The U.S. Court of Appeals for the Tenth Circuit, reversing a district court's decision, has ruled that the term “resident” in a divorced mother's homeowners' insurance policy was ambiguous for purposes of coverage of a lawsuit against her for negligently storing a handgun her son used to commit murder.
The Case
In October 2014, then-16-year-old Phillip Sam shot and killed Tyler Burns. David and Robin Burns, as representatives of Tyler Burns, brought a wrongful death action against, among others, Sam's mother, Dora Sam, alleging that she had negligently stored the handgun that Sam had used in the shooting.
Ms. Sam sought defense and indemnity from her homeowners' insurance carrier, American National Property and Casualty Company.
In response, American National filed an action in federal court seeking a declaration that there was no coverage under the policy. It reasoned that the policy excluded coverage for intentional or criminal actions by “any insured,” and that Sam was an insured because he was a minor son who resided with his mother and was in her care.
The district court granted summary judgment for American National, concluding that Sam was a “resident” of his mother's home at the time of the shooting; that the policy defined “insureds” to include relatives who were “resident[s]” of a named insured's home; and that because the policy excluded personal liability coverage for intentional and criminal actions by “any insured,” there was no coverage for Ms. Sam for the shooting.
The dispute reached the 10th Circuit, where the Burnses argued among other things that Sam was not a resident of his mother's household at the time of the shooting because he had been staying with his father at that time and had expressed an intent or desire to live with his father.
The Tenth Circuit's Decision
The circuit court reversed.
The Tenth Circuit, citing to Wyoming Insurance Guaranty Ass'n v. Woods, 888 P.2d 192 (Wyo. 1994) and T.M. ex rel. Cox v. Executive Risk Indemnity Inc., 59 P.3d 721 (Wyo. 2002), first ruled that the undefined term “resident” in the American National policy was an ambiguous term under applicable Wyoming law.
Having found the term “resident” to be ambiguous, the circuit court then ruled that it was “fairly susceptible” to an interpretation under Wyoming law consistent with providing Ms. Sam coverage in this case. The circuit court said that it could determine that Sam was a resident of his father's and not his mother's home at the time of the shooting, given that Sam had been staying with him at the time of the shooting.
The Tenth Circuit concluded that its reading of the policy term “resident” – to the effect that an individual only may have one residence at a time, but that an individual periodically alternating between his parents' homes would be, at a given point in time, a resident of the home he or she was staying at – was a “fair and reasonable” one, and was an interpretation that in fact favored coverage for Ms. Sam because her son was not a “resident[] of [her] household” under the policy at the time of the shooting and, therefore, he was not an “insured” under the policy.
The case is American National Property and Casualty Co. v. Burns, No. 18-8006 (10th Cir. April 23, 2019).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].