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Friends of Young Audiences Charter Association (YAC) is a Charter School authorized by the Jefferson Parish Public School System, and is open to Jefferson Parish students entering pre-kindergarten through 12th grade.

This is the case of Friends of Young Audiences Charter Association v. Certain Underwriters at Lloyd's London et al., in the U.S. District Court for the Eastern District of Louisiana.

This week YAC asked a Louisiana federal court to deny a motion filed by Lloyd's underwriters and nine other insurers to send the coverage dispute over damage sustained in a hurricane, to arbitration, telling the court that the domestic insurers cannot be forced into arbitration to settle their dispute.

Last week, Friends of Young Audiences Charter Association urged the court to deny the motion to compel arbitration filed by the Lloyd's underwriters, et al., claiming that there are ten separate and distinct insurance contracts for each of the ten insurance companies involved in the litigation, that underwrote the policy, and that there are only two foreign insurers that can take advantage of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Friends of Young Audiences are represented by Matthew M. Mize and Tristan Gregory Gruspier of Robichaux Mize Wadsack Richardson & Watson LLC and Rajan Pandit, John Mark Fezio, Peter N. Freiberg and Jessie B. Callahan of Pandit Law Firm LLC.

In YAC’s opposition to the motion to compel, counsel said "The insurers' motion to compel arbitration does not state the domicile of all the insurers, but it is important for the court to understand that eight of the 10 underwriters are domestic insurers organized, existing and domiciled in the United States."

According to court documents filed by YAC, the foreign insurance companies are Certain Underwriters at Lloyd's, London, and HDI Global Specialty SE of Hanover, Germany.
The domestic insurers are United Specialty Insurance Co. of Delaware and Texas, Lexington Insurance Co. of Delaware and Massachusetts, Indian Harbor Insurance Co. of Delaware and Connecticut, QBE Specialty Insurance Co. of North Dakota and Wisconsin, Steadfast Insurance Co. of Illinois, General Security Indemnity Co. of Arizona, Safety Specialty Insurance Co. of Missouri and Old Republic Union Insurance Co. of Illinois.

This dispute originates from severe Hurricane Ida-related damage sustained by Friends of Young Audiences on Aug. 29, 2021, at two separate properties it owns in Gretna, Louisiana.

When hurricane Ida hit, the two properties were insured against first-party property losses by a policy that was separately underwritten by the insurers, and was effective from Sept. 7, 2020, through Sept. 7, 2021, according to YAC’s complaint.

YAC filed a claim against the policy on Aug. 26 in the 24th Judicial District Court for Jefferson Parish as it wanted coverage for its property damage and "extra-contractual" penalties under the Louisiana insurance statutes related to an insurer's bad faith actions and conduct in handling claims.

However, on Oct. 10th the insurers removed the action to the Louisiana federal court, and then filed a motion to compel arbitration, claiming, "The market asserts that there is a valid arbitration clause that falls under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Therefore, this court has original jurisdiction."

But, YAC countered by saying the insurers have waived arbitration pursuant to the "service of suit" clauses contained in the separate insurance contracts.

"The policies have 'service of suit' clauses that have the effect of amending endorsements to the policies, which have the same effect of the insurers waiving arbitration" YAC said in its opposition brief. "In the service of suit clauses, the insurers agreed that they would submit to a jurisdiction at the request of the insured in the event that the insurers failed to pay a claim."

The insurer's motion to compel arbitration is currently under court submission.