The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CHUBB CAPITAL I
LIMITED ET AL. CIVIL ACTION
VERSUS NO: 23-5806
NEW ORLEANS CITY SECTION: “H”
ORDER AND REASONS
Before the Court is Defendant’s Motion to Stay Litigation Pending
Arbitration Between NOAB and Plaintiffs’ Insureds (Doc. 82). For the
following reasons, the Motion is GRANTED.
BACKGROUND
This case arises out of a contract dispute between the Crescent City
Aviation Team (“CCAT”) and Defendant the City of New Orleans by and
through the New Orleans Aviation Board (“NOAB”).1 NOAB and CCAT
contracted for CCAT’s provision of “professional engineering and architectural
design and related services” for construction of the new terminal facility at the
Louis Armstrong New Orleans International Airport (“the Design Services
Contract”).2 The Design Services Contract contains an arbitration clause.
1 CCAT is a joint venture composed of Leo A. Daly Company (“Daly”) and Atkins North
America, Inc. (“Atkins”).
2 Doc. 26 at 4.
Plaintiffs are a group of insurers (“the Insurers”) who provide
professional liability insurance coverage to Daly and Atkins, with CCAT listed
as an additional insured.3 On June 30, 2023, NOAB filed an arbitration
demand with the American Arbitration Association against CCAT, Daly,
Atkins, and the Insurers, demanding over $51 million in damages for errors
and omissions in CCAT’s project work.
On October 5, 2023, the Insurers filed suit in this Court, seeking (1) a
declaratory judgment that NOAB has no right to demand arbitration from
them and the Insurers should not be parties in the arbitration, and (2) a
preliminary and permanent injunction enjoining NOAB’s prosecution of the
arbitration against them.4 On May 6, 2024, this Court granted the Insurers’
request for a preliminary injunction, thereby enjoining NOAB’s arbitration
demand against the Insurers.5
Now before the Court is NOAB’s Motion to Stay Litigation Pending
Arbitration Between NOAB and Plaintiffs’ Insureds. The Insurers oppose.6
LEGAL STANDARD
The Federal Arbitration Act (“FAA”) requires a stay of proceedings
where the court finds that “the issue involved in such suit or proceeding is
3 Plaintiffs Chubb Capital I Limited, RenaissanceRe Corporate Capital (UK) Limited, Brit
UW Limited, and Swiss Re International SE had a contract of professional liability
insurance with Daly for the period of July 1, 2018 to July 1, 2019. Plaintiffs Catlin
Underwriting Agencies Limited, Scor Global P&C SE, AIG Europe Limited, Starr
Underwriting Agents Limited, Arch Insurance Canada Ltd., XL Reinsurance America Inc.,
Everest Insurance Company of Canada, Temple Insurance Company, and Aviva Insurance
Company of Canada had a contract of professional liability insurance with Atkins for the
period of April 30, 2020 to April 30, 2021.
4 Doc. 1 at 10.
5 Doc. 69. The Court also denied NOAB’s motion to compel the Insurers to arbitrate. Id.
6 Doc. 86 at 3.
referable to arbitration” pursuant to a written arbitration agreement.7 “In
some cases, of course, it may be advisable to stay litigation among the non-
arbitrating parties pending the outcome of the arbitration.”8 “That decision is
one left to the district court . . . as a matter of its discretion to control its
docket.”9 And if the district court issues a stay order, it must place “reasonable
limits on its duration.”10
LAW AND ANALYSIS
On May 6, 2024, this Court issued a preliminary injunction, enjoining
NAOB’s arbitration demand against the Insurers.11 The arbitration
proceedings—pending since June 30, 2023—among CCAT, Daly, and Atkins
(“the Insureds”) and NOAB will proceed. Various motions remain pending
before this Court, including a Rule 12(b)(6) motion to dismiss NOAB’s
counterclaim asserted against the Insurers. NOAB therefore asks this Court
to “not make substantive rulings” on the issues raised in these motions
“because such substantive issues as to the Insurers’ insureds’ liability under
Louisiana law are for the arbitrators to decide in the first instance.”12
Defendants, however, respond that the motion to stay is “premature
considering the pending Rule 12 motion” and that the issuance of a stay
“should not affect the ability of the Court to rule on the Rule 12 motion.”13
Under Louisiana law, insurers generally may owe their insureds a duty
to defend and/or a duty to indemnify. The duty to indemnify is the insurer’s
7 9 U.S.C. § 3.
8 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 20 n.23 (1983).
9 Id. (citing Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936).
10 GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711, 716 (5th Cir. 1985) (citing
Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 545 (5th Cir. 1983)).
11 Doc. 69.
12 Doc. 92-1 at 2.
13 Doc. 86 at 5.
“obligation to provide coverage for damage claims.”14 “‘[T]he insurer’s duty to
indemnify’ pertains to ‘a covered claim after judgment against the insured in
the underlying liability case.’”15 Therefore, resolution of the issue of the
insurer’s duty to indemnify the insured will necessarily depend on the
disposition of the merits of the injured party’s claim.16
Here, the merits of NOAB’s claims against the Insureds will be
determined in arbitration. NOAB has already initiated arbitration, and no
party disputes the validity and scope of the arbitration agreement between
NOAB and the Insureds.17 The Insurers’ duty to indemnify the Insureds,
among other issues, therefore depends upon the outcome of the pending
arbitration proceedings. Thus, the Court finds that issuance of a discretionary
stay pending resolution of arbitration between NOAB and the Insureds is
warranted to maintain control of this Court’s docket and to efficiently resolve
this case.
CONCLUSION
For the foregoing reasons, Defendant NOAB’s Motion to Stay Litigation
Pending Arbitration Between NOAB and Plaintiffs’ Insureds (Doc. 82) is
GRANTED.
IT IS ORDERED that the above-captioned matter is STAYED and
ADMINISTRATIVELY CLOSED pending resolution of the arbitration
14 Arceneaux v. Amstar Corp., 200 So. 3d 277, 281 (La. 2016) (citing Elliott v. Cont’l Cas. Co.,
949 So. 2d 1247, 1250 (La. 2007)).
15 Lewis v. State Nat’l Ins. Co., Inc., 368 So. 3d 653, 667 (La. App. 4th Cir. 2023) (citing
Brilliant Nat’l Servs., Inc. v. Travelers Indem. Co., 349 So. 3d 581, 585 (La. App. 1st Cir.
2022)).
16 Motorola, Inc. v. Assoc. Indem. Corp., 878 So. 2d 824, 837 (La. App. 1st Cir. 2004)).
17 In fact, the Insureds previously moved this Court to compel arbitration pursuant to the
Design Services Contract. See Doc. 34. The Court did not reach this alternative issue,
however, because it struck NOAB’s Third-Party Demand from the record. See Doc. 93.
proceedings between Defendant NOAB and CCAT, Daly, and Atkins. The case
may be re-opened upon motion of any party to this case upon resolution of the
arbitration proceedings.
IT IS FURTHER ORDERED that the oral argument on
Plaintiffs/Counterclaim Defendants’ Rule 12(b)(6) Motion to Dismiss presently
set for July 25, 2024 is CANCELLED.
New Orleans, Louisiana this 18th day of July, 2024.
gy TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE