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Nodak Mut. Ins. Co. v. Koller

Supreme Court of North Dakota

February 22, 2016

Nodak Mutual Insurance Company, Plaintiff and Appellee
v.
Nickolas Chance Koller, as Personal Representative to the Estate of Chase Koller, Defendant and Chris Kemp, as the guardian and next friend of G.K., and on behalf of all of the heirs at law of Stephanie Nelson, deceased, Defendant and Appellant
v.
Todd Anderson, individually and Becky Anderson, individually, Third-Party Defendants

Appeal from the District Court of Griggs County, Southeast Judicial District, the Honorable James D. Hovey, Judge.

Stephen W. Plambeck (argued), Fargo, N.D., and William P. Harrie (appeared),, Fargo, N.D., for plaintiff and appellee.

Daniel M. Traynor (argued), Devils Lake, ND, for defendant and appellant.

Lisa Fair McEvers, Carol Ronning Kapsner, Dale V. Sandstrom, Douglas L. Mattson, D.J., Gerald W. VandeWalle, C.J. Opinion of the Court by McEvers, Justice. Honorable Douglas L. Mattson, D.J., sitting in place of Crothers, J., disqualified.

OPINION

Page 452

McEvers, Justice.

[¶1] Chris Kemp, as the guardian of G.K., appeals from a district court's judgment determining that only the lower, " step-down" policy limits of an automobile insurance policy were available in defense of a wrongful death lawsuit resulting from a fatal accident because Chase Koller was not a resident of Todd Anderson's household at the time of the accident. We affirm.

I

[¶2] On or about June 7, 2011, Chase Koller and Stephanie Nelson, his girlfriend, were killed when Koller allegedly lost control of an all-terrain vehicle. Nelson is the mother of G.K., a child from a previous relationship. Becky Anderson, Koller's mother, was the registered owner of the vehicle. The vehicle was insured under a policy issued by Nodak Mutual Insurance Company (" Nodak" ). Todd Anderson, Koller's stepfather, is the named insured. The policy provides coverage for any " family member" of the named insured, up to $100,000 per incident. The policy defined a " 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." The policy included a " step-down" endorsement that reduced the policy limits to $25,000 per incident if the vehicle was being driven by an insured who was not a " family member" of the named insured.

[¶3] According to the record, Koller moved out of the Anderson's household in 2003, the Andersons had not listed Koller as a dependant on their tax returns since 2002. Todd Anderson dropped Koller as an authorized driver on his Nodak policy in 2005. The record also reflects that Koller moved to Grand Forks, North Dakota, in 2006 where he intermittently lived

Page 453

with a girlfriend with whom he had a child, A.K.

[¶4] According to testimony, in the fall of 2010, Koller rented an apartment in Grand Forks where he lived with A.K. Around December 2010, Koller lost his driver's license after a driving under the influence conviction. In February 2011, Koller's state-issued non-driver identification card identified his resident address as his Grand Forks apartment. In March or April 2011, Koller lost his job in Grand Forks.

[¶5] According to testimony, Koller obtained employment at Red Willow Resort, north of Binford, North Dakota, where he expected to work temporarily during the summer of 2011. Koller began staying at the Andersons' home on May 1, 2011, while he worked at the resort during the summer. Koller brought clothes for himself and A.K. and a limited amount of personal items, including toiletries and a game system to the Andersons' home. Koller did not have a key to the Andersons' home. According to testimony, Koller referred to the Andersons' house as his home. Becky Anderson testified that Koller did not pay rent, Koller and A.K. both had rooms in the house, she gave Koller rides because he did not have a driver's license, and she provided daycare services for A.K. at no charge. Koller maintained his Grand Forks apartment while staying at the Andersons' home. Koller continued to pay rent and utilities, he continued to receive mail, and he kept furnishings at the apartment. Nelson searched for construction jobs in Devils Lake, North Dakota, for Koller to work after his summer employment would end. Nelson also searched for apartments in Devils Lake where she and Koller could live together. According to testimony, Koller intended to leave the Andersons' home at the end of the summer of 2011 and move to Devils Lake to live with Nelson. The Andersons also intended for Koller to move out by the end of the summer of 2011.

[¶6] After the fatal accident, Nodak retained an attorney to represent Becky Anderson to prepare probate documents in Griggs County, North Dakota, which attested: " At the time of death, [Chase Koller] was domiciled in Griggs County, ND, though maintained [a] residence in Grand Forks County, ND. . . . Venue for this case is in this County because at the time of Decedent's death, Decedent was living and working in [Griggs] County." The district court in the probate matter determined venue was proper.

[¶7] Nodak sued Becky Anderson in her capacity as the Personal Representative to the Estate of Chase Koller, and Chris Kemp, as guardian of G.K., and the heirs of Stephanie Nelson, seeking a declaration that it was only liable to pay the reduced step-down policy limits because Koller was not a resident of Todd Anderson's household and, therefore, was not a " family member" under the policy. Kemp filed an answer, cross-claim, and third-party complaint asserting wrongful death against Becky Anderson in her capacity as the Personal Representative to the Estate of Chase Koller, and asserting negligent entrustment against Todd and Becky Anderson individually, claiming the family car doctrine applied. The district court severed Kemp's wrongful death claim from Nodak's declaratory judgment action under N.D.R.Civ.P. 21. In the declaratory judgment action, Kemp moved for summary judgment. Nodak filed a return and brief in response to Kemp's motion for summary judgment arguing that the district court should deny Kemp's motion and grant summary judgment in its favor. After a hearing, the district court entered an order granting Kemp's motion

Page 454

for summary judgment determining that Koller was a resident of the Andersons' household under Nodak's policy.

[¶8] Before the district court entered judgment, this Court decided Nodak Mutual Ins. Co. v. Bahr-Renner, 2014 ND 39, 842 N.W.2d 912, a case in which we interpreted an identical " step-down" provision. After reviewing this Court's decision in Bahr-Renner, the district court vacated its order granting Kemp's motion for summary judgment and scheduled the matter for trial. Following a bench trial, the district court applied the factors we adopted in Bahr-Renner and found that Koller was not a resident of Todd Anderson's household and concluded Nodak was only required to pay the " step-down" policy limits. Kemp appeals from the district court's declaratory judgment in favor of Nodak.

II

[¶9] This Court reviews declaratory judgments under the same standards as other judgments. Nationwide Mut. Ins. v. Lagodinski, 2004 ND 147, ¶ 7, 683 N.W.2d 903. Whether Koller was a resident of Todd Anderson's household at the time of his death is a question of fact. See Bahr-Renner, 2014 ND 39, ¶ 7, 842 N.W.2d 912. A finding of fact can be set aside on appeal only if it is " clearly erroneous," giving " due regard to the trial court's opportunity to judge the witnesses' credibility." N.D.R.Civ.P. 52(a)(6); see Knudson v. Kyllo, 2013 ND 102, ¶ 7, 831 N.W.2d 763. " 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." Bahr-Renner, 2014 ND 39, ¶ 7, 842 N.W.2d 912. " 'A district court's findings of fact are presumed to be correct, and we review the evidence in the light most favorable to the findings.'" Schmitt v. Schmitt, 2014 ND 225, ¶ 10, 857 N.W.2d 362 (quoting Paulson v. Paulson, 2011 ND 159, ¶ 6, 801 N.W.2d 746).

III

[¶10] Kemp argues the district court's finding that Koller was not a resident of Todd Anderson's household on the day of the accident is clearly erroneous.

[¶11] 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 a " 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." This Court interpreted the phrase " resident of your household" for purposes of an automobile insurance policy in Bahr-Renner stating:

We agree with the list of nonexclusive factors set forth by the West Virginia Supreme Court in Glen Falls Ins. Co. v. Smith, 217 W.Va. 213, 617 S.E.2d 760, 765 (2005), to consider in making the determination:
[I]n a homeowners' insurance policy [or an automobile insurance policy] that does not otherwise define the phrase " resident of your household," the phrase means a person who dwells--though not necessarily under a common roof--with other individuals who are named insureds in a manner and for a sufficient length of time so that they could be considered to be a family living together. The factors to be considered in determining whether that standard has been met include, but are not limited to, the ...

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