Diaz v. United Property and Casualty Insurance Company ( 2023 )

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA RAUL DIAZ, et al. CIVIL ACTION VERSUS NO. 23-394 UNITED PROPERTY AND SECTION M (2) CASUALTY INSURANCE COMPANY ORDER Based upon this Court’s review of the complaint,1 this case arises from an insurance coverage dispute involving defendant United Property and Casualty Insurance Company (“United Property”), and the Court has received notice that United Property has been placed into liquidation.2 Recognizing that states are primarily responsible for regulating the insurance industry and that “insolvent insurers are subject to the comprehensive oversight of state administrative agencies and courts,” the Fifth Circuit has held that “allowing a creditor or claimant to proceed against an insolvent insurer in federal court while a state insolvency proceeding is pending would usurp the state’s control over the liquidation proceeding by allowing the claimant to preempt others in the distribution of the insurance company’s assets.” Clark v. Fitzgibbons, 105 F.3d 1049, 1051 (5th Cir. 1997) (quotation and alterations omitted). In this vein, Louisiana law provides that “[a]ll proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this state shall be stayed for six months.” La. R.S. 22:2068(A). Accordingly, pursuant to such authority, IT IS ORDERED that the captioned matter is stayed for six months, or until November 13, 2023. 1 R. Doc. 1. 2 See, e.g., Samuel v. United Prop. & Cas. Ins. Co., No. 23-cv-50, R. Docs. 7, 8 (E.D. La. Mar. 2023). IT IS FURTHER ORDERED that no later than October 30, 2023, the parties shall file a status report advising the Court regarding the status of United Property’s insolvency and the liquidation proceedings in Florida. IT IS FURTHER ORDERED that the Clerk’s Office administratively close this matter for statistical and reporting purposes. After the six-month stay period has passed, any party may seek to reopen the case upon written motion. New Orleans, Louisiana, this 10th day of May, 2023. ________________________________ BARRY W. ASHE UNITED STATES DISTRICT JUDGE