FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NORTH RIVER INSURANCE 

COMPANY, a New Jersey 

corporation, 

Plaintiff-Appellant, 

 v. 

JAMES RIVER INSURANCE 

COMPANY, an Ohio corporation, 

Defendant-Appellee.

No. 23-55757 

D.C. No. 

2:23-cv-00027-

PSG-E 

ORDER

CERTIFYING A 

QUESTION TO 

THE SUPREME 

COURT OF 

NEVADA

Filed August 28, 2024

Before: Richard A. Paez, Danielle J. Forrest, and Gabriel 

P. Sanchez, Circuit Judges.

Order
2 NORTH RIVER INS. CO. V. JAMES RIVER INS. CO.

SUMMARY*

Certification Order / Nevada State Law

Pursuant to Nevada Rules of Appellate Procedure Rule 

5, the panel certified the question set forth below to the 

Nevada Supreme Court: 

Under Nevada law, can an excess insurer 

state a claim for equitable subrogation 

against a primary insurer where the 

underlying lawsuit settled within the 

combined policy limits of the insurers?

ORDER

Pursuant to Nevada Rules of Appellate Procedure Rule 

5, we respectfully certify the question set forth below to the 

Nevada Supreme Court. The answer to our certified 

question will “be determinative of the cause” pending before 

us. Nev. R. App. P. 5(a). 

This case involves an equitable subrogation claim 

brought by an excess insurer against a primary insurer. The 

suit arises from a murder in a Las Vegas, Nevada apartment 

complex. The victim’s estate sued the owners of the 

complex for negligence and wrongful death. The primary 

insurer rejected initial settlement demands that were at or 

within its policy limits, and the case ultimately settled for an 

* This summary constitutes no part of the opinion of the court. It has 

been prepared by court staff for the convenience of the reader.
NORTH RIVER INS. CO. V. JAMES RIVER INS. CO. 3

amount exceeding the primary insurer’s policy limits, but 

within the combined limits of the two insurance policies. 

After paying the remainder of the settlement, the excess 

insurer sued the primary insurer in federal court in 

California, asserting an equitable subrogation claim and 

alleging that the primary insurer breached its duty to settle 

and the implied covenant of good faith and fair dealing. 

To resolve this appeal, we must determine whether 

California or Nevada law applies. If the laws of the two 

states are the same, California law will presumptively apply,

as the forum state. See Washington Mut. Bank, FA v. 

Superior Ct., 24 Cal. 4th 906, 920 (2001). If there is a 

material conflict between the laws of the two states, 

however, we will be required to undertake a choice-of-law 

analysis and ultimately apply the prevailing jurisdiction’s 

law. See Chen v. Los Angeles Truck Centers, LLC, 7 Cal. 

5th 862, 867–68 (2019). It is not clear to us, however, what 

the law of Nevada is here.

The central issue in this appeal, therefore, is whether 

Nevada law permits equitable subrogation between insurers 

in this context. 

For the reasons we discuss below, we certify the 

following question:

Under Nevada law, can an excess insurer 

state a claim for equitable subrogation 

against a primary insurer where the 

underlying lawsuit settled within the 

combined policy limits of the insurers? 

We recognize that our phrasing of this question does not 

restrict the court’s consideration of the issues involved and 
4 NORTH RIVER INS. CO. V. JAMES RIVER INS. CO.

that the court may rephrase the question as it sees fit. We 

agree to accept the court’s answers. 

I.

We briefly summarize the relevant facts. In 2017, 

Marcus Collins (“Collins”) was murdered inside Shelter 

Island Apartments, an apartment complex in Las Vegas, 

Nevada. In 2019, Collins’s estate sued Alhambra Place 

Partnership, LP dba Shelter Island Apartments (“Alhambra 

Place”), the owner, for negligence and wrongful death. 

Alhambra Place had a primary insurance policy with James 

River Insurance Company (“James River”) for $1 million 

per covered occurrence, as well as an excess insurance 

policy with North River Insurance Company (“North 

River”) for $10 million per occurrence. 

As the primary insurer, James River defended the lawsuit 

against Alhambra Place. Between March 2019 and 

November 2021, James River rejected a number of 

settlement demands from Collins’s estate, all at or below the 

$1 million policy limit. North River alleges that, at least in 

November 2021, James River’s defense counsel had 

informed James River that the value of the lawsuit was 

greater than $1 million. 

In August 2022, James River learned of another lawsuit 

against Alhambra Place involving a more recent murder at 

Shelter Island Apartments. That lawsuit settled for $11 

million after the deposition of the owner of the apartment 

complex. That same month, Collins’s estate increased its 

demand to $5 million. James River subsequently decided to 

settle, and in November 2022, the case settled for $5 million. 

James River contributed its full policy limit of $1 million, 

and North River contributed the remaining $4 million. 
NORTH RIVER INS. CO. V. JAMES RIVER INS. CO. 5

In January 2023, North River filed the present lawsuit 

against James River in the Central District of California. 

North River alleged that James River breached its duty to 

settle and the implied covenant of good faith and fair 

dealing. North River asserted a claim of equitable 

subrogation, contending that had it not stepped in to cover 

the costs of the settlement, Alhambra Place would have 

possessed a cause of action against James River. North 

River thus alleged that, under these circumstances, it had the 

right to step into the shoes of Alhambra Place as subrogee of

that cause of action. 

On August 4, 2023, the district court granted James 

River’s motion to dismiss under Federal Rule of Civil

Procedure 12(b)(6) for failure to state a claim upon which 

relief could be granted. The court conducted a choice-oflaw analysis under California’s choice-of-law rules as the 

forum state. Relying on two unpublished decisions from the 

Nevada Supreme Court, the district court concluded that 

Nevada law presented a material conflict with California law 

because Nevada did not allow an excess insurer to maintain 

a claim for equitable subrogation against a primary insurer 

when the underlying case settled within the insurers’ 

combined policy limits. 

II.

Nevada permits certification of a state law question from 

a federal court where “there are involved in any 

proceeding . . . questions of law of [Nevada] which may be 

determinative of the cause then pending . . . and as to which 

it appears . . . there is no controlling precedent in the 

decisions of the Supreme Court or Court of Appeals of 

[Nevada.]” Nev. R. App. P. 5(a). “We invoke the 

certification process only after careful consideration and do 
6 NORTH RIVER INS. CO. V. JAMES RIVER INS. CO.

not do so lightly.” Kremen v. Cohen, 325 F.3d 1035, 1037 

(9th Cir. 2003). In deciding whether to certify a question of 

state law to a state supreme court, we consider “(1) whether 

the question presents important public policy ramifications 

yet unresolved by the state court; (2) whether the issue is 

new, substantial, and of broad application; (3) the state 

court’s caseload; and (4) the spirit of comity and 

federalism.” Murray v. BEJ Mins., LLC, 924 F.3d 1070, 

1072 (9th Cir. 2019) (cleaned up). 

This case raises important policy ramifications 

implicating insurance companies, their underlying duties to 

make reasonable settlement decisions, and their ability to 

subrogate claims after the payment of settlement fees. An 

insurance company’s motivations and interests may be 

influenced by its ability to bring a claim for equitable 

subrogation at a later point. See Restatement of Liability 

Insurance § 24 cmt. b (2019). And in the spirit and comity 

of federalism, we recognize that Nevada may have an 

interest in regulating its own insurance landscape. See, e.g.,

Cassirer v. Thyssen-Bornemisza Collection Found., 69 F.4th 

554, 557 (9th Cir. 2023)

In this appeal, we must determine whether a material 

conflict exists between Nevada and California law, such that 

a choice-of-law analysis is required. See Washington Mut. 

Bank, 24 Cal. 4th at 919–20. Federal courts sitting in 

diversity presumptively apply the choice-of-law rules of the 

forum state, so California choice-of-law rules would apply 

here. See First Intercontinental Bank v. Ahn, 798 F.3d 1149, 

1153 (9th Cir. 2015). 

“The California Supreme Court has indicated that the 

governmental interest test is ‘the appropriate general 

methodology for resolving choice-of-law questions’ in 
NORTH RIVER INS. CO. V. JAMES RIVER INS. CO. 7

California.” Cassirer, 69 F.4th at 560 (quoting McCann v. 

Foster Wheeler LLC, 48 Cal. 4th 68, 83 (2010)). Under 

California’s governmental interest test, we first ask whether 

the relevant law of the two jurisdictions “is the same or 

different.” Chen, 7 Cal. 5th at 867 (cleaned up). If the 

answer to this first question is that the laws of the two 

jurisdictions are the same, we do not need to proceed any 

further, as California law would apply. Washington Mut. 

Bank, 24 Cal. at 920; see Mazza v. Am. Honda Motor Co., 

666 F.3d 581, 591 (9th Cir. 2012), overruled in part on other 

grounds by Olean Wholesale Grocery Coop, Inc. v. Bumble 

Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022) (holding that a 

conflict of law issue “only arises if differences in state law 

are material, that is, if they make a difference in [the] 

litigation”). If the answer is that the laws of the two 

jurisdictions are materially different, then we must proceed 

with the remainder of the choice-of-law analysis. See Chen, 

7 Cal. 5th at 867–68.

Thus, in order to resolve this case, we must determine

whether there is a material difference between Nevada and 

California law. We therefore need to ascertain whether

Nevada law permits or prohibits equitable subrogation 

claims by an excess insurer against a primary insurer when 

the underlying settlement is within the insurers’ combined 

policy limits. California law permits such claims. See, e.g., 

Ace Am. Ins. Co. v. Fireman’s Fund Ins. Co., 2 Cal. App. 5th 

159, 183 (2016); RLI Ins. Co. v. CAN Cas. of California, 141 

Cal. App. 4th 75, 80 (2016). Under the current state of 

Nevada law, it is not clear whether Nevada recognizes a 

claim for equitable subrogation in these circumstances. 

Nevada generally recognizes the doctrine of equitable 

subrogation. See In re Fontainebleau Las Vegas Holdings, 

128 Nev. 556, 572 n.8 (2012) (“This court has recognized 
8 NORTH RIVER INS. CO. V. JAMES RIVER INS. CO.

the doctrine of equitable subrogation in a variety of 

situations.”). And, where Nevada law is less developed on 

an issue, such as equitable subrogation, Nevada courts have 

looked to the law of other states, including California. See, 

e.g., Mort v. United States, 86 F.3d 890, 893 (9th Cir. 1996) 

(“Where Nevada law is lacking, its courts have looked to the 

law of other jurisdictions, particularly California, for 

guidance. In accordance with this practice, we have looked 

to the law of other states when necessary to supplement 

Nevada’s law on equitable subrogation.”) (internal citations 

omitted); Zurich Am Ins. Co. v. Aspen Specialty Ins. Co., 

2021 WL 3489713 at *3 (D. Nev. Aug. 6, 2021) (“[The 

court] look[s] to California law for guidance because the 

Supreme Court of Nevada often does that when deciding an 

issue of first impression.”). 

The district court determined, however, that Nevada law 

diverged from California law here. The court concluded that 

two unpublished decisions from the Nevada Supreme Court 

prohibited an excess insurer from bringing an equitable 

subrogation claim against a primary insurer when the 

underlying settlement fell within the insurers’ collective 

policy limits. The first case, St. Paul Fire & Marine Ins. Co. 

v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 521 P.3d 418, 

2022 WL 17543613 (Nev. 2022), held that an excess insurer 

could not bring an equitable subrogation claim against 

another, equal-level excess insurer. 

In St Paul, four insurers—two primary and two excess—

were involved in settling the underlying lawsuit regarding 

the insured properties. 2022 WL 17543613 at *1. After a 

jury verdict, but before the punitive damages stage, the four 

insurers agreed to settle the case for an amount within their 

collective policy limits. Id. One of the excess insurers then 

sued the other excess insurer, alleging a claim for equitable 
NORTH RIVER INS. CO. V. JAMES RIVER INS. CO. 9

subrogation. Id. The Nevada Supreme Court reasoned that, 

because the settlement fell within the total policy limits, the 

insured “did not suffer damages to subrogate,” and thus no 

claim for equitable subrogation could proceed. Id. at *1–2. 

In a subsequent case arising out of the same underlying 

incident, the Nevada Supreme Court again ruled that the 

same excess insurer could not bring an equitable subrogation 

claim against a primary insurer. See Aspen Specialty Ins. Co 

v. Eighth Jud. Dist. Ct. in & for Cnty. of Clark, 528 P.3d 287, 

2023 WL 3185274 (Nev. 2023). There, the same excess 

insurer plaintiff from St. Paul sued a primary insurer. Id. at 

*2. The court held that because this case arose out of a 

related action, it was bound by St. Paul. Id. The court again 

noted that “the four insurers settled the litigation . . . without 

exceeding the collective policy limits,” and thus held that 

there were “no damages which [the excess insurer] can 

acquire.” Id. 

Importantly, however, these cases were unpublished. 

Under Nevada Rule of Appellate Procedure 36(c), the 

Nevada Supreme Court can “decide cases by either 

published or unpublished disposition.” If the court decides 

not to publish, the “unpublished disposition, while publicly 

available, does not establish mandatory precedent except in 

a subsequent stage of a case in which the unpublished 

disposition was entered, in a related case, or [to establish 

issue or claim preclusion].” Nev. R. App. P. 36(c)(2)

(emphasis added). However, a “party may cite for its 

persuasive value, if any, an unpublished decision[.]” Nev. 

R. App. P. 36(c)(3). St. Paul and Aspen are thus not 

“mandatory precedent” and have no compulsory binding 

effect on this case. 
10 NORTH RIVER INS. CO. V. JAMES RIVER INS. CO.

Additionally, neither case was decided by the full 

Nevada Supreme Court: St. Paul was decided by a six-justice 

court, see 2022 WL 17543613 at *5 n.4, and Aspen involved 

a petition for a writ of mandamus that was decided by a 

three-justice court, see 2023 WL 3185274. Further, there are 

some meaningful differences between those cases and the 

one here. In the underlying litigation there, the insurers 

negotiated a settlement after a jury verdict but before any 

award of punitive damages, whereas here, the underlying 

case never went to trial. And the present appeal arose from 

the grant of a Rule 12(b)(6) motion to dismiss, before any 

discovery was conducted, whereas St. Paul arose from the 

grant of summary judgment, after the close of discovery.

Left with no clearly controlling precedent, we believe 

that the Nevada Supreme Court should be the first to 

determine whether equitable subrogation is permitted 

between two insurers in this context. Certification is thus 

appropriate. See Nev. R. App. P. 5(a). We respectfully 

request that the court answer the question presented in this 

order. 

Pursuant to Rule 5 of the Nevada Rules of Appellate 

Procedure, we include here the designation of the parties 

who would be appellant and appellee in the Nevada Supreme 

Court, as well as the names and addresses of counsel. 

The names and addresses of counsel are: 

For Plaintiff-Appellant North River 

Insurance Company: Sabrina H. Strong and 

Zoheb P. Noorani, O’Melveny & Myers, 

LLP, 400 South Hope Street, Los Angeles, 

CA 90071.
NORTH RIVER INS. CO. V. JAMES RIVER INS. CO. 11

For Defendant-Appellee James River 

Insurance Company: Jeffrey V. Commisso, 

Benjamin D. Brooks, and John T. Brooks, 

Sheppard, Mullin, Richter & Hampton, LLP, 

501 West Broadway, 18th Floor, San Diego, 

CA 92101.

III.

The Clerk of Court is hereby directed to transmit to the 

Nevada Supreme Court, under official seal of the Ninth 

Circuit, a copy of this order and request for certification and 

all relevant briefs and excerpts of record. Submission of this 

case is withdrawn, and the case will be submitted following 

receipt of the Nevada Supreme Court’s opinion on the 

certified question or notification that it declines to answer 

the certified question. The Clerk is directed to 

administratively close this docket pending further order. 

The parties shall notify the Clerk of this court within one 

week after the Nevada Supreme Court accepts or rejects 

certification. In the event the Nevada Supreme Court grants 

certification, the parties shall notify the Clerk within one 

week after the court renders its opinion. 

It is so ORDERED. 

 /s/ Danielle J. Forrest

Danielle J. Forrest,

Circuit Judge, Presiding