RICHARDS CLEARVIEW CITY CENTER LLC AND RICHARD CANAL STREET PROPERTY LLC v. STARR SURPLUS LINES INSURANCE COMPANY (2025)

BACKGROUND

This and its companion case, 24-C-114, came before us previously on applications for supervisory writs that presented the same res nova question: whether the 2020 enactment of La. R.S. 22:868(D), that creates an exception to the general prohibition on forum selection clauses in Louisiana insurance contracts ¹ for “forum or venue selection clauses in a policy form that is not subject to approval by the Department of Insurance,” supersedes and repeals by implication the older statutory language of La. R.S. 22:442(A) that requires all suits against unauthorized insurers for claims arising from their surplus lines property and casualty insurance contracts to be brought in the district court of the parish in which the cause of action arose?

In our previously published opinions from June 5, 2024, after a review of the relevant provisions of the Louisiana Insurance Code and jurisprudence, we answered this question in the negative and held that the forum selection clauses contained in the surplus lines insurance policies issued by defendant Starr to plaintiff Richards were null and void as prohibited by La. R.S. 22:442(A).² Richards Clearview City Ctr., LLC v. Starr Surplus Lines Ins. Co., 24-104 (La. App. 5 Cir. 6/5/24), 391 So.3d 101; Richard's Clearview, LLC v. Starr Surplus Lines Ins. Co., 24-114 (La. App. 5 Cir. 6/5/24), 391 So.3d 739.

On February 5, 2025, the Louisiana Supreme Court issued a per curium order remanding the cases back to our court solely for the purpose of “reconsideration in light of Police Jury of Calcasieu Parish v. Indian Harbor Ins. Co., 2024-0449 (La. 10/25/24), 395 So.3d 717.” Richard's Clearview, LLC v. Starr Surplus Lines Ins. Co., 2024-00864 (La. 2/5/25), 400 So.3d 95. On remand, we allowed the parties to file additional briefs specifically addressing the order of the Supreme Court. Upon review of Calcasieu Parish and the arguments of parties, on reconsideration, we stand by and maintain our original determination that La. R.S. 22:868(D) does not supersede or repeal the mandatory venue provisions for surplus lines insurers La. R.S. 22:442(A) for reasons more fully articulated below.

DISCUSSION

In Calcasieu Parish, the Louisiana Supreme Court considered certified questions from the United States District Court for the Western District of Louisiana Lake Charles Division. 395 So.3d 717. The Police Jury of Calcasieu Parish, a political subdivision of the State of Louisiana, brought suit against its domestic insurers over property damage caused by Hurricanes Laura and Delta in 2020. Id. In its response to the first question presented, the Court considered whether the addition of Subsection D to La. R.S. 22:868, that permits inclusion of forum and venue selection clauses in limited circumstances, implicitly repealed Subsection A's long-standing prohibition of arbitration clauses in all insurance policies in Louisiana. Id. at 723. The Court answered that question in the negative, concluding that La. R.S. 22:868(D) neither expressly nor implicitly repealed La. R.S. 22:868(A).

Next, the Court considered whether La. R.S. 22:868(D) superseded the prohibitions on venue and arbitration clauses in all contracts with political subdivisions of the State contained in La. R.S. 9:2778. Id. at 726. The Court found that the prohibitions contained in La. R.S. 9:2778 are not superseded by enactment of La. R.S. 22:868(D). We find the Supreme Court's reasoning and holdings on these questions to be consistent with our own analysis.

La. R.S. 22:868

For completeness, we restate the relevant language of La. R.S. 22:868 considered by the Supreme Court in Calcasieu Parish and this Court in our previous dispositions:

A. No insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state, or any group health and accident policy insuring a resident of this state regardless of where made or delivered, shall contain any condition, stipulation, or agreement either:

(1) Requiring it to be construed according to the laws of any other state or country except as necessary to meet the requirements of the motor vehicle financial responsibility laws of such other state or country.

(2) Depriving the courts of this state of the jurisdiction or venue of action against the insurer.

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D. The provisions of Subsection A of this Section shall not prohibit a forum or venue selection clause in a policy form that is not subject to approval by the Department of Insurance.

In its discussion of this statute and whether or not the addition of Subsection D by legislative amendment in 2020 implicitly repealed Subsection A, the Court stated, “[w]e find no irreconcilable conflict between Subsections A and D, thus there is no repeal by implication. Rather, the plain language of Subsection D creates a limited exception in which a forum or venue selection clause is permitted in certain types of insurance contracts․[W]e find the Legislature's enactment of Subsection D provided merely a carve-out, allowing a forum or venue selection clause in limited circumstances, i.e., policies not subject to approval by the Department of Insurance. The language of the statute as amended is clear and unambiguous.” Id. at 725.

These findings are consistent with those expressed in our previous decisions where we stated, “’[t]he plain, unambiguous meaning of this language is that Subsection D of La. R.S. 22:868 creates an exception to the general and broad prohibition on forum selection clauses in Louisiana insurance policies stated in Subsection A. The language of Subsection D does not expressly authorize the use of forum selection clauses in all surplus lines policies, rather, it creates an exception to the limits on such clauses stated in Subsection A of La. R.S. 22:868.” Richards Clearview, 24-104, 391 So.3d at 107; Richards Clearview, 24-114, 391 So.3d at 747.

As we previously stated, the unambiguous language of Subsection D makes no express reference to surplus lines insurers. Rather, it makes general reference to policy forms that are not subject to approval by the Department of Insurance as those in which forum selection clauses are not prohibited. The approval of forms by the Department of Insurance is governed by La. R.S. 22:861, which sets forth a general policy that insurance policies may only be issued and delivered when the form has been filed with and approved by the commissioner of insurance:

A. (1) No basic insurance policy form, other than fidelity or surety bond forms, or application form where written application is required and is to be attached to the policy, or be a part of the contract or printed life, annuity, or health and accident rider or endorsement form shall be issued, delivered, or used unless it has been filed with and approved by the commissioner of insurance.

The statute makes no express reference to “surplus lines insurers,” but states instead the following exception for commercial property and casualty policies insuring special commercial entities:

F. Insurers negotiating with and insuring special commercial entities shall be exempt from the form filing and approval requirements of this Section. The commissioner shall adopt rules and regulations necessary for the implementation of this Subsection including a provision defining special commercial entities which qualify for exemption. The definition of exempt commercial policyholder shall be reviewed periodically by the commissioner. This Subsection shall apply only to commercial property and casualty insurance. The regulations required by this Subsection shall be issued by the commissioner.

Under the plain language of the R.S. 22:861, there are types of insurance policy forms other than surplus lines property and casualty insurance contracts which are not subject to approval by the Department of Insurance. The most obvious example of this is the exception for fidelity and surety bond forms stated in Subsection A of La. R.S. 22:861.³ Reading this statute in relation to La. R.S. 22:868, there are several types of insurance that do not require form pre-approval by the Insurance Commissioner to which La. R.S. 22:868(D) could apply.

La. R.S. 22:868(D) and La. R.S. 22:442(A)

Implicit in our above statements, and more expressly emphasized by the Supreme Court in its analysis of La. R.S. 9:2778, is the importance of harmonizing related statutes. It is presumed that the Legislature (1) intends to achieve a consistent body of law, and (2) has enacted each statute with deliberation and full knowledge of all existing laws on the same subject. Calcasieu Parish, 395 So.3d at 723. Statutory repeals by implication are not favored, and the Court will not find an implicit repeal when there exists any possible construction in which both provisions have full effect. Id. The Legislature further directs that those statutes within the Insurance Code which relate to a “particular kind of insurance or a particular type of insurer ․ shall prevail over provisions relating to ․ insurers in general, or to such matter in general.” La. R.S. 22:17.

As the Court illustrated in its examination of La. R.S. 9:2778, the Legislature not only failed to state that La. R.S. 22:868(D) superseded all other statutes on the subject, it also did not cross-reference or concomitantly amend the older statute when it enacted La. R.S. 22:868(D) in 2020. Id. at 728. We make the same observation here. Presumably, the Legislature enacted La. R.S. 22:868(D) with full knowledge of both La. R.S. 22:861, specifying which forms were subject to approval by the Department of Insurance, and La. R.S. 22:442 concerning the mandatory forum requirements for suits against unauthorized insurers on surplus lines policies.⁴ Our interpretation gives effect to both La. R.S. 22:868(D) and La. R.S. 22:422(A) by recognizing that there are other kinds of policies besides those surplus lines governed by La. R.S. 22:442 not subject to the approval to which La. R.S. 22:868(D) may apply. Such was not the case for the surplus lines property and casualty insurance policies issued by Starr to Richards.

For the foregoing reasons, we reaffirm our previous decisions denying Starr's applications for supervisory writs.

AFFIRMED ON RECONSIDERATION

The Louisiana Supreme Court, in a per curiam opinion, remanded this matter for reconsideration in light of Police Jury of Calcasieu Par. v. Indian Harbor Ins. Co., 24-449 (La. 10/25/24), 395 So. 3d 717. After reviewing the Supreme Court's opinion though, I do not believe that it provides specific guidance on this Court's original opinion. Thus, I maintain my original concurrence.

Calcasieu Parish certainly has reaffirmed and made it clear that the 2020 amendment to La. R.S. 22:868(D) allows forum or venue selection clauses in certain types of insurance contracts. But Calcasieu Parish did not even mention La. R.S. 22:442(A), nor did the decision attempt to harmonize La. R.S. 22:868(D) with La. R.S. 22:446(A), which provides that “[t]he commissioner [of insurance] shall not require surplus lines insurers to file or seek approval of their forms and rates for property and casualty insurance except as provided in R.S. 22:1456(B)(2) relative to public carrier vehicles.” (Emphasis added). Finally, Calcasieu Parish did not address whether or not strong public policy would prohibit the forum selection clause in the pending case.

Accordingly, despite the majority's well-reasoned analysis, I maintain my original position, concurring with the majority opinion to deny Starr's declinatory exception of improper venue. But I do so for different reasons.

For the convenience of the reader, my original concurrence is included in its entirety below:

I concur with the majority's decision to deny Starr's declinatory exception of improper venue but for different reasons.

The seminal decision by the Louisiana Supreme Court in Shelter Mutual Ins. Co. v. Rimkus Consulting Group, Inc. of Louisiana, 13-1977 (La. 7/1/14), 148 So.3d 871, 878, held that forum selection clauses in contracts are generally enforceable and are not per se violative of public policy in Louisiana.

We hold that [forum selection] clauses should be enforced in Louisiana unless the resisting party can ‘clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching․ [or that] enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.’

Id. at 881 (citation omitted.)

Additionally, in Creekstone Juban I, L.L.C. v. XL Ins. Am., Inc., 18-0748 (La. 5/8/19), 282 So.3d 1042, 1048, the Louisiana Supreme Court determined that La. R.S. 22:868 “does not indicate that Louisiana has a strong public policy against forum-selection clauses in insurance contracts.”

After Creekstone, the Louisiana legislature amended La. R.S. 22:868 in 2020 in two important respects. The legislature added the words “or venue” to La. R.S. 22:868(A)(2) and added a new section (D), which provides: “[t]he provisions of Subsection A of this Section shall not prohibit a forum or venue selection clause in a policy form that is not subject to approval by the Department of Insurance.”

Consequently, the current version of La. R.S. 22:868 provides in pertinent part:

A. No insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state, or any group health and accident policy insuring a resident of this state regardless of where made or delivered, shall contain any condition, stipulation, or agreement either:

(1) Requiring it to be construed according to the laws of any other state or country except as necessary to meet the requirements of the motor vehicle financial responsibility laws of such other state or country.

(2) Depriving the courts of this state of the jurisdiction or venue of action against the insurer.

***

C. Any such condition, stipulation, or agreement in violation of this Section shall be void, but such voiding shall not affect the validity of the other provisions of the contract.

D. The provisions of Subsection A of this Section shall not prohibit a forum or venue selection clause in a policy form that is not subject to approval by the Department of Insurance.

Also relevant to the analysis are the provisions of La. R.S. 22:446(A), which provide that “[t]he commissioner [of insurance] shall not require surplus lines insurers to file or seek approval of their forms and rates for property and casualty insurance except as provided in R.S. 22:1456(B)(2) relative to public carrier vehicles.” (Emphasis added).

Thus, in light of the amendment to La. R.S. 22:868, I would find that surplus lines insurers fall under the exception created by the legislature under section D as they are not required to have their forms approved by the Insurance Commissioner. Accordingly, surplus lines insurers, like Starr, are generally permitted to include forum selection clauses in their policies. However, as noted in Shelter Mutual, forum selection clauses should be enforced, unless, as in this case, the clause would contravene a strong public policy of the forum in which suit is brought, as declared by statute. Shelter Mut. Ins. Co., 148 So. 3d at 881.

The insurance policy issued by Starr contains more than a forum selection clause though. It also includes a choice of law provision. The combined “Choice of Law and Choice of Venue” provision of the subject policy states:

No suit, action, or proceeding regarding this POLICY for the recovery of any claim shall be sustainable in any court of law or equity unless the Insured shall have fully complied with all the requirements of this POLICY. The COMPANY agrees that any suit, action, or proceeding against it for recovery of any claim under this POLICY shall not be barred if commenced within the time prescribed in the statutes of the State of New York. Any suit, action, or proceeding against the COMPANY must be brought solely and exclusively in a New York state court or a federal district court sitting within the State of New York. The laws of the State of New York shall solely and exclusively be used and applied in any such suit, action, or proceeding, without regard to choice of law or conflict of law principles. (Emphasis added).

This language creates a dilemma for the Court because the record in this case indicates that if this case is transferred to New York, Starr will argue in the New York courts that New York law applies.¹ And it appears from the decision rendered in Louisiana Revitalization Fund LLC v. Starr Surplus Lines Insurance Co., No. 23CV1006VSBVF, 2024 WL 1337617 (S.D.N.Y. Mar. 27, 2024)(Figueredo, Mag. J., Report and Recommendation) that the New York courts would apply New York law to the subject contract, which would be in direct violation of Louisiana's strong, public policy against choice of law provisions in insurance contracts as set forth in La. R.S. 22:868(A)(1).

In the Louisiana Revitalization Fund case, the same defendant, Starr, and even some of the same attorneys who represent Starr, were involved. Moreover, the case had the same choice of law provision, involved property damage in Metairie, Louisiana resulting from Hurricane Ida and was initially filed in the 24th Judicial District Court before being removed to the Eastern District of Louisiana. The Eastern District then transferred the case to the United States District Court for the Southern District of New York based upon the forum selection clause in the contract just like Starr is requesting here. The plaintiffs filed a motion for partial summary judgment asking for a determination that Louisiana law apply because La. R.S. 22:868 prohibits choice of law provisions that apply the laws of other states. After conducting an extensive choice-of-law and conflict-of-law analysis though, the Magistrate Judge concluded that New York Court of Appeals precedent required application of New York law given the parties’ choice-of-law provision in the policy.

It stands to reason then that the same analysis in Louisiana Revitalization Fund will occur in the case at bar if this Court grants Starr's exception and transfers this case to New York. As the trial court noted during oral argument in this case:

And [plaintiff's counsel is] right you have an out-of-state company who agrees to abide by Louisiana laws and comes here to write insurance and then when there's a claim made they expect the property owner to go to fight it in New York, using New York laws when that was really not the deal that was made when they started writing insurance here.

Whether New York or Louisiana law applies in this case makes a difference to plaintiffs. If New York law applies, then plaintiffs will not be able to assert their claims regarding Starr's alleged bad faith under La. R.S. 22:1973 and 22:1892.

For all of the above reasons, while I concur in the result, I do not agree with the majority's opinion that La. R.S. 22:868 and 22:442(A) specifically prohibit forum selection clauses in Louisiana insurance policies from surplus lines insurers.

FIFTH CIRCUIT

101 DERBIGNY STREET (70053)

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www.fifthcircuit.org

SUSAN M. CHEHARDY CHIEF JUDGE

FREDERICKA H. WICKER

JUDE G. GRAVOIS

MARC E. JOHNSON

STEPHEN J. WINDHORST

JOHN J. MOLAISON, JR.

SCOTT U. SCHLEGEL

TIMOTHY S. MARCEL

JUDGES

CURTIS B. PURSELL CLERK OF COURT

SUSAN S. BUCHHOLZ CHIEF DEPUTY CLERK

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I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY APRIL 4, 2025 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:

24-C-104

CURTIS B. PURSELL CLERK OF COURT

E-NOTIFIED

24TH JUDICIAL DISTRICT COURT (CLERK)

HONORABLE DANYELLE M. TAYLOR (DISTRICT JUDGE)

RICHARD P. VOORHIES, III (RESPONDENT)

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FOOTNOTES

1.   La. R.S. 22:868(A).

2.   The Starr Surplus Lines Insurance Company property and casualty insurance contracts at issue in 24-C-104 and 24-C-114 contain identical choice of law and choice of venue clauses.

3.   See also Bruney v. Magnolia Quarterboats, Inc, 97-187 (La. App. 5 Cir. 3/11/98), 711 So.2d 308 and Swinea v. Humana, Inc., 51,719 (La. App. 2 Cir. 2/15/17), 215 So.3d 897 indicating that certain marine and disability insurers may have forms not subject to approval by the Department of Insurance.

4.   We further observe that La. R.S. 22:443 excludes certain types of surplus lines insurances from the mandatory venue provision contained in R.S. 22:442.

1.   Counsel for Starr admitted this during oral argument in the district court. Additionally, Starr's writ application states: “Starr reserves the right to assert that New York law applies to this dispute under the choice-of-law clause.” Further, Starr's answer asserts as a 30th affirmative defense that “[t]he Policy contains a New York choice of law provision. Plaintiffs’ claims fail under New York law, which the Policy requires be applied in this action.”

TIMOTHY S. MARCEL JUDGE

CONCURS WITH REASONS SUS