410_C118

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HOUSEHOLD EXCLUSION IN AUTOMOBILE POLICY WAS AMBIGUOUS

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Gilda Menendez (named insured) allowed her granddaughter, Fabiola G. Llanes (granddaughter) to use her vehicle. She negligently collided with another vehicle, with resulting injuries to herself, her parents and the named insured. At the time of the accident, granddaughter lived with her parents and the named insured lived at a different address. Afterwards, the parents sued the named insured to recover damages for their bodily injuries and the named insured sought coverage from State Farm Mutual Automobile Insurance Company (State Farm). State Farm denied coverage based on the policy's household exclusion, paraphrased as: "When (Liability) Coverage A Does Not Apply" "There is no coverage for any bodily injury to any insured or any member of an insured's family residing in the insured's household.

 

State Farm asserted that the named insured's granddaughter, as a permissive user of the insured vehicle, was an insured under the policy. Since the named insured's granddaughter and her parents lived in the same household, State Farm argued that there was no coverage under the policy for the parents' bodily injuries based on the exclusion. The parents claimed that the phrase "the insured" referred to the named insured, Gilda Menendez, and that the definition of "the insured" did not include permissive users of the insured. They argued that because they did not reside in the insured's household at the time of the accident, the household exclusion did not apply to them.

 

Following a hearing, the trial court determined that the household exclusion was ambiguous and entered final summary judgment against State Farm and in favor of the named insured, granddaughter, and granddaughter's parents. State Farm appealed.

 

The issue on appeal was one of interpretation of an insurance policy as a question of law and whether the household exclusion barred the bodily injury claims of the parents who were not residing with the named insured on the date of the accident. It was undisputed that Gilda Menendez was the "named insured"and that she permitted her granddaughter to drive the insured vehicle. It was also clear that both Menendez and her granddaughter were insureds and that the household exclusion applied to their injuries. However, the appeals court determined that the household exclusion could be interpreted in more than one way. State Farm suggested that "the insured" did not mean the "named insured" because the terms "you or your" defined elsewhere meant the "named insured." It contended that if it intended for the phrase "the insured" to mean "the named insured," the policy would have read, "Any insured or any member of an insured's family residing in your household."

 

The granddaughter's parents suggested that use of the word "the" before "insured" referred to the insured on the declarations, being Gilda Menendez. As a result, in order for an exclusion to apply, the family member of "an insured" would have to reside in the same household as the named insured. Because the named insured's granddaughter's parents did not reside in the same household as the named insured, the parents argued that the household exclusion could not apply to bar their bodily injury claims.

 

The appeals court construed the language in favor of the insured and against State Farm because the language of the household exclusion was ambiguous and susceptible to different, but reasonable, interpretations. It affirmed the trial court's judgment.

 

District Court of Appeals of Florida, Third District. State Farm Mutual Automobile Insurance Company, Appellant, v. Gilda Menendez, Fabiola G. Llanes, Fabiola P. Llanes and Roger Llanes, Appellees. No. 3D08-2969. Jan. 6, 2010. 24 So.3d 809