Progressive Direct Ins. Co. v. Rithmiller
| Decision Date | 08 December 2020 |
| Docket Number | Case No. 19-CV-2470 (PJS/HB) |
| Citation | 505 F.Supp.3d 899 |
| Parties | PROGRESSIVE DIRECT INSURANCE COMPANY, Plaintiff, v. William RITHMILLER and Jake Thompson, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Beth A. Jenson Prouty and Stephen M. Warner, ARTHUR, CHAPMAN, KETTERING, SMETAK & PIKALA P.A., for plaintiff.
Douglas E. Schmidt, SCHMIDT LAW FIRM, for defendant William Rithmiller.
In 2018, defendant William Rithmiller was injured when his vehicle collided with a vehicle driven by defendant Jake Thompson. Jake (who was 17 years old at the time) was insured under an automobile policy that American Family Mutual Insurance Group ("American Family") had issued to his mother, Andrea Beaudet.
Rithmiller settled his claim against American Family pursuant to a Drake-Ryan agreement.1 Rithmiller then pursued a claim against plaintiff Progressive Direct Insurance Company ("Progressive"), which had issued an automobile policy to Jake's step-mother, Julie Linnell-Thompson. Jake's father, Scott Thompson, had married Julie a couple of years before the accident.
Progressive filed this action against Rithmiller and Jake, seeking a declaration that it has no duty to indemnify Jake in connection with the 2018 accident. Progressive and Rithmiller have both moved for summary judgment.2 For the reasons that follow, Progressive's motion is granted, and Rithmiller's motion is denied.
Rithmiller was injured on February 22, 2018, when his vehicle collided with a Ford Taurus driven by Jake. Schmidt Aff. Ex. A, ECF No. 31-1. Jake's car was covered under his mother's automobile policy with American Family, and Rithmiller and American Family reached a Drake-Ryan settlement covering the first $100,000 of liability. Schmidt Aff. Ex. B, ECF No. 31-1. The settlement was insufficient to compensate Rithmiller for all of his damages, however, so Rithmiller sought additional recovery under the automobile policy that Progressive had issued to Julie (the "policy"). See Am. Compl. ¶ 14, ECF No. 9; Def.'s Mem. Summ. J. 3, ECF No. 30; Schmidt Aff. Ex. C, ECF No. 31-1.
The policy lists Julie as the "named insured" and identifies two "drivers and resident relatives": Scott and Julie's son Nicholas. Jake is not mentioned. The policy also identifies three vehicles that it covers: a Chevrolet Tahoe, a Pontiac Bonneville, and a Chevrolet Monte Carlo. Jake's Taurus is not mentioned. Schmidt Aff. Ex. C, at 11–12.3
Part I of the policy provides that Progressive "will pay damages for bodily injury and property damage for which an insured person becomes legally responsible because of an accident." Id. at 19.4 The policy defines "insured person" to include "you, a relative, or a rated resident...." Id. "You" is defined as the named insured and her spouse—here, Julie and Scott. Id. And, as is relevant here, "relative" is defined as "a person residing in the same household as you, and related to you by blood, marriage or adoption...." Id. at 18.
The parties agree that Jake is related to "you"—that is, to Julie and Scott—by "blood" (in Scott's case) and "marriage" (in Julie's). They dispute, however, whether Jake "resid[ed] in the same household" as Julie and Scott. The policy does not define the phrase "residing in the same household."
Jake's biological parents (Andrea and Scott) never married. Prouty Aff. Ex. D, Thompson Dep. 4:6–8, ECF No. 26-1. When Jake was young, a court awarded 50-50 joint custody to Andrea and Scott. Id. at 5:13–17. For years, Andrea and Scott strictly followed the custody order, and Jake split his time equally between his parents' houses. Id. at 17:2–5. As Jake grew older, however, he wanted to spend more time at his mother's house, as her house was closer to his school and job. Id. at 6:3–10. Scott agreed that it made sense for Jake to spend more time at Andrea's house. Id. at 5:18–6:6. By 2016, Jake was living full-time with Andrea. Id. at 14:12–21, 36:16–22. Andrea and Scott never returned to court to formally modify the custody order.
Despite this change in Jake's living arrangements, Jake and Scott maintained a close relationship. Id. at 7:15–20. Scott regularly visited Jake at work, they communicated daily, and they enjoyed hunting and skiing together. Id. at 9:3–10, 22:25, 27:3–4. Scott remained involved in Jake's schooling and attended parent-teacher conferences. Id. at 28:14–19. Scott also continued to pay child support, provided health insurance for Jake, and helped Andrea pay for the American Family policy that covered Jake's car. Id. at 12:1–2, 12:21–24, 22:8–10.
In 2016, Scott married Julie and moved into her house. Id. at 14:1–5. Scott and Julie believed that they were blending their families. Id. at 34:21–22. Jake was therefore always welcome at Julie's house. Prouty Aff. Ex. E, Linnell-Thompson Dep. 8:24–9:1, 10:8–11, ECF No. 26-1. From 2016 to 2018, Jake lived full-time with his mother, except that he spent about one night per month at Julie's house. He also had dinner with Scott and Julie two or three times per month. Thompson Dep. 23:19–24, 36:16–22. Jake did not show up at Julie's house unannounced. He always asked permission to visit, and he would not spend the night if Scott was gone. Id. at 8:10–12, 26:13–15; Linnell-Thompson Dep. 9:12–20.
Jake kept no personal belongings at Julie's house, did not have a designated bedroom in the house, did not have a key to the house, did not receive mail at the house, and had no set chores or responsibilities at the house. Thompson Dep. 8:22–25, 24:21–24, 25:4–26:9. Jake was not added to Julie's automobile insurance with Progressive because he was covered under his mother's automobile insurance with American Family. Id. at 29:7–30:10.
By 2018—the year of the accident—Jake was 17 years old and a senior in high school. Id. at 7:21–25. Following graduation, Jake planned to work in a trade and did not intend to live with Scott and Julie. Id. at 31:2–9.
Summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A dispute over a fact is "material" only if its resolution might affect the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute over a fact is "genuine" only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255, 106 S.Ct. 2505.
"The interpretation of an insurance contract is a question of law." Jerry's Enters., Inc. v. U.S. Specialty Ins. Co. , 845 F.3d 883, 887 (8th Cir. 2017) (citation omitted). The parties agree that "[b]ecause this case is in federal court based on diversity jurisdiction, Minnesota's substantive law controls [the Court's] analysis of the insurance policy." Corn Plus Coop. v. Cont'l Cas. Co. , 516 F.3d 674, 678 (8th Cir. 2008) ; see also Pl.'s Mem. Summ. J. 11, ECF No. 25; Def.'s Mem. Summ. J. 6. Under Minnesota law, courts rely on "general principles of contract law" to interpret insurance policies. Midwest Fam. Mut. Ins. Co. v. Wolters , 831 N.W.2d 628, 636 (Minn. 2013). Terms in an insurance policy are interpreted to mean "what a reasonable person in the position of the insured would have understood the words to mean rather than what the insurer intended the language to mean." Canadian Universal Ins. Co. v. Fire Watch, Inc. , 258 N.W.2d 570, 572 (Minn. 1977) (citation omitted). Finally, the "insured party bears the initial burden of demonstrating coverage, and the insurer then bears the burden of establishing an applicable exclusion." Rest. Recycling, LLC v. Emp. Mut. Cas. Co. , 922 F.3d 414, 417 (8th Cir. 2019) (citing Midwest Fam. , 831 N.W.2d at 636 ).
The parties dispute whether Progressive is required to indemnify Jake. As described above, that question turns on whether Jake was "residing in the same household" as Julie and Scott at the time of the accident.5 The Minnesota Supreme Court has repeatedly held that the term "resident" in an insurance contract is not ambiguous. See, e.g. , Lott v. State Farm Fire & Cas. Co. , 541 N.W.2d 304, 306–07 (Minn. 1995) (); Tollefson v. Am. Fam. Ins. Co. , 302 Minn. 1, 226 N.W.2d 280, 283 (1974) ().6 The Court will therefore apply that unambiguous phrase "to the facts of the case in order to give effect to the plain meaning of the language."7 Firemen's Ins. Co. of Newark v. Viktora , 318 N.W.2d 704, 706 (Minn. 1982).
Minnesota courts are often asked to determine whether a relative was a "resident" of a policyholder's household for the purposes of an insurance policy. See, e.g., McGlothlin v. Steinmetz , 751 N.W.2d 75, 82 (Minn. 2008) ; Am. Fam. Mut. Ins. Co. v. Thiem , 503 N.W.2d 789, 790–91 (Minn. 1993) ; Viktora , 318 N.W.2d at 706–07. The Minnesota Supreme Court has held that, in making that determination, courts should consider the " Pamperin factors": "(1) Living under the same roof; (2) in a close, intimate and informal relationship; and (3) where the intended duration is likely to be substantial ...." Viktora , 318 N.W.2d at 706 (quoting Pamperin v. Milwaukee Mut. Ins. Co. , 55 Wis.2d 27, 197 N.W.2d 783, 788 (Wis. 1972) ). The Pamperin factors are not exclusive, however, and Minnesota courts have relied on a wide range of additional considerations. See, e.g. , id. at 706–07 (); Wood v. Mut. Serv. Cas. Ins. Co. , 415 N.W.2d 748, 750 (Minn. Ct. App. 1987) (...
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