March 9, 2009
DOLORES L. DANZE AND PHILIP A. DANZE, PLAINTIFFS,
ADAM KATZ, ROBERT KATZ, DR. SANDRA CONNOLLY, AND CENTRA STATE MEDICAL CENTER, DEFENDANTS.
DOLORES L. DANZE AND PHILIP A. DANZE, PLAINTIFFS-RESPONDENTS,
LIBERTY MUTUAL FIRE INSURANCE COMPANY AND ALLSTATE INSURANCE COMPANY, DEFENDANTS-APPELLANTS,
AND ADAM KATZ, DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5261-03 and L-2508-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 14, 2009
Before Judges Fisher and Baxter.
By finding that defendant Adam Katz resided in his stepfather's household when the auto accident in question occurred, the trial court granted plaintiffs summary judgment, thus compelling the insurers of Adam's mother and stepfather to provide coverage. Because Adam's residency was determined only by resort to the mother's sworn statements, and failed to consider the prior representation of the mother's attorney that Adam was not a member of the stepfather's household, we reverse.
On November 2, 2002, plaintiffs Dolores and Philip Danze suffered personal injuries when their vehicle was struck by a 1996 Honda Prelude titled in the name of defendant Robert Katz and driven by his son, Adam, who was then seventeen years old.
The Prelude was covered by a policy issued to Robert Katz by defendant Liberty Mutual Fire Insurance Company. The applicability of this policy with regard to the accident in question is not in dispute here.
Contending Adam was also a resident of his mother and stepfather's household, plaintiffs filed a declaratory judgment action against Liberty Mutual and Allstate Insurance Company. The record reveals that, in 1991, Robert Katz and Adam's mother, Janis, divorced. Initially, Janis was designated the primary custodial parent of Adam. However, Janis married Ross Goldberg in June 1999, and, a few months later, the parties agreed that Adam would thereafter primarily reside with his father, with Janis retaining visitation rights.
Notwithstanding that Adam was primarily a resident of his father's household at the time of the accident, plaintiffs sought coverage against Liberty Mutual, which was the automobile insurer for Janis and Ross Goldberg, and Allstate, which provided umbrella coverage to Ross Goldberg, asserting that Adam was also a resident of the Goldberg household. This declaratory judgment action was consolidated with plaintiffs' negligence action against Adam and his father.
Motions for summary judgment were filed regarding the Liberty Mutual policy. The motion judge granted plaintiffs' motion, holding that Adam was covered by this policy because he was a resident of the Goldberg household; the judge also rejected Liberty Mutual's contention that coverage was excluded by way of Exclusion B-3.*fn1 Later, another judge granted summary judgment in favor of plaintiffs regarding the Allstate policy, primarily holding that the law of the case doctrine bound him to the other judge's finding that Adam was a resident of the Goldberg household.
Eventually, all parties entered into a settlement. The insurers agreed that if all their options for appeal proved unsuccessful, Allstate would pay plaintiffs $1,000,000, and Liberty Mutual would pay Dolores Danze $250,000 and Philip Danze $225,000. With this final disposition of all remaining issues, Liberty Mutual and Allstate filed timely appeals from the orders that granted summary judgment against them.
In ascertaining whether the policies provided liability coverage for Adam's alleged negligence in causing the accident in question, the starting point is the language of the policies.
The Allstate policy provided $1,000,000 in coverage to Ross Goldberg, defining "insured person" as:
a) You [Ross Goldberg], and any other person who is named on the Policy Declarations;
b) any person related to you by blood, marriage or adoption who is a resident of your household; or
c) any dependent person in your care, if that person is a resident of your household.
This policy declared that "Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury, personal injury or property damage, subject to the terms, conditions and limits of this policy."
The Liberty Mutual policy provided that it would "pay damages for 'bodily injury' . . . for which any 'insured' becomes legally responsible because of an auto accident." "Insured" was defined as "[y]ou" -- meaning Ross Goldberg or Janis Goldberg -- and "any 'family member,'" which was defined as "a person related to you by blood, marriage or adoption who is a resident of your household."
The Liberty Mutual policy also contained Exclusion B-3. See n. 1, supra. Neither Exclusion B-3, nor anything like it, was contained in the Allstate policy.
In reviewing the orders of summary judgment in question, we are bound by the same standards that applied in the trial court. Prudential Prop. & Cas. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). The motion judges here were required to deny plaintiffs' motions for summary judgment against the insurers upon finding one or more disputed questions of material fact. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In considering whether Adam was a member of the Goldberg household for the purpose of resolving the coverage disputes, we first recognize that individuals may be residents of more than one household in this setting. Gibson v. Callaghan, 158 N.J. 662, 673-74 (1999). The fact that Adam was a resident of his father's home at the time of the accident did not preclude the possibility that he was then also a resident of his mother and stepfather's home. Ohio Cas. Ins. Co. v. Estate of Wittkopp, 326 N.J. Super. 407, 412 (App. Div. 1999) (holding that children of divorced parents can be deemed residents of the non-custodial parent's household for automobile insurance purposes).
In order to determine residency, "the totality of the circumstances surrounding the relationship of parent and child, as well as the parental obligation, must be considered in determining whether insurance coverage of a parent extends to the child by reason of residency in the parents' household." Sjoberg v. Rutgers Cas. Ins. Co., 260 N.J. Super. 159, 164-65 (App. Div. 1992). This requires consideration of many factors, including the age of the child at the time of the accident, (the younger the child the greater the chances it will be a resident of both households); whether the parent had reasonable visitation rights; whether the parent was current with child support; whether the parent and the child have a good relationship; and whether the child had a bedroom or separate wardrobe at the non-custodial parent's house. [Ohio Cas. Ins. Co., supra, 326 N.J. Super. at 413 (quoting Garrison v. Travelers Ins. Co., 261 N.J. Super. 209, 212 (Law Div. 1992).]
Here, the record reflects that in ruling on the cross-motions for summary judgment related to the Liberty Mutual policy, the judge was presented with Janis Goldberg's affidavit, which was tailored to the relevant factors identified in Ohio Casualty. She acknowledged that "[i]n the summer of 1999," Adam "decided to move in with his father and older brother," but that she "maintained a close relationship with him," and had paid and was paying child support, as well as half of Adam's college expenses. In addition, Janis stated in the affidavit that Adam had his own key to and his own bedroom in the Goldberg household. At her subsequent deposition, Janis provided the following information regarding the amount of time Adam spent in the Goldberg home at or about the time of the accident:
Q: Was there some schedule of some kind or something you could identify for us that would dictate what days, or evenings perhaps is a better term, when Adam would stay at your home versus his father's home?
A: Weekends he would come. He'd bounce back and forth maybe every other weekend approximately, and then maybe a night or two during the week.
Based on these factual contentions, the motion judge concluded that Adam was a resident of the Goldberg household in finding Liberty Mutual liable to provide coverage.*fn2
If Janis Goldberg's affidavit and deposition were all that the trial court had to consider, the judge's determination would have met the standard set forth in the policy, as explained by Ohio Casualty. However, the record reflects that Janis Goldberg was noticed for a deposition earlier in the proceedings. Before the deposition occurred, her attorney wrote to plaintiffs' attorney in order to avoid the need for the deposition, representing the following facts:
I am advised that [Janis] Goldberg shares joint legal custody of Adam Katz with Adam's father, Robert Katz. Mr. Katz has physical custody. Janis pays child support.
Parenting time (formerly known as visitation) is currently sporadic and Adam is clearly not part of the Goldberg household. Many years ago, when Adam was much younger, he "visited" on a regular basis every other weekend and one time a week. This has not been the case for many years. For the last few years (including the time period surrounding the accident) his visits are occasional and he sleeps over rarely.
In sum, Adam Katz is not a member of the Goldberg household and is not covered by any automobile insurance policy maintained by Janis or Ross Goldberg. Under the circumstances, I request that the deposition scheduled . . . be adjourned while you review this information and that the subpoena ultimately will be withdrawn.
The affidavit, the deposition testimony and the letter of Janis's attorney provided relevant and admissible information regarding the pivotal question presented in these coverage disputes. The affidavit suggested Adam was a resident of the Goldberg household, but, as we have noted, it is telling that Janis did not indicate in her affidavit the frequency with which Adam stayed in the Goldberg home. In her deposition, Janis provided the additional information quoted above, but only when cross-examined by Allstate's attorney. And, as we have also observed, Janis's attorney, in speaking on her behalf, denied in earlier correspondence that Adam was a resident of the Goldberg household.
In ruling on the cross-motions concerning the Liberty Mutual policy, the judge concluded there was no dispute that Adam was a resident of the Goldberg household. The judge's decision refers to the facts provided by the affidavit and the deposition, but included no mention of the attorney's letter of December 15, 2003, which had been presented in opposition to plaintiffs' motion. We conclude that summary judgment was mistakenly entered because the attorney's letter was evidential and generated a question of fact regarding Janis's credibility in general and Adam's relationship to the Goldberg household in particular.
The attorney's letter of December 15, 2003, clearly meets the requirements of admissibility set forth in N.J.R.E. 803(b)(3), in that it constitutes "[a] statement offered against a party which is . . . a statement by a person authorized by the party to make a statement concerning the subject." The first paragraph of the letter states that the attorney was "writing as a follow-up to [his] telephone conversation [with plaintiffs' attorney] in which I advised that I represent Janis Goldberg and agreed to ascertain certain information which might obviate the need for her to appear for a deposition." That statement presents a foundation for the invocation of N.J.R.E. 803(b)(3) since it reveals the declarant's authority to speak for Janis on the subject in question. See Profit Sharing Trust v. Lampf, 267 N.J. Super. 174, 191 (Law Div. 1993).
Because the attorney's letter presents a starkly different version of Adam's relationship to the Goldberg household than does Janis's affidavit or her deposition testimony, the motion judge who ruled on the Liberty Mutual cross-motions should have concluded that relevant facts were in dispute that could not be decided by way of summary judgment. And, whether the judge who ruled on the cross-motions relating to Allstate's policy based his ruling on the law of the case doctrine or his own similar view of the facts, that decision also cannot stand.
We reject plaintiffs' argument that Janis's affidavit and deposition testimony -- because they came directly from her and because they were provided at a later date than the attorney's letter -- are somehow better evidence and should be viewed as superseding the attorney's representations. The worth of all these statements was a matter for the factfinder. On summary judgment, the motion judge was not permitted to assess the significance, persuasiveness or weight of the evidential material.*fn3 Accordingly, because the trial court decisions regarding the coverage provided by the Liberty Mutual and Allstate policies were dependent upon the judges' mistaken failure to consider conflicting evidential material, we reverse the orders of summary judgment entered in favor of plaintiffs.
Lastly, we consider Liberty Mutual's argument that even if Adam was a resident of the Goldberg residence, Exclusion B-3 precludes coverage in this instance.
Exclusions similar to Exclusion B-3 are included in automobile insurance policies as a manifestation of "an intention on the part of the insurer to protect itself from a situation whereby an insured could purchase a policy covering one automobile and be covered without qualification as to all automobiles available for his use." American Cas. Co. v. Lattanzio, 78 N.J. Super. 404, 410 (Ch. Div. 1963). Accord Di Orio v. N.J. Mfrs. Ins. Co., 79 N.J. 257, 269-70 (1979) (holding that such exclusions "reflect a simple though important purpose: to prevent an insured from obtaining coverage for some or all cars regularly used or owned by the insured by merely listing only one automobile in the family policy . . . and thereafter paying a premium calculated by the insurer upon the risk created by the ownership and use of only that one listed car"); see also Fiscor v. Atl. County Bd. of Chosen Freeholders, 293 N.J. Super. 19, 23-26 (App. Div.), certif. denied, 147 N.J. 263 (1996); Malouf v. Aetna Cas. & Sur. Co., 275 N.J. Super. 23, 27-28 (App. Div.), certif. denied, 138 N.J. 271 (1994). As a result, it is clear, and plaintiffs have not disputed, that -- putting aside the dispute regarding Adam's alleged residence in the Goldberg household -- the exclusion initially precludes coverage for this occurrence. As indicated by the initial language of Exclusion B-3, Liberty Mutual did "not provide Liability Coverage for the ownership, maintenance or use of . . . [a]ny vehicle, other than 'your covered auto.'" Adam's vehicle did not fit the definition of "your covered auto" because it was not mentioned in the declaration page.
Plaintiffs argue that, even though the initial language of Exclusion B-3 supports Liberty Mutual's position, the exception to the exclusion was applicable. That exception states that the exclusion "does not apply to your maintenance or use of any vehicle" which is either "[o]wned by a 'family member,'" or "[f]urnished or available for the regular use of a 'family member.'" In a nutshell, plaintiffs argue that the exception is triggered so long as one of the named insureds contributed to the maintenance of the vehicle in question; the extent to which such a contribution will be sufficient to trigger the exception is not at all clear, assuming this is the correct interpretation. Liberty Mutual argued, on the other hand, that even if the phrase "your maintenance or use" correctly covers an insured's contribution to maintenance, it would only provide coverage for liability resulting from or arising out of that particular act of or contribution to maintenance. For example, if Ross or Janis had attempted to fix the brakes on the vehicle and it was later alleged that the accident was caused because the brakes failed, then the exception -- in Liberty Mutual's view -- would be triggered, but not if the maintenance had nothing to do with the happening of the occurrence in question.
In granting summary judgment against Liberty Mutual, the judge held only that Janis provided 50% of the cost of maintenance of Adam's vehicle. He did not resolve the question of whether, if that was true, the liability in question, which resulted from Adam's use of the vehicle and not from the way the vehicle was maintained, was what the exception to the exclusion meant to cover. Although the interpretation of the exception to Exclusion B-3 may be susceptible to resolution by way of summary judgment, we decline to decide the question in the first instance, particularly in light of the absence of sworn statements or other evidential material regarding the adoption and use of such provisions in automobile insurance policies. Moreover, as we have already indicated, Janis's credibility as a general matter became a matter of legitimate dispute when she filed an affidavit and gave sworn testimony at her deposition that was in conflict with her attorney's earlier representations. Accordingly, there remains a factual dispute -- whether or to what extent Janis maintained Adam's vehicle --upon which Exclusion B-3 and its exception may hinge. But, beyond that, the record does not provide sufficient illumination regarding the meaning of the exception contained within Exclusion B-3 to warrant any safe conclusion about its true meaning.
For these reasons, we reverse the orders granting summary judgment in favor of plaintiffs and against Liberty Mutual and Allstate, and we remand for further proceedings in conformity with this opinion. We do not retain jurisdiction.