Damore v. Winnebago Park Ass'n

• Decision Date: 01 June 1989
• Docket Number: No. 88-1741,88-1741
• Citation: 876 F.2d 572
• Parties: Michael DAMORE, Plaintiff-Appellant, v. WINNEBAGO PARK ASSOCIATION; General Casualty Co. of Wisconsin; John F. Damore; Barbara Damore; American Family Mutual Insurance Co.; Fireman's Fund Insurance Co. of Wisconsin; Time Insurance Co.; Wisconsin Physician's Service Insurance Corp.; and Waukesha County, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 572

876 F.2d 572

Michael DAMORE, Plaintiff-Appellant, v. WINNEBAGO PARK ASSOCIATION; General Casualty Co. of

Wisconsin; John F. Damore; Barbara Damore; American

Family Mutual Insurance Co.; Fireman's Fund Insurance Co.

of Wisconsin; Time Insurance Co.; Wisconsin Physician's

Service Insurance Corp.; and Waukesha County, Defendants-Appellees.

No. 88-1741.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 7, 1989.

Decided June 1, 1989.

Wayne M. Yankala, Mark J. Mingo, Simarski & Stack, Ltd., Milwaukee, Wis., for defendants-appellees.

Timothy J. Aiken, Susan Rosenberg, Aiken & Mawicke, Milwaukee, Wis., for plaintiff-appellant.

Before FLAUM, RIPPLE and KANNE, Circuit Judges.

FLAUM, Circuit Judge.

This is a diversity action involving the construction of an exclusion clause in a homeowner's insurance policy. The district court granted summary judgment to the insurance company, holding that the personal liability section of the policy did not provide coverage to the named insureds for bodily injuries sustained by the their son. We affirm.

I.

American Family Mutual Insurance Co. ("American Family") issued two homeowner's policies to John and Barbara Damore (the "named insureds"), one insuring the couple's summer cottage on Lake Winnebago, Wisconsin, and the other insuring the couple's primary residence in Brookfield, Wisconsin. Under the liability sections of both policies, American Family agreed "to pay, up to our limit of liability, all sums for which any insured is legally liable because of bodily injury or property damage covered by this policy." The policies defined the term "insured" as follows:

Insured means you and your relatives if residents of your household. It also means any other person under the age of 21 in your care or in the care of your resident relatives.

The policies contained an exclusion clause stating that the personal liability coverage did not apply to bodily injury sustained by:

any insured, any relative of any insured who resides on the insured premises, or any employee of any insured other than a domestic employee.

In the summer of 1983, the Damores' son, Michael, was injured in a diving accident at the Lake Winnebago cottage. Michael brought a negligence suit against his parents, American Family, and the other named defendants. American Family asserted that neither policy provided coverage for Michael's injuries because he was an insured under both policies. Michael and American Family each moved for summary judgment on the question of coverage. Michael conceded that he was a resident of his parents' Brookfield home and, thus, an insured under the Brookfield policy. ¹ He argued, however, that he was not a resident of the "Lake Winnebago cottage household" and, therefore, not an insured under the Lake Winnebago policy. The district court granted summary judgment to American Family. Thereafter, John and Barbara Damore stipulated to a judgment being taken against them by their son in the amount of $100,000. Michael Damore now appeals the district court's grant of summary judgment to American Family, contending that his injuries are covered by the Lake Winnebago policy.

II.

The insurance policy at issue in this case provides a type of coverage that is commonly found in homeowner's liability and automobile liability policies: coverage to the named insureds and their families for liability to third parties. Policies of this type often use expressions such as "residents of your household," "members of your household," or "members of your family" in the definition and/or exclusion sections of the policy. The purpose of such expressions is twofold. First, the expression may be used in the definition section of the policy in order to expand the meaning of the term "insured" to include family members whose liability the named insured would ordinarily want the policy to cover--e.g., spouse, children, or other persons in the care of the named insured. See National Farmers Union Property & Casualty Co. v. Maca, 26 Wis.2d 399, 132 N.W.2d 517, 520 (1965). Second, the expression may be used in the exclusion section of the policy in order to exempt the insurer from providing liability coverage to one family member for negligently causing injury to another family member. In such a situation, the negligent party " 'would be apt to be partial' " to the injured party. National Farmers, 132 N.W.2d at 520 (quoting Tomlyanovich v. Tomlyanovich, 239 Minn. 250, 58 N.W.2d 855 (1953)). "Thus, the exclusion protects insurers from situations where an insured might not completely cooperate and assist an insurance company's administration of the case." A.G. By Waite v. Travelers Insurance Co., 112 Wis.2d 18, 331 N.W.2d 643, 645 (App.1983); see also Swart v. Rural Mutual Insurance Co., 117 Wis.2d 478, 344 N.W.2d 719, 721 (App.1984).

The instant policy defines "insured" to include "residents of your household," with the word "your" referring to John and Barbara Damore. The policy excludes coverage for bodily injury sustained by "any insured." Thus, if Michael Damore was a resident of his parents' household on the date of the accident, he was an "insured" under the policy. As a result, he would be afforded liability coverage if he were to negligently cause injury to a third party, but any injuries sustained by him as a result of his parents' negligence would not be covered.

Wisconsin courts have long held that the expression "resident of the household" is an unambiguous phrase, capable of plain and common meaning, and that it is synonymous with the expressions "member of the household" and "member of the family." See Quinlan v. Coombs, 105 Wis.2d 330, 314 N.W.2d 125, 127-29 (App.1981) and cases cited therein. The Supreme Court of Wisconsin has explained the meaning of these expressions as follows [T]hese expressions are used in all cases to describe a common-type of close relationship, varying greatly in detail, where people live together as a family in a closely-knit group, usually because of close relationship by blood, marriage or adoption and deal with each other intimately, informally, and not at arm's length. The intention of the members as to the duration of the relationship would seem to be important in only two respects. The intended duration should be sufficient so as not to be inconsistent with the intimacy of the relationship, and also long enough so that it is reasonable to expect the parties to take the relationship into consideration in contracting about such matters as insurance or in their conduct in reliance thereon.

National Farmers, 132 N.W.2d at 520-21. The Court has further explained:

[T]he controlling test of whether persons are members of a household at a particular time is not solely whether they are then residing together under one roof. Living together under one roof is a factor to be considered and must have occurred at some time. When not occurring at the time in question, the absence from the family roof must be of a temporary nature with intent on the part of the absent person to return thereto.

Doern v. Crawford, 30 Wis.2d 206, 140 N.W.2d 193, 196 (1966). Finally, the Court of Appeals of Wisconsin has stated that the phrase "resident of the household" is to be applied "on an objective basis derived from common experience rather than a subjective basis requiring redefinition with each changing fact situation." Quinlan v. Coombs, 105 Wis.2d 330, 314 N.W.2d 125, 128 (App.1981).

Applying this authority to the instant case, it becomes quite clear that Michael Damore was a resident (or member) of his parents' household at the time of the accident. At the time in question Michael was 19 years old and a typical college student. During the school year he lived in a college dormitory; during the summer months and breaks he lived with his parents at the Brookfield residence. Additionally, during the school year prior to the summer of 1983, Michael returned to his parents' home in Brookfield during the weekends to work part time. Michael did not pay rent to his parents, and he was financially supported by his father. Michael testified at his deposition that he considered himself to be a member of his "father's household" and a "part of the family."

Moreover, it is reasonable to assume that John and Barbara Damore considered their son to be a member of the family and would "take that relationship into consideration in contracting about such matters as insurance"--in particular, liability insurance under the Lake Winnebago cottage policy. National Farmers, 132 N.W.2d at 520-21. The Damores had owned the cottage since Michael was approximately eight years old. Over the years, Michael had "usually" accompanied his parents when they went to the cottage on weekends. ² As Michael grew older, he occasionally stayed at the cottage by himself. It would be unreasonable to conclude that Michael's parents did not consider Michael to be a part of the family for purposes of obtaining liability insurance in connection with the summer cottage.

Accordingly, Michael Damore was an insured under the Lake Winnebago cottage policy and his parents are afforded no liability coverage for his injuries. ³

III.

We also wish to point out that on appeal Michael's attorney has made arguments that, in another case, might invoke sanctions. First, the...