Insureds in a Case Study

by Cole Humphreys in Homeowners Insurance at July 17, 2015

Grand Prairie insurance agents need to know about this case dealing with a home owners insurance policy. It is a 2000, case from the ACA labeled Easter v. Providence Lloyds Ins. Co. Relevant information:
Bonnie was having a hard time dealing with the emotional and behavioral problems her daughter MDE was exhibiting, and in 1995 she placed her in the care of Joseph and Grace Bossette, licensed foster parents. She was nine years old at the time. Easter intended the placement to be for six months.
Soon after her arrival in the Bossettes’ home, Joseph Bossette was sexually molesting her. After approximately five months, she reported the abuse to CPS. She was removed from the Bossettes’ home and returned to her mother. In 1996, Easter brought suit on her behalf against Joseph Bossette for an intentional tort for committing the abuse, and against Grace Bossette for negligence for not stopping or reporting the molestation. A judgment was rendered against the Bossettes for $300,000. Easter then brought the action against Providence Lloyds to enforce the judgment against their homeowners’ insurance carrier.
One of the appeal points in this case was whether M.D.E. was a “resident” of the Bossette household and therefore an “insured” not eligible for recovery under the policy.
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.
Under the their 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 under 21 and under the care of the Bossettes; 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.
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 profound. 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 convinced the court 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.
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.
It is uncontroverted that M.D.E. was living under the same roof as the Bossettes; thus, only the last two things–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. This court disagreed. Foster parents by nature stand in an intimate relationship of care and responsibility through 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.
The subjective 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. 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 many years. After 5 months of living in the Bossette’s home and being treated as a member of the family, this court believed that M.D.E. was a resident of the Bossette household.
Because M.D.E. lived in the Bossette home in a family-like environment for a period of at least five months, 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.

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