found that because wholesale brokers do not communicate with insurance customers, plaintiffs have no possibility of recovery against them under Louisiana state law.... Moreover, two sections have reached the same conclusion with respect to Burns & Wilcox [i.e., the broker] in almost identical cases.... the same conclusion under similar circumstances include: that the nature of its business precludes any communication between it and customers. Given the legal duties of agents outlined in recent Orders of all Sections of this Court, the Court finds that Hull has met its burden in proving that the Bowmans [the insureds] have no possibility of recovery against it under Louisiana state law. has no communication between it and Lexington [the insurer] customers. Given the legal duties of agents outlined in recent orders of all Sections of this Court, the Court finds that Hull has met its burden in proving that Teamer [the insured] has no possibility of recovery against it under Louisiana state law. question presented here: whether the intermediary broker who does not have a direct relationship and held liable under Louisiana law for breach of a fiduciary duty. Those courts hold no duty exists. in Cajun Kitchen of Plaquemines, Inc. v. Scottsdale Ins. Co., et. al. still in its early stages overall, and close scrutiny of the pro-defense cases reveals some potential limitations on the defense's applicability. Specifically, all of the pro-defense cases were issued by the Louisiana Federal Eastern District Court. All are unpublished decisions. All involve only Hurricane Katrina claims. Further, the underlying concept of these rulings appears to be that, without evidence of direct communication or a contract between the insured and the broker, the only legal relationship that exists with the broker is between the broker and insurance agent. This implies that while the insured has no cause of action against a traditional, intermediary "broker," the agent may. With these issues in mind, it is worth noting that the pro-defense cases were issued by four different judges (i.e., Barbier, Feldman, Fallon and Lemelle), not just one. This defense, then, appears to be thoroughly engrained in the Louisiana Eastern District. This makes it very likely the defense will at least be addressed, if not wholly adopted, by other Louisiana courts in the future. Against the backdrop of these decisions are two pre-Katrina cases, Ronald C. Durham v. McFarland, et. al. Ins. Co., et. al., cases were decided before any of the pro-defense holdings cited above, which means neither of them directly repudiate those decisions. While in stating that a broker is not a mere "order taker" and can be liable to an insured, the "broker" in that case insured. Further, the ruling seems to use the terms "broker" and "agent" interchangeably, casting doubt on the decision's applicability in light of the distinction between wholesale brokers and insurance agents being considered here. As to LeGros, that case involved the denial of a supervisory writ, and it does not appear from the holding that the broker ever asserted lack of communication as a defense. Instead, the broker simply argued it had no duty to the insured as a matter of law. The court responded by finding this argument was an improper topic for summary judgment because the presence or absence of an agency relationship and whether a breach of duty exists are factual questions. Overall, it is still too soon to anticipate what limitations may ultimately develop with respect to this defense's application. At a minimum, though, there is repeated and consistent Louisiana case law supporting its viability. This means that lack of direct communication is a defense that should now be considered as part of a broker's defensive strategy when facing these types of claims from an insured in Louisiana. 2 Id at *1-*2. 3 Id at *2 (citing Frischhertz v. Lexington Ins. Co., 2006 5 Id at *1 and n.1. 6 Id at *1. 7 Id at *2 (internal citations omitted). 8 2006 WL 3733839, *2 (E.D.La.)(unpublished). 9 2007 WL 609738, *1 (E.D.La.)(unpublished). 10 2008 WL 2945926, *1 (E.D.La.)(unpublished)(citing 12 527 So.2d 403 (La.App. 4th Cir. 1988). 13 02-1485 (La.App. 3 Cir. 11/12/03); 865 So.2d 792. |