May 6, 2019

The United States Court of Appeals for the 10th Circuit has ruled that the term “resident” in a mothers' homeowners' policy was ambiguous for purposes of coverage of a lawsuit against her for negligently storing a handgun in her home which her son used to commit murder. The case is American National Property and Casualty Co. v. Burns, No. 18-8006 (10th Cir. April 23, 2019).

In late 2014, 16-year-old Phillip Sam shot and killed 19-year-old Tyler Burns, when Sam fired several shots into a group of teens at 1 am on an October night. Burns was initially injured and unable to run away. Burns begged Sam not to shoot him again, but Sam wanted to “finish what he started.” David and Robin Burns, as representatives of Tyler Burns, brought a wrongful death action against, among others, Sam's mother, Dora Sam, for negligently storing the handgun that Sam had used in the shooting. Ms. Sam sought defense and indemnity from the carrier of her homeowners' insurance, American National Property and Casualty Company (American National.) American National filed an action in federal court seeking a declaration that the policy provided no such coverage, reasoning 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 under her care.

The district court granted summary judgment for American National. The court concluded that Sam was a “resident” of the insured home at the time of the shooting because the policy defined “insureds” as relatives who were “residents” of a named insured's home, and that because the policy excluded personal liability coverage for the intentional acts of an insured. Since Sam was a “resident” and the act was intentional, Ms. Sam had no coverage for the shooting. The Burns' brought this case to the 10th Circuit arguing that Sam was not a resident of the home at the time of the shooting because he had been staying with his father when the shooting occurred, and had expressed intent and desire to live with his father permanently.

The Tenth Circuit first ruled that the term “resident” was ambiguous under applicable Wyoming law. The court then stated that since the term was ambiguous, and the term was “fairly susceptible” to an interpretation under Wyoming law that was consistent with providing Ms. Sam with coverage. The circuit court said it could find that Sam was a resident of his father's home at the time of the shooting because he had been staying with his father when the shooting occurred. The court read the term “resident” to mean that an individual may only have one residence at any time, but that an individual alternating between his parents' home would be a resident of the home he was staying at. This interpretation, the court said, is a “fair and reasonable” one, and that interpretation 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.

Editors Note: Since Wyoming has not defined the term “resident” and considers it ambiguous, the court was able to determine whether the shooter was residing at the time of the shooting. The parents, in this case, shared “joint legal custody” with the mother assigned as the primary residential custodian. Although his mother was the primary residential custodian, he stayed with his father when his father was home from work trips, which took him out of town on a regular basis. Seemingly the court could have interpreted this case in the opposite direction, stating that the shooter was not a resident of his father's house at the time of the shooting so the ambiguity of this scenario gave way to the courts' decision to find in favor of the insured mother in this case.

New York is working on pushing out a bill to mandate gun owners secure a $1,000,000 liability policy to compensate innocent victims of gun-related accidents and violence for the medical care for their injuries. In cases like the above, where the gun is stolen, the original owner would not be liable unless the weapon was stolen due to the negligence of the gun owner. If this type of insurance were already in place, that insurance would likely have responded to the above claim.

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