Olsen Securities Corporation, Inc v. Certain Underwriters at Lloyd's London

CourtDistrict Court, E.D. Louisiana
DecidedMay 12, 2025
Docket2:22-cv-03120
StatusUnknown

This text of Olsen Securities Corporation, Inc v. Certain Underwriters at Lloyd's London (Olsen Securities Corporation, Inc v. Certain Underwriters at Lloyd's London) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Olsen Securities Corporation, Inc v. Certain Underwriters at Lloyd's London, (E.D. La. 2025).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

OLSEN SECURITIES CORP., et al. CIVIL ACTION VERSUS NO. 22-3120 CERTAIN UNDERWRITERS AT LLOYD’S SECTION: “G”(1) LONDON, et al.

ORDER AND REASONS Before the Court is Plaintiffs Olsen Securities Corporation, Inc., OSC Management, Inc., Jasmine Lane Associates, Ltd., Lancelot Square TC-17 Associates Limited Partnership, Old Man River, LP, St. Rose Associates, Ltd., Willow Ridge Associates, Ltd., Pine Cliff TC-17 Associates Limited Partnership, Airport Road Associates, Ltd., College Towne Partnership, Green Oaks Associates, Ltd., and Cedar Court Associates, Ltd.’s (collectively, “Plaintiffs”) Motion to Lift Stay and Vacate Arbitration Order.1 This litigation involves an insurance dispute following alleged property damage caused by Hurricane Ida.2 On January 25, 2023, this Court granted Defendants Safety Specialty Insurance Company, Old Republic Union Insurance Company, Certain Underwriters at Lloyd’s, London, HDI Global Specialty SE, Indian Harbor Insurance Company, QBE Specialty Insurance Company, Steadfast Insurance Company, General Security Indemnity Company of Arizona, United Specialty Insurance Company, and Lexington Insurance Company (collectively, “Defendants”) Motion to Compel Arbitration and Stay Proceedings.3

1 Rec. Doc. 21. 2 Rec. Doc. 1. 3 Rec. Doc. 16. Plaintiffs now request that the stay be lifted as to the domestic insurers based on the recent decision by the Louisiana Supreme Court in Police Jury of Calcasieu Parish v. Indian Harbor Insurance Co.4 As discussed in more detail below, federal equitable estoppel principles allow

domestic insurers to compel arbitration when their foreign counterparts compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the Convention”) and there exists allegations of concerted and interdependent conduct.5 Based on this Court’s finding that concerted and interdependent conduct was alleged, arbitration can properly be compelled by both the domestic and foreign insurers who issued the Policy to Plaintiffs. Therefore, having considered the motion, the memoranda in support and in opposition, the record, and the applicable law, the Court denies the motion. I. Background This litigation arises out of alleged damage to Plaintiffs’ properties during Hurricane Ida.6 Plaintiffs filed a petition for damages against Defendants in the Thirty-Second Judicial District

Court for the Parish of Terrebonne on August 29, 2022.7 According to the Petition, Plaintiffs purchased a commercial insurance policy from Defendants covering eleven properties across several parishes against all risks of loss (the “Policy”).8 Plaintiffs aver that the properties covered by the Policy were severely damaged by hurricane force winds sustained during Hurricane Ida on

4 2024-0049 (La. 10/25/24); 395 So.3d 717. 5 Bufkin, 96 F.4th at 732. 6 Rec. Doc. 1-2 at 2–3. 7 Id. at 1. 8 Id. at 2. August 29, 2021.9 On September 2, 2022, Defendants removed the action to this Court, asserting subject matter jurisdiction based on a federal question under 28 U.S.C. §§ 1441 and 1446.10 In the Notice of Removal, Defendants asserted that removal was proper because Policy contains an

arbitration provision governed by the Convention Act, 9 U.S.C. § 201, et seq. (the “Convention Act”).11 On September 6, 2022, Defendants filed the instant Motion to Compel Arbitration.12 On January 25, 2023, the Court granted the motion and administratively closed the case pending arbitration.13 On January 23, 2025, Plaintiffs filed the instant motion to lift the stay.14 On February 10, 2025, Defendants filed an opposition to the motion.15 On February 14, 2025, Plaintiffs filed a reply brief.16 On March 13, 2025, Defendants filed a supplemental brief in further opposition to the motion.17 II. Parties’ Arguments A. Plaintiffs’ Arguments in Support of the Motion

Plaintiffs contend the Louisiana Supreme Court’s recent decision in Police Jury of Calcasieu Parish v. Indian Harbor Insurance Co. requires that the stay in this matter be lifted as

9 Id. at 3. 10 Rec. Doc. 1 at 2. 11 Id. at 8. 12 Rec. Doc. 4. 13 Rec. Doc. 16. 14 Rec. Doc. 21. 15 Rec. Doc. 24. 16 Rec. Doc. 25. 17 Rec. Doc. 28. to the domestic insurers.18 Plaintiffs argue the Louisiana Supreme Court has determined that the arbitration clause in the underlying insurance policy is invalid as to the domestic insurers.19 Plaintiffs assert based on the Louisiana Supreme Court’s ruling, the stay in this matter should be lifted as to the domestic insurers.20

B. Defendants’ Argument in Opposition to Motion to Lift Stay In opposition, Defendants argue the Supreme Court’s decision in Police Jury does not require this Court to lift the stay ordered in this matter.21 Defendants explain that because federal law supersedes state law in Convention cases, Plaintiffs must be compelled to arbitrate with both foreign and domestic insurers notwithstanding the court’s holding in Police Jury.22 According to Defendants, Plaintiffs’ motion is an improper because the issue of equitable estoppel was not raised in Plaintiffs’ original opposition to the motion to compel arbitration.23 Defendants argue that Plaintiffs should not be allowed to raise a new legal theory on a motion for reconsideration.24

Defendants assert that the Fifth Circuit’s holding in Bufkin Enterprises, LLC v. Indian Harbor Ins. Co., remains controlling law.25 According to Defendants, when foreign insurers are involved in the agreement between the parties, Bufkin instructs the court to apply the federal

18 Rec. Doc. 21-1 at 1. 19 Id. at 6. 20 Id. at 9. 21 Rec. Doc. 24 at 2. 22 Id. 23 Id. at 3. 24 Id. at 5. 25 Id. at 6 (citing 96 F.4th 726, 732-33 (5th Cir. 2024)). equitable estoppel principles under the Convention to determine whether the insured “raises allegations of substantially interdependent and concerted misconduct by both a non-signatory (the domestic insurers) and one or more signatories to the contract (the foreign ones).”26 In order to

give full effect to the Convention, Defendants argue the Convention must be uniformly interpreted and applied under federal law.27 Additionally, Defendants argue Plaintiffs’ request to lift the stay in this matter to permit litigation against the domestic insurers, which would run parallel to the foreign insurers’ arbitration on the same alleged losses, damages, and policy, is unworkable.28 Defendants assert that Plaintiffs’ request thwarts the liberal federal policy favoring arbitration.29 Even if a stay is not mandatory under the Convention as to the domestic insurers, Defendants argue the domestic insurers are entitled to a discretionary stay.30 Defendants assert a discretionary stay is warranted as to the domestic insurers because the claims involve the same operative facts, the claims are inseparable, and the litigation would have a critical impact on the

arbitration.31 C. Plaintiffs’ Arguments in Reply In reply, Plaintiffs argue Bufkin does not control and is now longer good law.32 Plaintiffs

26 Id. 27 Id. at 8. 28 Id. at 11. 29 Id. 30 Id. at 17. 31 Id. at 18. 32 Rec. Doc. 25 at 2. contend that the Court must follow Police Jury because state law governs the estoppel question.33 Plaintiffs assert this issue is properly raised on reconsideration because the Court relied on equitable estoppel principles in the Order compelling arbitration as to the domestic insurers.34

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