PROGRESSIVE GULF INSURANCE COMPANY, AN OHIO CORPORATION, Appellant,
RANDALL K. FAEHNRICH, INDIVIDUALLY AND AS NATURAL PARENT AND/OR LEGAL GUARDIAN OF RANDY FAEHNRICH AND CHRISTIAN FAEHNRICH, MINORS; AND TONI A. FAEHNRICH, INDIVIDUALLY AND AS NATURAL PARENT AND/OR LEGAL GUARDIAN OF RANDY FAEHNRICH AND CHRISTIAN FAEHNRICH, MINORS, Respondents
Certified question under NRAP 5 concerning the enforceability of a household exclusion clause in an automobile liability insurance policy issued out of state but applied to Nevada residents injured in Nevada. United States Court of Appeals for the Ninth Circuit; Robert R. Beezer, Andrew Jay Kleinfeld, and Susan Graber, Circuit Judges.
Prince & Keating and Dennis M. Prince and Douglas J. Duesman, Las Vegas, for Appellant.
Benson Bertoldo Baker & Carter, Chtd., and Brett A. Carter, Las Vegas, for Respondents.
Pickering, J. We concur: Gibbons, C.J., Parraguirre, J., Cherry, J., Hardesty, J., Douglas, J., Saitta, J.
The United States Court of Appeals for the Ninth Circuit has certified the following question to this court: " 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 NRS 485.3091 to Nevada residents who were injured in Nevada?"
The certified question grows out of a dispute over the validity of a household exclusion in an automobile liability insurance policy. The policy was negotiated, delivered, and renewed several times in Mississippi, where Randall and Toni Faehnrich lived with their two children. The policy was entitled " Mississippi Motor Vehicle Policy." The Faehnriches' insurance application listed Mississippi as their state of residence. This made Mississippi the state whose statutory law the policy incorporated:
TERMS OF POLICY CONFORMED TO STATUTES
If any provision of this policy fails to conform with the legal requirements of the state listed on your application as your residence [Mississippi], the provision shall be deemed amended to conform with such legal requirements. All other provisions shall be given full force and effect. Any disputes as to the coverages provided or the provisions of this policy shall be governed by the law of the state listed on your application as your residence.
(Emphasis added.) The parties and the Ninth Circuit refer to the italicized language as the policy's choice-of-law provision.
Eventually, the couple divorced and Toni moved to Nevada. She drove here in a Jeep that she and Randall co-owned. The couple's minor children, both boys, then flew out to join their mother in Las Vegas. The next day, while driving the Jeep with the children as passengers, Toni was involved in a single-car accident; the car rolled, and the boys suffered serious injuries. At the time, the Jeep still carried Mississippi registration and license plates, and Toni had a Mississippi driver's license.
The insurance policy, issued by Progressive Gulf Insurance Co., generally provides bodily injury liability coverage up to $100,000 per person and $300,000 per accident. But it includes a household exclusion that, on its face, eliminates coverage for the boys' claims against Toni. The exclusion states that the policy's liability coverage " does not apply to . . . bodily injury to you or a relative." " Relative" is defined as
a person residing in the same household as you, and related to you by blood, marriage, or adoption . . . . Your unmarried dependent children temporarily away from home will be considered residents if they intend to continue to reside in your household.
When the policy was issued, Progressive offered, but the Faehnriches declined, " All Uninsured/Underinsured Bodily ...