Progressive Gulf Ins. Co. v. FaehnrichAnnotate this Case
Randall and Toni Faehnrich were Mississippi residents when they entered into an automobile insurance policy with Progressive Gulf Insurance Company that was negotiated, delivered, and renewed in Mississippi. The policy contained a choice-of-law provision providing that disputes about coverage shall be governed by Mississippi law. The couple subsequently divorced, and Toni moved to Nevada. While driving the Jeep that she and Randall co-owned, Toni was involved in an accident in which the couple’s two boys, who were Nevada residents when the accident occurred, suffered serious injuries. Randall presented a claim to Progressive for his sons’ injuries, but Progressive denied coverage, citing a household exclusion included in the policy that eliminated coverage for the boys’ claims against Toni. The district court held that the exclusion violated Nevada public policy, and, in accordance with Nevada choice of law rules, Mississippi law validating such exclusions did not apply. The Ninth Circuit Court of Appeals certified a question of Nevada public policy to the Supreme Court, which answered by holding that Nevada’s public policy did not preclude giving effect to the choice-of-law provision in the insurance contract, even when that effect would deny recovery to Nevada residents who were injured in Nevada.