Fireman's Fund of New Jersey v. Caldwell

CourtSuperior Court of New Jersey
Citation636 A.2d 606,270 N.J.Super. 157
PartiesFIREMAN'S FUND OF NEW JERSEY, Plaintiff, v. Bertha M. CALDWELL and Georgia Caviness, Defendants.
Decision Date07 September 1993

C. Edward Speidel, for plaintiff (Golden, Rothschild, Spagnola & Di Fazio, P.C., attorneys).

Robert Rosenblum, for defendant Caviness (Thomas E. Hood, P.C., attorney).

DE LUCCIA, J.S.C.

This matter is before the court by way of plaintiff's motion for summary judgment in a declaratory judgment action. The case raises the question as to what level of socialization and domesticity must be reached, apart from kinship and joint residency, to establish a household. The issue is presented in the context of the interpretation of a provision in a homeowner's policy which excludes from liability coverage personal injury claims made by relatives residing in the policyholder's household.

The controversy developed as follows: defendants Georgia Caviness (Caviness) and Bertha M. Caldwell (Caldwell) are sisters. Caldwell owns what appears to be a two family dwelling situated at 374 East 24th Street, Paterson, New Jersey. Caldwell's ownership of the property extends from at least 1974 to the present. Caldwell also owned property at 73 Godwin Avenue, Paterson, New Jersey. The record before the court on this motion is unclear as to when Caldwell acquired the Godwin Avenue property or whether her ownership continued on February 23, 1990.

From at least 1974 through June 1990, Caldwell maintained a homeowner's liability insurance policy (the policy) with plaintiff Fireman's Fund. The policy covered the East 24th Street property and perhaps the Godwin Avenue premises, although as to the latter parcel, the record is at best ambiguous.

Sometime prior to February 23, 1990, Caviness took up residence in her sister's home. Her sister lived in the first floor apartment which consisted of five rooms, two of which were bedrooms. An unidentified tenant occupied the second floor apartment. At her deposition, Caviness testified she asked her sister to allow her to reside in one of the two bedrooms because her doctor preferred she not live alone. Caviness's testimony reveals this relationship to be more than familial. Initially, Caviness paid rent weekly, but subsequently, that was changed to monthly. Caviness was emphatic that these arrangements did not contemplate the provision of care by her sister because she was "not sick." Other than sharing common bath and kitchen facilities, the record does not provide additional details as to which, if any, prerogatives of family life the parties enjoyed.

On February 23, 1990, Caviness apparently was injured in a fall which allegedly occurred at the East 24th Street property. The record does not reflect additional details of the incident except that the matter ultimately matured into litigation.

Subsequent to the receipt of a notice of claim for damages from Caviness's attorneys, Fireman's Fund sent Caldwell a letter acknowledging the existence of her sister's claim and advising of its intention to investigate. However, plaintiff cautioned Caldwell that its investigation was proceeding under a "reservation of rights." The Caviness claim apparently eluded an amicable adjustment and litigation ensued. Fireman's Fund assigned counsel to defend Caldwell.

On June 9, 1992, Fireman's Fund informed Caldwell in writing of its determination that the Caviness claim fell outside the scope of coverage afforded under her policy. Fireman's Fund reasoned that Caviness, as a relative residing with Caldwell, qualified as an "insured" under the policy and consequently, no coverage was afforded. Thereafter, Fireman's Fund commenced the within declaratory judgment action against both Caldwell and Caviness, seeking a determination that the Caviness litigation fell beyond the penumbra of coverage provided by Caldwell's policy. Plaintiff also requests authorization to withdraw its defense of Caldwell in the Caviness lawsuit. Caviness has appeared in this action, but Caldwell has defaulted.

The disputed policy contains a definitional section. Section 3 defines "insured" as follows: " 'Insured' means you and residents of your household who are: (a) relatives; ...." (emphasis added). Section 4 defines "insured location" as "the residence premises." The term "household" is not defined in the policy.

Section 2 of the policy delineates liability coverages. Coverage is afforded up to the policy limits for a claim or suit brought against the insured for damages resulting from bodily injury or property damage caused by an occurrence. It is undisputed that, if covered, the Caviness accident would qualify as an "occurrence" under the policy.

The policy also contains a section denominated "Section II--Exclusions." Section 2(f) excludes coverage for personal liability claims arising out of "bodily injury to [the policyholder] or an insured within the meaning of part a. and b. of 'insured' as defined" in the policy.

The policy also includes an endorsement captioned "Additional Residence Rented to Others--1, 2, 3 or 4 Families." This endorsement is referred to as "HO-70." Caldwell was charged an additional premium for this endorsement. The HO-70 endorsement purports to extend coverage for personal liability and medical payments to the specific premises identified in the endorsement. The portion of the endorsement reserved for the identification of the insured premises is not completed. The policy, however, does not reference any premises other than the East 24th Street property.

Fireman's Fund contends the disputed policy is clear and unambiguous. It argues that Caviness qualifies as an "insured" under the definitional section of the policy since she is both a resident of the Caldwell household and Caldwell's sister. Plaintiff therefore reasons since Caviness is considered an "insured" under the policy, Section 2(f) operates to remove her lawsuit from the parameters of personal liability coverage afforded by the policy. Plaintiff also contends that endorsement HO-70 does not cover the East 24th Street property, but rather was intended to extend only to the Godwin Avenue property.

On the other hand, Caviness argues that the economic relationship between the sisters removes her from the class of relatives contemplated as additional insureds under the policy. Caviness also maintains that endorsement HO-70 must be construed to provide coverage for claims presented by Caldwell's tenants, such as herself and the second floor occupant. Defendant urges to the extent endorsement HO-70 creates an ambiguity in the policy, such ambiguity must be resolved against the insurer.

Plaintiff cites Foley v. Foley, 173 N.J.Super. 256, 414 A.2d 34 (App.Div.1980), and Knoblock v. Prudential, 260 N.J.Super. 127, 615 A.2d 644 (App.Div.1992), as support for its position. Plaintiff argues that in both decisions, the Appellate Division sustained as unambiguous, exclusions similar to Section 2(f) of the Caldwell policy. However, upon closer scrutiny, these cases are revealed to be distinguishable.

In Foley, plaintiff filed an action against her husband and State Farm, the homeowner carrier, for damages for personal injuries allegedly sustained at the hands of her husband. The State Farm policy contained an exclusion for claims made by relatives residing in the policyholder's household. This exclusion virtually mirrors that found in the Caldwell policy. Although the court upheld the validity of the exclusion in the State Farm policy, it did so on the basis that plaintiff qualified as an insured under the policy. Unfortunately, the opinion in Foley is devoid of any discussion of the factual or legal basis on which that determination was premised.

In Knoblock, plaintiff's infant son, while residing in plaintiff's household, was injured riding a mini-bike at a relative's home. The injured child's mother commenced a negligence action on his behalf against the relatives, who, in turn, counterclaimed against the mother and filed a third party action against the infant's father, seeking indemnification and contribution. The Knoblocks pursued a declaratory judgment action against Prudential to confirm coverage under the homeowner's policy for the claims asserted against them in the pending negligence litigation. The Law Division ruled the child to be an additional insured under the policy and entered summary judgment in favor of the carrier denying coverage. The Appellate Division affirmed.

As in Foley, supra, the Appellate Division found the exclusion contained in the Knoblock's homeowner policy clear and unambiguous. The exclusion is also virtually identical to Section 2(f) of the Caldwell policy.

However, the Knoblock decision also does not address the issue here raised. The Appellate Division made only fleeting reference to the infant plaintiff's status as a resident of his parents' household. See Knoblock v. Prudential, supra, 260 N.J.Super. at 129, 615 A.2d 644. Neither Foley nor Knoblock address the point raised in this case. Accordingly, these decisions are not controlling.

The coverage issue to be resolved is whether Caviness qualifies as a resident of the Caldwell household as that concept is contemplated by the policy. Since the policy does not define "household," the court must look elsewhere for an answer.

"Household is not a word of art. Its meaning is not defined in certain commonly known and universally accepted limits." See Mazzilli v. Acc. & Cas. Ins. Co. of Winterthur, 35 N.J. 1, 8, 170 A.2d 800 (1961). Our former equity court defined "household" as "... an organized family; a domestic establishment; a family considered as consisting of all those who share in the privileges and duties of common dwelling." See In re Ganey, 93 N.J.Eq. 389, 393, 116 A. 19 (Ch.1922). While "household" is often considered synonomous with "family," it is nonetheless generally treated as a more comprehensive term than "family." Maz...

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  • South v. North
    • United States
    • New Jersey Superior Court
    • May 19, 1997
    ...of terms which defy a precise definition, yet are readily recognizable when encountered." Fireman's Fund of New Jersey v. Caldwell, 270 N.J.Super. 157, 164, 636 A.2d 606 (Law Div.1993). Case law has developed under the Act, but there is no domestic violence case law that interprets the term......
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    ...was no longer a resident of her father's household even if she nonetheless established residency at her mother's home." Ibid. In Fireman's Fund of New Jersey, the trial denied summary judgment to the insured's live-in sister because it could not determine from the record whether the sisters......
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    ...used," falling "into thecategory of terms which defy precise definition, yet are readily recognizable when encountered." 270 N.J. Super. 157, 163-64 (Law Div. 1993). In R.G., we commented that, "[c]ourts struggled to determine the reach of this provision, especially when deciding what relat......

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