(CN) – The 9th Circuit asked the Arizona Supreme Court to weigh in on an insurance case involving a child whose father caused a car accident that killed his mother. The justices were asked whether policyholders’ “reasonable expectations” of coverage trumped policy exclusions barring recovery against negligent family members.
Jay Morgan’s father, John, caused a severe car accident that killed Jay’s mother, Geri. John was seriously injured and suffered permanent brain damage.
Morgan filed a claim with American Family Mutual Insurance Co. under his father’s umbrella personal liability insurance policy, seeking reimbursement for damages stemming from his mother’s death.
American Family denied the claim, citing the policy’s “intra-insured suits” exclusion, which bars recovery against family members for their negligence.
Morgan sued, claiming the policy is invalid under Arizona law. Insurance policies must be interpreted in light of the “reasonable expectations” of the policyholder, Morgan argued, and no reasonable policyholder would believe that family negligence would be excluded from coverage.
The district court ruled for Morgan, though neither party presented evidence of John Morgan’s expectations.
The 9th Circuit said the appeal “turns on an important and unsettled question of Arizona law,” and certified the following question to the Arizona Supreme Court:
“Can Arizona’s doctrine of reasonable expectations operate to void a named-insured exclusion in an insurance policy (1) without evidence of the circumstances surrounding the acquisition and issuance of the policy, and (2) where the exclusion is contained among typical exclusions in the policy?”