Rigby v. Allstate Indemnity Co.

KRAUSER, C.J. This is an appeal from a declaratory judgment issued by the Circuit Court for Baltimore City, averring that a “personal umbrella policy” issued by appellee, Allstate Indemnity Company, to the owner of an automobile (the “policy holder”), did not include, as an “insured person” under that policy, an adult and unrelated member of the policy holder’s household. Thus, his negligent operation of the policy holder’s car that had resulted in injuries to appellants—Baltimore City police Officer Teresa Rigby, tow truck operator Herman E. Griffiths, and Ashley Sims—was not a “covered occurrence” under Alstate’s policy. Appellants disagree. Citing, among other things, his youth, the length of his residency, as well as his past and present economic reliance on and close personal relationship with the policy holder, appellants contend that the adult in question was a “dependent person” and in the care of the policy holder at the time of the accident at issue and was therefore an “insured person” as defined by the Alstate policy.

For the reasons that follow, we shall affirm the judgment of the circuit court. ¹⁰¹ I. In June 2011, Officer Rigby, together with tow truck operator Griffiths, were rendering assistance to Sims, the driver of a disabled automobile, parked on the shoulder of the road, when a vehicle driven by twenty-two-year-old Robert Vander-ford collided with Officer Rigby’s police cruiser. The impact of that collision caused the cruiser, in turn, to strike the officer and Griffiths as well as Sims’s car (in which Sims was then sitting), injuring all three individuals. At the time of the accident, Vanderford was driving an automobile owned by Lawrence Archembeault, with whom he was residing, and whose “umbrella” insurance policy with Allstate is the subject of this appeal. Ultimately, Officer Rigby, Sims, and Griffiths brought separate negligence actions in the Circuit Court for Baltimore City against Vanderford and Archembeault, which were subsequently consolidated for trial.

The discovery that ensued disclosed that, at the time of the accident, Archembeault (whom we shall hereafter refer to as the “policy holder”) maintained two separate insurance policies with Allstate: One was an automobile insurance policy that provided up to $500,000 of liability coverage; 1 the other was an “umbrella” policy that supplied up to $5,000,000 of coverage for negligence and, central to this appeal, defined an “insured person” to include “any dependent person in your care, if that person is a resident of your household.” Because the former policy’s coverage did not offer sufficient recompense for the injuries and economic damages appellants sustained, they turned to the latter policy for adequate redress, 2 claiming that Vander-ford qualified as an “insured person,” under that policy. ¹⁰² After securing a stay of the appellants’ consolidated negligence actions, Allstate filed a declaratory judgment action against the policy holder, appellants, and Vanderford, in the same court, seeking a determination of whether the policy holder’s umbrella policy provided coverage for Vanderford’s negligent act. The Baltimore City circuit court declared that it did not, explicating that, at the time of the accident, Vanderford was not a “dependent person” “in the care of’ the policy holder and thus did not fall within the policy definition of an “insured person.” Contesting that judgment, appellants noted this appeal.

II

At his deposition, Vanderford testified that, in June 2008, he was living in an apartment in Albany, New York, “working two jobs” and “taking care of a bunch of homeless kids.” After Vanderford was rendered homeless by a fire started by one of the adolescents, he rented an apartment from the policy holder and his domestic partner, Donald Vandermark (not to be confused with our errant driver, “Robert Vanderford”). Less than a month later, the nineteen-year-old Vanderford moved from Albany to the policy holder’s home in the Roland Park neighborhood of Baltimore City. And, for the next three years, between June 2008 and June 2011, Vanderford lived principally at that residence together with the policy holder, his domestic partner, and the policy holder’s mother, Gail Archembeault. But the continuity of that residency was periodically interrupted, when Vanderford decided to move out of the policy holder’s home, only to later move back in.

He did this on three separate occasions. When he was living in the policy holder’s home, Vanderford performed various domestic chores for the policy holder, such as cutting the lawn, raking leaves, and cleaning gutters, in exchange for room and board. He did not pay any rent for nearly two years. But, fourteen months before the accident at issue, in April 2010, he obtained full-time employment with Flextronics (a contractor for Verizon Wireless), as a telephone ¹⁰³ technician, earning $26,000 per year, and thereafter agreed to pay a rent of $600 per month.

After obtaining full-time employment, Vanderford also assumed responsibility for the payment of such personal expenses as the cost of his telephone, food, and clothing (which had previously been paid by the policy holder). And, while the policy holder allowed Vanderford to use his 1999 Saab automobile, the vehicle Vanderford was driving at the time of the accident, Vanderford paid for fuel for the vehicle. Although the policy holder later deponed that he acted as a “mentor” to Vanderford, appellants insist that the relationship was even closer than that, noting that, in a recorded statement made to an Allstate adjuster on the day of the accident, Vanderford described the policy holder as his “father” and that, during Vanderford’s criminal trial for traffic offenses arising out of the automobile accident at issue in this case, Vanderford’s counsel referred to the policy holder and his domestic partner as Vanderford’s “family.” While the semblance of a familial relationship may have existed, the policy holder never claimed Vanderford as a dependent on his tax return, never gave Vanderford any money, credit cards, or an “allowance,” nor paid for Vanderford’s medical care or designated him as a beneficiary of his health insurance policy. Moreover, the policy holder admitted that he did not exercise any control over Vanderford’s comings and goings.

In fact, Vanderford was, in the policy holder’s words, “free to leave at any time he cho[se]” and did move out on three separate occasions.

III

This appeal, as noted earlier, is from a declaratory judgment, issued by the circuit court. That court concluded that the term “dependent person” is not ambiguous and that Vanderford was not a “dependent person” as defined by the umbrella policy. It reasoned as follows: Even though Defendant Vanderford lived with and was admittedly like family to Defendant Archembeault, he was ¹⁰⁴ not dependent upon Archembeault to live. The facts indicate that Vanderford is a 24 year old man 7 who rents, a room in Archembeault’s home, has free reign of the house, and borrow[s] the car to commute to work, but if for some reason the relationship is terminated, Vanderford is able to live on his own.

Thus, it cannot be said that he is a dependent of Archembeault. Additionally, it is clear that Vanderford does not rely on Archembeault to provide the necessities of life. That is evidenced by his natural resourcefulness. Prior to meeting Archembeault and his partner, Vanderford was living in New York, working two jobs and taking care of homeless children____ Archembeault has no legal responsibility to care for Vanderford....

Once Vanderford became employed he ... provided for his own food [and] his own cell phone, and he purchased gas for the car whenever he used it.... [He] was not subject to discipline by Archembeault, who did not control his movement around the house. Vanderford was free to move out if he wanted to, and he did on two occasions, but was allowed to come back and live with Archembeault. Vanderford had the freedom to do as he pleased[.] ... Thus, Vanderford is not a “dependent person” pursuant to the insurance policy.

Appellants noted this appeal from that judgment, presenting the following issue for our review: Whether Vanderford was a “dependent person” and therefore an “insured,” under the umbrella policy, which defines “insured” to include “any dependent person” in the policy holder’s care, “if that person is a resident of’ the policy holder’s household.

IV

At the outset, it appears that the parties disagree as to the proper standard of review to be applied in this case. The source of the disagreement is the parties’ conflicting views as to the nature of the proceedings below. Appellants character ¹⁰⁵ ize those proceedings as akin to a hearing on a motion for summary judgment, while Allstate maintains that they were tantamount to a bench trial. Under the circumstances of this case, this amounts to a distinction without a difference, as the questions before us, regardless of which of the two proceedings occurred, are subject to the same standard of review by this Court, given that the parties below were not at odds as to any material fact relevant to their dispute.

In any event, the court did deny Allstate’s (renewed) motion for summary judgment before moving on to the merits of the matter, and, in so doing, held what amounted to a bench trial, though no live testimony was taken, and no facts were in dispute. See, e.g., Mundey v. Erie Insurance Group, 167 Md.App. 444, 448, 450-51 , 893 A.2d 645 (2006) (applying Md. Rule 8—131(c), rule applicable to appellate review of bench trials, to lower court proceeding, in which “[njeither party called live witnesses,” but, rather, “each proffered evidence from which the circuit court could have found” the underlying facts), ajfd, 396 Md. 656 , 914 A.2d 1167 (2007). As this is an appeal from the decision rendered after a bench trial, we “review the case on both the law and the evidence.” Md. Rule 8-131 (c). We “will not set aside the judgment of the trial court on the evidence unless clearly erroneous,” giving “due regard to the opportunity of the trial court to judge the credibility of the witnesses.” Id.

But, the clearly erroneous standard of Rule 8-131(c) “does not apply to a trial court’s determinations of legal questions or conclusions of law based upon findings of fact.” Elderkin v. Carroll, 403 Md. 343, 353 , 941 A.2d 1127 (2008) (quoting S. Mgmt. Corp. v. Kevin Willes Constr. Co., 382 Md. 524, 539 , 856 A.2d 626 (2004)). Those determinations are subject to de novo review.

Id. y. Turning next to the principles of contract interpretation that are relevant to this dispute, we note that an insurance policy, like any contract, must be construed “in its ¹⁰⁶ entirety,” and, “if reasonably possible,” we give effect “to each clause,” avoiding “an interpretation which casts out or disregards a meaningful part of the language of the writing unless no other course can be sensibly and reasonably followed.” Connors v. Gov’t Emp. Ins. Co., 442 Md. 466, 480 , 113 A.3d 595 (2015) (quoting Cochran v. Norkunas, 398 Md. 1, 17 , 919 A.2d 700 (2007)).

But, “in the event that an insurance policy contains ambiguous language,” the language of the policy is to be construed “liberally in favor of the insured and against the insurer as drafter of the instrument.” Id. at 482-83, 113 A.3d 595 (quoting Megonnell v. United Services Auto. Ass’n, 368 Md. 633, 655 , 796 A.2d 758 (2002)). And a “policy term is considered ‘ambiguous if, to a reasonably prudent person, the term is susceptible to more than one meaning.’ ” Id. at 482, 113 A.3d 595 (quoting Cole v. State Farm Mut. Ins.

Co., 359 Md. 298, 305-06 , 753 A.2d 533 (2000)). But, simply because “a term cannot be precisely defined so as to make clear its application in all varying factual situations does not mean that it is ambiguous.” Allstate Ins. Co. v. Humphrey, 246 Md. 492, 496 , 229 A.2d 70 (1967).

VI

The umbrella policy at issue provides in pertinent part: Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury, personal injury or property damage, subject to the terms, conditions and limits of this policy. Bodily injury, personal injury and property damage must arise from a covered occurrence. We will not pay any punitive or exemplary damages, fines and penalties. (Emphasis added.) The policy defines an “insured person” as: a) you, and any other person who is named on the Policy Declarations; b) any person related to you by blood, marriage or adoption who is a resident of your household; or ¹⁰⁷ c) any dependent person in your care, if that person is a resident of your household.

(Emphasis added.) Because the parties agree that subsections a and b are not applicable to the facts of this case but that subsection c is, we are left to ponder whether Vanderford was, under that subsection, a “dependent person” and “in the care of’ the policy holder at the time of the accident.

VII

Appellants contend that the terms “dependent person” and “in the care of’ are ambiguous because the umbrella policy does not define either term and because “dependent” and “care” are words that have “multiple meanings” or “multiple shades of meaning.” Those terms, they claim, should be interpreted in favor of appellants. Once that is done, we would have to conclude, they assert, that Vanderford, at the time of the accident, was “dependent” upon and “in the care of’ the policy holder, thereby rendering them entitled to recovery under his umbrella