Jacobs v. Fire Ins. Exchange

• Decision Date: 06 February 1991
• Docket Number: No. A048070,A048070
• Citation: 278 Cal.Rptr. 52,227 Cal.App.3d 584
• Court: California Court of Appeals Court of Appeals
• Parties: Howard JACOBS, Plaintiff and Appellant, v. FIRE INSURANCE EXCHANGE, Defendant and Respondent.

Page 52

278 Cal.Rptr. 52

227 Cal.App.3d 584

Howard JACOBS, Plaintiff and Appellant, v. FIRE INSURANCE EXCHANGE, Defendant and Respondent.

No. A048070.

Court of Appeal, First District, Division 3, California.

Feb. 6, 1991.

Ronald H. Wecht, Walkup, Shelby, Bastian, Melodia, Kelly, Echeverria & Link, San Francisco, for plaintiff and appellant.

Eliot R. Hudson and Andrew Thomason, Kincaid, Gianunzio, Caudle & Hubert, Oakland, for defendant and respondent.

CHIN, Associate Justice.

Plaintiff and appellant Howard Jacobs (appellant) appeals from a summary judgment granted in favor of Fire Insurance Exchange (insurer) after the trial court concluded that the tortfeasor was not a permanent resident of the household of the named insured, Erma Peterson (Erma), and therefore was not insured under her policy. We find no error in the granting of summary judgment and therefore affirm.

The Facts

Summary. In November of 1986, 18-year-old Luis Arreaga (Luis) allegedly injured appellant by causing a truck to hit him. At the time Luis lived in one unit of a duplex with his father, Carlos, and his stepmother, Connie Arreaga (Connie). Erma, Connie's grandmother, owned the duplex and lived in the other unit.

At all pertinent times Erma was insured by a homeowner's policy issued by insurer. The policy provided liability coverage for Erma and for relatives or persons under age 21 "if permanent residents of [her] household." ¹

Appellant's attorney made a demand on insurer for the limits of the policy on the theory Luis was a resident of Erma's household. Insurer disagreed and denied the claim. Appellant obtained a default judgment in excess of $1 million against Luis. In exchange for a covenant not to execute, Luis assigned all claims and causes of action he might have against insurer to appellant. Appellant filed this action against insurer for violation of Insurance Code section 790.03 and negligent infliction of emotional distress. ² The trial court granted summary judgment, and held that as a matter of law Luis was not a member of Erma's household.

Scope of Erma's household. The two units in the duplex were separated by a solid wall. Each had a separate entrance, backyard, mailbox, kitchen, and bathroom. Prior to 1983, Erma occupied unit A of her duplex and rented unit B to tenants.

In about 1983, when Erma was approximately 85 years old and in declining health, Connie moved into unit A to help care for her. After Erma and Connie lived together in unit A for a few months, Erma evicted the tenants in unit B and moved into that half of the duplex. Connie stayed in unit A with her husband (Luis's father), who had moved in shortly before Erma left. Luis moved into unit A with his father and Connie in 1985 and resided there until January of 1987. He never slept at or stored possessions in unit B while he resided in unit A with his parents.

After Erma moved out of unit A, Connie paid $250 per month rent, the same amount paid by Erma's prior tenants. However, there was no written rental agreement because, in Erma's words, "we're family."

After Connie moved into the duplex, she had daily contact with Erma. Connie prepared Erma's daily medications, took her to medical and dental appointments, and periodically checked to see how she was. Connie also paid all of Erma's bills (using Erma's money) and generally took care of "all" her business, including paying insurance premiums and making insurance claims. Connie always had a key to Erma's unit, and apparently had access to the unit as necessary to provide her with assistance. In general, Connie considered herself to be Erma's "caretaker."

Erma ate separately from Connie and her family, but in the past Connie regularly prepared leftovers and brought them to Erma's unit for dinner. In 1989, Erma was receiving her meals from the Meals on Wheels program.

Luis's involvement in caring for Erma was limited. He assisted Connie "[m]aybe once a week" in some manner, including helping to sort out Erma's medications and helping Erma get down the stairs of her apartment.

Erma intended that her homeowner's insurance apply to the entire duplex structure. Subjectively, however, she considered the A and B units to be "separate households," and did not believe she and Luis were part of the same household.

Based on this evidence, the trial court concluded there was no triable issue of fact that Luis was part of Erma's household and granted summary judgment for insurer.

Discussion

Standard of Review

Summary judgment is proper if there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ.Proc., § 437c, subd. (c).) In reviewing a summary judgment, we determine whether the facts shown by the parties give rise to a triable issue of fact. In making this determination we strictly construe the moving party's papers, while liberally construing those of the opposing party. (Howell v. State Farm Fire & Casualty Co. (1990) 218 Cal.App.3d 1446, 1448, 267 Cal.Rptr. 708; Safeco Ins. Co. v. Gibson (1989) 211 Cal.App.3d 176, 179-180, 259 Cal.Rptr. 206.)

Applying this standard to the facts of the present case, we conclude the trial court properly granted summary judgment.

Definition of "Household"

Appellant argues that the term "household" is ambiguous, must therefore be construed, and must be interpreted in its most inclusive sense to provide coverage.

It is true that the rules of interpretation of insurance contracts provide that any ambiguity or uncertainty in an insurance policy is resolved against the insurer. "The purpose of this canon of construction is to protect the insured's reasonable expectation of coverage in a situation in which the insurer-draft[er] controls the language of the policy. [Citations.] Its effect differs, depending on whether the language to be construed is found in a clause providing coverage or in one limiting coverage. 'Whereas coverage clauses are interpreted broadly so as to afford the greatest possible protection to the insured [citations], exclusionary clauses are interpreted narrowly against the insurer. [Citations.]' [Citations.]" (Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 808, 180 Cal.Rptr. 628, 640 P.2d 764; Safeco Ins. Co. v. Gibson, supra, 211 Cal.App.3d at pp. 180-181, 259 Cal.Rptr. 206.)

However, the rules of construction do not apply if either of two situations exists. First, there is no need for construction if a provision is unambiguous, which means it can be interpreted in only one reasonable way. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 912, 226 Cal.Rptr. 558, 718 P.2d 920; Safeco Ins. Co. v. Gibson, supra, 211 Cal.App.3d at p. 181, 259 Cal.Rptr. 206.) Second, "[w]hen a clause in an insurance policy is authorized by statute, it is deemed consistent with public policy as established by the Legislature. [Citation.] In addition, the statute must be construed to implement the intent of the Legislature and should not be construed strictly against the insurer (unlike ambiguous or uncertain policy language). [Citations.]" (Prudential-LMI Com. Insurance v. Superior Court (1990) 51 Cal.3d 674, 684, 274 Cal.Rptr. 387, 798 P.2d 1230.) We find that both of the situations exist in the case at bench.

"Household" is not ambiguous. The policy at issue provided liability coverage for Erma and her relatives and persons under age 21 "if permanent residents of [her] household...." The quoted clause imposes two requirements. First, the person for whom coverage is sought must permanently reside with the named insured. Second, the person for whom coverage is sought must belong to the same household as the named insured. It is undisputed that Luis resided in the A unit with his parents. The question is whether the residents of the A and B units comprise a single household or two separate households.

Some courts have said that the term "household" has "no absolute meaning" and that its meaning may "vary according to the circumstances." (Cal-Farm Ins. Co. v. Boisseranc (1957) 151 Cal.App.2d 775, 781, 312 P.2d 401; see also cases cited in Watt by Watt v. Mittelstadt (Mo.App.1985) 690 S.W.2d 807, 815 (hereafter Mittelstadt ); Island v. Fireman's Fund Indemnity Co. (1947) 30 Cal.2d 541, 547, 184 P.2d 153; Highlands Ins. Co. v. Universal Underwriters Ins. Co. (1979) 92 Cal.App.3d 171, 175, fn. 2, 154 Cal.Rptr. 683.) Others have held that "household" is unambiguous when used in a contract of insurance. (Safeco Ins. Co. v. Gibson, supra, 211 Cal.App.3d at p. 181, 259 Cal.Rptr. 206; California State Auto. Assn. Inter-Ins. Bureau v. Hoffman (1978) 77 Cal.App.3d 768, 774, 143 Cal.Rptr. 835; Mittelstadt, supra, at pp. 815-816.) We agree with the latter cases, which explain their holding by observing that the apparent conflict in the cases interpreting "household" is not due to any inherent ambiguity in the term itself, but instead arises from the difficulty of applying varying sets of facts to a fixed definition.

Thus, in Safeco Ins. Co. v. Gibson, supra, 211 Cal.App.3d at page 181, 259 Cal.Rptr. 206, the court said, "it seems to us the common thread that runs through [cases interpreting 'resident' and 'household'] is not whether the terms 'resident' or 'member of the household' are themselves inherently ambiguous, but whether, under the particular facts of each of those cases, insurance coverage was extended or excluded under the terms of the policy in question." Similarly, in Mittelstadt, supra, 690 S.W.2d at pages 815-816, the court stated that "[c]ontrary to what is asserted by [the plaintiffs], what this court observes from the [cited authorities construing the term 'household'] is not that the term 'household' is ambiguous and thus capable of two or more interpretations, but rather these authorities reveal a struggle of determining whether, under a prescribed set of facts an individual is an insured or not within the terms of any insurance policy." (Original emphasis.)

We...