About a year ago, The Resource reported on a coverage case of particular interest to NCADA members who practice in the area of automobile insurance. The North Carolina Court of Appeals had decided a case involving whether a particular injured minor had been a resident of her grandfather's household so as to allow her to claim underinsured motorist benefits under the grandfather's policy. In that case, North Carolina Farm Bureau v. Paschal, the court had found coverage by interpreting the definition of "household" more broadly than in past decisions. Even though technically the grandfather and the injured granddaughter did not reside under the exact same roof, that court had determined that since the grandfather owned the house where she lived and acted as a parent would have, both emotionally and financially, that was enough to implicate his UIM coverage.
The Court of Appeals decision went up on a granted petition for discretionary review, but the North Carolina Supreme Court recently determined that the petition had been improvidently allowed. There are a number of coverage cases being appealed right now in which the broad holding and language of Paschal constituted the primary battleground - now parties resisting the expanded UIM coverage are going to have to try to distinguish the facts in their cases from those in Paschal since the Supreme Court did not provide any alternative thinking about this issue, as had been hoped by some.
One important fact in Paschal that could be unique was the fact that the house in which the grandfather lived and the different house in which the granddaughter lived were part of a "family compound" of adjacent properties. In addition, the fact that the grandfather played so much of a parental role because the parents themselves did not would be another possibly distinguishing factor. Any way you slice it, however, the days of deciding these coverage cases based just on how much personal stuff a claimant left at any particular house on a regular basis is gone. Instead, practitioners are going to need to delve deeper into the family dynamics, the emotional bonds between family members, and the subjective expectations and opinions of those family members in order to prepare these coverage cases for summary judgment and, as is more likely now, trial.
Synopsis provided by David W. Hood, Patrick Harper & Dixon, LLP
