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Salvato v. Grieco


March 27, 2009


On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-3975-06.

Per curiam.


Submitted March 3, 2009

Before Judges Skillman and Ashrafi.

Defendants Joseph and Linda Grieco appeal summary judgment dismissing their third-party complaint against their homeowners insurance carrier, High Point Property and Casualty Insurance Company ("High Point"). We affirm.

Plaintiff Robert Salvato filed suit against the Griecos on behalf of his seven-year-old daughter Francesca for injury caused by the Griecos' dog. The Griecos sought coverage from High Point. High Point declined coverage citing provisions of the insurance policy excluding liability coverage or medical payments for bodily injury to a resident of the household who is a relative by blood or marriage of the named insureds. Francesca is Linda Grieco's granddaughter and had been living with the Griecos for about four months before she was injured.

With their answer to the Salvatos' complaint, the Griecos filed a third-party complaint against High Point for declaration of coverage under the policy. After discovery, the Griecos and High Point filed cross-motions for summary judgment on the coverage issue. The trial court granted summary judgment to High Point by order of January 18, 2008, with a written statement of reasons. On April 15, 2008, the attorneys for the Salvato plaintiffs and for the Grieco defendants filed a stipulation of dismissal of the underlying personal injury lawsuit. The dismissal was without prejudice. The Griecos then filed a notice of appeal from the January 18, 2008, order.

As a preliminary matter, we are troubled by the procedural steps leading to this appeal. Rule 2:2-3(a) provides that a party may appeal a final judgment as of right. If appeal is sought from an order that is not a final judgment, the appellant must move before this court for leave to appeal. Rule 2:2-4; Janicky v. Point Bay Fuel, Inc. 396 N.J. Super. 545, 549-50 (2007). A final judgment is one that disposes of all issues as to all parties. Ibid.; Parker v. City of Trenton, 382 N.J. Super. 454, 457 (App. Div. 2006); Caggiano v. Fontoura, 345 N.J. Super. 111, 123 (App. Div. 2002).

The order of January 18, 2008, was not a final judgment. It did not resolve the underlying personal injury case between the Salvatos and the Griecos. We have no information about any terms of an agreement reached by the parties to dismiss voluntarily the personal injury case without prejudice. If the purpose was to open the door for an appeal of the coverage issue, and if the parties have agreed that the personal injury complaint will be reinstated by consent if the appeal is successful, then the case has not been resolved as to all issues and all parties. Defendants should have filed a motion for leave to appeal.

Despite our misgivings, we address the coverage issue on the merits assuming that the underlying case has been resolved. The Griecos incurred defense costs while the personal injury lawsuit was active and they have at least a claim against High Point for reimbursement of those costs.

For purposes of summary judgment and this appeal, the facts are either undisputed or viewed most favorably to the Griecos. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

On May 31, 2004, the Griecos' six-year-old golden retriever jumped on Francesca and injured her forehead. Because Francesca was the only one present and has not given a clear description of the incident, and also because medical records have not been included in the record of this appeal, the evidence does not show whether the dog bit or scratched Francesca. It appears that the injuries were not serious.

The incident occurred in the Griecos' home, where Francesca and her mother, Dana Madeline, had moved about four months earlier when Dana separated from Francesca's father, Robert Salvato. Dana Madeline is the daughter and Francesca Salvato the granddaughter of Linda Grieco. Neither Dana nor Francesca is related by blood to Joseph Grieco, who married Linda Grieco after Francesca was born.

Rather than quoting the terms of the High Point policy in their briefs, the parties agree that the policy does not cover the Griecos if Francesca is deemed to be related to them and a resident of their home at the time of her injury.

Insurance policies must be read to provide coverage where a fair interpretation of the language in the policy will allow. Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990); Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482 (1961). Exclusions in the policy must be narrowly construed and the insurer bears the burden of showing that an exclusion applies to particular circumstances. Am. Motorists Ins. Co. v. L-C-A Sales Co., 155 N.J. 29, 41 (1998). Furthermore, reasonable expectations of the insured must not be frustrated by technical obstacles to coverage, and ambiguities in the language of the policy will be read in favor of coverage. Doto v. Russo, 140 N.J. 544, 556-57 (1995); Allen v. Metro. Life Ins. Co., 44 N.J. 294, 305 (1965). The Griecos rely on this general case law to argue that Francesca and Dana's stay at the Griecos' home was only temporary and it did not make them residents such that coverage is excluded for the dog injury.

The High Point policy contains an exclusion that states in relevant part, "Coverage E - Personal Liability does not apply to: . . . bodily injury to you or an insured." Endorsement HO300P NJ attached to the policy defines "insured" to include "any other person who lives in your household and is related to you by blood, marriage, adoption or is a ward or a foster child." Another exclusion states that "Coverage F Medical Payments to Others . . . does not apply to you or regular residents of your household except residence employees."

The Griecos contend that the policy is ambiguous and should be read to provide coverage because it does not define the words "resident" and "relative." High Point responds that "resident" and "relative" must be given their ordinary meaning. See Longobardi, supra, 121 N.J. at 537.

Whether one is a resident or lives in the household has been raised in various contexts and depends on the facts of each case. See Gibson v. Callaghan, 158 N.J. 662, 672 (1999).

Often, the claimant seeks a finding of residency to obtain coverage rather than a finding that she was not a resident as in this case. In Gibson, the Court held that the term "household" in the homeowners policy was ambiguous and would be interpreted to provide liability coverage for the named insured's grandson and his wife, who were living in her home as caretakers although the insured herself was living elsewhere. Id. at 677. The Court also said that residency in a household frequently depends on a showing of a substantially integrated family relationship.

Id. at 672-73; cf. Mazzilli v. Accident & Cas. Ins. Co. of Winterthur, 35 N.J. 1, 14-16 (1961)(wife who was living in a separate residence from husband was nevertheless a member of the household and covered by his homeowners policy). But see Fireman's Fund of N.J. v. Caldwell, 270 N.J. Super. 157, 167-68 (Law Div. 1993)(summary judgment denied to insurance carrier where one sister paid rent to other and there was a factual issue as to whether they lived as an integrated family).

This court found an integrated family relationship in Arents v. General Accident Insurance Co., 280 N.J. Super. 423, 429 (App. Div. 1995), where an adult son lived five days a week in New York City but stayed at his parents' New Jersey home two nights a week and kept and insured his cars in New Jersey. The court held that the son was a resident of his parents' home in New Jersey as well as his own residence in New York and that the underinsured motorist coverage of the son's auto policy covered injuries to his father when driving the son's car. Id. at 429-30.

Similarly, in Ohio Casualty Insurance Co. v. Estate of Wittkopp, 326 N.J. Super. 407, 413-14 (App. Div. 1999), this court held that a teenage girl killed in a motor vehicle accident had two residences, those of both divorced parents, and consequently, the underinsured motorist coverage of each parent's auto policy was liable to provide coverage. That decision followed Miller v. United States Fidelity and Guaranty Co., 127 N.J. Super. 37, 44-45 (App. Div. 1974), which held that a child was a resident of both of his divorced parents' homes and thus damages caused by the child were covered by the liability provisions of both parents' homeowners policies.

The same concept of dual residency applies to children of divorce who are seeking to avoid the terms of an insurance policy rather than obtain coverage. In Roman v. Correa, 352 N.J. Super. 124, 125-26 (App. Div. 2002), the court held that selection of the lawsuit threshold in the divorced father's auto policy applied to his daughters' claims for personal injury damages although the mother had primary custody and was not subject to the lawsuit threshold.

These cases show that the issue of residency can arise in different contexts and sometimes favors coverage and sometimes limits it. The courts have been consistent, however, in holding that the terms "resident" and "household" apply to a variety of living circumstances and that insured persons can have more than one residence and be members of more than one household. No court has held that a person must intend to stay permanently in present living accommodations to be considered a resident or a member of the household.

In this case, the undisputed facts show that Francesca enjoyed a relationship as a family member of the Griecos. Her mother, Dana, intended to find permanent housing for herself and Francesca but continued to live at the Griecos' home until at least April 2005. At the time of the injury in May 2004, she had no plan to move elsewhere. Dana and Francesca shared a bedroom in the Griecos' home and had use of the common rooms. They ate meals with the Griecos, and Linda Grieco took care of her granddaughter and spent time with her as a grandmother would. Dana voluntarily gave a check for $400 each month to Linda Grieco to contribute to the household expenses, but there was no rental arrangement. Dana changed her driver's license to the Griecos' address and received mail there. Robert Salvato and Dana were disputing custody of Francesca, but no court order or other formal parenting arrangement was in place at the time of the injury. Typically, Francesca spent weekdays in the Griecos' home and weekends with her father, although there were times when Francesca spent more days with her father. The only rational conclusion to be drawn from this evidence is that Francesca was a resident of the Griecos' home or, in the words of the High Point policy, living in the insureds' household.

With respect to Francesca's relationship to the Griecos, there is no dispute that Francesca is Linda Grieco's granddaughter by blood and so liability coverage was appropriately denied to Linda. Defendants contend, however, that Francesca is not related to Joseph Grieco.

As previously quoted, the definition of "insured" in the policy includes any person who lives in the household and is related by marriage to a named insured. Step-children have been considered members of the family for insurance purposes. See Brokenbaugh v. N.J. Mfrs. Ins. Co., 158 N.J. Super. 424, 432 (App. Div. 1978). Step-siblings have also been held to be related by marriage for purposes of insurance coverage. Sigel v. N.J. Mfrs. Ins. Co., 328 N.J. Super. 293, 298-99 (App. Div. 2000). Francesca was related by marriage to Joseph Grieco when she was injured by the dog. As the man married to her grandmother and with whom Francesca was living, he was her step-grandfather.

The trial court ruled correctly that liability coverage for the Greicos and medical payments were not available under the plain terms of their homeowners policy because Francesca was living in their household as a resident and was related to them.



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