Kibbee v. Blue Ridge Insurance

Opinion

The question to be decided in this case is whether six-year-old Jackson Kibbee was a “resident” of his stepmother’s household when he drowned off the shore of Cabo San Lucas, Mexico. The trial court concluded from the undisputed facts that Jackson was a resident of Yvonne Kibbee’s household and therefore, under the “resident relative” coverage exception, defendants Blue Ridge Insurance Company and Republic Insurance Company (collectively referred to as Blue Ridge) had no duty to defend or

The children arrived in Cabo San Lucas on the scheduled day to begin their two-week stay with their father and stepmother. They brought with them clothing, toys and videos from their mother’s home in California. Unlike the arrangement in West Hills, the boys did not have a room of their own in Cabo San Lucas. Instead they slept in the same room with Lincoln and Yvonne.

On August 9, shortly before their two-week stay was to end, Lincoln took his sons down to the beach to play. A large wave hit the shore and as the water retreated it pulled both boys with it into the ocean. A bystander managed to pull eight-year-old Daniel to safety, but six-year-old Jackson was washed out to sea. In an effort to save his son, Lincoln dived into the ocean but drowned with Jackson in the turbulent water.

A month later, Carol sued Yvonne for the wrongful death of her son alleging Yvonne was negligent in her supervision of the children. Daniel also sued Yvonne for negligence based on his physical injuries and emotional distress. Yvonne tendered defense of the action to Blue Ridge under her homeowners policy. Blue Ridge denied coverage and refused to defend Yvonne on the ground Jackson was a resident of her household at the time of his death and thus an insured under the policy. The policy excludes liability coverage for bodily injury to an “insured.”

Yvonne retained counsel to represent her in the action by Carol and Daniel. The action was eventually dismissed but not until Yvonne incurred approximately $50,000 in attorney fees.

In the present action, Yvonne is suing Blue Ridge for breach of contract for its refusal to defend her in the underlying lawsuit brought by Carol and Daniel. The trial court granted summary judgment to Blue Ridge on the grounds there were no triable issues of material fact and Blue Ridge was entitled to judgment as a matter of law. The court concluded at the time of the accident Jackson and Daniel were “residents” of Yvonne’s household and therefore “insureds” under the policy’s “resident relative” exclusion.

Discussion

We agree with the trial court this case is ripe for summary judgment. Neither side contends there are material issues of fact requiring resolution at trial. The only dispute is over the proper legal, rule to be applied to the undisputed facts. (Cf. National Auto. & Cas. Ins. Co. v. Underwood (1992) 9 Cal.App.4th 31 , 36-37 [ 11 Cal.Rptr.2d 316 ].)

The policy at issue in this case provides standard liability coverage for a claim made or a suit brought against an insured “for damages because of a bodily injury . . .” The policy, however, specifically excludes coverage for “bodily injury to ... an insured.” An “insured” is defined as “you and residents of your household who are (a) your relatives or (b) other persons under the age of 21 and in the care of any person named above.”

The term “resident” is not defined in the policy. Two Court of Appeal decisions have interpreted the resident relative exclusion in the context of children of divorced parents and have reached different conclusions as to its applicability.

In Safeco Ins. Co. v. Gibson (1989) 211 Cal.App.3d 176 [ 259 Cal.Rptr. 206 ] (hereafter Gibson), a child was killed while riding in a car driven by his divorced father. The mother sued the father for wrongful death and the father’s insurance company denied coverage under the resident relative exclusion on the ground the child was a resident of the father’s household. The trial court granted summary judgment to the insurance company on its action for declaratory relief and the Court of Appeal affirmed.

The Gibson’s judgment of dissolution specified the child’s “primary place of residence” was with the mother but provided the parents would share physical custody—the father having custody of the child from Sunday evening until Wednesday morning and the mother having custody from Wednesday morning until Sunday evening. The parents adhered to this schedule until the child’s death. In addition to showing the child spent a substantially equal amount of time in the household of each parent, the evidence showed the child had his own room at his father’s house where he received mail and kept a separate array of clothing and toys.

The majority opinion in Gibson rejected the father’s claim under the facts of this particular case the term “resident” was ambiguous. (211 Cal.App.3d

The Underwood’s custody agreement designated the father as the children’s “primary caretaker.” The children lived with their father the majority of the time. They stayed with their mother every other weekend, alternate Thanksgivings, half their Christmas and Easter vacations and for 10 weeks during the summer. At the time of the accident, the children were on Easter vacation and living with their mother pursuant to the custody agreement. At their mother’s home the children slept in a separate bedroom, which was also used for storage. They kept some clothes and toys at their mother’s home.

The court in Underwood concluded “. . . the term ‘resident’ used in the exclusion clause at issue here is capable of at least two reasonable constructions when applied to the joint custody setting of this case.” (9 Cal.App.4th at p. 39.)

One reasonable construction, the court stated, was that the children had a single residence with their father based on the undisputed evidence they spent far more time with him than with their mother, attended school while maintaining their residency in the father’s household and the father was designated in the custody agreement as the “primary caretaker.” It would also be reasonable, the court acknowledged, to construe the term “resident” to mean the household where the children were physically residing at the time of the accident, which was with their mother. A third reasonable construction, the court said, would be that the children had dual residences at the time of the accident—one with the mother and one with the father. (9 Cal.App.4th at p. 40.) Given three reasonable interpretations of the term “resident” under the circumstances of this particular case the court followed the well-established rule that the term should be construed in favor of the policy holder. Accordingly, the court held, “. . . we adopt the interpretation that the children were not residents of [the mother’s] household at the time of the accident. If children of a divorced insured are to be excluded under the policy in the same fashion as children of an intact family under one roof, the insurer should make that clear in its policy. The fact is this case exemplifies a common joint custody arrangement of school-age children who spend

The Underwood court distinguished Gibson on its facts noting the Gibson majority “based its decision on the fact the boy spent ‘a substantially equal amount of time’ with his father and mother.” (9 Cal.App.4th at p. 41.) In contrast, the Underwoods’ children did not spend an equal amount of time with each parent. “They spent the vast majority of their time with [their father]. And this is a distinction with a difference given the [Gibson] court’s justified emphasis on this fact when considering the issue of residency.” (Ibid., citing Gibson, supra, 211 Cal.App.3d at pp. 178, 184.)

In the present case, Blue Ridge argues Gibson established a bright-line test for determining the residency of a minor child of divorced parents: the child is a resident of the household in which he or she is physically located at the time of the accident. (See Gibson, supra, 211 Cal.App.3d at p. 184.) Although the Gibson court made a statement which, taken out of context, lends support to Blue Ridge’s argument (see discussion, ante, pp. 58-59), we do not believe the court intended to declare such a rule, but even if it did we would decline to follow it for the reasons explained below.

Our principal reason for rejecting a rule declaring a minor child of separated or divorced parents to be a resident of whichever parent’s household he or she is living in at a particular point in time is that it is arbitrary and fails to take into account the particular facts of the case. In reaching its conclusion the Gibsons’ son had “dual residences,” the court relied heavily on the evidence showing how the parents actually behaved with respect to sharing custody of the child observing the parents faithfully complied with the time-sharing provisions of the order so that the child spent a substantially equal amount of time in the household of each parent. (211 Cal.App.3d at p. 184.) A test for residency which focuses exclusively on where the child is living at the time of the accident ignores the kind of facts the Gibson court found most significant.

Furthermore, despite its closing comment, we do not believe the Gibson court intended to hold as a matter of law the minor child of separated or divorced parents is a resident of whichever household he or she happens to be living in at the time of the accident. Earlier in its opinion the court had explained why a custody order was not determinative of the child’s residence. “It would be ludicrous,” the court asserted, “to find that a minor is the resident of the household of a parent who is awarded physical custody if, in

Yvonne, on the other hand, argues this case is indistinguishable from Underwood and should produce the same result. The children in this case, like the Underwood children, spent the majority of their time with one parent. Indeed, the children in the present case had lived exclusively with Carol from May until the end of July when they began their two-week visit with their father. Thus, the Kibbee children spent even less time with their father than the Underwood children spent with their mother. The Underwood court held the term “resident” was ambiguous under these circumstances and therefore construed the term in favor of the parent with whom the children spent the least amount of time. Likewise, Yvonne argues, we should construe the term “resident” in her favor and hold the children were at all relevant times residents of Carol’s household, the parent with whom they lived exclusively.

We agree the children in this case were residents of Carol’s household at the time of the accident, but not for the reasons advanced by Yvonne. Although the term “resident” may not have an absolute meaning (Cal-Farm Ins. Co. v. Boisseranc (1957) 151 Cal.App.2d 775 , 781 [ 312 P.2d 401 ]), it has a commonly accepted meaning so that its use in the resident relative exclusion is not inherently ambiguous. Accordingly, we believe the children’s residency can be determined by applying the facts and circumstances of this case to the commonly accepted meaning of the terms “resident” and “residence.” (Utley v. Allstate Ins. Co. (1993) 19 Cal.App.4th 815 , 821 [ 24 Cal.Rptr.2d 1 ] [words used in an insurance policy are interpreted according to the plain meaning a layperson would ordinarily attach to them].)

California courts are in agreement the term “residence” “ ‘connotes any factual place of abode of some permanency, more than a mere temporary sojourn[.]’ ” (Utley v. Allstate Ins. Co., supra, 19 Cal.App.4th at p. 820, citing Smith v. Smith (1955) 45 Cal.2d 235 , 239 [ 288 P.2d 497 ]; accord, Bullock v. City and County of San Francisco (1990) 221 Cal.App.3d 1072 , 1097 [ 271 Cal.Rptr. 44 ]; Vanguard Ins. Co. v. Hartford Ins. Co. (1970) 9 Cal.App.3d 765 , 768 [ 88 Cal.Rptr. 628 ].) This understanding is consistent with dictionary definitions of the term “resident” as one “ ‘who dwells in a

While there is no bright-line test for determining a child’s residency when the parents are divorced, the usual rules of contract interpretation and the common understanding of the terms “resident” and “residence” provide clear direction as to the factual inquiry a court must undertake in determining the applicability of the resident relative exclusion: The Washington Court of Appeal framed the inquiry as follows: “Does the child regularly spend time in the household in question, such that there exists a continuing expectation of the child’s periodic return on intervals regular enough that the household is the child’s home during the time the child is there, as opposed to a place of infrequent and irregular visits[]” (Estate of Adams v. Great Amer. Ins. Cos. (1997) 87 Wn.App. 883 [ 942 P.2d 1087 , 1091].)

Prior to Lincoln’s move to Cabo San Lucas there could have been no doubt Daniel and Jackson were residents of Lincoln’s household. Indeed, in Gibson’s words the boys had “dual residences”—one with Lincoln and one with Carol. The time they spent in each household was substantially equal. Whichever parent’s household they resided in at a given point in time it was known and accepted they would return to the other parent’s household within seven days. There were no exceptions contemplated to this schedule and none occurred so far as the record shows. (Cf. Gibson, supra, 211 Cal.App.3d at p. 184.) Moreover, the boys maintained clothing, toys and other boyhood necessities at both homes and engaged in the same activities, (going to school, attending soccer practice, taking karate lessons), regardless of which household they were living in. It would have been impossible then to have said the boys were residents of Lincoln’s household anymore than of Carol’s.

When Lincoln moved to Cabo San Lucas for an indefinite time the boys’ circumstances changed significantly. They no longer spent every other seven-day period with their father. They did not see him at all from the time he relocated to Mexico in May until they came for a two-week visit at the end of July and then only after Carol’s initial refusal to allow them to make the trip and her reluctant agreement to allow them to come for the two weeks. Clearly, this visit to Mexico did not signal the resumption of the seven-day time-sharing arrangement. The boys’ trip to Mexico was for two weeks not seven days and there was no agreement between Carol and

For the reasons stated above, we hold Daniel and Jackson were not residents of Lincoln’s and Yvonne’s household at the time of the accident and therefore the resident relative exclusion in their homeowners policy does not bar coverage for the suit filed against Yvonne by Carol and Daniel.

Disposition

The judgment is reversed and the cause is remanded to the trial court for further proceedings consistent with the views expressed in this opinion. Appellant is awarded costs on appeal.

Lillie, P. J., and Neal, J., concurred.

Respondents’ petition for review by the Supreme Court was denied April 21, 1999.