Father Suffers Insurance Defeat in 9th Circuit
(CN) - An insurer properly denied a Mississippi man's claim after his ex-wife got into a rollover vehicle accident in another state with their children, the 9th Circuit ruled.
Before they divorced in 200, Randall and Toni Faehnrich obtained a policy from Progressive Gulf Insurance covering vehicles in Mississippi.
Toni moved to Nevada after the divorce and was soon thereafter involved "in a rollover vehicle accident" with their two children in the car.
Progressive Gulf denied a claim submitted by Randall on behalf of the two children, citing the policy's family-member exclusion.
It then filed suit in Nevada, seeking a ruling to that effect.
A federal judge ruled for the Faehnrichs, holding that Nevada public policy precludes application of the family-member exclusion to bar all recovery.
On appeal in 2010, the 9th Circuit asked the Nevada Supreme Court to clarify choice of law in an insurance contract.
After that court found no preclusive effect by Nevada law, the 9th Circuit ruled Wednesday that application of Mississippi law requires summary judgment for Progressive.
The parties stipulated that there is no coverage under the insurance policy if Mississippi law applies, according to the ruling.
As reproduced in the ruling, the state court's answer had said 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."