Part 5 – Louisiana Venue Analysis: Issues Concerning Venue for Insurance Defense
Written by Kristin Lausten
Insurance providers generally conduct business across a number of jurisdictions, and their business conduct is rarely limited to a single parish in Louisiana. Due to the multi-jurisdiction reach of many insurance companies’ businesses, insurance companies often include venue provisions in their insurance policies which bind insurance policyholders to litigate disputes with the policy and claims in a specific, predetermined venue.
The biggest issue with venue provisions in insurance contracts is whether these clauses are enforceable. In Louisiana, the general rule for enforceability of venue provisions is that they are enforceable. None of the limited exceptions to enforceability of venue provisions in insurance policy contracts imposed by Louisiana state law are applicable to insurance contracts.
Venue Provisions Are Presumed Valid In Louisiana Unless…
Venue selection clauses are presumed to be valid in Louisiana. However, there are circumstances that could render the clause unenforceable. Insurance companies are generally very careful to ensure that their venue provisions are enforceable. However, according to the Louisiana Supreme Court in its 2014 decision in the case of Shelter Mutual Property Insurance Co. v. Rimkus Consulting Group, Inc., venue selection clauses are invalid if:
- Enforcement of the clause would be entirely unreasonable for the policyholder.
- The chosen forum is unreasonable and seriously inconvenient for one of the parties.
- The consent to the venue provision of the party challenging the insurance contract was obtained through fraud or undue influence.
- Enforcement of the clause is overreaching.
- Enforcement would contravene strong public policy interests in the forum where the lawsuit is supposed to be brought under the venue selection clause.
Louisiana courts favor the idea that contracting parties should be free to contract as they want to and strongly supports this as good public policy. But clearly there are situations, as identified above, where enforcing venue provisions – even if the contracting parties both agree to them – would be patently unfair to one of the contracting parties.
Why Is Venue Selection Important In Insurance Defense Cases?
The outcome of an insurance policy or claim dispute can hinge on venue. When the suit is brought in a venue that is pro-insurance companies, insurance companies tend to fare better than when a suit is brought in a venue that is pro-plaintiff. In unfavorable venues, insurance companies are viewed as deep pockets, which lead to policyholders being awarded more in their judgments. For insurance companies, the bottom line is important, so including venue provisions in insurance contracts is a smart strategy in order to avoid an unfavorable venue.
Contact An Experienced Louisiana Insurance Defense Lawyer Today
Insurance companies have a lot to gain by being strategic in their selection of a venue to include as a selection of venue provision in their insurance contracts. Litigating in a favorable venue can play a big role in the outcome of the dispute and insurance companies will want to select a venue that will be most favorable. Insurance companies that are in dispute with a policyholder should contact an experienced Louisiana insurance defense attorney.
The author may be contacted at:
Kristin M. Lausten
This article is provided as an educational service for general informational purposes only. The material does not constitute legal advice or rendering of professional services.