Judges dismisses suit regarding insurance claim over water-damaged Maison Blanche Annex project

By Danielle Pacey | Jul 5, 2018

NEW ORLEANS – A judge in the U.S. District Court for Eastern District of Louisiana recently granted an insurer's motion to dismiss a lawsuit regarding an insurance dispute over a water damaged development project aimed at converting the Maison Blanche Annex building in New Orleans.

NEW ORLEANS – A judge in the U.S. District Court for Eastern District of Louisiana recently granted an insurer's motion to dismiss a lawsuit regarding an insurance dispute over a water damaged development project aimed at converting the Maison Blanche Annex building in New Orleans.

U.S. District Judge Lance M. Africk, in his June 28 ruling, granted the motion to dismiss by Lloyd's London and other insurance underwriters in the case brought by plaintiff McDonnel Group LLC because the insurance policy contained valid arbitration agreement.

Between March 30 and April 1, 2017, severe water damage plagued the Mason Blanche Annex building in New Orleans that McDonnel Group was hired to convert into apartment buildings by the French Quarter Apartments Limited Partnership, the ruling said.

The McDonnel Group, which was insured by Great Lakes Insurance SE, UK branch, Lloyd's London syndicates, submitted a claim to the Lloyd's London underwriters for the water damage and the claim adjustment facts were heavily disputed.

On March 15, 2018, McDonnel filed suit and sought declaratory judgment that it is entitled to coverage under the insurance policy. They also declared breach of contract and insurer bad faith against Lloyd's London. 

Lloyd's London moved to dismiss the case based on the Federal Rules of Civil Procedure. The Federal Rules of Civil Procedure state the parties' dispute should be subject to binding arbitration and lacked subject matter jurisdiction.  Lloyd's London also sought to dismiss the case for improper venue.

The burden was on the plaintiff to prove that the lack subject matter jurisdiction existed by preponderance of the evidence,court filings said. Similarly, the plaintiff was to prove proper venue existed to dismiss for improper venue.

The ruling cited a 5th U.S. Circuit Court of Appeals decision in which it noted that they lacked subject matter jurisdiction on the case and deferred to the Federal Rules of Civil Procedure, arguing that the policy contains a valid arbitration case between the two parties. For this reason, the motion to dismiss was granted and the parties' dispute should be subject to binding arbitration.

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