# 3135 Dauphine LLC v. Independent Specialty Insurance Company

> District Court, E.D. Louisiana · September 26, 2023

URL: https://www.frixlaw.com/law-library/cases/10189956

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** September 26, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

3155 DAUPHINE LLC CIVIL ACTION
VERSUS NO. 23-2213
INDEPENDENT SPECIALTY INSURANCE SECTION: “G”(5)
COMPANY et al.

ORDER AND REASONS

Before the Court is Defendants Certain Underwriters at Lloyd’s, London, and Other
Insurers Subscribing to Binding Authority No. B604510568622021 and Independent Specialty
Insurance Company’s (collectively, “Insurers”) “Motion to Compel Arbitration and to Stay or,
Alternatively, Dismiss the Proceedings.”1 Plaintiff 3135 Dauphine LLC (“Plaintiff”) opposes,
arguing that the motion is premature and that the Court should order the parties to participate in
mediation.2 Considering the motion, the memoranda in support and in opposition, the record, and
the applicable law, the Court grants the motion, compels arbitration, and stays the claims against
Insurers pending arbitration.
I. Background
On June 27, 2023, Plaintiff filed a Complaint in this Court alleging that Defendants owe it
money under an insurance policy covering property damage caused by Hurricane Ida on August
29, 2021.3 Plaintiff alleges that Defendant Independent Specialty Insurance Company is a “foreign

1 Rec. Doc. 9.
2 Rec. Doc. 16.
3 Rec. Doc. 1 at 1–4.
insurance company” incorporated in Delaware and has its principal place of business in Texas.4
Plaintiff alleges that Certain Underwriters at Lloyds and Other Insurers Subscribing to
B604510568622021 is also a “foreign insurance company” that is incorporated in England and has
its U.S. principal place of business in New York.5 Plaintiff alleges that it owns property located at

3135 Dauphine Street, New Orleans, LA 70117 (“Property”) and that insurance policy number
2020-804569-02 (“Insurance Policy”) issued by Defendants was in effect when Hurricane Ida
struck and damaged the Property.6 Plaintiff asserts a breach of insurance contract claim and a claim
for bad faith insurance adjusting.7
On June 28, 2023, the Court issued the Hurricane Ida claims Amended Case Management
Order (“CMO”) in this case, which states that it is “presumed that the litigants in Hurricane Ida
cases will be subject to the [Streamlined Settlement Program] (“SSP.”).”8 On August 23, 2023,
Insurers filed the instant motion and noticed it for submission on September 20, 2023.9 On August
31, 2023, the Magistrate Judge granted Insurers’ Motion to Opt out of the Court’s Streamlined

Settlement Program in part to the extent necessary for Insurers to prosecute the instant Motion to
Compel Arbitration.10 On September 12, 2023, Plaintiff filed a response opposing Insurers’

4 Id.
5 Id. at 2.
6 Id. at 3.
7 Id. at 5–6.
8 Rec. Doc. 4 at 5.
9 Rec. Doc. 9.
10 Rec. Doc. 13.
motion.11 On September 19, 2023, Insurers filed a reply to Plaintiff’s opposition.12
II. Parties’ Arguments
A. Insurers’ Arguments in Support of the Motion to Compel Arbitration

Insurers move the Court to issue an Order staying this litigation and compelling arbitration
or in the alternative, to dismiss the Complaint in favor of arbitration.13 According to Insurers, the
Insurance Policy contains a mandatory arbitration clause.14 Insurers contend that the arbitration
provision in the Insurance Policy falls under the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (“Convention”).15 Insurers also contend that the arbitration provision
is “equally enforceable under the Federal Arbitration Act.”16
Insurers argue that the four criteria to compel arbitration under the Convention are
satisfied.17 First, Insurers assert that the Insurance Policy contains a written agreement to
arbitrate.18 Second, Insurers aver that the clause provides for arbitration in the United States, a
signatory nation to the Convention.19 Third, Insurers contend that the arbitration agreement arises

11 Rec. Doc. 16.
12 Rec. Doc. 20.
13 Rec. Doc. 9 at 1.
14 Id.
15 Id.
16 Id.
17 Rec. Doc. 9-1 at 7–9 (citing Brittania-U Nigeria, Ltd. v. Chevron USA, Inc., 866 F.3d 709, 712 (5th Cir.
2017) (“The requirements for Convention jurisdiction are typically (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.”) (quotations and citations
omitted)).
18 Id. at 8.
19 Id.
out of a commercial relationship between Plaintiff and Defendants.20 Fourth, Insurers argue that
some of the Defendants are not United States citizens.21 According to Insurers, “because the
Arbitration Agreement falls under the [] Convention, the Court should compel arbitration.”22

Insurers also argue that they have met the criteria for the Court to compel arbitration under
the Federal Arbitration Act.23 First, Insurers contend that the arbitration clause in the Insurance
Policy “is a valid agreement to arbitrate under Louisiana law.”24 Insurers then contend that “the
Court’s inquiry stops here,” because the arbitration provision contains a delegation clause that
requires the arbitration panel to decide whether this litigation falls within the scope of the
arbitration provision.25 Insurers argue even if the Court considered the second inquiry, whether the
dispute in question falls within the scope of the arbitration provision, this litigation here relates to
“[a]ll matters in dispute between [Plaintiff] and [Insurers] in relation to this Insurance …”26
Insurers also aver that 9 U.S.C. § 3 requires that this litigation be stayed pending
arbitration.27 Finally, Insurers note that “if the Court would prefer, it may also dismiss this action

20 Id.
21 Id.
22 Id. at 9.
23 Id. (citing Wilhem v. Thor Motor Coach, No. 17-1148, 2017 WL 2426007, at *2–*3 (E.D. La. June 5, 2017)
(Lemelle, J.) (“Accordingly, to determine if the parties agreed to arbitrate, the court should consider (1) whether a
valid agreement to arbitrate between the parties exist; and (2) whether the dispute in question falls within the scope of
that arbitration agreement.”) (quotations and citations omitted)).
24 Id. at 10.
25 Id.
26 Id.
27 Id. at 3. See also 9 U.S.C. § 3 (providing that the Court “shall on application of one of the parties stay the
trial of the action until such arbitration has been had in accordance with the terms of the agreement”).
because all the claims are arbitrable.”28
B. Plaintiff’s Arguments in Opposition to the Motion to Compel Arbitration
Plaintiff argues that Insurers’ motion should be denied because it is premature.29 Plaintiff

reasons that the Court’s CMO establishing the SSP stayed all pretrial matters except for initial
disclosures.30 In further support of this argument, Plaintiff cites to Southeastern Hospitality v.
Independent Specialty where another judge in this district denied a party’s motion to compel
arbitration as premature, which allowed the parties to go through mediation.31
Plaintiff also argues that the Court should require the parties to participate in the SSP and
allow the parties to resolve the matter through mediation.32 Plaintiff reasons that this is because
mediation “would serve the interests of judicial economy, encourage the efficient resolution of this
matter, and avoid potentially unnecessary costs to the parties.”33 Plaintiff further argues that
compelling arbitration and dismissing the case or staying it would be contrary to Insurers’ own
admitted goals of avoiding increased costs and lengthening time needed to resolve this case, which

insurers mentioned in their Motion to Opt out of the SSP.34
Plaintiff avers that “[o]rdering the parties to mediate this dispute through the SSP would
not violate the policy’s arbitration clause nor would it prejudice Defendants’ purported interest in

28 Rec. Doc. 9-1 at 13.
29 Rec. Doc. 16 at 1.
30 Id. at 2 (citing In re: Hurricane Ida Claims, First Amendment to Case Management Order No. 1 at 9).
31 Id. (citing Se. Hosp. Partners, LLC v. Ind. Specialty Ins. Co., Case No. 22-3771; Rec. Doc. 19 at 2).
32 Id. at 1, 3.
33 Id. at 3.
34 Id. (citing to Rec. Doc. 6 at 1).
compelling arbitration at a later date.”35 Plaintiff reasons that this is because the SPP is not a
process where the parties would submit the dispute for decision by a third-party, which Plaintiff
contends is what the arbitration clause covers.36 As to prejudice, Plaintiff reasons that requiring

mediation would not prejudice Insurers because they can still pursue arbitration at a later time if
mediation fails to resolve the case.37
C. Insurers’ Arguments in Further Support of its Motion to Compel Arbitration
Insurers filed a reply to Plaintiff’s response opposing the motion.38 First, Insurers argue
that compelling arbitration is mandatory and not permissive under the Convention.39 Second,
Insurers aver that the motion is timely and proper because this Court entered an Order granting
Insurers’ Motion to Opt Out of the SSP for the purpose of allowing them to prosecute their Motion
to Compel Arbitration.40 Insurers further argue that “Plaintiff’s reliance on Southeastern
Hospitality is misplaced, and its characterization of those proceedings is misleading.”41 Insurers
reason that Southeastern Hospitality is distinguishable because there, the parties already scheduled

a mediation that would occur two days after the submission on the defendant’s motion to compel
arbitration and the presiding judge ultimately denied the defendant’s motion to compel arbitration
without prejudice because mediation had to be rescheduled.42 In addition, Insurers argue that

35 Id. at 1, 3.
36 Id. at 4.
37 Id.
38 Rec. Doc. 20.
39 Id. at 2–3.
40 Id. at 3 (citing Rec. Doc. 13).
41 Id.
42 Id. at 3–4 (citing Se. Hosp., Case No. 22-3771; Rec. Doc. 17 at 2).
Southeastern Hospitality actually supports compelling arbitration because mediation in that case
ultimately failed and the defendant had to refile the motion to compel arbitration, thereby delaying
the case and wasting resources.43 Third, Insurers similarly contend that equity and judicial

economy support compelling arbitration because Plaintiff’s choice to file suit in this Court rather
than entering arbitration “forced the Court and Defendants to unnecessarily expend time and
resources addressing Plaintiff’s procedural impropriety.”44 Insurers also note that the Court is not
required to order that the parties participate in settlement negotiations and such an order would
delay resolution of the case.45 Fourth, Insurers contend that its forced participation in this litigation
rather than resolving this matter in an arbitral forum is in violation of the insurance contract.46
III. Law and Analysis
Insurers move the Court to issue an Order compelling arbitration and staying this
litigation.47 Insurers argue that the underlying insurance policy is governed by the Convention, and
that all requirements to compel arbitration under the Convention are met.48 Plaintiff opposes,

arguing that the motion is premature due to the Court’s CMO instituting the SSP.49 Plaintiff also
argues that the Court should require the parties to participate in the SSP and resolve the matter
through mediation because it is more time and cost effective.50

43 Id. at 5 (citing Se. Hosp., Case No. 22-3771; Rec. Doc. 28).
44 Id.
45 Id. at 6.
46 Id.
47 Rec. Doc. 9.
48 Id.
49 Rec. Doc. 16.
50 Id.
A. Whether the motion to compel is premature
As an initial matter, the Court must determine if Insurers’ motion is premature. Plaintiff
contends that because the parties in this case are bound by the Court’s CMO in which the case is

stayed and the parties must participate in the SSP, ordering the parties to arbitrate their dispute
would be premature.51 However, the CMO allows either party to petition the Magistrate Judge to
opt out of the SSP for good cause within 15 days of the defendant filing responsive pleadings.52
Subsequently, Insurers filed a motion to opt out of the SPP within 15 days after they filed an
answer.53 The Magistrate Judge then granted the Insurers’ motion to opt out of the SSP so that the
Court may consider Insurers’ instant motion to compel arbitration.54
This case is distinguishable from Southeastern Hospitality, which Plaintiff cites, because
the parties there already scheduled a mediation date when the defendants filed the motion to
compel arbitration and noticed it for submission two days before the mediation date.55 The plaintiff
there filed a response to the defendant’s motion to compel and sought to continue the submission

date.56 The presiding judge denied the defendant’s motion to compel arbitration as premature, but
without prejudice, because the parties provided an update that their originally scheduled mediation
date had to be rescheduled.57 Here, the parties have not represented that there is a scheduled

51 Id. at 1.
52 Rec. Doc. 4 at 5.
53 Rec. Docs. 5, 6.
54 Rec. Doc. 13.
55 Case No. 22-3771; Rec. Docs. 16, 17.
56 Case No. 22-3711; Rec. Doc. 16.
57 Case No. 22-3711; Rec. Doc. 19.
mediation that would be close to the submission date for the motion to compel arbitration.
Therefore, Plaintiff’s arguments that Insurers’ motion is premature is unavailing.
B. Whether the Court is required to compel arbitration

The Court must next determine whether it is required to compel arbitration, as Insurers
argue, or if the Court may order the parties to participate in mediation instead of arbitration, as
Plaintiff argues.
In 1958, the United Nations Economic and Social Council adopted the Convention.58 In
1970, the United States acceded to the treaty (the “Convention Act”), which was subsequently
implemented by Chapter 2 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 201 et seq.59 Article
II(1) of the Convention requires contracting states, including the United States, to recognize certain
written arbitration agreements. It states:
Each Contracting State shall recognize an agreement in writing under which the
parties undertake to submit to arbitration all or any differences which have arisen
or which may arise between them in respect of a defined legal relationship, whether
contractual or not, concerning a subject matter capable of settlement by arbitration.

Section 201 of the FAA provides that the Convention shall be enforced in United States
courts.60 The Supreme Court has stated that “[t]he goal of the Convention, and the principal
purpose underlying American adoption and implementation of it, was to encourage the recognition
and enforcement of commercial arbitration agreements in international contracts and to unify the

58 Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257, 1262 (11th Cir. 2011).
59 Id.
60 9 U.S.C. § 201 (“The Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June
10, 1958, shall be enforced in United States courts in accordance with this chapter.”).
standards by which agreements to arbitrate are observed and arbitral awards are enforced in the
signatory countries.”61
The Convention Act provides that “[a] court having jurisdiction under this chapter may

direct that arbitration be held in accordance with the agreement at any place therein provided for,
whether that place is within or without the United States.”62 In applying the Convention, the Fifth
Circuit has held that “courts conduct only a very limited inquiry.”63 Under this inquiry, a court
should compel arbitration if (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.64 Once these requirements are met, the Convention requires the district court to order
arbitration, “unless it finds that the said agreement is null and void, inoperative or incapable of
being performed.”65
As a general matter, arbitration provisions in insurance contracts are void under Louisiana

law.66 “The McCarran-Ferguson Act permits states to reverse-preempt an otherwise applicable
‘Act of Congress’ by enacting their own regulations of the insurance industry.”67 However, the
McCarran-Ferguson Act does not apply to “a treaty, such as the Convention, which ‘remains an
international agreement or contract negotiated by the Executive Branch and ratified by the Senate,

61 Scherk v. Alberto–Culver Co., 417 U.S. 506, 520 n.15 (1974).
62 9 U.S.C. § 206.
63 Freudensprung, 379 F.3d at 339.
64 Id.
65 Id.
66 McDonnel Grp., L.L.C. v. Great Lakes Ins. SE, UK Branch, 923 F.3d 427, 431 (5th Cir. 2019).
67 Id.
not by Congress.’”68 Therefore, the Convention Act is not reverse-preempted by state law, and
arbitration provisions that fall under the Convention Act are enforceable in Louisiana.69
Here, the Court finds that the requirements to compel arbitration under the Convention Act

are met. First, the insurance policy contains a written agreement to arbitrate in Section H,
subsection 4 of the policy.70 Second, that clause provides for arbitration in a signatory nation—
namely, the United States.71 Third, the arbitration agreement arises from a commercial legal
relationship because it is contained in an insurance policy issued to a business.72 Fourth, Defendant
Lloyd’s of London is a citizen of nations other than the United States. For example, multiple
underwriters at Defendant Lloyd’s of London are citizens of the United Kingdom, Great Britain,
and Bermuda.73 Plaintiff does not argue that the arbitration clause is unenforceable or that it is not
mandatory. Nor does the Court have discretion to order mediation in place of arbitration given that
the mandatory arbitration clause is enforceable and requires the Court to compel arbitration.74 The
Court recognizes the importance of mediation in resolving disputes and the parties may seek

permission from the arbitral forum to participate in mediation if they agree to do so. Accordingly,

68 Id. at 432 (quoting Safety Nat. Cas, Corp. v. Certain Underwriters at Lloyd’s London, 587 F.3d 714, 723
(5th Cir. 2009)).
69 Id.
70 See Rec. Doc. 9-2 at 39–40 (Insurance Policy Arbitration Clause).
71 See id at 40. (“Any arbitration shall take place in Nashville, Tennessee, unless some other locale is agreed
by the Arbitrator or Arbitration Tribunal.”).
72 Rec. Doc. 9–2 (Insurance Policy).
73 Rec. Doc. 9-1 at 2–3. Plaintiff has not opposed Insurers’ representation that certain members subscribing
to a portion of the Insurance Policy are not citizens of the United States. See Rec. Doc. 16. In addition, Plaintiff’s
complaint alleges that Defendant Certain Underwriters at Lloyd’s and Other Insurers Subscribing B604510568622021
is incorporated under the laws of England. Rec. Doc. 1 at 2.
74 Brittania-U Nigeria, 866 F.3d at 712; Freudensprung, 379 F.3d at 339; Franco’s Athletic Club LLC v.
Davis et al., No. 21-1647, 2022 WL 229343 (E.D. La. Jan. 26, 2023) (Brown, CJ).
the Court will compel arbitration. Additionally, when a court compels arbitration, it “shall . . . stay
the trial of the action . . . until such arbitration has been had.” Therefore, the Court will stay the
claims against Insurers pending arbitration.
V. Conclusion
Based on the foregoing,
IT IS HEREBY ORDERED that Insurers’ “Motion to Compel Arbitration and to Stay or
Alternatively, Dismiss the Proceedings”’® is GRANTED.
IT IS FURTHER ORDERED that the claims against Insurers are STAYED and the case
is administratively closed pending arbitration.
NEW ORLEANS, LOUISIANA, this 26th day of September, 2023.

NANNETTE JQZIVETTE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

5 9US.C. § 3.
% Rec. Doc. 9.
12

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10189956. Public record. Not legal advice.