Reinkemeyer v. SAFECO Ins. Co. of America, 96-17096
| Citation | 166 F.3d 982 |
| Decision Date | 23 March 1998 |
| Docket Number | No. 96-17096,96-17096 |
| Parties | 99 Cal. Daily Op. Serv. 793, 1999 Daily Journal D.A.R. 947 Joseph REINKEMEYER, Dr.; Patricia Reinkemeyer, Plaintiffs-Appellants, v. SAFECO INSURANCE COMPANY OF AMERICA; Does I through X; ABC Corporations I through X, Defendants-Appellees. . Submission deferred |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Vernon E. Leverty, Leverty & Associates, Reno, Nevada, for the plaintiffs-appellants.
William G. Cobb, Erickson, Thorpe & Swainston, Reno, Nevada, for defendant-appellee Safeco.
Appeal from the United States District Court for the District of Nevada; Howard D. McKibben, District Judge, Presiding. D.C. No. CV 94-00888-HDM(PHA).
Before: GOODWIN, FLETCHER and D.W. NELSON, Circuit Judges.
The principal question on this appeal is whether a homeowner insurance policy was covered by the provisions of Nevada Revised Statutes ("NRS") §§ 687B.310-420. We certified the statutory construction question to the Supreme Court of Nevada as one peculiarly within the expertise of that court. Based upon the decision of the Nevada Court, we reverse and remand this diversity case to the district court.
The facts in the case are not in dispute. The Reinkemeyers were insured by SAFECO Insurance Company under a homeowner's insurance policy. Between 1989 and 1993, the Reinkemeyers submitted three claims under the policy totaling approximately $212,400. In 1994, SAFECO notified the Reinkemeyers that it was declining to renew the policy.
The Reinkemeyers sued SAFECO claiming that the non-renewal violated various provisions of NRS §§ 687B.310-420 that govern the cancellation and renewal of certain insurance policies. For example, they asserted that the version of § 385 in effect at the time denied insurers any right to "cancel, refuse to renew or increase the premium for renewal of a policy of casualty or property insurance as a result of any claims made under the policy with respect to which the insured was not at fault." 1 SAFECO agrees that the losses were not the fault of the Reinkemeyers.
Section 310 limits the applicability of §§ 310-420 to insurance contracts "the general terms of which are required to be approved or are subject to disapproval by the commissioner" of insurance. Relying on this language, SAFECO argues that an insurance policy is subject to §§ 310-420 only if the legislature specifically grants the Commissioner the authority to approve or disapprove the policy. While the legislature has made certain insurance policies explicitly subject to approval by the Commissioner of Insurance, 2 no provision of Nevada law specifically grants the Commissioner authority over homeowner's policies.
The Reinkemeyers and amicus curiae (the State of Nevada Division of Insurance and Commissioner of Insurance) argue that homeowner's insurance policies, along with almost every other insurance policy used in the state, are subject to regulation under the Commissioner's general regulatory powers. Thus, the Reinkemeyers and the State of Nevada claim that almost all insurance policies used in Nevada are subject to §§ 310-420.
Adopting the magistrate's report and recommendation, the district court agreed with SAFECO, holding that because no provision of Nevada law affirmatively requires homeowner's insurance contracts to be approved by the Commissioner homeowner's insurance policies do not meet the requirements of § 310. The district court granted summary judgment to SAFECO on this basis.
Pursuant to Nevada Rule of Appellate Procedure 5, we certified the following question to the Nevada Supreme Court:
Is a homeowner's insurance policy, like the one at issue in this case, a contract of insurance the general terms of which are required to be approved or are subject to disapproval by the Commissioner of Insurance, as provided by NRS 687B.310?
In an unpublished "Order Answering Certified Question", the Supreme Court of Nevada has answered this question in the affirmative. 3 The Nevada Supreme Court holds that since homeowner's policies are forms of casualty or property insurance, they are made subject to chapter 687B by § 690B.010 and § 691A.010. 4 Furthermore, the court states that homeowner's policies are subject to disapproval by the Commissioner of Insurance under § 679B.225 which provides that "[t]he commissioner, at any time, may inspect any insurance policy covering any risk in this state." Finally, the court holds that except for insurance policies that include "home protection insurance" as defined in § 690B.100, no other statute or rule of the Commissioner exempts homeowner's policies from §§ 687B.310-420. The Nevada Supreme Court thus concludes that homeowner's insurance policies are generally subject to the terms of §§ 310-420.
In its supplemental brief addressing the Nevada Supreme Court's answer, SAFECO asks this court to disregard the answer. We are bound by the answers of state supreme courts to certified questions just as we are bound by state supreme court interpretations of state law in other contexts. See Grover v. Eli Lilly and Co., 33 F.3d 716, 719 (6th Cir.1994) ( ). See also Sifers v. General Marine Catering Co., 892 F.2d 386, 391-92 (5th Cir.1990) ); Redgrave v. Boston Symphony Orchestra, 855 F.2d 888, 903 (1st Cir.1988) (); Wright, Miller & Cooper, Fed. Prac. & Pro.: Jurisdiction 2d § 4248 at n. 67 (1988 & 1998 Supp.) (state court answer is binding upon certifying court).
SAFECO has not cited and we have not found any decision where a federal court has disregarded, on any grounds, a state court's answer to a certified question. Nor does SAFECO advance one of the few established grounds for disregarding state court interpretations of state law in other contexts such as where state court decisions violate federal law or are an "obvious subterfuge to evade consideration of a federal issue." Mullaney v. Wilbur, 421 U.S. 684, 691 n. 11, 95 S.Ct. 1881, 1886 n. 11, 44 L.Ed.2d 508 (1975) (collecting cases).
Instead SAFECO first attacks the Nevada Supreme Court's answer on the grounds that the court decided the question without the benefit of the record before this court or the district court. SAFECO cites Shebester v. Triple Crown Insurers, 974 F.2d 135 (10th Cir.1992), where the court held that a passing comment by the Oklahoma Supreme Court in an answer to a certified question was not binding on the federal courts since "this question was not certified ... and it is unclear whether the Oklahoma court had an adequate record to make this determination." Id. at 139 n. 3. Shebester, however, is clearly inapposite. The passing comment in Shebester was not responsive to the certified question; here, SAFECO asks us to disregard the state court's three-page direct response to our certified question. Moreover, even if an inadequate record can be a basis upon which to disregard an answer, the Nevada court answered an abstract question of Nevada law whose answer was independent of the specific factual situation, unlike the question at issue in Shebester. There is no reason to believe that the record in this case would affect the Nevada Supreme Court's answer.
SAFECO also argues that the Nevada answer should be disregarded because SAFECO was not afforded an opportunity to present briefing or arguments to the Nevada Supreme Court in violation of its due process right to be heard. The Nevada court did reach its decision without the benefit of briefing or argument by any of the parties. We do not, however, reach the novel question of whether a litigant's due process rights can be violated under such circumstances because, on the record before us, it appears SAFECO had an adequate opportunity to present all of its arguments to the Nevada Supreme Court in its Petition for Rehearing. We do not preclude SAFECO from presenting its due process argument to the district court or the courts of Nevada if it can establish a more substantial factual basis for its claim. We accept as the law of Nevada the considered judgment of Nevada's highest court.
Finally, SAFECO argues that, regardless of the answer of the Nevada Supreme Court, § 385 does not apply to homeowner's policies because the legislative history of the 1997 amendment shows that § 385, contrary to its plain language, was meant to apply only to motor vehicle insurance. The proper interpretation of § 385 was not certified to the Nevada Supreme Court. We decline to address the issue because it was not reached by the district court and was not fully briefed by the parties. SAFECO may, of course, present this argument to the district court on remand.
We vacate the judgment and remand to the district court to reconsider the claims made by the Reinkemeyers in light of the decision of the Nevada Supreme Court.
VACATED and REMANDED.
SAFECO INSURANCE COMPANY OF AMERICA, Respondent.
May 28, 1998.
This matter is before this court pursuant to the certification procedure set forth in NRAP 5. The Honorable Alfred T. Goodwin of the U.S. Court of Appeals for the Ninth Circuit certified the following question to this court: "Is a homeowners insurance...
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