Progressive Gulf Insurance Com v. Christian Faehnrich, et al

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FILED PER CURIAM OPINION (ANDREW J. KLEINFELD, SUSAN P. GRABER and RICHARD C. TALLMAN) REVERSED AND REMANDED. FILED AND ENTERED JUDGMENT. [9085749]

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Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT PROGRESSIVE GULF INSURANCE COMPANY, an Ohio corporation, Plaintiff-Appellant, v. RANDALL K. FAEHNRICH, individually and as natural parent and/or legal guardian of RANDY FAEHNRICH and CHRISTIAN FAEHNRICH, minors; TONI A. FAEHNRICH, individually and as natural parent and/or legal guardian of RANDY FAEHNRICH and CHRISTIAN FAEHNRICH, minors; DOES I THROUGH X; ROE BUSINESS ENTITIES I THROUGH X; inclusive, Defendants-Appellees. No. 09-16487 D.C. No. 2:05-cv-01067BES-PAL OPINION Appeal from the United States District Court for the District of Nevada Brian E. Sandoval, District Judge, Presiding Argued and Submitted October 6, 2010—San Francisco, California Filed May 7, 2014 Page: 1 of 22 Case: 09-16487 2 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Before: Andrew J. Kleinfeld, Susan P. Graber, and Richard C. Tallman,* Circuit Judges. Per Curiam Opinion * Judge Beezer was a member of the panel but passed away after oral argument. Judge Tallman was drawn to replace him. He has read the briefs, reviewed the record, and listened to the audio recording of oral argument held on October 6, 2010. Page: 2 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Page: 3 of 22 3 SUMMARY** Nevada Insurance Law The panel reversed and remanded to the district court for entry of summary judgment in favor of Progressive Gulf Insurance Company after the Nevada Supreme Court answered a certified question concerning choice-of-law in an insurance contract. The panel certified a question to the Nevada Supreme Court, and the Nevada Supreme Court rephrased the question. The Nevada Supreme Court held that Nevada public policy did not “preclude giving effect to a household exclusion clause in an automobile liability insurance policy delivered in Mississippi to Mississippi residents and choosing Mississippi law as controlling, where Mississippi law permits household exclusions but the effect of the exclusion is to deny Nevada residents who were injured in Nevada recovery of the minimum coverages specified in NRS 485.3091.” The panel held that because Mississippi law applied, summary judgment should have been granted in favor of Progressive Gulf Insurance Company where the parties stipulated that if Mississippi law applied, there was no coverage under the Progressive Gulf Insurance Company policy. ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. Case: 09-16487 4 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH COUNSEL Dennis M. Prince, Prince & Keating LLP, Las Vegas, Nevada, for Plaintiff-Appellant. Brett A. Carter, Benson Bertoldo Baker & Carter, Chtd., Las Vegas, Nevada, for Defendants-Appellees. OPINION PER CURIAM: Progressive Gulf Insurance Company seeks review of the district court’s order denying its motion for summary judgment and of a later order entering judgment in favor of the defendants. The sole issue before us is whether Nevada or Mississippi law applies to the parties’ insurance contract. Because Mississippi law applies, we reverse the judgment of the district court. Randall and Toni Faehnrich lived in Mississippi with their two minor children. They contracted with Progressive Gulf for automobile insurance. The policy was delivered in Mississippi. It covered cars garaged in Mississippi, bearing Mississippi license plates, driven by Mississippi-licensed drivers. The policy specified that it was governed by Mississippi law. The Faehnrichs divorced and, in 2003, Toni Faehnrich moved to Nevada. On June 8, 2003, Toni Faehnrich was involved in a rollover vehicle accident while the two children were passengers in her car. Randall Faehnrich presented a bodily injury claim to Progressive Gulf on behalf of the Page: 4 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Page: 5 of 22 5 children, which Progressive Gulf denied, citing the policy’s family-member exclusion. The parties stipulated that, “if Mississippi law is applicable, there is no coverage under the terms and conditions of the Progressive policy.” We certified the following question to the Nevada Supreme Court:1 Does Nevada’s public policy preclude giving effect to a choice-of-law provision in an insurance contract that was negotiated, executed, and delivered while the parties resided outside of Nevada, when that effect would deny any recovery under Nevada Revised Statutes section 485.3091 to Nevada residents who were injured in Nevada? The Nevada Supreme Court chose to rephrase the question, as is its prerogative. Rephrased, the question the Nevada Supreme Court answered was:2 Does Nevada public policy preclude giving effect to a household exclusion clause in an automobile liability insurance policy delivered in Mississippi to Mississippi residents and choosing Mississippi law as controlling, where Mississippi law permits household exclusions but the effect of the exclusion is to deny Nevada residents who 1 2 Progressive Gulf Ins. Co. v. Faehnrich, 627 F.3d 1137 (9th Cir. 2010). Progressive Gulf Ins. Co. v. Faehnrich, No. 57324, 2014 WL 1258808, at *2 (Nev. March 27, 2014). Case: 09-16487 6 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH were injured in Nevada recovery of the minimum coverages specified in NRS 485.3091? The Nevada Supreme Court answered this question in the negative, holding that “giving effect to the choice-of-law provision in the parties’ automobile insurance policy does not violate Nevada’s public policy.”3 Because Mississippi law applies, summary judgment should have been granted in favor of Progressive Gulf. The facts and reasoning are fully set out in the Nevada Supreme Court’s decision, Progressive Gulf Ins. Co. v. Faehnrich, No. 57324, 2014 WL 1258808 (Nev. March 27, 2014), which we attach as an appendix. REVERSED AND REMANDED for entry of summary judgment in favor of Progressive Gulf Insurance Company. 3 Progressive Gulf Ins. Co., 2014 WL 1258808, at *6. Page: 6 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH APPENDIX Page: 7 of 22 7 Case: 09-16487 8 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 1 of 15 Page: 8 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 2 of 15 Page: 9 of 22 9 Case: 09-16487 05/07/2014 10 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 3 of 15 Page: 10 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 11 of 22 11 Page: 4 of 15 Case: 09-16487 05/07/2014 12 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 5 of 15 Page: 12 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 13 of 22 13 Page: 6 of 15 Case: 09-16487 05/07/2014 14 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 7 of 15 Page: 14 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 15 of 22 15 Page: 8 of 15 Case: 09-16487 05/07/2014 16 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 9 of 15 Page: 16 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 17 of 22 17 Page: 10 of 15 Case: 09-16487 05/07/2014 18 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 11 of 15 Page: 18 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 19 of 22 19 Page: 12 of 15 Case: 09-16487 05/07/2014 20 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 13 of 15 Page: 20 of 22 Case: 09-16487 05/07/2014 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 21 of 22 21 Page: 14 of 15 Case: 09-16487 05/07/2014 22 ID: 9085749 DktEntry: 29-1 PROGRESSIVE GULF INS. CO. V. FAEHNRICH Case: 09-16487 04/01/2014 ID: 9040274 DktEntry: 25 Page: 15 of 15 Page: 22 of 22

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