In a New York Law Journal article titled "Southern District Rules That New York Choice of Law Clauses in Insurance Policies Are Enforceable," Schulte partner Ted Keyes and associate Faith W. Pang examine the Southern District's recent affirmation that New York choice of law clauses are enforceable in insurance policies, even when the parties lack New York contacts.
The Southern District relied on Section 5-1401 of the New York General Obligations Law, which allows parties to contracts involving transactions of at least $250,000 to choose New York law regardless of the parties' connections to the state. This decision was issued in the case of Cajun Conti, LLC v. Starr Surplus Lines Insurance Co., involving a dispute over hurricane damage in Louisiana. Despite opposition from Cajun Conti, following transfer of the case from Louisiana to New York, the court enforced the choice of law and forum selection clause.
The article emphasizes that, consistent with Court of Appeals' precedent, New York courts adhere to the principle that a choice of law provision in a contract should be honored without a conflict of laws analysis. The Southern District rejected arguments based on the Louisiana Insurance Code and public policy, reinforcing New York's legislative intent to support predictable contractual law choices.
This ruling provides strong precedent for the enforcement of choice of law and forum selection clauses in insurance policies, giving contracting parties confidence that New York courts will uphold these provisions without considering external statutes or policies.
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