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.