Nationwide Mut. Ins. Co. v. Budd-Baldwin, BUDD-BALDWIN

• Decision Date: 23 July 1991
• Docket Number: No. 91-1171,BUDD-BALDWIN,91-1171
• Citation: 947 F.2d 1098
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant, v. Anne Marie . Submitted Under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 1098

947 F.2d 1098

NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant, v. Anne Marie BUDD-BALDWIN.

No. 91-1171.

United States Court of Appeals, Third Circuit.

Submitted Under Third Circuit Rule 12(6)

July 23, 1991.

Decided Oct. 21, 1991.

Bruce A. Irvine, Paul T. Bemiller, Fronefield & Defuria, Media, Pa., for appellant.

Jonathan Wheeler, Wheeler & Bishop, P.C., Philadelphia, Pa., for appellee.

Before SLOVITER, Chief Judge, GREENBERG, Circuit Judge, and McCLURE, District Judge. ^*

OPINION OF THE COURT

McCLURE, District Judge.

Appellant Nationwide Mutual Insurance Company (Nationwide) appeals from the district court's order granting summary judgment in favor of appellee Anne Marie Budd-Baldwin ¹ (Baldwin) and awarding her first party and underinsured motorist benefits for the death of her brother, David Michael Budd (Budd), under an automobile insurance policy Nationwide issued to Baldwin. We reverse, and direct that summary judgment be entered in favor of Nationwide.

I. BACKGROUND

Budd died from injuries sustained in a one-vehicle accident that occurred on December 16, 1989 while he was a passenger in a vehicle owned and operated by third parties who have not been joined in this lawsuit. At the time of his death, Budd did not own a vehicle and was not a named insured on any automobile policy issued to him. ² He was, however, listed as an "occasional driver" on a policy issued by Nationwide to his sister, the appellee.

Based on that designation, as well as her contention that Budd was a resident of her household under the terms of the policy, Baldwin sought underinsured and first party benefits from Nationwide. When Nationwide denied coverage, Baldwin filed this declaratory judgment action ³ seeking a determination that she is entitled to recover such benefits.

The district court granted summary judgment in Baldwin's favor, on the basis that Nationwide was estopped from denying coverage because it accepted an additional premium from Baldwin for carrying Budd as an "occasional driver" on her policy.

Nationwide seeks reversal of the district court's order, contending that there is no basis for extending coverage to Budd under the terms of the policy and no basis for estoppel. First, Nationwide argues that Budd is not an insured under the policy, because he does not qualify as a resident relative under the terms of the policy. Second, Nationwide contends that Budd's designation as an "occasional driver" is of no relevance, since persons so designated have no right to recover first party or underinsured benefits if injured while driving or riding in a vehicle other than a vehicle listed in the subject policy. Finally, Nationwide asserts that there is no factual basis for a finding of estoppel.

II. DISCUSSION

A. Standard of Review

We exercise plenary review of the district court's order on an appeal from summary judgment. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). Construction of the term "resident" in the policy is a matter of law, see Myers v. State Farm Ins. Co., 842 F.2d 705, 708 (3d Cir.1988); Ram Construction Co. v. American States Insurance Co., 749 F.2d 1049, 1053 (3d Cir.1984), as is the application of principles of estoppel, see Murray v. Silberstein, 882 F.2d 61 (3d Cir.1989), over which we exercise plenary review, but to the extent that summary judgment is dependent on the determination of historical facts, it can be granted only if there is no issue of material fact in dispute. See Fed.R.Civ.P. 56(c).

B. Policy terms

1. First party benefits.

The policy Nationwide issued to Baldwin limits coverage for first party benefits to the policyholder and his or her relatives, as defined in the policy. It states (on page 8):

We will pay First Party Benefits for bodily injury of an insured as a result of an accident that arises out of the maintenance or use of a motor vehicle as a motor vehicle. We will pay these benefits regardless of who is at fault in the accident.

You and your relatives are covered while occupying or injured by any motor vehicle.

* * * * * *

For purposes of this coverage:

1. The words 'YOU' and 'YOUR' mean the policyholder first named in the attached Declarations. They do not include that policyholder's spouse.

2. 'RELATIVE' means the following residents of your household:

* * * * * *

b) anyone related to you by blood, marriage or adoption; and

* * * * * *

A relative may live temporarily outside your household.

(emphasis original.)

2. Uninsured/Underinsured Motorist Coverage.

The provisions governing underinsured coverage state, from Endorsement 2113A:

We will pay compensatory damages that you or your legal representative are legally entitled to recover from the owner or driver of an uninsured motor vehicle or underinsured motor vehicle because of bodily injury. Damages must result from an accident arising out of the ownership, maintenance or use of the uninsured motor vehicle or underinsured motor vehicle.

Relatives living in your household also have this protection.

3. Definitions.

"Relative" is defined in the generally applicable "Definitions" portion of the policy (on page 2) as:

... one who regularly lives in your household, related to you by blood, marriage or adoption (including a ward or foster child). A relative may live temporarily outside your household. ⁴

C. Pennsylvania insurance law

It is this court's obligation to review the claims asserted under Pennsylvania law. ⁵ The Pennsylvania appellate courts have not been confronted with a case requiring them to construe the exact phrase used here, i.e. who qualifies as a person who "regularly lives" in the insured's household, but the Superior Court ⁶ has construed similar phrases governing the coverage extended to resident relatives. In Donegal Mutual Insurance Company v. State Farm Mutual Insurance Company, 377 Pa.Super. 171, 546 A.2d 1212, 1214 (1988), the policy at issue extended basic loss benefits coverage to a relative who "is in residence in the same household" provided he or she "usually makes his home in the same family unit, even though he temporarily lives elsewhere." Noting that the term "household" is defined by Black's Law Dictionary, 666 (5th ed.1979), as a "family living together" and that "household" is generally synonymous with "family" for insurance purposes, the court focused on the living arrangements in effect to ascertain whether the claimant acted like, and was treated as if he were a member of, policyholder's family. The court noted as significant factors whether the claimant paid rent or board to the family, ate his meals with the family, had his own key, received his mail there, kept his personal possessions there, and generally was treated as one would expect a member of the household to be treated.

In Amica Mutual Insurance Company v. Donegal Mutual Insurance Company, 376 Pa.Super. 109, 545 A.2d 343 (1988), the policy at issue provided for liability coverage to family members and defined a "family member" as "a person related to you [the insured] by blood, marriage or adoption who is a resident of your household." Id., 545 A.2d at 344, f.n. 1. The Superior Court found that Donegal's definition evidenced its intent "to limit coverage to those family members who actually live in the same household as the insured", Id., 545 A.2d at 346, and in construing the policy, applied the common law definition of resident. The court found that the claimant was entitled to coverage if she resided with the insured "as a matter of physical fact". Id., 545 A.2d at 349. See also: Krager v. Foremost Insurance Company, 304 Pa.Super. 390, 450 A.2d 736 (1982) (Residence, as distinguished from domicile, which incorporates an element of intent, is the "factual place of abode." Living in a particular place requires "only physical presence".)

With this background, we turn to the facts before us. Nationwide's definition of a "resident relative" is, if anything, more precise than the definitions construed by the Pennsylvania courts in prior cases. See, e.g., Stoner v. State Farm Mutual Automobile Insurance Co., 780 F.2d 1414, 1417 (8th Cir.1986). ("[T]he phrase 'lives with you' is susceptible of only one interpretation, i.e., actually living in fact, ..."). It appears to us that Nationwide heeded the Superior Court's suggestion, (See: Amica, supra, 545 A.2d at 346), that insurers add "words of refinement" if they intend the term "residence" to mean something more than its common law definition. Nationwide defines a covered resident relative as one who "regularly lives" in the insured's household. Something occurs regularly, if it recurs at "fixed or uniform intervals". Webster's New Collegiate Dictionary 974 (7th ed.1973). A person lives where they "occupy a home". Webster's, supra at 673. So to "regularly live" somewhere means to occupy that particular home at fixed intervals. When we combine the dictionary definition with the facts of everyday life, it is clear that to occupy a home means to be able to call that place one's own, to claim it as a place where one has a right to be. The word home itself connotes a place where one belongs and can always go with the certainty that he will be taken in. It connotes not only a physical place, i.e. the place where one eats meals, sleeps, socializes and generally spends time when not "otherwise engaged with the activities of life," ⁷ but a sense of belonging. This definition clearly excludes persons who are mere visitors to the residence, however frequently they may visit and however certain they may be that they will always be taken in. Temporary visits, however frequent or regular, are simply insufficient to establish residency. Donegal Mutual, supra, 546 A.2d at 1214, citing A.G. by Waite v. Travelers Insurance Co., 112 Wis.2d 18, 21-22, 331 N.W.2d 643, 645 (1983), ("Something more than mere temporary sojourn is required" to establish residency.).

We need not decide...