ensco, 579 F.3d 442, 444-48 (5th Cir. 2009)).
36 R. Doc. 12 at pp. 8-9.
investigate, and timely pay its insurance claim and requests money damages, in
addition to and separately from, statutory penalties.37 Defendants further assert that
the Fifth Circuit and district courts within it, including this one, have already

rejected Ten G’s argument that the exclusionary language in the arbitration clause
shows an intent to exclude bad faith claims from arbitration, and that courts
routinely order all claims to arbitration.38 Defendants claim that courts have likewise
rejected Ten G’s argument that a right to removal can be waived based upon the
exclusionary language contained in the arbitration clause.39 Defendants maintain
that the Convention requires arbitration of all of Ten G’s claims against them that
arise from its dispute over its Hurricane Ida insurance claim.40

In its Sur-Reply brief, Ten G asserts, for the first time, that Defendants’ Motion
should be denied as premature because this action is subject to the Court’s Hurricane
Ida Case Management Order (“CMO”) and Streamlined Settlement Program
(“SSP”).41 Ten G claims that pursuant to the CMO, both parties had the opportunity
to opt out of the SSP within 15 days of entry of the CMO on November 8, 2022.42 Ten
G points out that the CMO specifically states that if the parties do not seek to opt out,

37 R. Doc. 19 at pp. 1-2 (citing R. Doc. 1-1 at ¶¶ 13, 17, & 18).
38 R. Doc. 19 at p. 2 (citing Woodmen of the World Life Ins. Co. v. Lewis, 118 Fed.Appx. 826, 831 (5th
Cir. 2004); 419 Carondelet, LLC v. Certain Underwriters at Lloyd’s, London, Civ. A. No. 22-4311, 2023
WL 143318 (E.D. La. Jan. 10, 2023) (Vitter, J.); Academy of Sacred Heart of New Orleans v. Certain
Underwriters at Lloyd’s London, Civ. A. No. 22-4401, 2023 WL 246832 (E.D. La. Jan. 18, 2023) (Africk,
J.); STMB Properties, LLC v. Certain Underwriters at Lloyd’s London, Civ. A. No. 22-2229, 2022 WL
3924313 (E.D. La. Aug. 31, 2022) (Africk, J.); Figear, LLC v. Velocity Risk Underwriters Claims, Civ.
A. No. 22-01094, 2022 WL 2812980 (E.D. La. July 18, 2022) (Fallon, J.); Georgetown Home Owners
Ass’n v. Certain Underwriters at Lloyd’s, Civ. A. No. 20-102-JWD-SDJ, 2021 WL 359735 (M.D. La. Feb.
2, 2021) (deGravelles, J.)).
39 R. Doc. 19 at p. 3 (citing Figear, Civ. A. No. 22-01094, 2022 WL 2812980 at *5).
40 R. Doc. 19 at pp. 3-4.
41 R. Doc. 21 at p. 1.
42 Id. (citing R. Doc. 6).
they are electing to participate in the SSP.43 Ten G then seems to suggest that
because neither party opted out, they have elected to participate in the SSP, thereby
rendering Defendants’ Motion premature.44

II. LEGAL STANDARD
The Convention on the Recognition and Enforcement of Foreign Arbitration
Awards (the “Convention”) applies when a party seeks to compel arbitration outside
the United States or attempts to enforce an arbitration agreement “arising out of a
legal relationship, whether contractual or not, which is considered as commercial”
and is not “entirely between citizens of the United States.”45 The purpose of the
Convention is to “encourage the recognition and enforcement of commercial contracts

and to unify the standard by which the agreements to arbitrate are observed, and
arbitral awards are enforced in signatory countries.”46 In determining whether the
Convention requires compelling arbitration, courts must “conduct only a very limited
inquiry.”47 According to the Fifth Circuit, a court should compel arbitration only if
the following four prerequisites are met: (1) there is a written agreement to arbitrate
the matter; (2) the agreement provides for arbitration in a Convention signatory

nation; (3) the agreement arises out of a commercial legal relationship; and (4) a party
to the agreement is not an American citizen.48 “Federal policy and precedent

43 R. Doc. 21 at pp. 1-2 (quoting R. Doc. 6) (internal quotation marks omitted).
44 R. Doc. 21 at pp. 1-2.
45 9 U.S.C. § 202.
46 419 Carondelet, LLC v. Certain Underwriters at Lloyd’s, London, Civ. A. No. 22-4311, 2023 WL
143318, at *2 (E.D. La. Jan. 10, 2023) (quoting Scherk v. Alberto-Culver, Co., 417 U.S. 506 n.15, 94
S.Ct. 2449, 41 L.Ed.2d 270 (1974)) (internal quotation marks omitted).
47 Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 339 (5th Cir. 2004) (citation
omitted).
48 Freudensprung, 379 F.3d at 339.
emphasize a strong presumption in favor of the enforcement of arbitration clauses.”49
The Fifth Circuit has held that, “A presumption of arbitrability exists requiring that
whenever the scope of an arbitration clause is fairly debatable or reasonably in doubt,

the court should decide the question of construction in favor of arbitration.”50
III. ANALYSIS
A. Waiver
1. Defendants did not waive their rights to removal.
While not a model of clarity, Ten G seems to argue in its Opposition brief that
Defendants waived their rights to arbitrate Ten G’s bad faith claims and that
Defendants waived their rights to remove Ten G’s bad faith claims to federal court

based upon the exclusionary language contained in the arbitration clause.51
Regarding removal, Ten G asserts that, “Defendants waived its [sic] removal rights
based on the language of the policy,” and that, “Defendants waived their rights to
remove bad faith claims.”52 Ten G then cites a Fifth Circuit case, Ensco Intern., Inc.
v. Certain Underwriters at Lloyd’s, which set forth three ways by which a party may
waive its removal rights under the Convention.”53 Ten G then seems to conflate

49 Figear, LLC v. Velocity Risk Underwriters Claims, Civ. A. No. 22-01094, 2022 WL 2812980, at *1
(E.D. La. July 18, 2022) (citing Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294, 297 (5th Cir.
2004)). See, City of Kenner v. Certain Underwriters at Lloyd’s London, Civ. A. No. 22-2167, 2022 WL
16961130, at *1 (E.D. La. Nov. 16, 2022) (Vance, J.) (citing Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 4, 103 S.Ct. 927, 74 L.Ed. 2d 765 (1983); 9 U.S.C. § 2) (“Federal courts apply
a heavy presumption in favor of arbitration.”).
50 Mar-Len of Louisiana, Inc. v. Parsons-Gilbane, 773 F.2d 633, 635-36 (5th Cir. 1985) (citing United
Steelworkers of America v. Warrior & Gulf Navigational Co., 363 U.S. 574, 583, 80 S.Ct. 1347, 1353, 4
L.Ed.2d 1409 (1960)). See, Sedco, Inc. v. Petroleos Mexicanos Mexican Nat. Oil Co. (Pemex), 767 F.2d
1140, 1145 (5th Cir. 1985) (citing authority) (“Thus, as a general rule, whenever the scope of an
arbitration clause is in question, the court should construe the clause in favor of arbitration.”).
51 R. Doc. 12 at pp. 6-9.
52 Id. at p. 6.
53 Id. (citing Ensco, 579 F.3d 442, 444-45 (5th Cir. 2009)).
waiver of the right to arbitrate with waiver of the right to remove when it cites the
purported waiver language contained in the arbitration clause and asserts that,
“Defendants could not be more explicit in their clear waiver of arbitration of bad faith

claims,” and that, “This waiver is clear and unambiguous – Plaintiff’s bad faith claims
and damages arising from same are excluded from arbitration.”54 Ten G again cites
Ensco for the proposition that the language in the arbitration clause “clearly operates
as a waiver of the insurers’ right to remove bad faith claims by the expressed
limitation on the Tribunal’s jurisdiction over bad faith type damages.”55
To the extent Ten G claims that Defendants have waived their right to remove
Ten G’s claims to federal court, Ten G cites a Fifth Circuit case, Freudensprung v.

Offshore Technical Services, Inc., for the notion that the Convention “requires the
district court to order arbitration . . . unless it finds that the said agreement is null
and void, inoperable or incapable of being performed.”56 Ten G then seems to discuss
removal in the context of “the so called ‘null and void’ clause,”57 but never actually
alleges that the arbitration clause at issue is null or void.58 Ten G then correctly
asserts that the Fifth Circuit has recognized that there are three ways by which a

party may waive its removal rights: (1) by explicitly stating that it is doing so; (2) by
allowing the other party the right to choose venue; or (3) by establishing an exclusive

54 R. Doc. 12 at p. 7.
55 Id. at pp. 7-8 (citing Ensco, 579 F.3d at 444-45).
56 R. Doc. 12 at p. 6 (quoting Freudensprung, 379 F.3d 327, 339 (5th Cir. 2004)) (internal quotation
marks omitted).
57 R. Doc. 12 at p. 6.
58 See, generally, R. Doc. 12.
venue within the contract.59 While Ten G recognizes these are the three avenues by
which a party may waive its removal rights “under the Convention,”60 Ten G
inexplicably fails to allege or explain which avenue is applicable here. Instead, Ten

G merely cites additional Fifth Circuit cases indicating that a waiver of removal
rights need not contain explicit words,61 that a waiver may be implicit to give effect
to all contractual provisions,62 and that, “Courts generally apply the clear statement
rule to determine waiver.”63 Ten G, however, does not allege any facts or cite any
legal authority to support its position that Defendants waived their rights to removal
based upon the exclusionary language in the arbitration clause. The Fifth Circuit
has made clear that, “For a contractual clause to prevent a party from exercising its

right to removal, the clause must give a clear and unequivocal waiver of that right.”64
The Court finds that Ten G has failed to show that Defendants clearly and
unequivocally waived their rights to removal.
2. Defendants did not waive their rights to arbitrate Ten G’s bad
faith claims.

Ten G also asserts in its Opposition brief that Defendants waived their right
to arbitrate its bad faith claims through the provision in the arbitration clause that
states, “The Arbitration Tribunal may not award exemplary, punitive, multiple, or

59 R. Doc. 12 at p. 6 (citing Ensco, 579 F.3d at 443-44 (quoting City of New Orleans v. Mun. Admin.
Servs., Inc., 376 F.3d 501, 504 (5th Cir. 2004))).
60 R. Doc. 12 at p. 6.
61 R. Doc. 12 at p. 6 (citing Southland Oil Co. v. Miss. Ins. Guar. Ass’n, 182 Fed.Appx. 358, 361 (5th
Cir. 2006)).
62 R. Doc. 12 at p. 6 (citing Ensco, 579 F.3d at 444).
63 R. Doc. 12 at p. 6 (citing Ensco, 579 F.3d at 447).
64 Ensco, 579 F.3d at 443 (quoting City of New Orleans, 376 F.3d at 504) (internal quotation marks
omitted).
other damages of a similar nature.”65 At least two other Sections of this Court have
rejected these same arguments. In Figear, LLC v. Velocity Risk Underwriters Claims,
the plaintiff argued that its bad faith claims were excluded from the arbitration

clause entered into by the parties, which is nearly identical to the arbitration clause
in this case and provided that:
All matters in dispute between you and us (referred to in this policy as
“the parties”) in relation to this insurance, including this policy’s
formation and validity, and whether arising during or after the period
of this insurance, shall be referred to an Arbitration Tribunal in the
manner described below . . . . The Arbitration Tribunal may not award
exemplary, punitive, multiple, or other damages of a similar nature.66

Addressing the plaintiff’s waiver argument, the Figear court recognized that, “[i]n
light of the federal policy favoring arbitration, there is a strong presumption against
finding a waiver of arbitration.”67 The Figear court held that, “Waiver must be
explicit, clear, and unequivocal,” and that the plaintiff had failed to cite any cases
“which would indicate that this language can operate as an explicit waiver of the right
to arbitrate any claims which might result in exemplary, punitive, multiple, or other
damages of a similar nature.”68 The Figear court further held that, “At most, this
clause limits the damages which an arbitrator might order in the event that Plaintiff
was to prevail at arbitration.”69 The Figear court concluded that, “Especially in light
of the strong presumption that arbitration is not waived, the Court declines to find

65 R. Doc. 12 at p. 7.
66 Figear, Civ. A. No. 22-01094, 2022 WL 2812980, at *2 (E.D. La. July 18, 2022) (citation omitted).
67 Id. (quoting Al Rushaid v. Nat’l Oilwell Varco, Inc., 757 F.3d 416, 421-22 (5th Cir. 2014)) (cleaned
up by Figear) (internal quotation marks omitted).
68 Figear, Civ. A. No. 22-01094, 2022 WL 2812980 at *2.
69 Id.
here a clear and unequivocal waiver of the right to arbitrate any claim which might
result in exemplary, punitive, multiple, or other damages of a similar nature.”70 As
such, the court in that case found that the defendants in that case had not waived

their right to arbitrate the plaintiff’s bad faith claim.
Another Section of this court, adopting the Figear court’s analysis, reached the
same conclusion in STMB Properties, LLC v. Certain Underwriters at Lloyd’s
London.71 The arbitration clause in STMB contained the same exclusionary language
as Ten G’s policy, namely that, “The Arbitration Tribunal may not award exemplary,
punitive, multiple, or other damages of a similar nature.”72 Citing the language
quoted above from Figear, the STMB court concluded that Figear court had

“identified the crucial distinction—operative in the instant case as well—between the
first-order question of whether the Arbitration Tribunal has the authority to decide
if penalties and fees are warranted pursuant to Louisiana state law, and the second-
order question of whether the tribunal has authority to order damages be paid.”73
Although not expressly stated in the opinion, the STMB court rejected the plaintiff’s
waiver argument and compelled arbitration.

The Court reaches the same conclusion in this case. For the reasons set forth
by the Figear court, and adopted by the STMB court, this Court finds that Defendants
have not waived their right to arbitrate Ten G’s bad faith claims.
B. Ten G’s bad faith claims fall within the scope of the arbitration clause.

70 Id.
71 Civ. A. No. 22-2229, 2022 WL 3924313, at *2-3 (E.D. La. Aug. 31, 2022).
72 Id. at *1 (internal quotation marks omitted).
73 Id. at *3.
In the Opposition brief, Ten G does not dispute that the Convention compels
arbitration for its property coverage dispute and contractual claims, but argues that
its bad faith claims remain “clearly outside the scope of the arbitration clause” at

issue in this case.74 Defendants assert in their Motion that the four criteria that must
be met for a court to compel arbitration under the Convention are all met in this
case.75 Specifically, Defendants assert that there is a written agreement to arbitrate
contained in the insurance policy at issue, that the arbitration clause provides for
arbitration in a signatory nation, namely the United States (New York), that the
arbitration clause arises out of a commercial legal relationship (an insurance contract
between the parties), and that at least one of the parties to the arbitration agreement

is not a citizen of the United States.76 Ten G does not dispute these assertions.
Instead, Ten G argues that its bad faith claims do not implicate the arbitration
clause, “Because bad faith, punitive claims and damages do not arise from the
contract of insurance, but rather from the insurers’ violation of statutory duties.”77
The Figear court rejected this same argument, explaining that, “It is true that there
are Louisiana state court cases holding as such. But these cases do not arise in the

context of arbitration.”78 The Figear court acknowledged the Fifth Circuit’s

74 R. Doc. 12 at p. 1.
75 Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 339 (5th Cir. 2004) (quoting
Francisco v. STOLT ACHIEVEMENT MT, 293 F.3d 270, 273 (5th Cir. 2002)) (internal quotation
marks omitted).
76 R. Doc. 10-1 at pp. 2 & 5. See, supra, note 24.
77 R. Doc. 12 at p. 5 (citing Johno v. Doe, 2015-0737 (La. App. 4 Cir. 3/9/16), 187 So.3d 581, 585)
(emphasis in original).
78 Figear, LLC v. Velocity Risk Underwriters Claims, Civ. A. No. 22-01094, 2022 WL 2812980, at *2
(E.D. La. July 18, 2022) (citing Johno, 2015-0737, 187 So.3d at 585 (holding that release of all
contractual rights against insurer did not include statutory bad faith claim)).
instruction that, “whenever the scope of an arbitration clause is fairly debatable or
reasonably in doubt, the court should decide the question of construction in favor of
arbitration.”79 The court in Figear then noted the strong presumption that

arbitration agreements are valid and binding and pointed out that at least one other
court in this Circuit had “specifically rejected the argument Plaintiffs present here
[that bad faith claims fall outside the scope of the arbitration clause because they are
statutory and not based on the policy], with reference to an essentially identically
worded arbitration clause.”80
In that other case, Georgetown Home Owners Association, Inc. v. Certain
Underwriters at Lloyd’s, London, the Middle District of Louisiana held that, “The

Arbitration Agreement at issue is broad in scope because it states that ‘all matters in
difference’ that relate to the insurance policy are subject to arbitration,” and that, “By
drafting a broad delegation clause, the parties have clearly and unmistakably
evidenced their intent to arbitrate all their claims, disputes and other matters
pertaining to the contractual agreement.”81 The Georgetown court further held that,
“Contrary to Plaintiff’s argument that its bad-faith claims fall outside the scope of

the arbitration agreement because they are ‘statutory’ and ‘not based on the Policy,’
the substance of these claims relates to the insurance agreement. Without the Policy

79 Figear, Civ. A. No. 22-01094, 2022 WL 2812980 at *2 (quoting Mar-Len of Louisiana, Inc. v. Parsons-
Gilbane, 773 F.2d 633, 635 (5th Cir. 1985)) (internal quotation marks omitted).
80 Figear, Civ. A. No. 22-01094, 2022 WL 2812980 at *2 (citing Georgetown Home Owners Ass’n, Inc. v.
Certain Underwriters at Lloyd’s, London, Civ. A. No. 20-102-JWD-SDJ, 2021 WL 359735, at *15 (M.D.
La. Feb. 2, 2021) (deGravelles, J.)).
81 Georgetown, Civ. A. No. 20-102-JWD-SDJ, 2021 WL 359735 at *15 (citing Halliburton Energy
Services, Inc. v. Ironshore Specialty Ins. Co., 921 F.3d 522, 538 (5th Cir. 2019)).
of insurance between the parties, no disputes or differences would exist.”82 As such,
the Georgetown court concluded that, “the Arbitration Agreement conceivably covers
these claims.”83 The court in Figear agreed with that holding and concluded that the

parties had to arbitrate the plaintiff’s bad faith claims.84 The STMB court, relying
on both Figear and Georgetown, reached the same conclusion and left “issues relative
to the determination of whether penalties and fees are warranted pursuant to
Louisiana law to the Arbitration Tribunal.”85 Other Sections of this court have
likewise compelled arbitration of bad faith claims.86
Notably, Ten G does not address any of these cases in its Opposition brief or
its Sur-Reply brief, despite the fact that some were cited by the Defendants in their

Motion87 and/or Reply brief.88 This Court agrees with the courts in Georgetown,
Figear, and STMB and finds that Ten G’s bad faith claims fall within the scope of the
arbitration clause at issue. As stated by the court in Georgetown, the substance of
Ten G’s bad faith claims arise from alleged failures of the insurers to adequately
adjust, investigate and pay the claims. Accordingly, the Court will stay the pending

82 Georgetown, Civ. A. No. 20-102-JWD-SDJ, 2021 WL 359735 at *15 (internal citation to the record
omitted).
83 Id.
84 Figear, Civ. A. No. 22-01094, 2022 WL 2812980 at *3.
85 STMB Properties, LLC, Civ. A. No. 22-2229, 2022 WL 3924313, at *3 (E.D. La. Aug. 31, 2022).
86 See, Olsen Securities Corp. v. Certain Underwriters at Lloyd’s London, Civ. A. No. 22-3120, 2023 WL
405437, at *6 (E.D. La. Jan. 25, 2023) (Brown, C.J.) (citing authority) (finding that plaintiff’s bad faith
and breach of duty of good faith and fair dealing claims derive from the insurance policy and are subject
to the arbitration clause); City of Kenner v. Certain Underwriters at Lloyd’s London, Civ. A. No. 22-
2167, 2022 WL 16961130, at *3 (E.D. La. Nov. 16, 2022) (ordering the parties to arbitrate plaintiff’s
claim that defendants breached their duties of good faith and fair dealing).
87 See, R. Doc. 10-1 at pp. 5-6.
88 R. Doc. 19 at p. 2.
litigation while the Arbitration Tribunal determines whether penalties and fees are
warranted under Louisiana law.89
C. The Motion is not premature based upon the CMO.

In its Sur-Reply brief, Ten G argues that in addition to lacking merit,
Defendants’ Motion should be denied as premature because the parties did not timely
opt out of the Court’s Hurricane Ida Streamlined Settlement Program (“SSP”), as
described in the Case Management Order (“CMO”) pertaining to Hurricane Ida
claims and, as such, the parties are subject to the SSP.90 The CMO was filed into the
record in this case on November 8, 2022, and it provides that, “Within 15 days of the
filing of the defendant’s responsive pleading (or if later then within 15 days of either

an Order denying a motion for remand or of entry of this Order) either party may
petition the presiding Magistrate Judge to opt out of the SSP (Section 3 of this
Order).”91 The CMO further provides that, “If the parties do not seek to opt out, they
are electing to participate in the two-staged Streamlined Settlement Program . . . .”92
This Court has previously held that even when parties fail to timely opt-out of
the SSP, there are instances when “mandating the parties to abide by the SSP would

hinder rather than promote the swift and just resolution of this matter.”93 As such,
the Court concluded that, “the clear language of the arbitration clause as well as

89 In their Motion, Defendants request that the Court either compel arbitration and dismiss Ten G’s
claims against them or, alternatively, stay the litigation pending arbitration. R. Doc. 10 at p. 1; R.
Doc. 10-1 at pp. 1 & 6-7. Since the Court will grant Defendants’ request to compel arbitration and stay
the case, the Court declines to dismiss Ten G’s claims at this time.
90 R. Doc. 21 (citing R. Doc. 6).
91 R. Doc. 6 at p. 5.
92 Id.
93 419 Carondelet, LLC v. Certain Underwriters at Lloyd’s, London, Civ. A. No. 22-4311, 2023 WL
143318, at *2 (E.D. La. Jan. 10, 2023).
binding precedent require this Court to grant Defendants’ Motion to Compel
Arbitration.”94 In doing so, the Court explained that, “Although Louisiana law
ordinarily prohibits enforcement of arbitration clauses concerning insurance

disputes, the Fifth Circuit has held that [the Convention] supersedes state law.”95 At
least one other Section of this Court has reached the same conclusion.96 Accordingly,
the Court rejects Ten G’s assertion that the parties’ failure to opt-out of the SSP
renders the instant Motion, and Defendants’ request to compel arbitration,
premature.
IV. CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that Defendants’

Motion to Compel Arbitration and Dismiss Claims or Alternatively Stay Litigation
Pending Arbitration97 is GRANTED in part and DENIED in part. The Motion is
GRANTED to the extent that Defendants move to compel arbitration, but DENIED
to the extent that Defendants seek dismissal of Ten G’s claims.
IT IS FURTHER ORDERED that this matter is STAYED and
ADMINISTRATIVELY CLOSED pending a final decision by the Arbitration

Tribunal.
IT IS FURTHER ORDERED that if any issues remain after a final judgment
is issued by the Arbitration Tribunal, the above-captioned matter may, following a

94 Id.
95 Id. (citing McDonnel Grp., LLC v. Great Lakes Ins. SE, UK Branch, 923 F.3d 427, 431-32 (5th Cir.
2019), as revised (June 6, 2019)).
96 3501 N. Causeway Assocs., LLC v. Certain Underwriters at Lloyd’s, London, Civ. A. No. 22-3787,
2023 WL 1765920, at *3 (E.D. La. Feb. 3, 2023) (Barbier, J.).
97 R. Doc. 10.
written motion by a party filed within thirty (380) days of a final judgment of the
Arbitration Tribunal, be reopened if authorized by this Court.
New Orleans, Louisiana, July 25, 2023.

WENDY heed
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10189701. Public record. Not legal advice.