North Carolina Farm Bureau Mutual Insurance v. Paschal

NO. COA13-615
NORTH CAROLINA COURT OF APPEALS
Filed: 7 January 2014
NORTH CAROLINA FARM BUREAU MUTUAL
INSURANCE COMPANY, INC.,
Plaintiff-Appellee,
v. Wake County
No. 12 CVS 7710
WADE H. PASCHAL, JR., Guardian Ad
Litem for Harley Jessup; REGGIE
JESSUP; RANDALL COLLINS JESSUP;
and THURMAN JESSUP,
Defendants-Appellants.
Appeal by Defendants from orders entered 30 November 2012 and
6 December 2012 by Judge G. Wayne Abernathy in Superior Court,
Wake County. Heard in the Court of Appeals 22 October 2013.
Haywood, Denny & Miller, L.L.P., by Robert E. Levin, for
Plaintiff-Appellee.
Moody, Williams, Roper & Lee, LLP, by C. Todd Roper, for
Defendants-Appellants.
McGEE, Judge.
Sixteen-year-old Harley Jessup (“Harley”) was injured on 15
April 2009 when a truck driven by her cousin, Randall Collins
Jessup (“Randall”), ran off the road and into a ditch, causing
Harley to be ejected from the truck. Harley, through her guardian
ad litem Wade H. Paschal, Jr. (“Paschal”), and Harley’s father,
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Reggie Jessup (“Reggie”), filed a complaint on 28 March 2012,
alleging injury from the accident and medical expenses of
$81,087.44. Randall’s automobile insurance carrier tendered the
$30,000.00 amount of its coverage. The 28 March 2012 complaint
also included an underinsured motorist claim against an automobile
policy (“the policy”) of Harley’s paternal grandfather, Thurman
Jessup (“Thurman”), which was issued by North Carolina Farm Bureau
Mutual Insurance Company, Inc. (“Plaintiff”).
Plaintiff initiated the present action by filing a complaint
for declaratory judgment on 25 May 2012. Paschal, as guardian ad
litem for Harley, along with Reggie, Randall, and Thurman were all
named defendants. In Plaintiff’s complaint, Plaintiff asked the
trial court to rule that Harley was not covered by the policy.
Plaintiff moved for summary judgment on 4 October 2012. Harley,
through Paschal, along with Reggie, Randall, and Thurman, moved on
30 October 2012 to change venue from Wake County to either Chatham
County or Randolph County. The motion for change of venue was
denied by order filed 30 November 2012. In an order filed 6
December 2012, the trial court concluded that Harley was “not a
resident of [Thurman’s] household on April 15, 2009, and [was]
therefore not entitled to coverage under the policy[.]” Based
upon this conclusion, the trial court granted summary judgment in
favor of Plaintiff. Paschal, as guardian ad litem for Harley, and
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Reggie and Thurman (“Defendants”) appeal from the 30 October 2012
and the 6 December 2012 orders. Defendant Randall Collins Jessup
is not a party to this appeal.
At the time of the accident, Thurman owned multiple houses
and several hundred acres of farmland. Thurman and Reggie had
owned a house together until the house burned in 2005. Harley
lived with Reggie in that house for a short period after she was
born. Thurman purchased a house at 6846 Brush Creek Road. (“Brush
Creek house”) in 1983, and lived there until sometime in the early
2000s. Thurman also purchased a house at 6615 Joe Branson Road
(“Branson house”) in 1997. The Branson house was approximately
one mile from the Brush Creek house, and a person could walk from
the Branson house to the Brush Creek house without leaving
Thurman’s property. Reggie and his children, including Harley,
moved into the Branson house shortly after Thurman purchased it.
In 2002, Thurman purchased a fifty percent interest in a house
owned by his girlfriend, Donna Whitehead (“Ms. Whitehead”),
located at 398 Browns Crossroads (“Browns Crossroads house”).
After purchasing an interest in the Browns Crossroads house,
Thurman spent most of his nights sleeping at either the Browns
Crossroads house or the Brush Creek house. On rare occasions,
Thurman would sleep at the Branson house.
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Most of Thurman’s mail, including bank statements, was sent
to the Brush Creek house, and that is the address Thurman used for
most official business, such as his tax returns and voter
registration. The Brush Creek house was also where Thurman kept
most of his clothing.
At his deposition, Thurman testified he owned over 100 head
of cattle, approximately 4,000 hogs, and about 32,000 chickens,
which were housed in different areas around his farm, including
the Branson house, the Brush Creek house, and surrounding land.
Thurman considered his farm to be a “family farm,” and several
relatives lived and work on the farm. Reggie lived in the Branson
house with Harley and her brothers. Harley had lived primarily at
that address since she was a very young child. Thurman paid all
the bills associated with the Branson house. Those bills were
sent to Thurman’s Brush Creek house. Reggie did not pay anything
to live in the Branson house. Thurman even paid for Reggie’s phone
service.
For many years, Thurman had taken continued responsibility
for multiple family members, and some people not related to him by
blood or marriage. For example, at the time of his deposition,
Thurman had two children, not related to either him or Ms.
Whitehead, living with him. Thurman had taken the two children in
nine years earlier because the children’s father was often out of
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the state for work. When the children’s father was in town,
Thurman allowed him to stay in one of Thurman’s houses free of
charge. Ms. Whitehead’s daughter and her two children also lived
with Thurman and Ms. Whitehead. Harley and her brothers also lived
with Thurman at times. Reggie had ongoing trouble with the law,
and spent time in jail or prison on occasion. When Harley could
not stay with Reggie due to Reggie’s legal problems, she stayed
with Thurman, at both the Browns Crossroads house and at the Brush
Creek house. Around 2005, Harley spent a year living with Thurman
because of Reggie’s legal troubles. Thurman was appointed as
Harley’s guardian for that period of time. Harley’s mother was
not very involved in Harley’s life, and did not appear to provide
Harley with material assistance or much guidance.
Thurman testified he supported Harley through “every bit” of
her life, providing food, clothes, housing, utilities, phone, and
other expenses. Reggie drove a truck that belonged to Thurman and
if something was needed for the Branson house, such as a washing
machine, Thurman bought it. Thurman testified that when Harley
was not living with him, he saw her two or three times a week.
Harley testified she saw Thurman almost every day. Thurman had
keys to all his houses, and felt free to enter them at any time.
If Harley needed to go to the doctor or dentist, Thurman took her.
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When questioned at his deposition, Thurman agreed that Reggie,
Harley, and her brothers were all a part of his household.
Plaintiff filed its complaint for declaratory judgment on 25
May 2012 and requested that the trial court “declare whether
[Plaintiff’s] UIM policy issued to Defendant Thurman Jessup [was]
applicable to the claim of Harley Jessup.” Harley, through
Paschal, and Reggie, answered Plaintiff’s complaint on 3 August
2012, and counterclaimed, asking that the trial court “declare the
UIM policy issued to defendant Thurman Jessup applicable to the
claims of Harley and Reggie arising from the accident on or about
April 15, 2009.” Plaintiff filed a motion for summary judgment on
4 October 2012. Defendants filed a motion on 30 October 2012 to
change venue from Wake County to either Chatham County or Randolph
County. The trial court denied Defendants’ motion to change venue
by order filed 30 November 2012. In an order entered 6 December
2012, the trial court granted Plaintiff’s motion for summary
judgment, ruling that Harley “was not a resident of the Defendant
Thurman Jessup’s household on April 15, 2009, and [was] therefore
not entitled to coverage under the policy of UIM insurance issued
by the Plaintiff to Defendant Thurman Jessup[.]” Defendants
appeal.
I.
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The issues in this appeal are whether (1) the trial court
erred in denying Defendants’ motion to change venue and (2) the
trial court erred in granting summary judgment in favor of
Plaintiff by ruling that Harley was not a resident of Thurman’s
household. We affirm in part and reverse and remand in part.
II.
Defendants acknowledge that Wake County was a proper venue
for this action. However, Defendants argue the trial court abused
its discretion by not changing venue to either Chatham County or
Randolph County “for the convenience of witnesses and the promotion
of justice.” We disagree.
The trial court is given broad discretion when ruling on a
motion to change venue for the convenience of witnesses:
“‘[T]he trial court may change the place of
trial . . . [w]hen the convenience of
witnesses and the ends of justice would be
promoted by the change.’” However, the
court's refusal to do so will not be disturbed
absent a showing that the court abused its
discretion. The trial court does not
manifestly abuse its discretion in refusing to
change the venue for trial of an action
pursuant to subdivision (2) of [N.C. Gen.
Stat. § 1-83] unless it appears from the
matters and things in evidence before the
trial court that the ends of justice will not
merely be promoted by, but in addition demand,
the change of venue, or that failure to grant
the change of venue will deny the movant a
fair trial.
. . . .
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In resolving this issue here, we do not set
forth a “bright line” rule or test for
determination of whether a trial court has
abused its discretion in denying a motion to
change venue. Rather, the determination of
whether a trial court has abused its
discretion is a case-by-case determination
based on the totality of facts and
circumstances in each case.
United Services Automobile Assn. v. Simpson, 126 N.C. App. 393,
399-400, 485 S.E.2d 337, 341 (1997) (citations omitted).
Defendants fail to demonstrate that the trial court’s
discretionary ruling denying their motion to change venue denied
them a fair trial, or that the ends of justice demanded a change
of venue. Defendants simply argue that “it [was] more convenient
for [Defendants] to litigate this action in either Randolph or
Chatham County rather than Wake County.” According to Defendants’
motion to change venue, “Plaintiff’s principal office is in Wake
County, North Carolina and it conducts business in said county.”
Chatham County borders Wake County, and the courthouses in these
two counties are not separated by great distances.
Though Randolph or Chatham County may be a more convenient
forum for Defendants, Wake County appears to be a more convenient
forum for Plaintiff, and we find no abuse of discretion in the
trial court’s order denying Defendants’ motion to change venue
from Wake County. This argument is without merit.
III.
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Defendants argue the trial court erred in granting summary
judgment in favor of Plaintiff because Harley was covered under
the policy. We agree.
Although this is an action for declaratory judgment, because
it was decided by summary judgment, we apply the standard of review
applicable to summary judgment.
Summary judgment is appropriate where “there
is no genuine issue as to any material fact”
and “any party is entitled to a judgment as a
matter of law.” In ruling on a motion for
summary judgment, “the court may consider the
pleadings, depositions, admissions,
affidavits, answers to interrogatories, oral
testimony and documentary materials.” All
such evidence must be considered in a light
most favorable to the non-moving party. On
appeal, an order allowing summary judgment is
reviewed de novo.
Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470, 597 S.E.2d 674,
693 (2004) (citations omitted).
This Court reviews a grant of summary judgment de novo, and
should affirm the trial court’s action if our de novo review
uncovers any basis to support the grant of summary judgment. We
agree with the trial court that the dispositive issue is whether
the policy issued by Plaintiff covers Harley as a “family member”
as that term is defined in the policy.1 “Part C1” of the policy:
“Uninsured Motorists Coverage,” states in relevant part:
1 Plaintiff and Defendants argue about whether Thurman could be
considered a resident of 6615 Joe Branson Road. Determination of
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We will pay compensatory damages which an
insured is legally entitled to recover from
the owner or operator of an uninsured motor
vehicle because of:
1. Bodily injury sustained by an insured and
caused by an accident; and
2. Property damage caused by an accident.
The owner's or operator's liability for these
damages must arise out of the ownership,
maintenance or use of the uninsured motor
vehicle.
. . . .
"Insured" as used in this Part means:
1. You [the named insured] or any family
member. [(Emphasis in original)].
The policy includes the following definition of “family member:”
"Family member" means a person related to [the
named insured] by blood, marriage or adoption
who is a resident of [the named insured’s]
household. This includes a ward or foster
child. [(Emphasis in original)].
Resolution of the matter before us depends on whether Harley
was “a resident of [Thurman’s] household” under the policy. The
policy does not define the words “resident” or “household.” It is
undisputed that Harley is related to Thurman Jessup by blood, and
that she lived at 6615 Joe Branson Road at the time of the accident.
The determination of whether Harley was also a resident of
the place or places where Thurman resided, however, is only
relevant to the extent, if any, that it can assist in determining
what constituted Thurman’s “household.”
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Thurman’s household, however, is more complicated. The word
“resident” is “flexible, elastic, slippery and somewhat
ambiguous[,]” meaning anything from “a place of abode for more
than a temporary period of time” to “a permanent and established
home[.]” Great American Ins. Co. v. Allstate Ins. Co., 78 N.C.
App. 653, 656, 338 S.E.2d 145, 147 (1986) (citations and quotation
marks omitted). This Court has held that when a term,
if not defined, is capable of more than one
definition [it] is to be construed in favor of
coverage. . . . . “When an insurance company,
in drafting its policy of insurance, uses a
‘slippery’ word to mark out and designate
those who are insured by the policy, it is not
the function of the court to sprinkle sand
upon the ice by strict construction of the
term. All who may, by any reasonable
construction of the word, be included within
the coverage afforded by the policy should be
given its protection. If, in the application
of this principle of construction, the limits
of coverage slide across the slippery area and
the company falls into a coverage somewhat
more extensive than it contemplated, the fault
lies in its own selection of the words by which
it chose to be bound.”
Fonvielle v. Insurance Co., 36 N.C. App. 495, 497-98, 244 S.E.2d
736, 738 (1978) (citations omitted).
Determinations of whether a particular person is a resident
of the household of a named insured are individualized and fact-
specific:
Cases interpreting the phrase, “residents of
the same household,” as used in insurance
policies, are legion. These cases can be
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divided into two categories: those involving
clauses that exclude from coverage members of
the insured's household, and those that extend
coverage to such persons. Applying the
general rule that coverage should be provided
wherever, by reasonable construction, it can
be, courts have restrictively defined
“household” in those cases where members of
the insured's household are excluded from
coverage. On the other hand, where members of
an insured's household are provided coverage
under the policy, “household” has been broadly
interpreted, and members of a family need not
actually reside under a common roof to be
deemed part of the same household. As pointed
out by this court in Fonvielle v. Insurance
Co., . . . construction of such terms as
“resident” and “household” in favor of
coverage may lead to “the seemingly anomalous
result” of a very narrow definition under one
set of circumstances and a very broad
definition under another.
Davis v. Maryland Casualty Co., 76 N.C. App. 102, 105, 331 S.E.2d
744, 746 (1985) (citations omitted) (emphasis added). Not only
are relevant facts considered in making this determination, but
intent, as well:
As observed by our courts, the words
“resident,” “residence” and “residing” have no
precise, technical and fixed meaning
applicable to all cases. “Residence” has many
shades of meaning, from mere temporary
presence to the most permanent abode. It is
difficult to give an exact or even
satisfactory definition of the term
“resident,” as the term is flexible, elastic,
slippery and somewhat ambiguous. Definitions
of “residence” include “a place of abode for
more than a temporary period of time” and “a
permanent and established home” and the
definitions range between these two extremes.
This being the case, our courts have held that
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such terms should be given the broadest
construction and that all who may be included,
by any reasonable construction of such terms,
within the coverage of an insurance policy
using such terms, should be given its
protection.
Our courts have also found . . . that in
determining whether a person in a particular
case is a resident of a particular household,
the intent of that person is material to the
question.
Great American, 78 N.C. App. at 656, 338 S.E.2d at 147 (citations
omitted). A minor may be a resident of more than one household
for the purposes of insurance coverage. Davis, 76 N.C. App. at
106, 331 S.E.2d at 746 (citation omitted).
We find the particular factual situations in Davis and Great
American instructive for our analysis. In Davis, this Court held:
Applying these general principles to the case
sub judice, we believe that the minor
plaintiff was as much a resident of her
insured father's household as that of her
mother. While the father maintained a
separate residence from that of the mother,
the evidence discloses that there existed
between the father and the minor plaintiff a
continuing and substantially integrated
family relationship. We therefore hold that
the trial court correctly concluded that the
minor plaintiff . . . was a resident of her
insured father's household within the meaning
of the insurance policy, and is entitled to
coverage thereunder.
Davis, 76 N.C. App. at 106, 331 S.E.2d at 747 (citations omitted).
The following facts were considered by this Court in Great
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American, where the issue was whether the defendant was a resident
of his parents’ household for insurance purposes:
The forecast of evidence before the trial
court showed that at the time of the
collision, Sean Wale [the defendant] was an
emancipated person who was enlisted in the
United States Navy and stationed at Norfolk,
Virginia. He enlisted in November of 1979.
At the time he enlisted he gave his parents'
home address in Salisbury as his home address.
During his enlistment, he had no housing other
than his military station. Also, during his
enlistment, he visited his parents from time
to time and, just prior to the April
collision, he had completed a 14-day
convalescent leave spent at his parents' home
and was returning to his base in Norfolk. At
the time of the collision, Sean gave the
investigating highway patrolman a home address
the same as his parents' home address in
Salisbury. In June 1982, when asked by an
insurance adjuster where he was, Sean
answered, “At home,” giving his parents'
address. After he got out of the service in
August of 1982, Sean stayed with his parents
for several weeks while he looked for a place
to live.
When Sean left to join the Navy, he removed
all of his personal belongings from his
parents' home. When he visited his parents on
leave, he slept on a living room couch and had
no bed or dresser of his own. When he enlisted
in the Navy, he never intended to return to
his parents' home. He did not consider
himself to be a resident of his parents'
household at the time of the collision.
Sean's parents did not consider Sean to be a
resident of their household at the time of the
collision.
. . . .
The forecast of evidence before the trial
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court raises a question as to Sean Wale's
intent to remain a resident of his parents'
household or to assume that status from time
to time. Sean's habit of returning to his
parents' home for furloughs and leaves and his
returning there after discharge from the Navy
tends to show an intent to make his parents'
home his own. On the other hand, the forecast
is complicated by Sean's own statement that he
did not intend to return to that residence
after his enlistment; this statement tends to
show an opposite intent from that shown by his
habits and activities. Thus, a material issue
of fact has been raised which must be
determined by the finder of fact.
Great American, 78 N.C. App. at 655, 656-57, 338 S.E.2d at 146-47(citations omitted).
In the present case, evidence before the trial court,
considered in the light most favorable to Defendants, tends to
show that Thurman was the most constant caregiver in Harley’s life.
Thurman owned the Branson house where Harley was living at the
time of the accident. Thurman did not charge any rent for Reggie,
Harley, or her brothers to live there. Thurman had a key to the
Branson house, and freely entered it whenever he desired. Thurman
paid the utility bills for the Branson house, and bought appliances
for the house as needed. The Branson house and the Brush Creek
house were connected to each other by contiguous land owned by
Thurman. Thurman considered these two houses to be part of his
farm, which he considered to be a family farm. To this extent,
Harley and Thurman could both be considered residents of Thurman’s
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“family farm.” Thurman spent much of his time at the Brush Creek
house, and had most of his mail, including important documents,
delivered to that address.
Though Thurman apparently did not spend many nights at the
Branson house, he did see Harley most every day of the week, and
he was a regular participant in Harley’s life. Thurman was often
the one who took Harley to the dentist or doctor. Thurman paid
for the vast majority of Harley’s expenses, including necessaries
such as food and clothing, as well as lifestyle items, such as
Harley’s prom dress. In addition, when Harley did not have a
parent with whom to live because her father was either in prison
or otherwise prohibited from living with Harley, and her mother
either could not or would not provide housing and support, Harley
lived with Thurman. On these occasions, Thurman handled every
responsibility, including helping Harley with her schoolwork and
taking her to school. For a period of time when Reggie was
incarcerated, Thurman was appointed legal guardian of Harley. A
few years before the accident, Harley lived with Thurman for a
year due to Reggie’s legal troubles.
Finally, in the present case, unlike in Great American, both
Harley and Thurman considered Harley to be a part of Thurman’s
household. When we consider all the relevant facts, we hold, in
light of the very particular circumstances in this case, that
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Harley was a resident of Thurman’s household as defined under the
policy at the time of the accident. We reverse the 6 December
2012 order granting summary judgment in favor of Plaintiff and
remand for entry of an order declaring that, at the time of the
accident, Harley was a “family member,” and thus an “insured,”
pursuant to the UIM policy issued by Plaintiff to Thurman.
Affirmed in part, reversed and remanded in part.
Judges BRYANT and STROUD concur.