State Farm Mut. Auto. Ins. Co. v. Johnson

• Decision Date: 18 January 1994
• Docket Number: 32110-2-I,Nos. 31844-6-,s. 31844-6-
• Court: Washington Court of Appeals
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Appellant, v. Barry D. JOHNSON, Respondent.

Page 580

72 Wn.App. 580

871 P.2d 1066

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Appellant, v. Barry D. JOHNSON, Respondent.

Nos. 31844-6-I, 32110-2-I.

Court of Appeals of Washington Division 1.

Jan. 18, 1994.

Reconsideration Denied Feb. 16, 1994.

William Robert Hickman, Michael Simpson Rogers, Reed McClure, Seattle, for appellant.

Richard Andrew Bergh, Christopher Cyrus Pence, Pence & Dawson, Seattle, for respondent.

COLEMAN, Judge.

State Farm Mutual Automobile Insurance Company appeals two cross-orders of summary judgment. In the first order, Judge Lloyd Bever granted Barry Johnson's motion for summary judgment, finding that he was an insured under his father's policy. State Farm argues on appeal that Barry Johnson is not an insured under the underinsured motor vehicle ("UIM") provision of his father's policy because Barry Johnson was not "living with" his father within the meaning of the coverage.

In the second order, Judge Liem Tuai granted Barry Johnson's motion for summary judgment, finding that the "other insurance" clause in his father's policy was ambiguous and unenforceable. State Farm argues on appeal that the "other insurance" clause in Johnson's father's policy unambiguously limits UIM excess coverage to the amounts already received by Barry Johnson under other policies.

State Farm also appeals two separate orders awarding Barry Johnson attorney fees. We affirm in part and reverse in part and remand for recalculation of attorney fees.

Barry Johnson lived with his parents, Marco and Lavonne Johnson, until his high school graduation in 1971. Barry subsequently married Mary Jane Bies and they had two children. Both prior to and during the marriage, Barry and Mary Jane established a number of residences in Washington and Alaska. Barry was alternately employed as a commercial fisherman and an electrical engineer. Between residences, Barry and Mary Jane, and sometimes just Mary Jane, occasionally lived with Barry's parents.

In July 1984, Barry traveled to Texas to investigate a job offer. After accepting the position, Mary Jane and the children soon joined him. The family took only those possessions that they could carry on the plane, and they stored their furniture and other belongings in Barry's parents' home in Seattle. During their 2 1/2-year stay in Texas, Barry purchased furniture, obtained a Texas driver's license, and otherwise established his residence in Texas.

In October 1986, the Johnsons decided to move back to Seattle. Barry went ahead of Mary Jane and the children in order to find a job and a place to live for his family. Mary Jane and the children were to follow once Barry was settled and the children could be moved without substantial disruption to their lives. During this period, Barry lived with his parents. Barry and his parents understood that this living arrangement might extend indefinitely.

Shortly after his arrival in late October, Barry found a job as a marine engineer with a former employer. He then enrolled his eldest daughter for school, using his parents' address as her listed address. ¹ On November 17, Barry signed a lease for a rental home, with the lease commencing December 1.

On November 20, while being driven from work to home by co-worker Michael Ogilvie, Barry was injured in an automobile accident caused by an uninsured driver. On November 25, Barry flew to Texas to move his family to Seattle. The family arrived on November 30, stayed the night at Barry's parents, and moved into the rental house on December 1.

Barry has made three underinsured motorist ("UIM") claims under three separate State Farm policies. ² The first policy belongs to Michael Ogilvie. State Farm has paid the UIM coverage limit of $50,000 to Barry under this policy. The second policy belongs to Barry Johnson. State Farm has paid the UIM coverage limit of $50,000 to Barry under this policy. The third policy, which is the subject of this appeal, belongs to Barry's father Marco Johnson. State Farm has refused to pay Barry Johnson under the Marco policy, claiming that he is not an insured under the policy and, even if he were, that he has already received the policy coverage limit.

In May 1992, State Farm brought a declaratory judgment action to determine the UIM coverage under the Marco policy. The case was resolved by two separate summary judgment rulings. In the first ruling, Judge Bever issued partial summary judgment, finding that Barry Johnson was "living with" his father within the meaning of the Marco policy UIM provision defining an insured.

In the second ruling, Judge Tuai issued an order on cross motions for summary judgment, holding that the "other insurance" clause in the Marco policy was ambiguous and unenforceable and declaring that the Marco policy extends $100,000 of UIM coverage to Barry Johnson.

In addition, two other orders were issued, awarding attorney fees to Barry Johnson. In the first order, Judge Tuai awarded Barry Johnson $10,000 for attorney fees incurred after September 22, 1992. In the second order, Judge Bever awarded Barry Johnson $9,500 for attorney fees incurred through September 21, 1992. Prior to each award, State Farm requested an evidentiary hearing. State Farm hoped to subpoena the supporting documentation for the "billing detail" submitted by Johnson's attorney and to cross-examine the attorney as to the entries in the billing detail. Both judges ruled on Johnson's application for attorney fees without a hearing. State Farm appeals.

When reviewing an order of summary judgment, the appellate court must engage in the same inquiry as the trial court. Marincovich v. Tarabochia, 114 Wash.2d 271, 274, 787 P.2d 562 (1990) (citing Highline Sch. Dist. 401 v. Port of Seattle, 87 Wash.2d 6, 15, 548 P.2d 1085 (1976)). An order of summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Marincovich, at 274, 787 P.2d 562 (citing Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982)). The court must consider the facts in the light most favorable to the nonmoving party, and the motion should be granted only if, from all the evidence, reasonable persons could reach but one conclusion. Marincovich, at 274, 787 P.2d 562 (citing Wilson, at 437, 656 P.2d 1030).

We initially consider whether, as a matter of law, Barry Johnson is a "relative" who "lived with" the insured, Marco Johnson, within the meaning of the State Farm/Marco Johnson UIM coverage policy provision. Under this provision, an insured includes the "relatives" of the first person named in the policy. A relative is defined as "a person related to you by blood or adoption who lives with you. It includes your unemancipated child away at school." Johnson's status as an insured turns on whether he "lived with" Marco Johnson at the time of his injury.

State Farm argues that although Washington courts have not yet construed the phrase "who lives with you" in the insurance policy context, they have construed a similar definition of "relative" using the phrase "resident member of the named insured's household." Accordingly, State Farm argues that the Washington case law construing the phrase "resident member of the named insured's household" controls this issue because "resides with" is synonymous with the phrase "who lives with you." State Farm argues that its approach represents the majority rule.

State Farm argues that Washington case law, in turn, defines "resides with" as requiring a permanent living arrangement. See Consumers United Ins. Co. v. Johnson, 26 Wash.App. 795, 801, 614 P.2d 657, review denied, 94 Wash.2d 1022 (1980). Under this standard, State Farm contends that Barry Johnson did not "live with" his father. Rather, State Farm claims that Barry lived with his family in Texas and was only staying with his father in Washington until his return to Texas. Therefore, because Barry does not meet the definition of a "relative," he is not an insured for purposes of UIM coverage under the Marco policy. We disagree.

Contrary to the position taken by State Farm, there is no majority rule holding that the terms "reside with" and "live with" are synonymous. In fact, the case law from other jurisdictions, which construes the identical policy provision at issue, is conflicting. While all of the courts agree that the policy language should be construed according to its plain meaning, they diverge as to whether the terms are synonymous and whether the terms are ambiguous. ³

We find persuasive, however, those cases construing the term "living with" as being qualitatively different, and therefore not synonymous, with the term "residing with". ⁴ As those cases note, the two terms cannot be synonymous given that the term "lives with" has no legal or technical meaning, unlike the term "residing with." As the court stated in Fisher v. Novak, 1990 WL 82159, * 2 (Del.Super.1990), aff'd, 599 A.2d 414 (Del.Spr.1991):

Most uninsured motorists' policies described in the case law limit coverage to relatives "residing with" the named insured, or to "residents of the same household" as the named insured. In contrast, State Farm has here chosen a term, "live with", that unlike "residence" or "domicile" has no particular legal or technical significance and is of everyday ordinary use.

(Citations and footnote omitted.) Fisher, at * 3.

We similarly find persuasive those cases which hold that the term "lives with" in the context of an insurance policy such as the one here is not ambiguous. ⁵ Specifically, the term "lives with," as used in the policy, means living or dwelling in fact whether or not permanently or continuously. ⁶ See Stoner, at 1417.

In any event, even if we were to find ambiguity with the term "lives with," ambiguous terms must be construed in favor of the insured. Vadheim v. Continental Ins. Co., 107 Wash.2d 836, 841, 734 P.2d 17 (1987) (citing Morgan v. Prudential Ins. Co....