                                                                            Feb 16 2016, 10:50 am




      ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
      J. Thomas Vetne                                            Tara M. Worthley
      Brian R. Gates                                             Steven L. Langer
      Jones Obenchain, LLP                                       Langer and Langer
      South Bend, Indiana                                        Valparaiso, Indiana



                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Secura Supreme Insurance                                  February 16, 2016
      Company, Tim O’Brien, and                                 Court of Appeals Case No.
      Sandra O’Brien,                                           64A03-1503-PL-83
                                                                Appeal from the Porter Superior
      Appellants-Defendants,
                                                                Court
              v.                                                Trial Court Cause No.
                                                                64D05-1311-PL-10467

      Diana Johnson,                                            The Honorable Mary R. Harper,
                                                                Judge
      Appellee-Plaintiff.




      Pyle, Judge.

[1]   Secura Supreme Insurance Company and its insureds, Tim and Sandra O’Brien

      (“the O’Briens”), (collectively “Secura”) appeal the trial court’s denial of their

      motion for summary judgment and the grant of summary judgment in favor of

      Diana Johnson (“Johnson”) in her lawsuit seeking a declaratory judgment that

      Nicole Alarid (“Alarid”) was an “insured” under the O’Briens’ homeowners

      Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016                    Page 1 of 11
      insurance policy. Prior to seeking a declaratory judgment, Johnson had sued

      Alarid and the O’Briens for injuries arising out Alarid’s dog attacking Johnson

      and her dogs.


[2]   On appeal, Secura claims that it was entitled to summary judgment as a matter

      of law because Alarid is not an “insured” under the O’Briens’ insurance

      contract. Specifically, Secura argues that Alarid was not a “resident” of the

      O’Briens’ “household,” thus their insurance does not provide coverage for her.

      Here, the insurance contract did not specifically define the terms “resident” and

      “household.” Concluding that the lack of definition in the policy for the terms

      “resident” and “household” make the terms ambiguous and therefore subject to

      different and reasonable interpretations, the issue of whether Alarid was an

      “insured” under the Secura policy was a genuine issue of material fact

      precluding summary judgment in favor of either party. Accordingly, we affirm

      the denial of summary judgment to Secura, reverse the grant of summary

      judgment in favor of Johnson, and remand to the trial court for further

      proceedings.


[3]   We affirm in part, reverse in part, and remand.


                                                       Issue
              Whether the trial court erred in denying summary judgment to
              Secura and granting summary judgment in favor of Johnson.




      Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 2 of 11
                                                       Facts
[4]   The O’Briens lived in a house in Hobart (“the Hobart house”) but purchased a

      house in Valparaiso (“the Valparaiso house”) in 2009. After purchasing the

      Valparaiso house, the O’Briens added it to their insurance policy as a secondary

      residence and extended the personal liability coverage to the Valparaiso house.

      The O’Briens also used the Valparaiso house address to send their children to

      Union Township schools, intending to move into Union Township after selling

      their house in Hobart.



[5]   Around May 2010, the Hobart house had not yet sold, and the O’Briens rented

      the Valparaiso house to Alarid, Sandra’s sister, while continuing to use the

      address to send their children to Union Township schools. Alarid kept two

      dogs at the Valparaiso house. On May 26, 2010, one of the dogs crawled under

      a chain-link fence in the backyard and attacked Johnson while she was walking

      her dogs in her neighbor’s yard. Johnson and her dogs suffered serious injuries.


[6]   On January 10, 2012, Johnson filed a complaint against Alarid and the

      O’Briens arising out of the injuries she and her dogs had suffered on May 26,

      2010. On November 19, 2013, Johnson filed a separate complaint seeking a

      declaratory judgment that Alarid was an “insured” under the O’Briens’

      homeowners policy insuring the Valparaiso house.


[7]   In relevant part, the O’Briens’ homeowners insurance contract defined

      “insured” as follows:


      Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 3 of 11
              5. Insured means:
                       a. You and residents of your household who are;
                                (1) Your relatives; or
                                (2) Other persons under the age of 21 and in the
                                    care of any person named above;
                       b. A student who is a relative and enrolled in school full[-
                          ]time, as defined by the school, who was a resident of
                          your household before moving out to attend school.
                          This definition does not include students:
                          (1) Who are emancipated students;
                          (2) Who receive no financial support from an insured; or
                          (3) Who have established residence elsewhere.


      (App. Vol. I 99-100). The policy did not define “resident” or “household.”


[8]   On May 27, 2014, Secura filed a motion for summary judgment, arguing that

      Alarid was not an “insured” under the insurance policy because she rented a

      house owned by the O’Briens and was not a member of their household. On

      June 26, 2014, Johnson filed a response to Secura’s motion and a cross-motion

      for summary judgment. In her response and motion, Johnson argued that

      because the insurance policy did not define the term “household,” the insurance

      contract should be strictly construed against Secura, and Alarid should be

      declared an “insured” as a matter of law. Alternatively, Secura requested that

      the trial court “determine those facts that exist without substantial controversy,

      and those facts that are actually disputed in good faith,” while Johnson



      Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016      Page 4 of 11
       requested that summary judgment be denied to all parties if the ultimate issue

       was a mixed question of law and fact. (App. Vol. I 25).


[9]    On February 5, 2015, the trial court entered an order denying summary

       judgment in favor of Secura and granting it in favor of Johnson. Secura did not

       define the term “household,” so the trial court used Indiana common law to

       supply the definition. Because of the broad definitions of “resident” and

       “household” under Indiana common law, the trial court ultimately concluded

       that Alarid could be considered a resident of the O’Briens’ household because

       the Valparaiso house served as an extension of their primary residence and she

       was a relative. Secura now appeals.1


                                                      Decision
[10]   Secura appeals the trial court’s grant of summary judgment declaring Alarid an

       “insured” under the O’Briens’ homeowners insurance policy and the denial of

       its motion for summary judgment.


[11]   We review summary judgment de novo, applying the same standard as the trial

       court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Summary judgment

       is appropriate only where the designated evidence shows “that there is no

       genuine issue as to any material fact and that the moving party is entitled to




       1
        We direct Secura’s counsel’s attention to Ind. Appellate Rule 43(G) regarding the margins for briefs.
       Appellate counsel should not manipulate margins to reach or stay within page limits, giving the collegiate
       impression of quantity over quality.

       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016                       Page 5 of 11
       judgment as a matter of law.” Ind. Trial Rule 56(C). “A fact is ‘material’ if its

       resolution would affect the outcome of the case, and an issue is ‘genuine’ if a

       trier of fact is required to resolve the parties’ differing accounts of the truth, or if

       the undisputed material facts support conflicting reasonable inferences.”

       Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). On

       review, we may affirm a grant of summary judgment on any grounds supported

       by the designated evidence. Catt v. Bd. of Com’rs of Knox Cnty., 779 N.E.2d 1, 3

       (Ind. 2002).


[12]   The moving party “bears the initial burden of making a prima facie showing

       that there are no genuine issues of material fact and that it is entitled to

       judgment as a matter of law.” Gill v. Evansville Sheet Metal Work, Inc., 970

       N.E.2d 633, 637 (Ind. 2012). If the moving party meets this burden, the non-

       moving party must designate evidence demonstrating a genuine issue of

       material fact. Id. “[A]n adverse party may not rest upon the mere allegations

       or denials of his pleading, but his response, by affidavits or as otherwise

       provided in this rule, must set forth specific facts showing that there is a genuine

       issue for trial.” T.R. 56(E).


[13]   “Just as the trial court does, we resolve all questions and view all evidence in

       the light most favorable to the non-moving party, so as to not improperly deny

       him his day in court.” Alldredge v. Good Samaritan Home, Inc., 9 N.E.3d 1257,

       1259 (Ind. 2014) (internal citations omitted). We “consciously err[] on the side

       of letting marginal cases proceed to trial on the merits, rather than risk short-

       circuiting meritorious claims.” Hughley, 15 N.E.3d at 1004. Where, as here,

       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016     Page 6 of 11
       cross-motions for summary judgment were filed, our standard of review does

       not change. Mahan v. Am. Standard Ins. Co., 862 N.E.2d 669, 676 (Ind. Ct. App.

       2007), trans. denied. “Instead, we must consider each motion separately to

       determine whether the moving party is entitled to judgment as a matter of law.”

       Id.


[14]   This case involves the interpretation of an insurance contract, which is subject

       to the same rules of construction as any other contract. Jackson v. Jones, 804

       N.E.2d 155, 158 (Ind. Ct. App. 2004). Generally, the construction of a written

       contract is a question of law for the trial court, in which summary judgment is

       particularly appropriate. Mid State Bank v. 84 Lumber Co., 629 N.E.2d 909, 914

       (Ind. Ct. App. 1994). However, if the terms of a written contract are

       ambiguous, it is the responsibility of the jury to ascertain the facts necessary to

       construe the contract. Id. Consequently, when summary judgment is granted

       based upon the construction of a written contract, the trial court has either

       determined as a matter of law that the contract is not ambiguous or uncertain,

       or that the contract ambiguity, if one exists, can be resolved without the aid of a

       factual determination. Id.


[15]   Here, the insurance contract does not define the terms “resident” or

       “household,” and, on their face, the terms do not appear to be ambiguous.

       When, as here, the parties leave contract terms undefined, we apply Indiana

       common law to determine their meaning. Jones v. Western Reserve

       Group/Lighting Rod Mut. Ins. Co., 699 N.E.2d 711, 714 (Ind. Ct. App. 1998),

       reh’g. denied, trans. denied.

       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 7 of 11
[16]   As a general principle, “resident” has no fixed or precise meaning in the law.

       Id. In determining residency status under an automobile liability insurance

       contract, established case law has developed a three-fold test: 1) whether the

       claimant maintained a physical presence in the insured’s home; 2) whether the

       claimant had the subjective intent to reside there; and 3) the nature of the

       claimant’s access to the insured’s home and its contents. See, e.g., Ind. Farmers

       Mut. Ins. Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. Ct. App. 2000). We have

       applied this test to determine residency status in personal liability cases as well.

       Ind. Farmers Mut. Ins. Co. v. Imel, 817 N.E.2d 299, 304 (Ind. Ct. App. 2004).

       Likewise, we have found that the term “household” does not require people to

       live under the same roof. Erie Ins. Exchange v. Stephenson, 674 N.E.2d 607, 610

       (Ind. Ct. App. 1996). Thus, it is possible to maintain two households or to live

       as a member of one household and still be the “domestic head” of a separate

       household. Id.


[17]   There is no dispute from the designated evidence that Alarid was a resident of

       the Valparaiso house, as Alarid rented and lived in the O’Briens’ Valparaiso

       house. The ultimate issue was whether the Valparaiso house is an extension of

       the O’Briens’ household, thus making an Alarid an insured under the insurance

       policy.


       1. Secura’s Motion for Summary Judgment

[18]   Secura argues that Alarid was not an “insured” under the insurance policy

       because she was not a resident of the O’Briens’ household. Secura

       acknowledges that the term “household” does not require members of the same

       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 8 of 11
       household to live under one roof per our opinion in Stephenson. Instead, Secura

       essentially asks us to adopt a requirement that members of a household have

       some dependent relationship. Secura relies on State Farm Fire and Cas. Co. v.

       Ewing, 269 F.3d 888, 892 (8th Cir. 2001), which mentioned our opinion in

       Stephenson, in support of this proposition. We decline to do so.


[19]   When we decided Stephenson, we refused to establish a “single, exclusive

       definition of the word ‘household.’” Stephenson, 674 N.E.2d at 610. Rather, we

       held that if the insurance company wanted to define “household” as members

       of a family dwelling under the same roof, it could have defined the term as such

       in the policy. Id. Likewise, if Secura wanted to require members of a

       household to depend on each other in some fashion, it should have defined the

       term in that manner. Secura also relies on a case from Illinois, State Farm Fire

       and Case Co. v. Martinez, 893 N.E.2d 975 (Ill. App. Ct. 2008), in support of their

       claim that Alarid is not a resident of the O’Briens’ household. However, their

       reliance on Martinez is also misplaced because the court’s decision in that case

       relied upon precedent holding that “household” is synonymous with a family

       living under the same roof. Id. at 981. Accordingly, Secura has not shown, as a

       matter of law, that Alarid is not a member of the O’Briens’ household, and the

       trial court did not err in denying their motion for summary judgment.


       2. Johnson’s Motion for Summary Judgment

[20]   Turning to Johnson’s motion for summary judgment, she claims that she is

       entitled to summary judgment because, as a matter of law, ambiguous terms in

       an insurance contract are construed against the insurer.
       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 9 of 11
[21]   Clear and unambiguous language in insurance policy contracts, like other

       contracts, should be given its plain and ordinary meaning. Cinergy Corp. v.

       Associated Elec. & Gas Ins. Services, Ltd., 865 N.E.2d 571, 574 (Ind. 2007) (citing

       Allstate Ins. Co. V. Dana Corp., 759 N.E.2d 1049, 1054 (Ind. 2001)). But, where

       the policy language is ambiguous, insurance contracts are to be construed

       strictly against the insurer and the language must be viewed from the standpoint

       of the insured. Dana II. 759 N.E.2d at 1056. Thus, ambiguous terms will be

       construed in favor of the insured, but for purposes of summary judgment, only

       if the ambiguity exists by reason of the language used and not because of extrinsic

       facts. Cinergy I, 865 N.E.2d at 574. (emphasis added).


[22]   Here, the extrinsic facts of the case caused the ambiguity. The insurance

       contract designated the Valparaiso house as a “SECONDARY RESIDENCE

       PREMISES” and extended the personal liability policy limits to the Valparaiso

       house from the Hobart house. (App. Vol. I 79) In addition, the O’Briens used

       the address on the Valparaiso house to enroll their children in Union Township

       schools even after renting the house to Alarid. These extrinsic facts allow for

       the possibility that the O’Briens’ household extends from the Hobart house to

       the Valparaiso house. However, a fact-finder could also conclude that a

       landlord-tenant relationship is incompatible with being a member of a

       household. Essentially, the undisputed material facts here establish nothing as

       a matter of law, making the question of whether Alarid is a resident of the

       O’Briens’ household a genuine issue of material fact.




       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 10 of 11
[23]   Indiana’s common law treatment of the term “household” and Secura’s failure

       to define the term in the contract allow for conflicting reasonable inferences

       from the undisputed material facts, precluding summary judgment in favor of

       Secura or Johnson. See, e.g., Jones, 699 N.E.2d at 717 (reasonable minds could

       differ as to inferences supported by the undisputed facts and question of fact

       existed regarding whether plaintiff was a resident of a household at the time of

       her accident). Accordingly, we affirm the trial court’s denial of summary

       judgment to Secura, reverse the grant of summary judgment in favor of

       Johnson, and remand to the trial court for further proceedings.


[24]   Affirmed in part, reversed in part, and remanded.


       Vaidik, C.J., and Robb, J., concur.




       Court of Appeals of Indiana | Opinion 64A03-1503-PL-83 | February 16, 2016   Page 11 of 11
