Determining "Resident" of the Household

For purposes of insurance coverage, it is important to determine if the person suffering an injury was a "resident of the household" of the insured. The author explains the need for - and offers a proposal of - a uniform instruction to help guide juries in answering this not-so-simple question.

by Arnold P. Anderson

here are some key questions a personal injury attorney must ask the client and the tortfeasor. The answers to these questions will determine if there is insurance to cover the claim.

• Do you have insurance?
• Where were you living at the time of the accident?
• Did the people you lived with have insurance?

This article deals with the second question: Where was the person living at the time of the accident? Stating that question in terms of the insurance policy, was that person a "resident of the household" of someone who has insurance?

This article describes the need for a detailed and factual instruction to guide juries in resolving this residence issue. Some basic policy language and Wisconsin case law is discussed and then the experience of other states is explored. Finally, the proposed jury instruction allows a jury to go through a list of factors it should consider in deciding if a person was a resident of a household at the time of the accident.

Auto Insurance

If a negligent driver lives with someone who has insurance, the driver may also qualify as an insured if he or she is a resident of that household. For example, auto policies issued to individuals usually include coverage to all residents of the household of the named insured.

"Insured as used in this Part means: You or any family member for the ownership, maintenance, or use of any auto or trailer.

"Family member means a person related to you by blood, marriage, or adoption, who is a resident of your household. This includes a ward or foster child."

If the injuries are the result of an auto accident, the inquiry about residence will disclose if the client has uninsured (UM) or underinsured (UIM) motorist insurance. A resident should also be insured for UM and UIM motorist coverage that is available to a named insured. Attorneys sometimes forget to check at "home" for that type of coverage when a person is riding in a nonowned car. There may be more UM or UIM insurance where that client-passenger lives. Residents of the named insured's household will have the benefits of UM and UIM coverage no matter where they go since such coverage is "personal and portable."¹

Homeowners Insurance

Homeowners policies also insure residents of the household of the named insured. A typical homeowners policy defines insured as follows:

"Insured means you and residents of your household who are your relatives; or other persons under the age of 21 and in the care of any person named above."

Where a person is living also may decide if a family exclusion in a homeowners policy will preclude coverage. This is an exclusion for bodily injury claims to a resident of the household of the named insured.²

Not Domicile, but Residence

Insurance policies, such as the ones quoted above, key on a person's residence, not domicile. Wisconsin recognizes the difference between "domicile" and "household." A person may have only one true domicile but can have more than one household for insurance purposes.³ Doern v. Crawford noted: "Every person has a domicile but not every person is a member of a household."⁴

The terms "resident or member of the same household" are not ambiguous and are construed in light of their plain and common meaning.⁵ To establish residence, the duration of an individual living in the household must be substantial. If early termination is highly probable, that person is not a resident.⁶

National Farmers Union Property & Casualty Co. v. Maca⁷ stated that "resident of the household" includes a close relationship "varying greatly in detail" and "includes people who live or are 'living' together as a family in a closely knit group" usually because of a "close relationship by blood, marriage or adoption."⁸ However, persons need not be related to be a "resident of the household":

"Because a relationship between people, whether married or unmarried, can bring about the opportunity to interchange cars frequently, the insurance policy can properly exclude protection for unmarried residents driving each other's cars."⁹

When a spouse has moved out of the household because of a separation or a pending divorce, Wisconsin courts are reluctant to find that the separated spouse is no longer a resident of the family household. Courts do not want the issue of residency to affect a relationship that is already in jeopardy.¹⁰

Who Lives With You

State Farm Mutual Automobile Insurance Company does not use "resident" language in its auto policy, but defines "relative" as follows:

"A person related to you or a spouse by blood, marriage or adoption who lives with you. It includes your unmarried and unemancipated children away at school."¹¹

The term "lives with you" is more restrictive than "resident of the household." In Taussig, the son still had a room in his parent's home, left some of his personal belongings there, and visited at least once a week. Some of his bills were sent to his parents', he was still on his parents' health insurance, and his income tax return, his drivers license, and his motorist registration listed the father's residence. The father testified in deposition that he believed his son could not make it on his own without financial, emotional, and psychological assistance and that he contributed to his son's living expenses. However, the fact that the son had moved out of the parents' home into his own apartment, and slept and ate most of his meals at his apartment meant that the son was living on his own and not "living with" his parents for purposes of the auto policy.¹²

Wisconsin Jury Instructions

There is no pattern jury instruction in Wisconsin for residency issues. Pamperin v. Milwaukee Mutual Ins. Co. is relied upon by attorneys and judges in formulating a residency jury instruction:

"Therefore, under the decisions of this court, a determination as to whether a person is a resident or member of a household in the present context is dependent upon three 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, where it is consistent with the informality of the relationship, and from which it is reasonable to conclude that the parties would consider the relationship '... in contracting about such matters as insurance or in their conduct in reliance thereon.' National Farmers Union Property & Casualty Co. v. Maca, supra, 406."¹³

This language from Pamperin is often lifted verbatim and used as a jury instruction. This was done in Seichter v. McDonald,¹⁴ where the trial court gave the following instruction:

"The question on the verdict asks whether or not Joseph McDonald was a resident of his parents' household. It is recognized that a person may be a resident of more than one household for insurance purposes. Members of a household are not required to live under the same roof to be considered part of the same household. You should consider the following three factors to determine whether Joseph McDonald was a resident of his parents' household. No one factor is controlling but all of the elements must combine to a greater or lesser degree in order to establish the relationship. The factors are: (1) living under the same roof or any present intent to return to living under the same roof; (2) in a close, intimate and informal relationship, and (3) where the intended duration is likely to be substantial, where it is consistent with the informality of a family or household relationship, and from which it is reasonable to conclude that the parties would consider the relationship in contracting about such matters as insurance."

The Wisconsin Court of Appeals found this instruction to be "legally sound."¹⁵

Seichter v. McDonald presented a typical situation. Joseph McDonald had grown up on his parents' farm and then moved to Madison. There were any number of indices of residency that remained with his parents' home, including some clothes, the address on his drivers license, and the address on his tax forms. Joseph visited frequently and helped with farm work in the spring and fall. On the other hand, at the time of the accident, Joseph was 22 and had lived in apartments for more than a year in Madison, where he worked and attended school. Although not mentioned by the court of appeals, all witnesses testified that Joseph was financially self-sufficient. Joseph and his parents all testified that Joseph had no intention of moving back with his parents because he was not going to be a farmer. They testified that he was living in Madison. The jury found that Joseph was a resident of his parents' farm, and this finding was upheld by the trial court and the court of appeals.

The defense objected to the jury instruction as misleading and a misstatement of the law. It also argued that Joseph's intent not to return to the household was not disputed and therefore Joseph was not a resident of his parents' farm based on Doern, which stated:

"We determine that ... physical absence coupled with an intent not to return is sufficient to sever the absent person's membership in the household."¹⁶

The court of appeals in Seichter disagreed and stated:

"[a]nd nowhere in the Doern opinion does the court state that expression of an intent not to return is anything other than one of several factors to be considered."¹⁷

Other States' Jury Instructions

Other jurisdictions have looked to Pamperin and other Wisconsin authority when establishing residency rules. In doing so, these states have refined residency law and made it easier for juries to apply. For example, State Farm Mutual Auto. Ins. Co. v. Nguyen¹⁸ reviewed Pamperin and concluded the intent of the party to stay or return is the core question in a residency case.

Another Texas case identified what it called the "real test" of residency:

"The controlling test of whether persons are residents of the same household at a particular time, within the meaning of the policy in question, is not solely whether they are then residing together under one roof. The real test is whether the absence of the party of interest from the household of the alleged insured is intended to be permanent or only temporary - i.e., whether there is physical absence coupled with an intent not to return."¹⁹

This same holding (real test is intent to return) was discussed in LaFleur v. Dugas,²⁰ Cicciarella v. Amica Mut. Ins. Co.,²¹ Mathis v. Employers Fire Ins. Co.,²² and Rice v. State Farm Fire & Casualty Co.²³

Minnesota looked to Wisconsin case law when applying "resident of the household" language in insurance policies. Fireman's Ins. Co. v. Viktora²⁴ adopted the Pamperin criteria and, in Wood v. Mutual Serv. Cas. Ins. Co., Minnesota subsequently laid out the basis for an easily understood jury instruction:

"We conclude, in the final analysis, that, in determining residency in a household, factors to be considered include: (1) age of the person; (2) whether a separate residence is established; (3) self-sufficiency of the person; (4) frequency and the duration of the stay in the family home; and (5) intent to return.

"The fact that belongings remain in the home and the home continues to be the mailing address may be considered, but are not dispositive."²⁵

Seichter cited with approval Minnesota case law and this list of items a jury should consider in the determination of residence.²⁶

The Nebraska Supreme Court defined "resident of the insured's household" as "one who dwells or has an abode under the same roof as the named insureds for a duration of sufficient length so that the occupiers can be said to compose a family."²⁷ The court also listed several factors to be considered, including, but not limited to, the intent of the parties, the formality of the relationship between the person in question and the members of the named insured's household, the permanent or transient nature of that person's residence therein, the absence or existence of another place of lodging for that person, and the age and self-sufficiency of that person.²⁸

Courts also have relied upon a variety of factors in determining whether a separated spouse is still a resident of the insured spouse's household. Hawaiian Ins. v. Guaranty Co. Ltd. v. Federated American Ins. Co. (1975)²⁹ concluded the basic inquiry was whether the separation of the spouses was intended to be permanent without the prospect of reunion or only temporary with reconciliation possible.³⁰ Factual considerations include the living arrangements, attitudes toward one another, whether they continued to see each other, the status of financial obligations, and public policy in favor of continuing coverage to both spouses during the legal existence of the marriage.³¹

A Proposal

States have taken the legal principles of Wisconsin cases and developed jury instructions that are straightforward and easy to understand. The result is a list of factors for a jury to weigh in determining the true intent of the person in question.

A proposed jury instruction is provided that sets out the primary elements involved in determining residency. Two basic options are given; which one is used depends upon whether the individual involved was living at the residence in question at the time of the accident. Choosing one of those two options enables the jury to focus upon the facts before it.

Doern and other jurisdictions note that the primary issue in a residency case is the intent of the parties. This is emphasized in the proposed instruction by noting intent as a "key element." However, consistent with Seichter, the testimony of a witness is a factor to be considered along with other evidence. The jury is instructed to examine if such testimony is self-serving or against the witness's interest. For example, under the proposed jury instruction, if the person in question said there was no intent to return home to the parents' home, and is the person seeking coverage, that should carry more weight than another's testimony of an intent to return to live at the residence.

Other factors involved in deciding the residency issue, particularly those involving young adults, are listed in the instruction and follow Minnesota's lead. Other indicia of residency may be added or deleted from the instruction, depending upon the facts of the case. For example, if the issue involves separated spouses, the factors listed in Hawaiian Ins. may be appropriate.

Arnold P. Anderson, Marquette 1969, is the author of Wisconsin Insurance Law, 4th Edition, corporate counsel with Wisconsin Reinsurance Corp., and a member of the firm of Mohr & Anderson S.C., Madison. He was one of the attorneys involved in Seichter v. McDonald, discussed in this article.

The instruction does not include any reference to the parties considering the relationship in contracting about such matters as insurance. This language appears in several Wisconsin cases.³² In State Farm Fire & Cas. Co. v. Short,³³ the insurance company argued the instruction was in error because it did not include this consideration about insurance. The Minnesota Supreme Court disagreed, stating that an instruction without such wording still conveyed "... a clear, fair and correct understanding of applicable law."³⁴ It is not likely that people actually consider whether someone is a "resident" when purchasing insurance. It may be a factor in an individual case, and, if so, it would be more help to a jury to be specific about it. For example, in the proposed instruction, the jury could consider that when the residents bought auto insurance whether the person in question was listed as a driver living in the household.

Hopefully this suggested instruction will assist a jury, as well as court and counsel, as they try to answer the question: "Where were you living at the time of the accident?"

Endnotes

¹ Welch v. State Farm Mut. Ins. Co., 122 Wis. 2d 172, 361 N.W.2d 680 (1985).

² See Shannon v. Shannon, 150 Wis. 2d 434, 442 N.W.2d 25 (1989).

³ Londre v. Continental Western Ins. Co., 117 Wis. 2d 54, 58, 343 N.W.2d 128, 131 (Ct. App. 1983).

⁴ Doern v. Crawford, 30 Wis. 2d 206, 213, 140 N.W.2d 193, 196 (1966).

⁵ Pamperin v. Milwaukee Mut. Ins. Co., 55 Wis. 2d 27, 36-37, 197 N.W.2d 783, 789 (1972).

⁶ Id. at 38, 197 N.W.2d at 787.

⁷ Nat'l Farmers Union Property & Cas. Co. v. Maca, 26 Wis. 2d 399, 132 N.W.2d 517 (1965).

⁸ Id. at 406, 132 N.W.2d at 520.

⁹ Quinlan v. Coombs, 105 Wis. 2d 330, 336, 314 N.W.2d 125, 129 (Ct. App. 1981).

¹⁰ Belling v. Harn, 65 Wis. 2d 108, 221, N.W.2d 888, 892 (1974). See also, Wall v. Heritage Mut. Ins. Co., 151 Wis. 2d 691, 446 N.W.2d 75 (Ct. App. 1989).

¹¹ State Farm Mut. Auto. Ins. Co. v. Taussig, 592 N.E.2d 332 (Ill. App. 1 Dist. 1992). (Emphasis added).

¹² Id. See also, Stoner v. State Farm Mut. Auto. Ins. Co., 780 F.2d 1414, 1417 (8th Cir. 1986), holding that the phrase "lives with you" was not ambiguous.

¹³ Pamperin at 36-37, 197 N.W.2d at 788-89.

¹⁴ Seichter v. McDonald, 228 Wis. 2d 838, 599 N.W.2d 71 (Ct. App. 1999).

¹⁵ Id. at 846.

¹⁶ Doern at 213, 140 N.W.2d at 196.

¹⁷ Seichter at 843-44.

¹⁸ State Farm Mut. Auto. Ins. Co. v. Nguyen, 920 S.W.2d 409, 412 (Tex. App. 1996).

¹⁹ Southern Farm Bureau Cas. Ins. Co. v. Kimball, 552 S.W.2d 207, 208 (Tex. App. 1977).

²⁰ LaFleur v. Dugas, 714 So. 2d 792 (La. App. 1998).

²¹ Cicciarella v. Amica Mut. Ins. Co., 66 F.3d 764, 769 (5th Cir. 1995).

²² Mathis v. Employers Fire Ins. Co., 399 So. 2d 273, 275 (Ala. 1981).

²³ Rice v. State Farm Fire & Cas. Co., 628 So. 2d 582 (Ala. 1993).

²⁴ Fireman's Ins. Co. v. Viktora, 318 N.W.2d 704, 706 (Minn. 1982).

²⁵ Wood v. Mutual Serv. Cas. Ins. Co., 415 N.W.2d 745, 748-49 (Minn. App. 1987).

²⁶ Seichter at 845, 599 N.W.2d at 74.

²⁷ Amco Ins. Co. v. Norton, 500 N.W.2d 542, 546-47 (Neb. 1993).

²⁸ Id. at 547.

²⁹ 534 P.2d 48 (Wash. 1975).

³⁰ Id. at 56.

³¹ Id.

³² See Pamperin, supra note 13.

³³ 459 N.W.2d 111 (Minn. 1990).

³⁴ Id. at 114.

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