Waller v. Auto-Owners Ins. Co.

• Decision Date: 06 June 2001
• Parties: Jennifer WALLER, Appellant, v. AUTO-OWNERS INSURANCE COMPANY, a Michigan corporation, Respondent. Auto-Owners Insurance Company, a Michigan corporation, Counterclaim Plaintiff, v. Jennifer Waller, Counterclaim Defendant.
• Court: Oregon Court of Appeals

26 P.3d 845

174 Or. App. 471

Jennifer WALLER, Appellant, v. AUTO-OWNERS INSURANCE COMPANY, a Michigan corporation, Respondent.

Auto-Owners Insurance Company, a Michigan corporation, Counterclaim Plaintiff, v. Jennifer Waller, Counterclaim Defendant.

99-CV-0164-AB; A109303.

Court of Appeals of Oregon.

Argued and Submitted January 8, 2001.

Decided June 6, 2001.

Warren John West, Bend, argued the cause and filed the briefs for appellant.

Tamara E. MacLeod, Bend, argued the cause for respondent. With her on the brief were Ronald L. Roome, Bend, and Karnopp, Petersen, Noteboom, Hansen, Arnett & Sayeg, LLP.

Before LANDAU, Presiding Judge, and LINDER and BREWER, Judges.

LINDER, J.

Plaintiff initiated this breach of contract action against defendant Auto-Owners, her parents' automobile insurance carrier, to recover underinsured motorist (UIM) benefits. The trial court granted defendant's motion for summary judgment, concluding as a matter of law that, because she was a resident of Oregon at the time of the accident, plaintiff was not covered under her parents' Florida insurance policies. Plaintiff appeals. Because we conclude that a genuine issue of material fact exists, see ORCP 47 C, we reverse and remand.

The following background facts, which are not disputed, gave rise to the present controversy. In June 1994, plaintiff, who was 17 years old, moved to a group home in Sisters, Oregon. Her parents, who lived in Florida, sent her to Oregon after numerous failed attempts to enroll her in out-of-state boarding schools because of her behavioral problems. In November 1995, plaintiff was injured when she was hit by an automobile while she was walking in a crosswalk in Bend. She settled her personal injury claim against the driver of the motor vehicle for $25,000, which was the bodily injury liability limit of his policy. Later, she sought additional coverage under two automobile insurance policies maintained by her parents and issued by defendant Auto-Owners.

With respect to the scope of coverage, the relevant portions of the policies provide as follows:

"LIABILITY COVERAGE

"We will pay damages for bodily injury and damage to tangible property for which you become legally responsible and which involve your automobile. We will pay such damages on your behalf, on behalf of any relative who lives with you, or on behalf of any person using your automobile with your permission. * * *

"* * * * *

"UNINSURED MOTORIST COVERAGE

"We will pay damages for bodily injury which any person occupying or getting in or out of an automobile covered by the Liability Coverage of this policy is legally entitled to recover from the owner or driver of an uninsured motor vehicle. * * *

"If you are an individual, we extend this coverage. We will pay bodily injury damages which you are legally entitled to recover from the owner or driver of any uninsured motor vehicle. We give this same protection to any relative living with you who does not own a car."

(Emphasis added.) Pursuant to an endorsement attached to each one entitled "Uninsured Motorist Coverage Amendment (Stacked)," the policies further define "named insured" to mean "the first named insured as stated in the Declarations if an individual * * *, and while residents of the same household, the spouse of any such first named insured and the relatives of either." Finally, the endorsement defines a "relative" as "a person who resides with you and who is related to you by blood, marriage, or adoption."

Plaintiff brought this breach of contract action against defendant to recover UIM benefits pursuant to the foregoing policies. Initially, she sought $475,000 in damages; later, however, she amended her complaint to seek $1,475,000 in damages.¹ In its answer, defendant denied coverage and asserted two affirmative defenses: failure to state a claim and comparative fault. Defendant also brought a counterclaim, seeking a declaration that it was not obligated to pay UIM benefits to plaintiff. Subsequently, defendant moved for summary judgment, arguing that there were no genuine issues of material fact and that it was entitled to judgment as a matter of law. According to defendant, because plaintiff was living in Oregon at the time of the accident, she was not physically "living with" her parents in Florida; therefore, she was not entitled to UIM benefits under the terms of the insurance policies. Alternatively, defendant contended that plaintiff did not qualify as a "resident" of her parents' household. Plaintiff opposed the motion for summary judgment, arguing that the policies extended coverage to relatives who are "residents" of her parents' household, not merely those who are physically living with her parents, and that the record gave rise to a factual dispute on that issue. The trial court agreed with defendant that the only conclusion a jury could reach on the summary judgment record was that plaintiff was not a resident of her parents' household at the time of the injury. Consequently, the trial court granted summary judgment in defendant's favor. On appeal, the parties renew the arguments they made below.

Preliminarily, we must decide what law to apply in this case. Both below and on appeal, the parties proceeded on the assumption that Florida substantive law and Oregon procedural law should apply because, although the present litigation is in Oregon, it involves an action upon an insurance contract entered into in Florida and issued to Florida residents. See Davis v. State Farm Mut. Auto. Ins., 264 Or. 547, 549, 507 P.2d 9 (1973)

; Manz v. Continental American Life Ins. Co., 117 Or.App. 78, 80-82, 843 P.2d 480 (1992),

modified on recons. 119 Or.App. 31, 849 P.2d 549,

rev. den. 317 Or. 162, 856 P.2d 317 (1993). That approach, however, overlooks a necessary threshold determination in analyzing a conflict of law issue: whether there is a material difference between Oregon substantive law and the law of the other forum. We previously have explained that if there is no material difference—i.e., if there is a "false conflict" instead of an "actual conflict"—Oregon law applies. See Angelini v. Delaney, 156 Or.App. 293, 300, 966 P.2d 223 (1998),

rev. den. 328 Or. 594, 987 P.2d 514 (1999). As proponents of Florida law, it was incumbent on the parties to identify material differences in the applicable law of Florida and Oregon. Id. Because neither party has done so, we apply Oregon law in our analysis.

We reject defendant's first argument that the policies preclude coverage for plaintiff because she was not physically "living with" her parents at the time of the accident. Defendant argues that coverage is so limited, relying on the text of the coverage provisions that we quoted earlier. That argument, however, overlooks the terms of the endorsement for stacked uninsured motorist coverage contained in both policies. As we described in outlining the relevant policy terms, the endorsements define "named insured" to include "residents of the same household," and they define "relative" to include "a person who resides with you." It is worth noting that the coverage provisions do not expressly say "physically" living with, and thus there may not be any difference in meaning between that language and the reference in the endorsements to residency. But we need not decide whether the terms mean different things. To the extent that there is a conflict between the terms of an insurance policy and an endorsement, the endorsement controls. See First Far West Transp. v. Carolina Casualty Ins., 47 Or. App. 339, 344, 614 P.2d 1187 (1980)

. Therefore, we conclude that the question under the policies at issue in this case is whether plaintiff was a "resident" of her parents' household despite the fact that she was living in Oregon.

As our cases reveal, several factors are relevant to the factual question of whether a person is a resident of a household for purposes of an insurance policy extending coverage on that basis. See Farmers Ins. Co. v. Jeske, 157 Or.App. 362, 366-67, 971 P.2d 422 (1998)

; Jordan v. Farmers Ins. Co., 123 Or.App. 109, 111, 858 P.2d 919 (1993). Those factors include whether the persons alleged to be residents of the same household live under one roof; the length of time they have lived together; whether the residence is intended to be permanent or temporary; and whether the persons are financially interdependent.²

State Farm Mutual Auto. Ins. Co. v. McCormick, 171 Or.App. 657, 661, 17 P.3d 1083 (2000); Jeske, 157 Or.App. at 366,

971 P.2d 422. In cases involving the residency of a child who is away from the parents' home due to military service or college, additional considerations come into play, such as whether the child: lived at home before military service or attending school; returns home on leaves and vacation; keeps significant personal items at the parents' home; uses that home address as a permanent address; continues to be supported financially by his or her parents; has failed to take actions to establish a permanent residence elsewhere; and expresses an intent to return to the parents' home. Jeske, 157 Or.App. at 366-67,

971 P.2d 422; Jordan, 123 Or.App. at 112,

858 P.2d 919.³ Significantly, no one factor is dispositive. McCormick, 171 Or. App. at 661,

17 P.3d 1083. For purposes of the residency analysis, summary judgment is inappropriate unless the evidence reveals a factual situation from which only one inference can be drawn. Id.; Jeske, 157 Or.App. at 366,

971 P.2d 422.

Viewing the record in this case in the light most favorable to plaintiff, as the party opposing the motion for summary judgment,⁴ we conclude that competing conclusions reasonably could be drawn with respect to plaintiff's residency. In the spring of 1994, plaintiff's parents sent her to Oregon to live in a group home due to her behavioral problems. While living there, plaintiff successfully completed her GED. Later that fall, plaintiff enrolled in classes at Central Oregon Community College (COCC...