St. Paul Fire & Marine Insurance v. Lewis

935 F.2d 1428

• Court: Court of Appeals for the Third Circuit
• Decided: June 27, 1991
• Docket: Nos. 90-1810, 90-1821 to 90-1823
• Status: Published

Opinions

OPINION OF THE COURT

COWEN, Circuit Judge.

This appeal arises from a declaratory judgment action in which St. Paul Fire and Marine Insurance Company (“St. Paul”) seeks a determination that the adult son of its policy holder is not covered by an insurance policy it issued. The dispute turns on the meaning of the phrase “living with” in the insurance policy. We find the policy to be unambiguous, and hold it requires that a party have some regular, personal contacts with the insured’s home in order to be covered by the policy. Because there is no evidence of any such contacts here, we will affirm the directed verdict entered in favor of St. Paul.

I.

The incident giving rise to this insurance dispute occurred on October 16, 1983. That evening Andrew Klinghoffer’ was driving an automobile on the Benjamin Franklin Bridge, which spans the Delaware River between Philadelphia, Pennsylvania and Camden, New Jersey. Klinghoffer swerved out of his lane, crossed the center line, and collided with two cars travelling in the opposite direction. Those cars contained a total of six passengers, four of whom were injured and two of whom were killed in the accident. The injured parties and the estates of the deceased filed a tort action against Klinghoffer and the Delaware River Port Authority, which operates the Benjamin Franklin Bridge, in the Court of Common Pleas of Philadelphia County. That state tort action is still pending resolution.

At the time of the accident, Klinghoffer carried a personal automobile insurance policy with limits of coverage insufficient to meet the injured parties’ claims against him. Klinghoffer’s father, Leonard Kling-hoffer, also carried a personal liability policy, referred to as an “excess” or “umbrella” policy, with St. Paul. That policy, which is the center of the controversy in this action, was in effect from February of 1983 through February of 1984 and. had a coverage limit of $1,000,000.00. This umbrella policy provided “we’ll cover all relatives living with you and anyone under 21 in your or their care. They’re covered for any accidents involving an auto they own, rent or use as a temporary substitute.” App. at 167 (emphasis added).

St. Paul initiated this declaratory judgment action pursuant to 28 U.S.C. § 2201 (1988), under the district court’s diversity jurisdiction, 28 U.S.C. § 1332 (1991 Supp.), seeking a determination of whether Andrew Klinghoffer was entitled to coverage under his father’s umbrella policy.¹ At trial, Klinghoffer testified that he was “living” in an apartment located at 4800 Pine Street in Philadelphia at the time of the accident. App. at 95-99, 126-27. It is uncontested that Klinghoffer and a roommate began leasing the two-bedroom Pine Street apartment in September of 1983. According to Klinghoffer’s testimony, he slept and ate his meals at this apartment on a daily basis; kept personal belongings there, including his cat and fish; and received mail and telephone calls there.

The uncontradicted evidence also indicates that Klinghoffer maintained certain contacts with his parents’ condominium located at 1820 Rittenhouse Square in Philadelphia. Specifically, Klinghoffer frequented his parents’ condominium to visit, eat meals, and celebrate the holidays; he considered his parents’ Rittenhouse Square condominium to be his “home,” App. at 26; his parents maintained a separate room for him there, where he kept some personal belongings; he recorded his address as 1820 Rittenhouse Square on his drivers license, bank deposit slips, personal checks, 1982 and 1983 tax returns, job applications, and Federal Aviation Administration pilot’s records; and he received mail at his parents’ condominium. In addition, the emergency room records from the night of the accident, listed 1820 Rittenhouse Square as Klinghoffer’s address. During the policy period, Klinghoffer’s parents were also giving him some sporadic financial support of an unspecified amount.

After a two-day trial, the district court found that the only issue to be resolved was whether Klinghoffer was “living with” his father within the meaning of the St. Paul insurance policy. The court entered a directed verdict in favor of St. Paul, concluding that, under the law of Pennsylvania, the phrase “living with” in an insur-anee contract requires a person to physically reside with the insured and there was no evidence indicating that Klinghoffer satisfied that requirement. This consolidated appeal followed. We have jurisdiction under 28 U.S.C. § 1291 (1988).²

Our review of the district court’s granting of a directed verdict is plenary; we engage in the same inquiry as the district court in deciding the motion. Gay v. Petstock, 917 F.2d 768, 771 (3d Cir.1990). A directed verdict is appropriate only where the evidence, when viewed in a light most favorable to the party opposing the motion, is insufficient for a reasonable jury to find in favor of the opposing party. Id.

II.

At issue in our review of this directed verdict is whether Klinghoffer was living with his father for purposes of coverage under his father’s umbrella insurance policy. Resolution of this issue requires us to decide the meaning of the phrase “living with” in the insurance contract. We apply Pennsylvania law to this contract.³ In construing an insurance policy, unambiguous terms are to be given their “plain and ordinary meaning.” Pennsylvania Mfrs. Ass’n Ins. Co. v. Aetna Casualty & Sur. Ins. Co., 426 Pa. 453, 457, 233 A.2d 548, 551 (1967). Ambiguous terms, however, are to be construed strictly against the insurer, in favor of the insured. Mohn v. American Casualty Co of Reading, 458 Pa. 576, 586, 326 A.2d 346, 351 (1974). If the phrase living with is ambiguous, the defendants would automatically prevail under Pennsylvania law but if the phrase is not ambiguous, it must be given its plain meaning. Our initial inquiry, therefore, is whether the phrase is ambiguous.

A.

Determining whether the terms of a contract are ambiguous is a question of law. See, e.g., International Union, UAW v. Mack Trucks, Inc., 917 F.2d 107, 111 (3d Cir.1990). We have recognized a contract ambiguity to be “intellectual uncertainty; ... the condition of admitting of two or more meanings, of being understood in more than one way, or referring to two or more things at the same time.... ” Id. (quoting Mellon Bank N.A. v. Aetna Business Credit, 619 F.2d 1001, 1011 (3d Cir.1980)). In determining whether a contract term is ambiguous, we must consider the actual words of the agreement themselves, as well as any alternative meanings offered by counsel, and extrinsic evidence offered in support of those alternative meanings. Id. In making the ambiguity determination, however, we must remember that “[t]he language of the policy may not be tortured ... to create ambiguities where none exist.” Pacific Indem. Co. v. Linn, 766 F.2d 754, 761 (3d Cir.1985).

Applying these principles here, we find that the phrase living with in this insurance contract is not ambiguous. Moreover, we find that no reasonable jury could have found that the phrase does not require at least some regular, personal contacts with the insured’s home. The verb “to live,” in the sense of to live with someone in their home is defined as follows: “to occupy a home: dwell, reside” Webster’s Third New International Dictionary 1323 (3d Ed.1986). The synonym “reside” is defined as “to settle oneself or thing in a place; to be stationed; remain; stay.” Id. at 1931. These definitions indicate that the concept of living with someone contemplates, at a minimum, some consistent, personal contact with that person’s home. Occasional, sporadic, and temporary contacts are insufficient.

Although Pennsylvania courts have not decided the meaning of the exact phrase at issue here, their consideration of a similar term leads us to predict that Pennsylvania courts would probably require some regular, personal contact in order for a party to be living with the insured for purposes of insurance coverage. In Amica Mut. Ins. Co. v. Donegal Mut. Ins. Co., 376 Pa.Super. 109, 545 A.2d 343 (1988), the Pennsylvania Superior Court held that the insured’s daughter was not a resident of his household under his insurance contract, based on the trier of fact’s findings that she made only sporadic visits to her father’s house and did not live there. The court affirmed the trial court’s finding that the daughter did not live with the insured and was not, therefore, a resident of his household for purposes of the insurance contract despite evidence indicating that she stayed overnight at her father’s house three to five times a month, received mail there, and kept personal belongings there, which included a pet rabbit, one or two closets full of clothing, and approximately forty pairs of shoes. Id. at 113-14, 545 A.2d at 345.

Perhaps we would not have been able to conclude that this term is unambiguous if the defendants had offered an alternative definition that is plausible in the context of a parent and adult child. Instead of offering a concrete alternative definition of what would constitute living together in this context, however, the defendants merely assert that parties can live together without physically dwelling together. They rely on cases interpreting the phrase living with in the Social Security Act and workman’s compensation statutes. See, e.g., Boyd v. Folsom, 257 F.2d 778 (3d Cir.1958) (widow of decedent wage earner was “living with” her husband at the time of his death for purposes of the Social Security Act, even though they maintained separate household, because he continued to make regular financial contributions to her support); Sheaffer v. Penn Dairies, 161 Pa.Super. 583, 56 A.2d 368 (1948) (decedent and his wife were living together for purposes of Pennsylvania workman’s compensation statute even though they did not physically dwell together in same house, based on evidence that they saw each other daily and that there was no break in the connubial relations). The dissent’s reliance on these cases to define this phrase in the insurance contract before us is misguided because they arise in a vastly different context. Whether or not two individuals live together as husband and wife focuses on factors that are completely irrelevant to determining whether other relatives live together. Moreover, Boyd focused on the financial support that the deceased had been giving his spouse because of the nature of the statutory compensation sought. Even if financial support were relevant to determining whether Klinghoffer was living with his father for purposes of insurance coverage, the only evidence of financial support is testimony that Klinghoffer’s father occasionally gave him some money or bought him a suit. These sporadic payments are not the type of regular support contemplated in Boyd.

The defendants also refer us to eases holding that a member of the military may still be considered to live with his parents even if he does not actually reside in their home. See, e.g., United Services Auto Ass’n v. Evangelista, 698 F.Supp. 85 (E.D.Pa.1988) (individual on active duty in Air Force was still a member of his parents’ household for purposes of insurance coverage, even though he was stationed elsewhere). We might find that a party need not have regular, personal contacts with a residency in order to be living there if he is prevented from having such contacts by virtue of a military assignment, or even by virtue of the fact that he was a full-time student. As this case does not present such a situation, we need not consider whether this contract would be ambiguous as applied to a member of the military, and find Evangelista to be inapplicable to the issue before us.

The defendants urge us to find that the St. Paul insurance contract is ambiguous because it does not restrict an individual from living in more than one place at a given time. The issue before us, however, is not whether Klinghoffer could live in more than one place. Rather, we must determine whether Klinghoffer’s ties with his parents’ condominium were such that he was actually living there, regardless of wherever else he might also have been living. We hold that the insurance contract unambiguously requires a party to maintain regular personal contacts with the insured’s home, and as discussed below, we find that Klinghoffer did not meet these requirements. We need not, therefore, consider whether the term contemplates that a party can live at more than one place at a given time, and we will not rely on such a possibility to create an ambiguity. Pacific Indem. Co., 766 F.2d at 761.

B.

Having determined this contract requires that a party have at least some regular, personal contacts with the insured’s residency, we apply that determination to the facts before us. The evidence presented, even when viewed in a light most favorable to the defendants, contains no indication that Klinghoffer had the requisite contacts with his parents’ condominium. The defendants have presented no evidence that his visits occurred with any frequency. The record indicates that he did not sleep at his parents’ or take his meals there with any regularity.

The fact that Klinghoffer stored personal possessions at his parents’ condominium and used their address for certain purposes does not replace personal contact. Kling-hoffer could have rented a post office box or public storage facility to serve the same functions, but certainly would not have been considered to live at those places. As there is no evidence that could even create an inference that Klinghoffer had regular, personal contacts with his parents’ home, we find that a directed verdict was appropriately entered in favor of St. Paul.

C.

As a final matter, we address the defendants’ argument that the question of whether Klinghoffer was covered by his father’s umbrella insurance policy should have been decided by the jury because, even if he was not living with his parents at the time of the accident, there is evidence that could be interpreted as showing that he was living with them at other points during the policy period. Specifically, the defendants point to Klinghoffer’s testimony that he could not remember where he lived during the summer of 1983, Klinghoffer’s father’s testimony that he believes his son stayed at the Rittenhouse Square condominium that summer, and the fact that Klinghoffer convalesced at his parents’ condominium for some period after the accident before returning to his own apartment.

While it is true that the insurance policy does not explicitly state that a party must live with the insured at the time of the accident, we cannot interpret it to mean otherwise. The defendants’ proposed interpretation would lead to an unreasonable result. If we were to interpret it as meaning that a party need only live with the insured at some point during the policy period, we would give insureds the ability to affect the scope of their policies after an accident occurred. Policy holders would be able to expand the scope of their coverage merely by having their adult children stay with them for a few days after an incident. We decline to adopt an interpretation that would lead to an such unreasonable result which could not have been intended by either Leonard Klinghoffer or St. Paul. See Tennant v. Hartford Steam Boiler Inspection & Ins. Co., 351 Pa. 102, 40 A.2d 385, 387 (1944) (“A contract of insurance must have a reasonable interpretation such as was probably in the contemplation of the parties when it was made.”).

III.

Because we find that the phrase “living with” in this insurance contract unambiguously requires a party to have at least some regular, personal contacts with the insureds’ home and there was no evidence of such contacts here, we will affirm the directed verdict in favor of the insurer St. Paul.

1 . The following parties were named as defendants in the declaratory judgment action: Barbara Lewis, Nya Lewis, John Mincy, and Shahi-da Mincy, the four parties injured in the accident; Khalid Lewis, one of the deceased; Sheila Furey, administratrix of the estate of the other deceased, John Furey; the Delaware River Port Authority of Pennsylvania and New Jersey; and Andrew Klinghoffer. We refer to these parties collectively as "the defendants.”

2 . All the declaratory judgment defendants, except Klinghoffer, appealed the district court’s disposition of this action. They filed four separate appeals, which we consolidated for purposes of briefing and disposition.

3 . The district court applied Pennsylvania law and neither party challenges this choice of law on appeal. Although it is not apparent from the record before us why the district court applied Pennsylvania law, we assume the court made this choice under Pennsylvania's choice of law rule requiring application of the law of the state with the greatest interest in the litigation. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941) (in diversity, district court must apply choice of law rules of state in which it sits); Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964) (court must apply law of state with greatest interest in outcome of litigation).