Legal Memorandum: Choice of Law in an Insurance Matter in IA

Issue: What is the choice of law standard in an insurance matter in Iowa?

Area of Law: Insurance Law, Litigation & Procedure
Keywords: Choice of law; Significant relationship test; Insurance
Jurisdiction: Iowa
Cited Cases: 355 F.3d 1125; 539 N.W.2d 144; 780 F.2d 1414
Cited Statutes: Restatement (Second) of Conflict of Laws § 188(2)
Date: 08/01/2010

             “If there is not a true conflict between the laws . . . on the pertinent issue, then no choice-of-law is required.”  Modern Equip. Co. v. Cont’l W. Ins. Co., 355 F.3d 1125, 1128 n.7 (8th Cir. 2004).           

When a true conflict of laws does exist, Iowa applies the significant relationship test to contract disputes if there is no choice-of-law provision in the contract.  See Gabe’s Constr. Co. v. United Capitol Ins. Co., 539 N.W.2d 144, 146 (Iowa 1995).  The most significant relationship test, as set forth in Restatement (Second) of Conflict of Laws § 188, provides that the factors to be considered include the place of contracting; the place of negotiating the contract; the place of performance; the locale of the subject matter of the contract; and the domicile, residence, nationality, place of incorporation, and place of business of the parties.  Restatement (Second) of Conflict of Laws § 188(2). 

In Stoner v. State Farm Mutual Insurance Co., 780 F.2d 1414 (8th Cir. 1986), no estoppel theory was urged, and there was no mention of the payment of additional premiums for the daughter’s coverage.  Rather, in Stoner the daughter argued for an expansive interpretation of the phrase “lives with you” so that she would qualify for coverage under her father’s policy, and the court declined to so read the relevant policy language. 


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