In State Farm Mutual Automobile Ins. Co. v. Fischer (2D08-589), the Second District reversed a summary judgment and final declaratory judgment entered by the trial court in favor of the plaintiff because the trial court adopted a definition of the word "relative" contrary to the plain language of the policy.
The Facts
On March 19, 2006, Mr. Fischer was a passenger in a car being driven by his friend. They were involved in an automobile accident, resulting in injuries to Mr. Fischer. Mr. Fischer's parents owned the car and insured it with State Farm. The insurance policy included $10,000 in personal injury protection ("PIP") coverage and $50,000 in medical expense coverage. As a result of Mr. Fischer's injuries, State Farm paid the $10,000 in PIP coverage to Mr. Fischer's health care providers, but it denied Mr. Fischer's demand for payment of medical expenses in excess of $10,000.
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The deposition testimony established that at the time of the accident, Mr. Fischer lived in a mobile home some three to four miles away from his parents' home. He purchased the mobile home in 1998. The mortgage for the mobile home and the lot lease were in his name, as were the electric and water bills. Mr. Fischer received mail at his home, including the mortgage, electric, and water bills. However, he received some mail at his parents' home address. At various times during the eight years that he lived in his mobile home, he rented a room in the mobile home to others. Mr. Fischer has a learning disability, and he worked sporadically in the construction industry. He had financial difficulties, and his parents paid many of his debts. His mother testified that they paid 95% of his bills, and his father stated that Mr. Fischer paid part of his bills some of the time.
The Policy
The insurance policy provides that it will pay medical expenses for bodily injury sustained by the first person named in the declarations, his or her spouse, and their relatives. Concerning medical expense coverage, the policy defines "relative" as "a relative of any degree by blood or by marriage who usually makes his home in the same family unit, whether or not temporarily living elsewhere."
(Emphasis added by the Court.)
The Trial Court
After a hearing on Mr. Fischer's motion for summary judgment, the trial court concluded, without explanation, that the applicable definition of "relative" in the insurance policy was ambiguous and that "the undisputed facts of this case require an interpretation in favor of coverage under the medical payment provisions." On that basis, the trial court granted summary judgment and then entered a final judgment in Mr. Fischer's favor.
The Second District's Decision
"If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and [] another limiting coverage, the insurance policy is considered ambiguous. Ambiguous policy provisions are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy." Id. (citations omitted). But, "the rule of liberal construction in favor of the insured applies only when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction," and the fact that a policy fails to define an operative term does not, by itself, create an ambiguity. Gen. Star, 874 So. 2d at 30. "When the insurer has not defined a term, the common definition of the term should prevail." Above All Roofing, 924 So. 2d at 847.
We cannot agree with the trial court's conclusion that the definition of "relative" contained in the policy is ambiguous. The policy language, including the definition of "relative," is readily understood as providing medical expense coverage to a person related by blood or marriage to the named insured who usually makes his or her home with the named insured. Coverage would not be precluded if the person is temporarily living elsewhere. Although certain phrases within the disputed policy provision are not specifically defined, those phrases are readily understood within the context of the full provision. Further, the definition as a whole is not ambiguous or fairly susceptible to more than one meaning. Accordingly, the trial court's determination that an ambiguity existed cannot be upheld.
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In construing the terms "household" or "residency" under an insurance policy several courts, including this one, have observed there are three material aspects, including: "(1) close ties of kinship, (2) fixed dwelling unit, and (3) enjoyment of all the living facilities."...A number of cases have held that the concept of household does not require an individual to live at the same physical address as the insured relative...Finally, this court has recognized that "[a] determination of residency involves consideration of both fact and intention."
Here, the evidence established that Mr. Fischer had close ties of kinship with his parents and was financially supported by them to a significant degree. However, he was not physically living with them at the time of the accident and was not living in his mobile home on merely a temporary basis. Instead, he maintained his residence separate from his parents and had been living at that residence for years, and he did not establish that he had full enjoyment of his parents' home or that he ever intended to live there again.
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