New Jersey Appellate Division Reverses Grant of Summary Judgment to Allstate in Declaratory Judgment Action to Determine Liability Coverage Under an Auto Insurance Policy

In Allstate New Jersey Property & Casualty Insurance Company v. Estate of Sean McBride, the Appellate Division of the Superior Court reversed the trial court’s decision that summary judgment be granted to Allstate in a case seeking a declaration that Allstate was not obligated to provide liability insurance coverage to the Estate of McBride for claims arising from a car accident. The trial court had determined that no genuine issues of material fact existed and held that no coverage was available for McBride under the Allstate policy. The Appellate Division disagreed and found that there were genuine issues of material fact regarding McBride’s possible dual residency that precluded summary judgment.

The background facts of this case are rather convoluted. McBride was driving a car owned and insured by his girlfriend, who he also lived with, when he lost control of the car and it struck a disabled vehicle. McBride and his girlfriend were both killed and the driver of the disabled vehicle suffered significant injuries. While McBride lived with his girlfriend, his step-father listed him as a driver under his auto policy with Allstate. Multiple tort actions were filed against the Estate and Allstate filed a declaratory judgment action to determine coverage. Allstate took the position that coverage was not owed because McBride was not a resident relative of the step-father’s house. The Estate argued that because McBride was listed as a driver on the declarations page of the policy, he had a reasonable expectation that he would be covered. The trial court held that it was undisputed that McBride was not a resident of his step-father’s home and had not resided there since 2013. He also found that it was undisputed that the step-father believed that McBride had been removed from his policy and thus had not expectation that McBride was insured under the policy.

The appellate court focused on two issues in making its ruling—residency and reasonable expectations. The court noted that New Jersey recognizes that a person may have more than one residence, but may not have more than once domicile and can be a resident of more than one household for the purposes of availability of insurance coverage. Looking at the facts, the court found that McBride had lived in at least four different residences over the five years preceding the accident and was welcome to return and live at his step-father’s house. McBride continued to receive mail there and his driver’s license, voter registration profile and child support/probation account listed his step-fathers residence as his address of record. Based on these facts, the court held that there was a genuine issue of material fact as to whether McBride maintained dual residency, which would entitle him to insurance coverage under the Allstate policy as a resident relative.

The Appellate Court also disagreed with the trial court’s finding that the step-father had no reasonable expectation that McBride would be covered under the policy. After examining the record, the court found that Allstate representatives testified that there was no record of a request being made to remove McBride from the policy. Moreover, the court found that the listing of McBride’s name as a driver on the declarations page, when looked at from the perspective of the typical automobile policy or intended beneficiary, could create a reasonable expectation of coverage. The court held that the doctrine of dual residency, reinforced by the reasonable expectation of the typical policyholder and intended beneficiary, created genuine issues of material fact and precluded summary judgment.

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