Resident Relative Definition
The insured, the father of a minor child who was killed in a motor vehicle accident, filed a lawsuit against his auto insurer alleging that it breached its contract with him by refusing coverage under the underinsured motorist (UIM) provision. This case is Hall v. Shelter Mutual Insurance Company, 45 Kan.App.2d 797 (2011).
Kinnie Hall was a passenger in a car operated by her stepfather, Christopher Blake. Mains, a driver in the vehicle ahead of Blake on the highway stopped or slowed abruptly in front of Blake. As a result, Blake lost control of his vehicle and struck a concrete barrier. Kinnie died as a result of her injuries from the accident. At the time of the accident, Clayton Hall was divorced from Kinnie's mother but both he and the mother made a claim against Blake and Mains for Kinnie's wrongful death. All the claims were settled with both Hall and his ex-wife receiving $25,000.
Hall had an auto policy with Shelter that included UIM coverage with limits of $50,000 per person. Hall filed a claim against UIM for the UIM payment but Shelter denied coverage. The insurer stated that Kinnie would not be considered a relative under Hall's auto policy since she was not a resident and actually living with Hall at the time of the accident. Hall filed this lawsuit against Shelter seeking UIM coverage. The trial court granted the insurer's motion for summary judgment and this appeal followed.
The appeals court noted that Hall had joint legal custody of Kinnie from the time of the divorce until the time of her death. Kinnie maintained her own room at Hall's home and she received mail at the home. Kinnie stayed with Hall at a minimum of every other weekend, for holidays, and during the summer months. However, the facts showed that at the time of the accident, Kinnie was primarily residing with Hall's ex-wife.
The auto policy insuring agreement for UIM coverage applied to the named insured and any relative, defined as an individual related to the named insured by blood who is primarily a resident of, and actually living in, the household of the named insured. The trial court found that this definition did not include Kinnie and Hall disputed this point.
The appeals court said that the determinative issue is whether Kinnie qualifies as an insured under Hall's auto policy. There was no question that Kinnie was related to Hall by blood, but the question was whether she resided with him. Hall wanted the definition of “resident” and “household” to be broadly construed. But the court said that in promoting a broad interpretation of these words, Hall failed to recognize a significant distinction: his policy with Shelter explicitly limits coverage to relatives who primarily reside in the household. The evidence in this case was undisputed that Kinnie primarily resided with the ex-wife rather than with Hall, and under Kansas family law, a minor child subject to a primary residence arrangement can have only one primary residence, even if legal custody is shared.
To the court, the policy language was clear: UIM coverage was restricted to relatives primarily residing in the named insured's household. To construe that “primarily” means more than one household makes the use of that word meaningless. Because Kinnie did not reside primarily with Hall, she did not meet the definition of insured under the auto policy and the decision of the trial court was affirmed.
Editor's Note: The restriction of UIM coverage to resident relatives is not out of the ordinary. What stands out in this decision is the fact that the insurance policy required the residence to be primary. According to Kansas law, a minor child can have only one primary residence and the facts here showed that Kinnie's primary residence was with her mother, not with Hall. Therefore, based on the policy language (which the court found to be very clear) and state law, there was no UIM coverage.