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Gulledge v. Certain Underwriters At Lloyd's

United States District Court, E.D. Louisiana

September 26, 2018

JACK GULLEDGE and LOUIS PANNAGL
v.
CERTAIN UNDERWRITERS AT LLOYD'S, LONDON

         SECTION A(4)

          ORDER AND REASONS

          JUDGE JAY C. ZAINEY UNITED STATES DISTRICT JUDGE.

         Before the Court is a Motion to Remand (Rec. Doc. 7) filed by Plaintiff, Louis C. Pannagl (“Plaintiff”). Certain Underwriters at Lloyd's, London (hereinafter collectively referred to as “Defendant”) oppose the motion. The Motion, set for submission on August 22, 2018, is before the Court on the briefs without oral argument.[1] Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that Plaintiff's Motion to Remand (Rec. Doc. 7) is DENIED.

         I. Background

         Plaintiff owns commercial property in Gretna, Louisiana. Defendant issued a policy of insurance covering direct physical loss or physical damage caused by windstorm and/or hail occurring during the policy period. (Rec. Doc. 3-2, State Court Pleadings). On August 29th, 2012, Hurricane Isaac severely damaged Plaintiff's property. (Id.). On August 15th, 2013, Plaintiff filed suit in the Twenty-Fourth Judicial District Court for the Parish of Jefferson against Defendant alleging Defendant's nonpayment of claims for damages to the commercial property. (Id.). Defendant removed the matter to this Court on July 12th, 2018, under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the Convention”). (Rec. Doc. 1, Notice of Removal ¶ 4). Pursuant to 9 U.S.C. §203, Defendant alleges that this Court has original subject matter jurisdiction for an arbitration agreement in Defendant's policy subject to the Convention. (Id. ¶ 11-14).

         II. Legal Standard

         The removing defendant bears the burden of demonstrating that federal jurisdiction exists and therefore that removal was proper. Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993), cert. denied, 510 U.S. 868, 114 S.Ct. 192, 126 L.Ed.2d 150 (1993). In assessing whether removal is appropriate, the court is guided by the principle, grounded in notions of comity and that recognition that federal courts are courts of limited jurisdiction, that removal statutes should be strictly construed. See, e.g., Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Doubts regarding whether federal jurisdiction is proper should be resolved against federal jurisdiction. Acuna v. Brown & Root, 200 F.3d 335, 339 (5th Cir. 2000).

         III. Law and Analysis

          Plaintiff moves to remand the case to the Twenty-Fourth Judicial District Court on the rationale that the Convention is inapplicable to the policy. (Rec. Doc. 7). Specifically, Plaintiff argues that Defendant's sole basis for removal is diversity jurisdiction, 28 U.S.C. § 1332, and pursuant to 28 U.S.C. 1446, Defendant failed to timely file for removal within thirty days after service. (Rec. Doc. 7-1, p. 2). Plaintiff further states three reasons as to why removal is not justified under the Convention: (1) the policy contains a “Conformity to Statute” clause which requires the policy to amend and apply Louisiana state law; (2) the McCarran-Ferguson Act reverse preempts the Convention as it is contrary to Louisiana public policy; and (3) the Convention only applies to the recognition of arbitral awards.

         a. Application of the Convention

         The United States is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which Congress has implemented at 9 U.S.C. § 201, et seq. (the “Convention”). Proceedings that fall under the Convention “shall be deemed to arise under the laws and treaties of the United States.” 9 U.S.C. § 203. Chapter Two of the Federal Arbitration Act (FAA), expressly grants federal courts jurisdiction to hear actions seeking to enforce an agreement or award falling under the Convention Act. Vaden v. Discover Bank 556 U.S. 49, 59 n.9 (2009).

         An international agreement to arbitrate falls under the Convention if: “(1) there is an agreement in writing to arbitrate the dispute, (2) the agreement provides for arbitration in the territory of a Convention signatory, (3) the agreement arises out of a commercial legal relationship, and (4) a party to the agreement is not an American citizen.” Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898, 903 (5th Cir. 2005). In accordance with these four elements, the instant matter falls under the Convention. Defendant's insurance policy contains an arbitration clause in Section J, clause 15. (Rec. Doc. 2-2, p. 32). The United States is a signatory of the Convention and the Defendant subjects itself to the jurisdiction of a court of competent jurisdiction within the United States. (Id., p. 15). The agreement arises out of Defendant's insurance policy, a commercial legal relationship, issued to Plaintiff. (Rec. Doc. 1, Notice of Removal ¶ 3). Defendant is a citizen of the United Kingdom. (Id.)

         As the policy falls under the Convention, Defendant timely filed the Notice of Removal (Rec. Doc. 1). 9 U.S.C. § 205 provides, “The defendant or the defendants may, at any time before the trial thereof, remove such action or proceeding to the district court of the United States.” Defendant filed the notice of removal prior to the Twenty-Fourth Judicial District Court holding a trial. (Rec. Doc. 11, p. 2). Thus, this Court finds that the Convention applies and the Defendant timely filed for removal. The Motion to Remand is DENIED on the grounds of timeliness.

         b. Conformity ...


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