Hearing Ordered to Determine Whether Infant Claimant Was Resident Relative Living in Insured's Household

UM – RESIDENT RELATIVE – "HOUSEHOLD" – STAY OF ARBITRATION
Matter of Government Employees Ins. Co. v. Fudge
(Sup. Ct., Suffolk Co., decided 7/15/2008)

GEICO brought this special proceeding to stay arbitration of the uninsured motorist (UM) coverage claim filed by of its policyholder holder, Donna Fudge, as guardian of infant Miguel Cuevas. Fudge testified in an EUO and swore in an affidavit that Cuervas was her nephew through marriage and was living with his brother and her in her downstairs apartment of a two-apartment home when the accident occurred. Fudge also averred that she was Cuervas' de facto guardian and was providing financial support to him. Fudge's mother married Cuervas' grandfather, making Cuervas' mother Fudge's step-sister. In opposition to Geico's petition, Fudge also averred that Miguel’s mother was presently in a shelter and Miguel only saw his father on Sundays for three to four hours.

Geico's policy defined an "insured" under the SUM endorsement as "you, as the named insured and, while residents of the same household, your spouse and the relatives of either you or your spouse[.]" The policy further defined a “relative” as “a person related to you who resides in your household.” The term "related" was not defined or limited by the policy.

In finding there to be a triable issue of fact as to whether Miguel Cuevas resided in policyholder's "household”, Suffolk County Supreme Court Justice Sandra Sgroi ruled:

The Court notes that under the circumstances involved herein, even if Cuevas was living in the upstairs apartment and Fudge was not acting as the Respondent’s de facto guardian and providing financial support, it is possible that the circumstances involved in this living arrangement would require the Court to find that Cuevas was part of the “household” of Fudge.

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It has been held, where the term relative was defined in the policy “a person who regularly resides in [the named insured‘s] household and is related to [the named insured] by blood, marriage or adoption”that the husband of the daughter of the policy holder was an insured (see, Matter of Nationwide Mut. Ins. Co. (Hodge), 224 A.D.2d 770,636 N.Y.S.2d 946) and that the step-daughter of the policy holder was an insured (see, Smith v. Pennsylvania Gen. Ins. Co., 32 A.D.2d 854, 300 N.Y.S.2d 975, afld 27 N.Y.2d 830, 316 N.Y.S.2d 436, 265 N.E.2d 258; see also, Matter of New York Cent. Mut. Fire Ins. Co. (Prehoda by Prehoda), 23 1 A.D.2d 829,830,647 N.Y.S.2d 66,67-foster child held to be an “insured”; Developments in Uninsured and Underinsured Motorist Coverage, 69-OCT N.Y. St. B.J. 18,20,1997). Here, the policy does not apparently even attempt to limit the definition of “related” to the extent that it was limited in Matter of Nationwide Mut. Ins. Co. (Hodge) (supra). While any ambiguity in the policy will be construed against the insurer for the benefit of the policy holder and in favor of the infant who is alleged to be the “relative” of Fudge(see, McGuinness v. Motor Vehicle Acc. Indemnification Corp., 18 A.D.2d 1 100,239 N.Y.S.2d 920), the Court will take evidence at the hearing on the issue both of whether the infant was a resident and whether the infant was a relative of Donna Fudge, as that term is used in the policy.