PerSONa Non Grata Not a Household Resident and Therefore Not an Insured Under the Father's Farmowners Policy

FARMOWNERS – "HOUSEHOLD" – RESIDENT RELATIVE – INSURED STATUS
Farm Family Cas. Ins. Co. v Nason
(4th Dept., decided 11/10/2011) 

If your adult son stayed sometimes on your property in a separate but uninsured trailer and sometimes off premises with his girlfriend, did not reside with other members of your family, and was not welcome in your home, could he be considered a member of your household for purposes of qualifying as an insured under your homeowners or farmowners insurance policy?  No, says the Appellate Division, Fourth Department.

Farm Family insured property on which Gerald Nason, Sr., had his home and a dairy business.  Under the terms of that policy, Nason's relatives were insureds only if they were residents of his "household."  Eric Pommerenck died as the result of injuries that he sustained on farm property owned by Nason while examining a hay elevator that had been offered for sale by Nason's son, Gerald R. Nason, Jr., the defendant in this declaratory judgment.  Nason Jr. did not reside exclusively on his father's residence property but also resided at times with his girlfriend at another location.  Pommerenck's estate commenced a wrongful death action against, among others, Nason Sr. and Nason Jr., and Farm Family commenced this action seeking a declaration that it owed no duty to defend or indemnify Nason Jr. in the underlying action on the ground that he was not an insured under its policy. Supreme Court, Erie County (Sedita, J.) denied Farm Family's motion for summary judgment and it appealed.

In REVERSING the lower court's order and declaring that Farm Family was not obligated to defend or indemnify Nason Jr. in the underlying wrongful death action, the Appellate Division, Fourth Department, while noting that the undefined term "household" has been characterized as being ambiguous, found that Farm Family has submitted sufficient evidence to support the conclusion that Nason Jr. was not a member of his father's household, and thus did not qualify as an "insured" under his policy with Farm Family at the time of the underlying accident:

"The term household has been characterized as ambiguous or devoid of any fixed meaning in similar contexts . . . and, as such, its interpretation requires an inquiry into the intent of the parties . . . The interpretation must reflect the reasonable expectation and purpose of the ordinary business [person] when making an insurance contract . . . and the meaning which would be given it by the average [person] . . . Moreover, the circumstances particular to each case must be considered in construing the meaning of the term" (General Assur. Co. v Schmitt, 265 AD2d 299, 300 [internal quotation marks omitted]). In addition, "the term should . . . be interpreted in a manner favoring coverage, as should any ambiguous language in an insurance policy" (Rohlin v Nationwide Mut. Ins. Co., 26 AD3d 749, 750). 

Here, plaintiff established that Nason did not consider defendant to be a member of his household, nor would he have anticipated that defendant would be afforded coverage under his insurance policy inasmuch as defendant lived separately from Nason, either in a trailer on the subject property or with a girlfriend. The trailer was not listed in the policy as an alternate residence. Furthermore, members of the Nason family testified at their respective depositions that defendant did not reside with the other members of the family and, indeed, was not welcome in the family home. Consequently, plaintiff established as a matter of law that defendant was not a member of Nason's household within the meaning of the policy (see Matter of Hartford Ins. Co. of Midwest v Casella, 278 AD2d 417, 418, lv denied 96 NY2d 710; Walburn v State Farm Fire & Cas. Co., 215 AD2d 837; cf. Korson v Preferred Mut. Ins. Co., 55 AD3d 879, 880-881), and defendants failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562).

No Coverage for a Non-Non-Owned Car

PERSONAL AUTO – NON-OWNED CAR – HOUSEHOLD RESIDENT RELATIVE – TIMELY DISCLAIMER – INSURANCE LAW § 3420(D)(2)
Konstantinou v. Phoenix Ins. Co.
(4th Dept., decided 6/11/2010)

David Thurston was operating his sister Tynette Thurston's Chevy Celebrity when he crashed into the plaintiff's vehicle, killing that vehicle's passenger and seriously injuring its driver.  Plaintiff sued the Thurston siblings and their mother, Brenda Henderson, with whom they allegedly resided.  After obtaining a judgment against the Thurston siblings, plaintiff commenced this action pursuant to New York Insurance Law § 3420(a)(2) and (b)(1) against Henderson's personal auto insurer, Phoenix Insurance Company, for liability coverage under Henderson's policy with Phoenix.  Wayne County Supreme Court (Kehoe, J.) granted Phoenix's motion for summary judgment, dismissing the complaint, and plaintiff appealed.

Henderson's personal auto policy with Phoenix provided:

We will pay damages for which the insured becomes legally responsible because of bodily injury or property damage caused by accident and arising out of the ownership, maintenance or use of your car or any non-owned car.

The policy listed Henderson as the only named insured and a Chevrolet Lumina as the only covered vehicle. The policy defined "your car" as, among other things, "any vehicle described on the declarations page of [the] policy." Because the Celebrity was not listed on the declarations page, it was not covered under the "your car" category.

The policy also defined a "non-owned car" as

a land motor vehicle with at least four wheels designed to be used mainly on public roads, or a trailer. However, it must not be owned by or furnished or available for the regular use of you or a relative.

 The policy further explained that "You and your mean the person [listed as the named insured on the declarations page, i.e., Henderson, and that] . . . Relative means your relative, residing in your household."

In AFFIRMING the order granting summary judgment to Phoenix, the Fourth Department concluded that the Celebrity did not qualify as a "non-owned car" under Henderson's policy with Phoenix because it was owned by Tynette Thurston, Henderson's daughter and resident of Henderson's household, and was available for the regular use of David Thurston, Henderson's son and also resident of Henderson's household.  The appellate court also held that the timely disclaimer requirement of New York Insurance Law § 3420(d) did not apply because the Celebrity did not qualify as a covered vehicle under the Phoenix policy, and plaintiff's claim fell outside the scope of coverage of that policy:

Contrary to plaintiff's contention, the court properly determined that the Thurston siblings were relatives of Henderson who resided in her household and that the Celebrity therefore was not a "non-owned car" for which defendant would be required to provide coverage with respect to the accident in question. A person is a resident of a household for insurance purposes if he or she " lives in the household with a certain degree of permanency and intention to remain' " (Matter of State Farm Mut. Auto. Ins. Cos. v Jackson, 31 AD3d 1171, 1171). Although Tynette Thurston lived at college at the time of the accident, defendant submitted evidence in support of the motion establishing that she was a resident of the household inasmuch as she lived with Henderson during the summers, received mail at Henderson's house, stayed there every other weekend, and listed that address on the Celebrity's title and insurance (see Dutkanych v United States Fid. & Guar. Co., 252 AD2d 537, 538; see also Matter of Prudential Prop. & Cas. Ins. Co. [Galioto], 266 AD2d 926). Thus, because the Celebrity was owned by a relative of Henderson who was a resident of her household, it was not a "non-owned car" under the terms of the policy entitled to coverage by defendant. 

Moreover, it was undisputed that David Thurston was a relative of Henderson who was a resident of her household, and defendant submitted evidence in support of the motion establishing that the Celebrity was available for his regular use inasmuch as he had unrestricted access to the Celebrity while Tynette Thurston was at college and had used it several times prior to the accident (see generally Newman v New York Cent. Mut. Fire Ins. Co., 8 AD3d 1059, 1060). Thus, the Celebrity also was not a "non-owned car" within the meaning of the policy because it was available for the regular use of a relative of Henderson who was a resident of her household. 

Contrary to plaintiff's further contention, the Celebrity is not entitled to coverage under Henderson's policy with defendant on the ground that defendant failed to disclaim coverage in a timely manner. It is well established that "[d]isclaimer pursuant to [Insurance Law § ] 3420 (d) is unnecessary when a claim falls outside the scope of the policy's coverage portion. Under those circumstances, the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed" (Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188; see State Farm Fire & Cas. Co. v Whiting, 53 AD3d 1033, 1035; see generally Zappone v Home Ins. Co., 55 NY2d 131, 137-139).

Grown Daughter Not a "Resident" of Her Parents' Household, Despite Visiting Often and Still Having a Room with Some Belongings There

UM – CPLR ARTICLE 75 PROCEEDING – HOUSEHOLD "RESIDENT"
Matter of State Farm Mut. Auto. Ins. Co. v. Bonifacio
(2nd Dept., decided 1/19/2010)

Respondent lived most of her life at her parents' residence in Yorktown Heights until she graduated from college in 2005. Shortly afterwards, in September of that year, she rented an apartment in Manhattan with two other people. Two months later, the respondent began employment in Manhattan where she worked five days a week, 11 to 12 hours a day. More than two years later, after spending a Sunday afternoon with some friends near her hometown, the respondent was struck by a car while crossing Route 9A in Ardsley.

Respondent made a claim for uninsured motorists (UM) coverage benefits to State Farm, her mother's personal auto insurer.  State Farm denied UM coverage based on its conclusion that she did not qualify as an "insured" for UM coverage purposes because she was no longer a a resident of her parents' household at the time of the accident.  The respondent demanded arbitration of her UM claim, and State Farm commenced this special proceeding for a permanent stay of that arbitration.  After conducting an evidentiary hearing, Westchester Supreme denied State Farm's petition and directed that the parties proceed to arbitration.  State Farm appealed.

In REVERSING the lower court's order, the Second Department ruled that the evidence presented at the hearing established that the respondent did not reside in her mother's household at the time of the accident and, thus, was not a covered person under the subject policy:

A person's status as a resident of an insured's household "requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain" (Matter of State Farm Mut. Auto. Ins. Co. v Nicoletti, 11 AD3d 702, 702 [internal quotation marks omitted]; see Lindner v Wilkerson, 2 AD3d 500, 501-502; Fennell v New York Cent. Mut. Fire Ins. Co., 305 AD2d 452, 453; Government Empls. Ins. Co. v Paolicelli, 303 AD2d 633, 633; Matter of New York Cent. Mut. Fire Ins. Co. v Bonilla, 269 AD2d 599; New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941; see also Matter of Aetna Cas. & Sur. Co. v Gutstein, 80 NY2d 773, 775; Matter of Aetna Cas. & Sur. Co. v Panetta, 202 AD2d 662). The issue of residency is a question of fact to be determined at a hearing (see Government Empls. Ins. Co. v Paolicelli, 303 AD2d at 633; Matter of American Natl. Prop. & Cas. Co. v Chulack, 265 AD2d 550). Based on the evidence presented here, we disagree with the hearing court's finding that the respondent resided in the household of the petitioner's named insured, the respondent's mother, at the time of the accident.

* * * * * 

Although the respondent testified at the hearing that she visited her parents at the Yorktown residence at least once a month, "most often more," and that her parents maintained a room for her there where she kept some of her personal belongings, the respondent was emancipated from her parents, paid rent at the Manhattan residence, filed her own tax returns, and was no longer a dependent on her parents' tax returns. Evidence that the respondent's driver's license still listed her parents' address as her home address, that she possessed a key to her parents' home and, in 2008, voted in Yorktown Heights, and that she previously opened a bank account at a Chase branch in Yorktown Heights, was insufficient to establish that the respondent was residing at the Yorktown residence of her parents at the time of the accident (see Matter of Aetna Cas. & Sur. Co. v Gutstein, 80 NY2d 773; Matter of Aetna Cas. & Sur. Co. v Panetta, 202 AD2d 662; D'Amico v Pennsylvania Millers Mut. Ins. Co., 72 AD2d 783, affd 52 NY2d 1000; cf. Dutkanych v United States Fid. & Guar. Co., 252 AD2d 537). Moreover, physical presence in the parents' home was insufficient to establish residency, particularly where, as here, the respondent had previously established another legal residence in Manhattan and signed a new one-year lease at that residence only two months before the accident (see Hollander v Nationwide Mut. Ins. Co., 60 AD2d 380, 383; Appleton v Merchants Mut. Ins. Co., 16 AD2d 361; Allstate Ins. Co. v Jahrling, 16 AD2d 501).

Based on the evidence presented, the respondent was not a covered person under the subject policy and, therefore, the petition to permanently stay the arbitration should have been granted.

Factors offered in support of respondent's ultimately unsuccessful argument that she was a resident:

• her parents kept a room with some of her belongings in their home for her;
• she visited them once a month or more;
• her driver's license still listed her parents' address as her home address;
• she had a key to her parents' home;
• in the year of the accident, she voted in Yorktown Heights, where her parents lived; and
  
• she previously opened a bank account at a Chase branch in Yorktown Heights.
  

Factors cited by the court for its conclusion that respondent was not a resident:

• she worked in Manhattan, five days a week, 11-12 hours a day;
• she had previously established a legal residence in Manhattan;
• she had just signed a one-year lease for that Manahattan apartment, two months before the accident;
• she was emancipated from her parents;
• she paid rent at the Manhattan residence; and
  
• she filed her own tax returns and was no longer claimed as a dependent on her parents' tax returns.