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Nodak Mutual Ins. Co. v. Bahr-Renner

Supreme Court of North Dakota

February 20, 2014

NODAK MUTUAL INSURANCE COMPANY, Plaintiff and Appellee
v.
Eric BAHR-RENNER, Sara Daede, Ashley Collins, Billie Rauser, Kenneth McCoy, Con-Way Freight, Inc., Emily Young, J.C., a minor child, and Peggy Gwyther, deceased, Defendants Eric Bahr-Renner, Sara Daede, Ashley Collins, J.C., a minor, Emily Young, and Kenneth McCoy, Appellants.

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[Copyrighted Material Omitted]

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William P. Harrie, Fargo, N.D., for plaintiff and appellee.

Duane A. Lillehaug, Fargo, N.D., for appellants Eric Bahr-Renner, Sara Daede, Ashley Collins, J.C., a minor, and Emily Young.

Tatum O. Lindbo (appeared) and Timothy M. O'Keeffe (on brief), Fargo, N.D., for appellant Kenneth McCoy.

SANDSTROM, Justice.

[¶ 1] Eric Bahr-Renner, Sara Daede, Ashley Collins, J.C. (a minor), Emily Young, and Kenneth McCoy (collectively " claimants" ) appeal from a judgment that only the lower, " step-down" policy limits in an automobile insurance policy were available for their damages sustained in an automobile accident. We affirm, concluding the district court's finding of fact that Mary Gwyther was not a resident of her mother's household was not clearly erroneous and the step-down endorsement to the insurance policy did not violate North Dakota law.

I

[¶ 2] On January 14, 2010, Mary Gwyther was in a multi-vehicle accident while driving a pickup she co-owned with her mother, Peggy Gwyther, who died in the accident. The claimants allegedly suffered injuries and property damage as a result of the accident.

[¶ 3] The Gwyther vehicle was insured under a policy issued by Nodak Mutual Insurance Company (" Nodak" ). The policy was issued to Peggy Gwyther as the

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named insured and carried bodily injury liability limits of $100,000 for each person and $300,000 for each accident. The policy included a " step-down" endorsement which reduced the bodily injury policy limits to the statutory minimum of $25,000 per person and $50,000 per accident, and $25,000 for property damage, if the vehicle was being driven by an insured who was not a " family member" of the named insured. " Family member" was defined in the policy as a person related to the named insured who was a resident of the named insured's household.

[¶ 4] Peggy Gwyther lived in a home she co-owned with Mary Gwyther in Bismarck. Although Mary Gwyther was listed as a co-owner of the Bismarck property, she had never actually lived in the home, and had not lived with her parents since 1972. Mary Gwyther had been living in Switzerland since 2000. She owned a business in Switzerland, owned and insured a vehicle there, and had a Swiss driver's license and residence permit. In 2008 and 2012, however, Mary Gwyther voted by absentee ballot in North Dakota as a resident, declaring in applications and affidavits that she was a resident at her mother's Bismarck address. She also designated the Bismarck address as her permanent home address with the State Department.

[¶ 5] Nodak brought this interpleader action seeking a declaration it is only liable to pay the reduced step-down policy limits because Mary Gwyther was not a resident of Peggy Gwyther's household at the time of the accident and therefore was not a " family member" under the policy. The case was tried as a bench trial on stipulated facts. The district court found Mary Gwyther was not a resident of Peggy Gwyther's household, concluded the policy did not violate North Dakota law, and concluded Nodak was required to pay only the lower step-down policy limits.

II

[¶ 6] The claimants argue the district court erred in ruling Mary Gwyther was not a resident of her mother's Bismarck household on the day of the accident.

[¶ 7] When a case is tried before a district court on the basis of stipulated facts or documentary evidence, this Court reviews the court's findings of fact under the clearly erroneous standard of review of N.D.R.Civ.P. 52(a). See Kadlec v. Greendale Twp. Bd. of Twp. Supervisors, 1998 ND 165, ¶ 9, 583 N.W.2d 817; State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 902 n. 3 (N.D.1986); Stracka v. Peterson, 377 N.W.2d 580, 582 (N.D.1985). The determination of whether an individual is a " resident" is a question of fact. Dietz v. City of Medora, 333 N.W.2d 702, 704 (N.D.1983). A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence supports it, or if, on the entire record, we are left with a definite and firm conviction a mistake has been made. Maddock v. Andersen, 2013 ND 80, ¶ 8, 830 N.W.2d 627.

[¶ 8] The Nodak insurance policy provided that " any ‘ family member’ " was not subject to the lower, step-down policy limits but was entitled to the same amount of coverage as the named insured. The policy defined " ‘ Family member’ " as " a person related to you by blood, marriage or adoption, including a ward or foster child, who is a resident of your household." Although this Court has encountered similar language in previous insurance cases, see, e.g., Schleuter v. ...


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