Progressive Gulf Ins. Co. v. Faehnrich

A choice-of-law provision in automobile insurance contracts does not violate Nevada public policy.

Randall and Toni Faehnrich purchased automobile insurance from Progressive Gulf Insurance Company ("Progressive Gulf") while living in Mississippi; the policy was governed by Mississippi law. Toni Faehnrich moved to Nevada and subsequently her children were injured in an automobile accident. Progressive Gulf denied a bodily injury claim regarding the children because of a household exclusion clause in the policy. Toni Faehnrich brought action in district court to recover under the bodily injury claim. The district court denied Progressive Gulf's motion for summary judgment concluding that the Faehnrich's were entitled to coverage because Nevada law applied. The court held that Nevada public policy precludes giving effect to a household exclusion clause. The panel certified a question to the Nevada Supreme Court to determine “whether Nevada public policy precludes giving effect to a household exclusion clause. The Nevada Supreme Court determined it did not and the panel reversed the district court decision, determining that Mississippi, not Nevada, law should have applied to the policy. When Mississippi law applies to the policy, there is no coverage for the bodily injury claim. Therefore, Progressive Gulf should have been granted summary judgment. The case is reversed and remanded granting summary judgment to Progressive Gulf. REVERSED AND REMANDED.