Bonnie Easter as Next Friend of M. D. E. v. Providence Lloyds Insurance Company

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-99-00426-CV Bonnie Easter as next friend of M. D. E., Appellant v. Providence Lloyds Insurance Company, Appellee FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT NO. 97-09409, HONORABLE F. SCOTT McCOWN, JUDGE PRESIDING Appellant, Bonnie Easter as next friend of M.D.E., sued M.D.E.'s foster parents, Joseph and Grace Bossette, for injuries M.D.E. sustained while in the Bossette home. Easter obtained a default judgment against the Bossettes, then sued appellee, Providence Lloyds Insurance Company, the Bossettes' homeowners' insurer. The district court granted Providence Lloyds' motion for summary judgment. On appeal, Easter contends the trial court erred in granting Providence Lloyds' motion. Because we conclude that M.D.E. was a "resident" of the Bossette household and therefore an "insured" precluded from recovering under the Bossettes' homeowners' policy, we will affirm the district court's judgment. In addition, we deny Providence Lloyds' motion for frivolous appeal damages under Texas Rule of Appellate Procedure 45. FACTUAL AND PROCEDURAL BACKGROUND Bonnie Easter was having a difficult time dealing with the emotional and behavioral problems her daughter M.D.E. was exhibiting, and in February 1995 she placed M.D.E. in the care of Joseph and Grace Bossette, licensed foster parents. M.D.E. was nine years old at the time. Easter intended the placement to be for no more than six months. Soon after M.D.E.'s arrival in the Bossettes' home, Joseph Bossette began sexually molesting her. After approximately five months, M.D.E. reported the abuse to Child Protective Services. She was removed from the Bossettes' home and returned to her mother. In February 1996, Easter brought suit on M.D.E.'s behalf against Joseph Bossette for an intentional tort for committing the abuse, and against Grace Bossette for negligence for failing to stop or report the molestation. A default judgment was rendered against the Bossettes for $300,000. Easter then brought the present action against Providence Lloyds to enforce the judgment against the Bossettes' homeowners' insurance carrier. On appeal, Easter contends the district court erred in granting summary judgment for Providence Lloyds because genuine issues of material fact exist as to: (1) whether foster parenting is a "business pursuit" for purposes of an exclusionary clause in the Bossettes' homeowners' policy; (2) whether Grace Bossette's negligence was an activity "ordinarily incidental to a non-business pursuit" and thus excepted from the exclusion; (3) whether M.D.E. was a "resident" of the Bossette household and therefore an "insured" not eligible for recovery under the policy; and (4) whether Providence Lloyds was prejudiced by the Bossettes' alleged failure to cooperate in the defense of the underlying lawsuit. Additionally, Easter contends that the district court erred because as a matter of law: (1) the term "resident" in the insurance contract is vague and raises an issue of material fact; and (2) Grace Bossette acted negligently, not intentionally; thus, her acts were not excluded under the policy. DISCUSSION In her third issue on appeal, Easter contends that M.D.E. was not a "resident" of the Bossettes' household. If M.D.E. is deemed a resident, she is an "insured" under the policy; the policy excludes coverage for "bodily injuries sustained by an insured." The standard for reviewing a trial court's grant of a motion for summary judgment is well established: (1) the movant for summary judgment has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. See Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The function of summary judgment is not to deprive litigants of the right to trial by jury, but to eliminate patently unmeritorious claims and defenses. See Swilley v. Hughes, 488 S.W.2d 64, 68 (Tex. 1972). Under the Bossettes' contract for homeowners' insurance, personal liability coverage does not apply to injuries to "insureds." "Insureds" are defined as: "you and residents of your household who are: a) your relatives; or b) other persons under the age of 21 and under the care of [Joseph or Grace Bossette]." M.D.E. was undisputedly under 21 and under the care of the Bossettes; therefore, the pivotal question is whether M.D.E. was a "resident" of the Bossette household. In general, Texas cases determining residency have relied on the child's relationship to the household, the nature of the child's stay in the home, and the intent of the parties. In Hartford Casualty Insurance Co. v. Phillips, 575 S.W.2d 62 (Tex. Civ. App.--Texarkana 1978, no writ), a fourteen-year old boy left some clothes at his mother's home and visited her regularly. Id. at 63. Even though his mother had been awarded legal custody, the boy lived primarily with his father. See id. Nonetheless, he was held to be a resident of his mother's home for insurance purposes. See id. In Travelers Indemnity Company v. Mattox, 345 S.W.2d 290 (Tex. Civ. App.--Texarkana 1961, writ ref'd n.r.e.), the court upheld a jury finding that a minor son living temporarily away from his father was a resident of his father's home under an auto insurance policy. Id. at 292. Most of the son's personal belongings were still at his father's home, and he intended to return there to live. See id. at 291. In each of these cases, the child had a blood relationship with others in the household despite having an insignificant presence in the home. Although the children did not regularly live in the household, attend school from there, or even regularly eat meals there, the combination of their relationship to the household and the intent of the parties to continue that relationship was enough to establish residency. M.D.E. presents a different scenario. A foster parent/child relationship is not as close or as permanent as a normal parent/child relationship; however, M.D.E.'s presence in the Bossettes' home was much more profound than the presence of the children in either Phillips or Mattox. It is undisputed that, for a period of at least five months, M.D.E. lived in the Bossette home, ate her meals there, and shared a bedroom with other foster children over whom the Bossettes had day-to-day authority and responsibility. Her relationship to the household and the nature of her stay convince us that M.D.E. was a resident of the Bossettes' home during her five-month stay there. Easter argues that M.D.E. was still a resident of her mother's home and therefore could not also be a resident in the Bossettes' home. She cites several cases that indicate that one can be a member of a household even if temporarily absent, asserting "[t]he real test is whether the absence of the party of interest from the household of the alleged insured is intended to be permanent or only temporary--i.e., whether there is physical absence coupled with an intent not to return." Southern Farm Bureau Cas. Ins. Co. v. Kimball, 552 S.W.2d 207, 208 (Tex. Civ. App.--Waco 1977, writ ref'd n.r.e.). Although M.D.E. was physically absent from her mother's home, there is evidence to show that the absence was only temporary and that she would return after her mother "got back on her feet." Based on these facts, one could conclude that M.D.E. was a resident of her mother's household even as she was living with the Bossettes. This does not, however, preclude her from being a resident of the Bossette household at the same time. See Hartford, 575 S.W.2d at 63. (1) The Hartford court stated a person could have more than one residence, especially when that person is a minor. See id. We agree. Therefore, even assuming M.D.E. was still a resident in her mother's home, this does not foreclose the possibility that she was also a resident of the Bossette household. As stated above, we are satisfied that where, as here, a child lives in a foster family home for a period of five months, the child is, as a matter of law, a resident of that household. Whether a foster placement establishes residency for insurance purposes is a question of first impression in Texas. Accordingly, Easter urges us to look at how other jurisdictions have resolved the same issue. Easter argues that under the residency test used in several other jurisdictions, M.D.E. would not be considered a resident of the Bossette household for insurance purposes. See Pamperin v. Milwaukee Mut. Ins. Co., 197 N.W.2d 783, 787 (Wis. 1972). In Pamperin, the Wisconsin Supreme Court held the child is a resident of a home where the parties are (1) living under the same roof; (2) in a close, intimate, and informal relationship; and (3) where the intended duration is likely to be substantial, where it is consistent with the informality of the relationship, and where it is reasonable to conclude that the parties would consider the relationship "in contracting about such matters as insurance or in their conduct in reliance thereon." Id. at 788-89. These factors are to be considered as a whole, with no one factor predominating. See id. at 789. (2) We find it unnecessary to adopt Pamperin in the present case but briefly note that close analysis of the Pamperin test and accompanying case law shows that, even under the Pamperin analysis, M.D.E. would be considered a resident of the Bossette household. It is uncontroverted that M.D.E. was living under the same roof as the Bossettes; thus, only the last two factors--intimacy of the relationship and duration of stay--are disputed. Easter asserts that M.D.E. was not in a "close, intimate and informal relationship" because the Bossettes abused and threatened her. We disagree. Foster parents by nature stand in an intimate relationship of care and responsibility vis-à-vis foster children, irrespective of the quality of the care actually provided by an individual foster family. Easter's logic would mean that no child could be a resident of a household where she was abused, clearly an unreasonable result. Regarding the third factor, the Pamperin court noted: "[T]he subjective or declared intent . . . while a fact to be considered, is not controlling, but the intended duration oftentimes must be determined only after a thorough examination of all the relevant facts and circumstances surrounding the relationship." Id. at 788. In other words, merely placing the label "temporary" on a stay that would otherwise be considered substantial does not change the fundamental nature of the relationship. While all foster family relationships are necessarily temporary, some are "temporary" for several years. After five months of living in the Bossette's home and being treated as a member of the family, we believe that M.D.E. was a resident of the Bossette household. (3) We recognize that the result in this case seems harsh, foreclosing an avenue for recovery to a foster child who was sexually molested in the very home that was to provide her a stable and nurturing environment; we believe, however, that it will generally be in the best interest of both foster children and foster families to deem foster children insured under the foster parents' homeowners insurance policies. Otherwise, foster parents would be subject to suit for any number of potentially negligent acts. As a result of this heightened risk, their insurance premiums would increase. The number of individuals and families willing and able to open their homes to provide respite to children in need is already insufficient to meet current demands. Further, foster children will themselves generally benefit by being insured, having coverage that might not be available otherwise. CONCLUSION Because M.D.E. lived in the Bossette home in a family-like environment for a period of at least five months, we hold that, as a matter of law, M.D.E. was a resident of the Bossette household. She is therefore an insured under the policy and is precluded from recovering for the injuries she sustained in the Bossettes' home. Because Providence Lloyds has shown that it is entitled to judgment as a matter of law, we need not address Easter's other issues on appeal. We affirm the trial court's grant of summary judgment. Regarding Providence Lloyd's motion for frivolous-appeal damages, we conclude that Easter had a reasonable expectation of reversal and there has been no showing that she pursued this appeal in bad faith. See In re Long, 946 S.W.2d 97, 99 (Tex. App.--San Antonio 1997, no writ). Providence Lloyd's motion for damages under Texas Rule of Appellate Procedure 45 is denied. J. Woodfin Jones, Justice Before Justices Jones, Kidd and Patterson Affirmed Filed: March 9, 2000 Publish 1. Providence Lloyds asserts M.D.E. was actually with the Bossettes for a span of seven to eight months. The record is inconclusive on the actual length of M.D.E.'s stay with the Bossettes. Giving the non-movant every positive inference, we defer to Easter's evidence that M.D.E. stayed in the Bossettes' home for five months of an intended six-month stay. 2. Other jurisdictions have also adopted Wisconsin's Pamperin test. See Blanchard v. Peerless Ins. Co., 958 F.2d 483, 489 (1st Cir. 1992); Nationwide Mut. Ins. Co. v. Budd-Baldwin, 947 F.2d 1098, 1102 (3d Cir. 1991); State Farm Fire & Cas. v. Vaughn, 803 F.Supp. 1446, 1450 (S.D. Ind. 1992); Dartez v. Atlas Assur. Co., 721 So.2d 109, 112 (La. Ct. App. 1998); Donegal Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 546 A.2d 1212, 1216 (Pa. Super. Ct. 1988); Allstate Ins. Co. v. Tomaszewski, 447 N.W.2d 849, 851 (Mich. Ct. App. 1989). 3. Applying the Pamperin factors to a foster child situation very similar to the present case, the Wisconsin Court of Appeals found a child to be a resident of a foster home as a matter of law. See Waite v. Travelers Ins. Co., 331 N.W.2d 643, 645 (Wis. App. 1983). The court also held that a foster family is a "close, intimate and informal" relationship by design and thus easily meets the second factor of the Pamperin test. after a thorough examination of all the relevant facts and circumstances surrounding the relationship." Id. at 788. In other words, merely placing the label "temporary" on a stay that would otherwise be considered substantial does not change the fundamental nature of the relationship. While all foster family relationships are necessarily temporary, some are "temporary" for several years. After five months of living in the Bossette's home and being treated as a member of the family, we believe that M.D.E. was a resident of the Bossette household. (3) We recognize that the result in this case seems harsh, foreclosing an avenue for recovery to a foster child who was sexually molested in the very home that was to provide her a stable and nurturing environment; we believe, however, that it will generally be in the best interest of both foster children and foster families to deem foster children insured under the