Crescent City Surg v. Interstate Fire

── Crescent City Surg v. Interstate Fire ── Court: Court of Appeals for the Fifth Circuit Date: April 22, 2026 Category: Private Civil Federal Case: 25-30044 Document: 99-1 Page: 1 Date Filed: 04/22/2026 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED April 22, 2026 No. 25-30044 ____________ Lyle W. Cayce Clerk Crescent City Surgical Operating Company, Plaintiff—Appellee, versus Interstate Fire & Casualty Company; Independent Specialty Insurance Company; Velocity Risk Underwriters, L.L.C.; Certain Underwriters at Lloyds, London, Subscribing to Policy No. VPC-CN-0002838-01, improperly named Certain Underwriters at Lloyds, Consortium No. 9226, Defendants—Appellants. ______________________________ Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 2:22-CV-2625 ______________________________ Before King, Jones, and Wilson, Circuit Judges. Per Curiam: * This insurance dispute arises in the wake of Hurricane Ida, a Category 4 hurricane that swept through Louisiana in August 2021. After its coverage _____________________ * This opinion is not designated for publication. See 5th Cir. R. 47.5. Case: 25-30044 Document: 99-1 Page: 2 Date Filed: 04/22/2026 No. 25-30044 claims were denied, a Louisiana hospital brought this action against its insurers, two domestic and two foreign. The district court compelled arbitration of the claims against the foreign insurers but declined to compel arbitration as to the domestic insurers. The court then refused to stay the litigation pending the foreign insurers’ arbitration. All four insurers appeal. We first determine that the foreign insurers have standing to appeal, even though they were afforded (partial) relief in the district court. On the merits, bound by Louisiana law and this court’s recent precedent, we affirm the denial of arbitration as to the domestic insurers. But we conclude the district court abused its discretion by not staying the litigation pending arbitration against the foreign insurers. I. Plaintiff-Appellee Crescent City Surgical Operating Company (Crescent City) operates an acute care hospital in Metairie, Louisiana. To insure the hospital, Crescent City contracted for coverage with four insurers (collectively, the Insurers): two domestic companies, Independent Specialty Insurance Company and Interstate Fire & Casualty Company, and two foreign, brokered through Certain Underwriters at Lloyds, London (the Underwriters). The Insurers agreed to provide discrete levels of coverage for Crescent City’s hospital, all delineated within a single document (the Policy) administered and executed by Velocity Risk Underwriters, L.L.C. The Policy contains two clauses at issue in this case. First, it contains an arbitration clause: “All matters in dispute between the named insured and the insurer(s) . . . in relation to this insurance, including this policy’s formation and validity . . . shall be referred to an Arbitration Tribunal . . . .” Second, it contains an allocation endorsement. That endorsement lists unique contract and policy numbers for each of th