Cajun Conti, LLC v. Starr Surplus Lines Insurance Company

Background

Cajun Conti, a Louisiana limited liability company, sued Starr Surplus Lines Insurance Company over insurance coverage for damage allegedly caused by Hurricane Ida on August 29, 2021. The policy covered a restaurant and warehouse in Louisiana. Cajun Conti alleged that Starr failed to pay the full benefits owed for covered losses.

The policy contained a choice-of-law clause requiring that lawsuits against Starr be brought in New York state court or a federal court in New York, and requiring the use of New York law without regard to conflict-of-law principles. The policy had a per-occurrence liability limit of approximately $15.35 million.

The case was initially filed in the Eastern District of Louisiana. That court transferred it to the Southern District of New York based on the policy’s forum-selection clause. After the transfer, the parties filed cross-motions for partial summary judgment—motions asking the court to decide an issue when there is no genuine dispute about material facts. The issue presented was which state’s law governs the dispute.

The Parties’ Arguments

Cajun Conti argued that Louisiana law should apply because the insured properties and its business were in Louisiana. It also argued that Louisiana Revised Statutes § 22:868 made the policy’s selection of New York law void because the policy covered subjects located in Louisiana.

Starr argued that the policy’s express choice-of-law clause was enforceable and that New York law required the court to honor the parties’ selection of New York law.

Court’s Analysis

The court applied New York choice-of-law rules because it sits in New York. It held that New York General Obligations Law § 5-1401 independently supported enforcement of the clause. That statute permits parties to certain contracts involving at least $250,000 to choose New York law, even when the contract does not otherwise have a reasonable connection to New York. The court concluded that the policy fell within the statute because its per-occurrence liability limit was approximately $15.35 million.

The court also held that New York Court of Appeals decisions required enforcement of the policy’s New York choice-of-law clause even apart from § 5-1401. Those decisions, the court explained, direct courts to apply the law selected by the parties rather than conduct a separate conflict-of-laws analysis.

The court rejected Cajun Conti’s argument based on the Louisiana Insurance Code. Because New York choice-of-law rules governed and required application of New York law, the court held that Louisiana Revised Statutes § 22:868 did not invalidate the policy’s choice-of-law provision. The court acknowledged uncertainty in some recent decisions about a possible public-policy exception but concluded that such an analysis was not appropriate here.

Ruling and Effect

The court held that New York law governs the action. It denied Cajun Conti’s motion for partial summary judgment and granted Starr’s motion for partial summary judgment. The court did not, in this order, decide the ultimate amount of insurance coverage or whether Starr must pay the claimed losses. It ordered the parties to meet and confer and submit a letter proposing next steps by April 15, 2025, and directed the clerk to terminate the two pending motions.