CAN YOUR INSURANCE COMPANY SELECT THE STATE OR FORUM WHERE YOUR CLAIM MUST BE FILED?

Yes, according to the decision of the Louisiana Supreme Court in Creekstone Juban I, L.L.C. v. XL Insurance (See http://www.lasc.org/opinions/2019/18-0748.CC.OPN.pdf)

This case involved a claim for flood damage, contents damage to commercial real estate east of Baton Rouge, Louisiana, during the historic flooding in August 2016. The claims of the property owner also included loss of revenue. Although some of the insurance benefits had been paid to the property owner, a dispute arose regarding the remaining value of the owner’s claims. Suit was filed in Livingston Parish, Louisiana.

The insurance company filed exceptions and a motion to dismiss. The insurance company’s primary argument was its policy had a forum selection clause which required the property owner and insurance to bring their claims and disputes exclusively in New York. The trial court and appellate court found Louisiana law forbid insurance companies from including this type clause or language in insurance policies. The Louisiana Supreme Court disagreed; however, two justices dissented from the Supreme Court’s decision and would have affirmed the trial court and appellate court’s decisions.

Louisiana Revised Statute 22:868 states:

No insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state, …, 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 of action against the insurer.

However, the majority of the Supreme Court found this statute does not prevent an insurance company from requiring its insureds to bring claims in another state, even as far away as New York. The Court’s majority held an insurance company cannot deprive Louisiana courts of jurisdiction, but the insurance company can deny the insureds a day in a Louisiana court.

The case was sent back to the trial court where it will either be dismissed or transferred to a court in New York.

The implications of this case are unknown. Louisiana insureds should look at their insurance policies to see if those policies have similar forum selection clauses.

Hopefully you never have a claim, or if you do, hopefully, your insurance company handles your claim correctly.

If not, Frederick Law Firm is here to discuss your claim, review your policy, and explain your rights. At Frederick Law Firm, where you get the Frederick Fee Guarantee, we strive to be Fast Fair and Focused on our client’s needs.

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