The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
GREGORY JAMES CHIARTANO * CIVIL ACTION
VERSUS * NO. 23-6288
STATE FARM FIRE AND CASUALTY * SECTION “J” (2)
INSURANCE COMPANY, ET AL.
ORDER AND REASONS
Pending before me is Defendants Dover Bay Specialty Insurance Company and State Farm
Fire and Casualty Insurance Company’s Motion to Opt Out of Streamlined Settlement Program.
ECF No. 10. As of this date, Plaintiff has not filed an Opposition Memorandum, and the deadline
for same expired on Tuesday, February 27, 2024. See E.D. La. L.R. 7.5.
Having considered the record, the submissions and arguments of counsel, and the
applicable law, Defendants’ Motion to Opt Out (ECF No. 10) is GRANTED IN PART AND
DENIED IN PART for the reasons stated herein.
I. BACKGROUND
Plaintiff Gregory James Chiartano filed suit in state court against Defendants Dover Bay
Specialty Insurance Company and State Farm Fire and Casualty Insurance Company seeking to
recover for losses incurred as a result of Hurricane Ida, as well as extra-contractual damages. ECF
No. 1-1. After removal, Defendants filed a Motion to Dismiss for Failure to State a Claim, which
Judge Barbier recently denied as premature given the parties’ failure to opt out of the Hurricane
Ida Streamlined Settlement Program (“SSP”) within 15 days of the filing of Defendants’
responsive pleading. ECF Nos. 7, 9.
Defendants now seek leave to opt out of the SSP in order to file a dispositive motion
seeking dismissal on the basis that Plaintiff is not a named or additional insured under the policy
of insurance. ECF No. 10-1 at 2. Defendants admit that they failed to timely request leave to opt
out of the SSP but argue that, if they were to file an answer in order for the parties to proceed with
a CMO mediation, they would waive certain defenses under Rule 12. Id. Defendants further argue
that State Farm has filed similar motions to dismiss in Hurricane Ida cases in this Court, which
motions were granted without either party opting out of the SSP. Id. at 2-3 (citing cases).
Moreover, Defendants argue, they cannot participate in a mediation with Plaintiff because he is
not a named or additional insured under the policy. Id. at 3. Defendants argue that, just as Chief
Magistrate Judge North may authorize a stay of discovery in Hurricane Ida cases in “exceptional
circumstances,” this Court should permit the parties to opt out of the SSP so that Defendants may
re-file their dispositive motion despite the expiration of the opt-out deadline. Id.
II. APPLICABLE LAW & ANALYSIS
On August 26, 2022, this Court adopted CMO No. 1 to govern Hurricane Ida claims. CMO
#1 includes provisions for certain mandatory initial disclosures as well as a streamlined settlement
program (“SSP”) that requires parties to engage in informal settlement conferences as well as
court-ordered mediation. See Sections 1, 3. Although parties may generally not opt out of the
mandatory initial disclosures set forth in Section 1, within 15 days of the responsive pleading or
entry of the CMO, a party may seek to opt-out of the SSP in Section 3 upon a showing of good
cause. See Section 3.
Although Defendants failed to seek leave to opt-out of the SSP within fifteen days of filing
a responsive pleading, as recently explained by Chief Judge Brown, the court adopted the
Hurricane Ida CMO to facilitate the speedy and orderly resolution of insurance cases arising out
of Hurricane Ida through the SSP.1 Requiring the parties to proceed with the SSP when the
1 Okpalobi v. American Nat’l Prop. & Cas. Co., No. 23-6691, 2024 WL 838464, at *9 (E.D. La. Feb. 28, 2024).
plaintiff is alleged to have no viable claim because he is not a named insured or third party
beneficiary hinders the efficient resolution of this matter and thus would be contrary to the goals
of the CMO.’ District judges on our court have granted delinquent motions to opt-out when same
promotes the efficient administration of justice.> Accordingly, Defendants’ request to opt-out of
the CMO 1s granted, but only for the limited purpose of filing their dispositive motion. The parties
remain obliged to comply with all other terms of the CMO unless or until the matter is resolved
on Defendant’ s motion or otherwise.
I. CONCLUSION
For the foregoing reasons, Defendants are granted limited relief from the CMO, solely for
purposes of pursuing their Motion to Dismiss on the basis of whether Plaintiff is a named or
additional insured under the governing policy. Accordingly,
IT IS ORDERED that Defendants’ Motion to Opt Out of the Streamlined Settlement
Program (ECF No. 10) is GRANTED IN PART AND DENIED IN PART. Defendants are granted
limited relief from the CMO’s automatic stay solely to enable them to pursue their motion to
dismiss as set forth herein. If the motion is denied or the case otherwise remains on the docket, it
will remain subject to the Hurricane Ida CMO and the Streamlined Settlement Program.
New Orleans, Louisiana, this 6th day of March, 2024.
UNITED STATES MAGISTRATE JUDGE
Td.
3 Td. (citations omitted).