United States District Court, E.D. Louisiana
ORDER & REASONS
M. AFRICK, UNITED STATES DISTRICT JUDGE.
McDonnel Group LLC (“McDonnel”) is the general
contractor for a development project in New Orleans aimed at
converting the Maison Blanche Annex building at 939 Iberville
Street into residential apartments. The project is owned by
French Quarter Apartments Limited Partnership (“French
Quarter”) and was insured for the period of November
30, 2015 to August 30, 2017 under a policy issued by Great
Lakes Insurance SE, UK Branch, Lloyd's Syndicates CNP
4444 and 958, and Inter Hannover (collectively, “the
March 30 and April 1, 2017, water intrusion caused
significant damage to the project. McDonnel subsequently
submitted a claim for the damage to the Underwriters, and a
claims adjustment process ensued, the facts of which are in
dispute. On March 15, 2018, McDonnel initiated this lawsuit
seeking a declaratory judgment that it is entitled to
coverage under the policy issued by the Underwriters.
McDonnel also alleges breach of contract and insurer bad
Underwriters now move to dismiss pursuant to Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(3), arguing that the
policy contains a valid arbitration agreement between the
parties. For the following reasons, the
Underwriters' motion is granted.
Fifth Circuit “has not  definitively decided whether
Rule 12(b)(1) or Rule 12(b)(3) is the proper rule for motions
to dismiss based on an arbitration or forum-selection
clause.” Noble Drilling Servs., Inc. v. Certex USA,
Inc., 620 F.3d 469, 472 n.3 (5th Cir. 2010). It has
“held that a district court lacks subject matter
jurisdiction over a case and should dismiss it pursuant to
Federal Rule of Civil Procedure 12(b)(1) when the
parties' dispute is subject to binding
arbitration.” Gilbert v. Donahoe, 751 F.3d
303, 306 (5th Cir. 2014); see also Omni Pinnacle, LLC v.
ECC Operating Servs., Inc., 255 Fed. App'x. 24, 26
(5th Cir. 2007) (affirming district court order dismissing
case pursuant to Rule 12(b)(1) based on an agreement between
the parties requiring arbitration of dispute). However, it
has also “accepted Rule 12(b)(3) as a proper method for
dismissal based on an arbitration clause.” Gupta v.
Lynch, No. 12-1787, 2013 WL 3187273, at *2 (E.D. La.
June 20, 2013) (Milazzo, J.) (citing Lim v. Offshore
Specialty Fabricators, Inc., 404 F.3d 898, 902 (5th Cir.
2005) (analyzing motion to dismiss based on an arbitration
clause under Rule 12(b)(3) and observing that “other
circuits agree that a motion to dismiss based on an
arbitration or forum selection clause is proper under Rule
Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction, the burden of proof is on the party asserting
jurisdiction. Ramming v. United States, 281 F.3d
158, 161 (5th Cir. 2001). “Accordingly, the plaintiff
constantly bears the burden of proof that jurisdiction does
in fact exist.” Id. “In order to bear
that burden, the party must prove by a preponderance of the
evidence that the court has jurisdiction based on the
complaint and evidence.” Gilbert, 751 F.3d at
307. “However, a motion to dismiss for lack of subject
matter jurisdiction should be granted only if it appears
certain that the plaintiff cannot prove any set of facts in
support of his claim that would entitle plaintiff to
on a Rule 12(b)(3) motion to dismiss for improper venue, the
burden is on the plaintiff to show that venue is proper.
Summers v. Kenton, OH Police, No. 11-3162, 2012 WL
1565363, at *4 (E.D. La. May 2, 2012) (Africk, J.). The court
may consider, in addition to the complaint and its proper
attachments, other evidence in the record. Ambraco, Inc.
v. Bossclip B.V., 570 F.3d 233, 238 (5th Cir. 2009)
(citations omitted). Further, “the court must accept as
true all allegations in the complaint and resolve all
conflicts in favor of the plaintiff.” Braspetro Oil
Servs. Co. v. Modec (USA), Inc., 240 Fed. App'x.
612, 615 (5th Cir. 2007).
Court need not decide here whether Rule 12(b)(1) or 12(b)(3)
is the more appropriate vehicle for analyzing the
Underwriters' motion to dismiss. As explained herein,
McDonnel's claims are properly dismissed in favor of
arbitration under either rule. See Murchison Capital
Partners, LP v. Nuance Commc'ns, Inc., 625 Fed.
App'x 617, 627 (5th Cir. 2015) (affirming dismissal of
plaintiff's claim on the ground that the defendant
“would have been entitled to prevail on a Rule 12(b)(1)
or 12(b)(3) motion to dismiss the case because the dispute is
covered by the arbitration clause”).
policy at issue provides, in pertinent part:
VII. General Conditions. . .
Any dispute, controversy or claim arising out of,
relating to, or in connection with this Policy,
shall be finally settled by arbitration. The arbitration
shall be conducted in accordance with the International
Arbitration Rules of the American Arbitration Association in
effect at the time of the arbitration. The seat of the
arbitration shall be New York, New York, in the United States
. . .
7. Conformity to Statute:
the event any terms of this Policy are in conflict
with the statutes of the jurisdiction where the Insured
Property is located, such terms are amended to conform
to such statutes.
Underwriters insist that McDonnel's claims must be
dismissed in favor of arbitration pursuant to the
policy's broad arbitration provision, the Federal
Arbitration Act (“FAA”), and the United Nations
Convention on the Recognition ...