A panel of the Ninth Circuit Court of Appeals was recently faced with what it called "an important, open question of Nevada law." Progressive Gulf Insurance Co. v. Faehnrich, 2010 WL 4948507 *1 (9th Cir. December 7, 2010)(authorized password required to access Westlaw).
The U.S. District Court granted Judgment to the Policyholders-Plaintiffs in that case. It refused to apply a Family Member Exclusion as a matter of Nevada public policy. However, the Insurance Contract before the Court was issued and delivered in Mississippi. Mississippi Insurance Law reportedly upholds the Family Member Exclusion.
On appeal, the Ninth Circuit neither affirmed nor reversed the District Court. Instead, the Ninth Circuit certified this question to the Nevada Supreme 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 Nevada Revised Statutes section 485.3091 to Nevada residents who were injured in Nevada?
Progressive Gulf Insurance Co. v. Faehnrich, 2010 WL 4948507 at *3.
In what may seem a roundabout way, Nevada Insurance Law may determine the outcome in this case after all.
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