Carbon v. Allstate Ins. Co.

• Decision Date: 20 October 1998
• Citation: 719 So.2d 437
• Parties: 97 3085 La
• Court: Louisiana Supreme Court

Page 437

719 So.2d 437

97 3085 La. 10/20/98

Robert J. CARBON, individually and on behalf of his minor daughter, Jennifer Carbon v. ALLSTATE INSURANCE COMPANY.

No. 97-C-3085.

Supreme Court of Louisiana.

Oct. 20, 1998.

Rehearing Denied Nov. 25, 1998.

Christopher E. Lawler, James E. Ryan, Donovan & Lawler, Metairie, for Applicant.

Daniel A. Cavell, Camille a. Morvant, II, Peltier, Morvant & Cavell, Thibodaux, for Respondent.

[97 3085 La. 1] VICTORY, Justice. ^*

We granted a writ of certiorari in this case to determine if the lower courts erred in excluding evidence tending to show whether Jennifer Carbon, a 15-year-old girl severely injured in an automobile accident, was a "resident" entitled to coverage under the uninsured/underinsured motorist provisions of her father's automobile and umbrella policies with Allstate Insurance Company ("Allstate").

FACTS AND PROCEDURAL HISTORY

On May 20, 1992, Jennifer Carbon was injured in a one-car automobile accident just outside of New Braunfels, Texas. A guest passenger in the automobile, Jennifer was propelled through the front windshield during the accident, sustaining several injuries, including a closed head injury.

Jennifer's parents, Linda Franz and Dr. Robert Carbon, divorced in 1988. Her father remained in Thibodaux, Louisiana and Jennifer lived with her mother or other relatives from 1988 until the accident in May of 1992, first in Shreveport and then in New Braunfels. However, pursuant to a consent judgment rendered in the [97 3085 La. 2] Seventeenth Judicial District Court in Lafourche Parish, the care, custody, and control of Jennifer was awarded jointly to both parents, with the judgment noting "[t]he principal residence of the minor child shall be with the mother." Although Dr. Carbon was entitled to regular visitation rights under the agreement ¹, from 1988 until the time of the accident, Jennifer attended school in Shreveport and New Braunfels and stayed with her father in Thibodaux on only a few occasions. According to Dr. Carbon's proffered deposition, she visited him at least once during a school holiday during the 1988-89 school year, during the Christmas holiday in 1989, in June of 1989, during the Thanksgiving holiday in 1990, and for one month during the summer of 1991.

In July of 1992, Dr. Carbon made a claim for Jennifer's injuries on two insurance policies he had purchased from Allstate. Both policies limited coverage to "insured persons," who were defined as "[y]ou and any resident relative." The policies defined a "resident" as follows:

"Resident"--means the physical presence in your household with the intention to continue living there. Unmarried dependent children, while temporarily away from home will be considered residents if they intend to continue to live in your household.

Allstate sent notice to Dr. Carbon rejecting his claim for Jennifer's injuries, contending that Jennifer was not an insured person under the policies because she was not a "resident" of Dr. Carbon's household, as defined by the policies, at the time of the accident.

[97 3085 La. 3] Dr. Carbon subsequently filed this lawsuit on behalf of himself and his daughter seeking recovery under the uninsured/underinsured motorist provisions of his policies in addition to other damages and attorneys' fees.

Prior to trial, plaintiffs filed a motion in limine in which they sought to exclude evidence regarding the divorce proceedings of Linda Franz and Dr. Robert Carbon, as well as evidence showing both where Jennifer physically lived prior to the accident and where she intended to live. The trial court granted plaintiffs' motion in limine on April 4, 1996. In its written reasons for judgment the court concluded Allstate's use of the word "they" in its definition of resident was ambiguous, and any insurance policy provision which allowed a 15-year-old child to determine her own residence violated public policy. Therefore, the court looked to the intent of the parties who controlled where the child would reside. That intent, according to the trial court, was reflected in the court's ruling in the custody proceedings. Therein, the court had ruled Jennifer was to be subject to joint custody by Carbon and Franz. The trial court held a child subject to a joint custody decree which provides for cotutorship has two legal residences as a matter of law. Thus, according to the trial court, Jennifer's residence with her father was established as a matter of law, and evidence of the intent of the parties indicating otherwise was irrelevant. Under the court's ruling, Jennifer was a covered "resident" under her father's Allstate policies. The appellate court denied Allstate's writ application contesting the trial court's ruling, noting Allstate could proffer the excluded evidence and present its argument on appeal after the trial.

At trial, the jury made a substantial award to Dr. Carbon for Jennifer's medical expenses and personal injuries, which was subject to a reduction for Jennifer's contributory fault and the limits under the policies. The defendant proffered [97 3085 La. 4] evidence, including Dr. Carbon's deposition and correspondence between Dr. Carbon and Jennifer, which Allstate claims indicates Jennifer's intent to live with her mother. (Allstate would have introduced this evidence had the trial court not granted the plaintiffs' motion in limine.)

On appeal, the First Circuit affirmed. Carbon v. Allstate Ins. Co., 96-2109 (La.App. 1st Cir. 9/23/97), 701 So.2d 462. Although the court did not agree with the trial court's finding that the word "they" in the second sentence of the policies' definition of "resident" was ambiguous, the court found the policies' definition of "resident" violated public policy because it predicated coverage on the intent of a minor as to her own residence. Absent a valid policy definition of "resident," the court concluded that as a matter of law, the custody judgment provided the legal residence of Jennifer was with both parents, and that the plan of visitation, even though never fully implemented, showed an intent of the court and the parents as to where Jennifer would reside. As such, the court held the trial court did not err in granting plaintiffs' motion in limine or in finding Jennifer was a resident of her father's household as a matter of law. We granted Allstate's writ of certiorari. Carbon v. Allstate Insurance Co., 97-3085 (La.3/27/98), 716 So.2d 365.

LAW AND DISCUSSION

An insurance policy is a contract between the parties. It should be construed by using the general rules for the interpretation of contracts as set out in the Civil Code. Louisiana Ins. Guar. Ass'n v. Interstate Fire & Cas. Co., 93-0911, p. 5 (La.1/14/94), 630 So.2d 759, 763; Smith v. Matthews, 611 So.2d 1377, 1379 (La.1993). The role of the judiciary in interpreting insurance contracts is to ascertain the common intent of the parties to the contract. Louisiana Ins., id.; La. C.C. art.2045. A court is to determine the intent of the parties to an insurance contract "in [97 3085 La. 5] accordance with the general, ordinary, plain and popular meaning of the words used in the policy, unless the words have acquired a technical meaning." Louisiana Ins., id.; Breland v. Schilling, 550 So.2d 609, 610 (La.1989). An insurance policy should not be interpreted in an unreasonable manner, such as to enlarge coverage beyond what is reasonably contemplated by the terms of the policy. Lindsey v. Poole, 579 So.2d 1145, 1147 (La.App. 2nd Cir.1991) (citing Zurich Ins. Co. v. Bouler, 198 So.2d 129 (La.App. 1 st Cir.1967)). Additionally, "[a]bsent a conflict with statutory provisions or public policy, insurers, like other individuals, are entitled to limit their liability and to impose and to enforce reasonable conditions upon the policy obligations they contractually assume." Louisiana Ins., 93-0911 at 6, 630 So.2d at 763; see also Oceanonics, Inc. v. Petroleum Distributing Co., 292 So.2d 190, 192 (La.1974).

Both of the policies purchased by Dr. Carbon provide coverage to "insured persons," which include "any resident relative." As noted earlier, the policies define a "resident" as follows:

"Resident" means the physical presence in your household with the intention to continue living there. Unmarried dependent children, while temporarily away from home will be considered residents if they intend to continue to live in your household.

Under this definition there are two ways by which a person may be covered as a "resident" under the policy. The first sentence defines a resident as one who has a physical presence in the household of the insured plus the intention to continue living there. The second sentence states that an unmarried dependent child, although temporarily away from home, is covered if he or she intends to continue living in the household of the insured. The plain meaning of these sentences is clear and unambiguous. A relative will be considered a "resident" only if he has a physical [97 3085 La. 6] presence in the household plus the intent to continue living in that household at the time of the accident. However, an unmarried dependent child will nonetheless be considered a "resident," provided he was temporarily away from the home but intended to continue to live in the insured's home. The plain language employed, as well as the use of the word "continue" in both sentences, mandates this interpretation.

Because this provision is not ambiguous, Allstate is entitled to use its definition of "resident," agreed to by both parties, to limit its coverage as long as the definition does not conflict with either statutory law or public policy. Louisiana Ins., 93-0911 at p. 6, 630 So.2d at 763. The requirement of physical presence in the household clearly does not violate any statutory law or public policy. No Louisiana statute forbids insurers from limiting coverage to relatives of the insured who physically reside in or are only temporarily away from the insured's...