Imagine this scenario. You moved to Nevada two weeks ago. However, your car is still insured in California. You're driving to work when another vehicle rear-ends you. It's a rental car that's registered in Florida. The driver is on vacation with a car insurance policy from New York. Between the four different states involved, what law applies to the car accident claim? Does it matter what laws apply?
Yes, it does matter. In fact, it can make all the difference. Let's talk about choice of law issues in Nevada car accident cases.
What Is Choice of Law When It Comes to Car Accident Cases?
When it comes to car accident cases, choice of law is what body of law applies to the case. Laws from the state or local jurisdiction where the accident occurs may apply. However, there may be drivers, companies, vehicles and insurance policies involved in the accident from other states. Choice of law is the determination of what rules apply to decide the rights and liabilities of those involved in the car accident.
Why Does Choice of Law Matter in a Car Accident Case?
Choice of law matters in a car accident case because the law that applies can determine the case's outcome. One set of events may have two different results in court depending on which law decides. For example, one state may have a comparative negligence system that allows a victim to recover some compensation even if they are 99% at fault for the accident. Other states may prohibit a victim from recovering if they are 51% at fault or if they even have any responsibility at all. What law applies may result in a recovery or leave a victim empty-handed.
Another example of differences between states that may be significant is the statute of limitations. That determines how long a victim has to initiate their case. Similarly, vicarious liability is when an employer may be liable for the actions of their employees. Finally, negligence per se is the existence of a local traffic law that may create a presumption that a defendant acted negligently. Differences in these laws between states can make choice of law the determining factor of the outcome of the case.
Choice of Law and Jurisdiction Are Not the Same Thing
It's important to note that choice of law is not the same thing as jurisdiction. Jurisdiction is which court has the authority to hear the case. Usually, the laws of that jurisdiction apply. However, there may be exceptions. A court can have jurisdiction over a case with different governing law. This occurs when the parties agree on a choice of law in a contract, but it may happen in other types of cases, too.
Sometimes, the Parties Stipulate to Choice of Law
Parties to a contract may agree in advance about what body of law applies to interpret the contract. In fact, choice of law clauses are somewhat common in insurance contracts, contracts of sale and even employment agreements.
In the context of car accidents, this may come into play in insurance policies. If there is no stipulation between the parties, the court must decide what body of law applies. Even if there is a stipulation, the court may determine whether the choice of law provision is enforceable.
Progressive Gulf Ins. Co v. Faehnrich, Nevada Supreme Court, 2014
One case that discusses choice of law in car accidents is the Nevada Supreme Court case Progressive Gulf Ins. Co. v. Faehnrich. The driver in the case bought an insurance policy in Mississippi. She was a resident of the State of Mississippi.
About the Insurance Policy
The policy excluded coverage for bodily injury to family members under a household exclusion clause. The driver specifically declined uninsured/underinsured motorist coverage. The contract also contained a choice of law provision, which stated that disputes regarding coverage would be resolved under Mississippi law.
An Accident Occurs
The woman later divorced and moved to Nevada. There, she and her two sons were in a one-vehicle accident. The sons suffered serious injuries. When the driver made a claim on behalf of her sons, the insurance company denied coverage because of the household exclusion.
The woman sued her insurance company. She claimed that because Nevada law requires all drivers to carry a minimum amount of insurance, the insurance company should pay the minimum amount. She argued that the Mississippi household exclusion law was not enforceable because Nevada law applied to the claim.
The Court Upheld Choice of Law
The Nevada Supreme Court was taxed with determining if the Mississippi choice of law provision in the contract was enforceable. The court acknowledged that generally, parties may choose what body of law applies to an insurance contract. They said that the courts invalidate a choice of law only if needed to protect a fundamental public policy. Ultimately, the court said that there was no reason not to honor the parties' decision to choose Mississippi law to govern the claim. They upheld the household exclusion clause in the contract.
Choice of Law in Nevada Car Accident Cases
As a resident or visitor to Nevada, it's essential to be aware of choice of law. It may impact a car accident case. Ultimately, identifying choice of law issues is important to properly strategizing and pursuing any claim. Developing both facts and legal issues like choice of law can significantly impact receiving justice after a car accident. If you have questions about your case, you should consult a Nevada car accident attorney.