Reinkemeyer v. Safeco Insurance Co. of America

Citations: 166 F.3d 982; 99 Cal. Daily Op. Serv. 793; 99 Daily Journal DAR 947; 1999 U.S. App. LEXIS 1109Docket: No. 96-17096

Court: Court of Appeals for the Ninth Circuit; January 27, 1999; Federal Appellate Court

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The appeal addresses whether a homeowner insurance policy falls under Nevada Revised Statutes NRS 687B.310-420. The case involves the Reinkemeyers, who, insured by SAFECO Insurance Company, made three claims totaling approximately $212,400 between 1989 and 1993. In 1994, SAFECO declined to renew their policy, prompting the Reinkemeyers to sue, claiming this action violated provisions governing the cancellation and renewal of insurance policies. They argued that under the relevant statute, insurers cannot refuse renewal due to claims for which the insured is not at fault, a point SAFECO conceded. 

SAFECO contended that NRS 310-420 applies only to insurance contracts that require approval from the Commissioner of Insurance, asserting that no law grants authority to approve homeowner policies specifically. Conversely, the Reinkemeyers and the State of Nevada argued that homeowner policies are regulated under the Commissioner’s general powers and thus subject to NRS 310-420. The district court sided with SAFECO, granting summary judgment based on the absence of a requirement for homeowner insurance to be approved by the Commissioner.

The appellate court certified the question of whether homeowner insurance policies require approval under NRS 687B.310 to the Nevada Supreme Court. The Supreme Court affirmed that homeowner policies are indeed considered casualty or property insurance and thus fall under chapter 687B. It clarified that these policies can be inspected by the Commissioner and are not exempt from the provisions of NRS 687B.310-420, concluding that they are generally subject to these statutory terms. The appellate court subsequently reversed the district court's ruling and remanded the case for further proceedings.

SAFECO requests the court to disregard the Nevada Supreme Court's answer to a certified question, asserting that federal courts are not bound by state court answers unless specified. The court emphasizes that it is legally bound by state supreme court answers to certified questions, which should not be treated as merely advisory. It notes that SAFECO has not cited any precedent where federal courts have disregarded such answers, nor has it provided grounds for doing so, such as violations of federal law. 

SAFECO challenges the Nevada Supreme Court's decision on the basis that it lacked a complete record, referencing Shebester v. Triple Crown Insurers; however, the court distinguishes this case by stating that the Nevada Supreme Court provided a direct response to the certified question, unlike the passing comment in Shebester. The court indicates that the abstract nature of the Nevada question means the record is unlikely to affect the answer.

Additionally, SAFECO claims a violation of its due process rights due to not being able to present arguments to the Nevada Supreme Court. The court refrains from ruling on this issue, suggesting that SAFECO may have had adequate opportunity to argue its case in its Petition for Rehearing. The court accepts the Nevada Supreme Court's interpretation as binding law.

Lastly, SAFECO contends that Nevada Revised Statute 385 does not apply to homeowner's policies based on its legislative history; however, this issue was not certified to or addressed by the Nevada Supreme Court or the district court. The court declines to rule on this matter, allowing SAFECO to present this argument on remand. The judgment is vacated and the case is remanded to the district court for further consideration of the Reinkemeyers' claims in light of the Nevada Supreme Court's decision.

The Supreme Court of Nevada addressed a certified question regarding whether a homeowners insurance policy is a contract requiring approval from the Commissioner of Insurance, based on NRS 687B.310. The inquiry emerged in the context of whether such policies are governed by statutes concerning cancellations and nonrenewals. NRS 687B.310 specifies that it applies to all insurance contracts whose terms must be approved or can be disapproved by the Commissioner, unless exempted by statute or rule. The court determined that while there is no statute mandating approval of homeowners insurance policy terms, the Commissioner retains the authority to inspect any insurance policy in the state. Consequently, the court concluded that homeowners insurance policies are generally subject to disapproval by the Commissioner and are not exempt from the provisions of NRS 687B.310 to 687B.420, except when they cover home protection as defined in NRS 690B.100. Moreover, homeowners insurance encompasses both casualty and property insurance, thus mandating compliance with the relevant statutes unless specifically exempted for home protection insurance, which is governed by distinct provisions under Chapter 690B of the Nevada Revised Statutes.

NRS 690B.160 outlines the regulations for the cancellation and renewal of home protection insurance contracts. As such, home protection insurance is not governed by the cancellation and non-renewal statutes in NRS 687B.310 to 687B.420. However, homeowner’s insurance policies are not exempt from these provisions unless they specifically provide home protection insurance as defined in NRS 690B.100. Therefore, homeowner’s insurance policies are classified as contracts of insurance that must receive approval from the Commissioner of Insurance concerning their general terms, and are subject to the cancellation and non-renewal regulations, except when they pertain to home protection. Additionally, Section 385 was amended in 1997, changing "casualty or property" to "commercial or private passenger automobile," while leaving the other provisions from 310 to 420 intact. NRS 690B.031 mandates the Commissioner’s approval for all automobile insurance policies with airbags, and NRS 691A.010 imposes similar requirements for property insurance policies.