Progressive Gulf Insurance Com v. Christian Faehnrich
2010 U.S. App. LEXIS 24891
| 9th Cir. | 2010Background
- Progressive Gulf Insurance issued a Mississippi-law-governed auto policy to Randall and Toni Faehnrich with $100,000/$300,000 limits and a family-member exclusion; Mississippi law controls by contract provision.
- Faehnrichs divorced; Toni, Nevada resident, moved to Nevada with two children; accident occurred in Las Vegas while policy remained in effect.
- Minor children were injured; insurer denied coverage under the family-member exclusion and filed a diversity action seeking a declaration that exclusion is valid in Nevada.
- District court granted summary judgment for the Faehnrichs, ruling Nevada public policy precludes application of the family-member exclusion to bar all recovery.
- The insurer appealed, arguing Mississippi law should apply per the contract; the Faehnrichs argued Nevada public policy requires Nev. Rev. Stat. 485.3091 minimums and coverage.
- The Ninth Circuit, applying Nevada choice-of-law rules, concluded the issue is open under Nevada law and certified to the Nevada Supreme Court to decide whether public policy bars enforcing the choice-of-law provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Nevada public policy preclude enforcing a choice-of-law provision denying Nevada recovery? | Faehnrichs: public policy favors Nev. 485.3091 minimums; Mississippi exclusion should not bar recovery. | Progressive: enforce contract’s choice-of-law; Mississippi law applies and excludes coverage. | Question certified to Nevada Supreme Court; no resolution on the merits. |
Key Cases Cited
- Sotirakis v. United Service Automobile Association, 106 Nev. 123 (1990) (supports applying another state's law when fortuitous connections to Nevada are insufficient)
- Williams v. United Services Automobile Association, 109 Nev. 333 (1993) (suggests Nevada public policy can bar out-of-state law only where all recovery would be precluded)
- Daniels v. National Home Life Assurance Co., 103 Nev. 674 (1987) (Nevada case preserving Nevada law for notices; discusses public policy in exclusions context)
- Ferdie Sievers & Lake Tahoe Land Co. v. Diversified Mortgage Investors, 95 Nev. 811 (1979) (multi-factor test for enforcement of choice-of-law provisions; public policy safeguard)