The U.S. Fifth Circuit Court of Appeals upheld the dismissal of a Louisiana-based insured's lawsuit seeking coverage, finding that a New York forum-selection clause in the policy is not violative of public policy or Louisiana statute. Al Copeland Investments, L.L.C. v. First Specialty Ins. Corp., 884 F.3d 540 (5th Cir. 2018).
The insured, a Louisiana-based restaurant operator, sought coverage under an insurance policy for damage sustained to one of its facilities. The insurer denied the claim, and the insured filed suit in federal court in Louisiana to recover damages and costs incurred as a result of the property damage. The insurer moved to dismiss arguing that the policy's forum-selection clause required litigation in New York. The district court granted the insurer's motion and the insured appealed.
On appeal, the insured argued that the clause violated Louisiana's public policy against forum-selection clauses in insurance contracts derived from Louisiana Revised Statute §22:868, which provides that "[n]o insurance contract delivered or issued ... in Louisiana ... shall contain any condition, stipulation, or agreement ... [d]epriving the courts of [Louisiana] of the jurisdiction of action against the insurer." The Fifth Circuit disagreed, finding that the statute does not evince a public policy against forum-selection clauses in insurance contracts because venue and jurisdiction are separate and distinct and forum-selection clauses concern venue, not jurisdiction. It affirmed the district court's enforcement of the provision and dismissal of the suit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
