Arizona Court of Appeals Holds Brother Entitled to Underinsured Motorist Coverage as Resident of Older Brother's Household?

by Jaburg Wilk

In Mendota Insurance Company v. Gallegos, 232 Ariz. 126, 302 P.3d 651, 657 (2013), the Arizona Court of Appeals recently held a named insured's younger brother was a resident of his brother's household and therefore entitled to underinsured motorist ("UIM") coverage, despite the facts that Older Brother rented a room at friend's house and spent the majority of his time at his girlfriend's apartment.

The case arose from a September 17, 2009 accident.  Until nine months before the accident, Older Brother lived and "slept every single night" at the same house as his Younger Brother, step-father and mother ("Mother's Home").[1] In January 2009, Older Brother rented a room at a friend's home ("Friend's Home") for $300 per month and half the utility costs.  Older Brother moved his bed and some clothes to his Friend's Home, but maintained a room and kept personal belongings and furniture at his Mother's Home.  Although Older Brother had no specific timeline, Older Brother intended to move back to his Mother's Home.  Shortly after moving into his Friend's Home, Older Brother began to spend a significant amount of time at his girlfriend's apartment ("Girlfriend's Home").  Older Brother spent five nights a week at Girlfriend's Home, but his girlfriend did not consider him to live with her at the time of the accident because they had been dating less than a year and Older Brother did not pay any bills at the apartment.  During the months before the accident, Older Brother continued to pay rent to his friend and spend time at his Mother's Home.[2]

On September 8, 2009, the Insurer issued a policy that provided UIM coverage to Older Brother, as the named insured, and his "family member[s]."  The policy defined "family member" as "a person related to [the named insured] by blood, marriage or adoption who is a resident of [the named insured's] household."  The policy did not define the terms "resident" or "household."[3]

Younger Brother was injured in the September 17, 2009 accident while riding in a friend's car.  Younger Brother made a UIM claim under Older Brother's policy, the Insurer conducted an interview of Older Brother and the insurer filed a declaratory judgment action seeking a declaration that Younger Brother was not a resident of Older Brother's household.  After a bench trial, the trial court concluded the facts indicated Younger Brother was a "resident of [Older Brother's] household."[4]

The Insurer appealed.  The Court of Appeals stated the issue as, was Younger Brother a "resident of [Older Brother's] household" for the purpose of receiving UIM coverage under Older Brother's policy?[5] Mendota divided the analysis into a two-part inquiry:  (1) Where was Older Brother's household?  (2) Was Younger Brother a resident of Older Brother's household?[6]

Where Was Older Brother's Household?

The Court of Appeals rejected the Insurer's focus "solely on the physical presence aspect of a household" and the Insurer's argument that Older Brother did not maintain a household at his Mother's Home because his presence or time there was "sporadic, occasional and temporary."[7] The Court of Appeals noted that, while the term "resident" connotes place or geography, the term "household" connotes a social unit or domestic establishment.[8] Thus, the totality of the circumstances, rather than mere physical presence, must be taken into account to demonstrate the existence of a household.

Mendota declared "a household shares at least three attributes.  First, a household contemplates a close-knit group of individuals who treat each other like family, and deal with each other intimately and informally.  A household, thus, requires the existence of a family unit.  Second, a household contemplates a connection to a shared dwelling place where its members develop and maintain their close-knit, intimate, and informal relationships…  Third, a household contemplates a settled or permanent status; it requires a degree of permanency and intention to integrate into the family unit and remain a member for more than a mere transitory period."[9] Thus, "[d]etermining where an insured's household is…requires an objective evaluation of the totality of the relationships between or among the individuals, their connection to a shared dwelling where they have developed and maintained those relationships, and the permanency and integration of the individuals into a family unit."[10]

The Court of Appeals seemed to announce a shift away from a focus on a claimant's residence or physical presence and a new emphasis on a claimant's "household" or familial/social unit when analyzing "resident of the same household."[11] Nonetheless, Mendota stated the factors announced in previous "resident of household" cases are "instructive and provide guidance in determining an insured's household."[12] Those factors include:

  • whether the individuals lived under the same roof,
  • the nature and formality of their relationship,
  • the intended duration of their relationship,
  • their presence or absence on the date of the incident giving rise to the insurance claim,
  • the reasons or circumstances explaining their presence or absence,
  • prior living arrangements,
  • their intent regarding their living arrangements, and
  • the existence of a second place of lodging.[13]

Additionally, the Court of Appeals suggested that a court should consider the following factors when determining whether the intimate and familial relationships necessary to form a "household" exist:


  • the extent and quality of the individuals' shared experiences,
  • the level of emotional and financial commitment,
  • the "particulars of their day-to-day" interactions,
  • how they relate to each other and conduct themselves, and
  • the reliance they place on each other for family services.[14]

Applying the above principles and factors, Mendota held the trial court properly considered the totality of the circumstances and substantial evidence supported its conclusion that Older Brother's household was at his Mother's Home.[15] Although Older Brother lived in three different places and spent most of his time with his girlfriend, Older Brother:

  • maintained his familial ties with Younger Brother and his mother at his Mother's Home;
  • considered his Mother's Home, rather than his Friend's Home or Girlfriend's Home, "his home";
  • had lived at his Mother's Home continuously for four years before January 2009, when he first moved out on his own;
  • listed his Mother's Home on his driver's license;
  • listed his Mother's Home on his insurance application;
  • received his mail at his Mother's Home;
  • could be "kicked out" of his Friend's Home or his Girlfriend's Home at any time because he did not sign a lease; and
  • visited his Mother's Home three out of four weekends, during which brought his girlfriend, did laundry and both had meals and interacted with his Younger Brother and Mother.[16]

Younger Brother also testified that he saw Older Brother often, at least a few time a week and they did things together "all the time."[17]

The Court of Appeals observed, compared to his Friend's Home, where he was "just a roommate," or his Girlfriend's Home, where he was "an invited guest who had not officially moved in," Older Brother "shared the most lasting and enduring relationships" with Younger Brother and his Mother at his Mother's Home.[18] Additionally, although Older Brother spent more time at his Girlfriend's Home and his Friend's Home than he did at his Mother's Home, he "continued to function as part of a domestic unit comprised of" Younger Brother and Mother and, with them, "maintained the intimate familial relationships of a household."[19] In conclusion of analyzing the location of Older Brother's "household," the Court of Appeals stated that, although Older Brother moved out, Older Brother "maintained close, intimate, and familial relationships" with Younger Brother and Mother at his Mother's Home and consequently "maintained a household with them."[20]

Whether Younger Brother Was a Resident of Older Brother's Household?

Mendota rejected the Insurer's arguments that Younger Brother was not a resident of Older Brother's household because Older Brother did not have a "special relationship" with Younger Brother and Older Brother did not act as the head of a household to Younger Brother.[21] The Court of Appeals noted that the first set of factors above governs whether a person is a resident of a named insured's household, but "no one factor is controlling"; rather, all "must combine to a greater or lesser degree."[22]

Mendota held the trial court did not abuse its discretion in finding Younger Brother was a resident of Older Brother's household.[23] At all pertinent times, Younger Brother lived at his Mother's Home, where the Court of Appeals concluded that Older Brother "maintained his household."[24] Younger Brother's presence at their Mother's Home was "permanent, consistent and regular; he lived nowhere else and had no intention of living anywhere else."[25] And, the brothers still had an "intimate, informal relationship" on an ongoing basis.  Indeed, they saw each other a few times a week, socialized where Older Brother maintained his household, had dinner together, watched TV and movies and talked.

Public Policy

The Court of Appeals also rejected the Insurer's public policy argument.  The Insurer argued that public policy considerations precluded coverage for Younger Brother because Older Brother allegedly failed to disclose Younger Brother as a resident of his household and the Insurer therefore did not contemplate coverage for Younger Brother.  Initially, the Court of Appeals noted the evidence regarding the alleged lack of disclosure conflicted.  Next, Mendota observed the policy "did not do a very good job of capturing the real world, in which young adults maintain their anchor with their family home as they transition from being primarily at home to starting to strike out on their own with little steps at a time."[26] The Court of Appeals observed that the Insurer could have drafted its policy to take into account this transitional process, the policy could have defined the terms "household" or "resident," and it could have required its brokers to more thoroughly explore an applicant's household, especially when applicants have non-traditional or complicated living arrangements.[27]

Mendota Analysis & Conclusion

Mendota's analysis and holding indicates that Arizona has shifted the focus of its "resident of household" analysis away from the named insured's "residence," mere physical presence or location; the analysis must focus more on the named insured's "household," a domestic or social unit; and the analysis must consider the totality of the circumstances.  Whether a claimant is a "resident of the named insured's household" is already a difficult fact question.  Mendota will make it even more difficult for an Insurer in Arizona to determine whether a claimant is, in fact, a resident of the named insured's household and entitled to UIM coverage, especially in today's modern, more complicated and non-traditional family living arrangements.

This article is not intended to provide legal advice and only relates to Arizona law. It does not consider the scope of laws in states other than Arizona. Always consult an attorney for legal advice for your particular situation.

[1] See Mendota, 302 P.3d at 653.

[2] Id.

[3] Id.

[4] Id.

[5] Id. at 654.

[6] Mendota noted that "Arizona courts have consistently viewed a person's membership or residency in a household as involving a factual inquiry." Mendota, 302 P.3d at 654 (citing Mid-Century Ins. Co. v. Duzykowski, 131 Ariz. 428, 430, 641 P.2d 1272, 1274 (1982) (whether child was "resident of the same household" for coverage inclusion was question of fact); State Farm Mut. Auto. Ins. Co. v. Novak, 167 Ariz. 363, 369, 807 P.2d 531, 537 (App.1990) (whether child "lived with" parents for coverage inclusion was question of fact); Heard v. Farmers Ins. Exch. Co., 17 Ariz.App. 193, 195, 496 P.2d 619, 621 (1972) (whether child was resident of step-father's household for coverage exclusion was factual determination)).

[7] See Mendota, 302 P.3d at 654.

[8] Id. The Court of Appeals also observed that, when construing identical or similar insurance policy provisions, it defined the term "household" as "those who dwell under the same roof and compose a family"; "a domestic establishment" and "a social unit comprised of those living together in the same dwelling place"; "a collection of persons as a single group, with one head, living together, a unit of permanent and domestic character, under one roof." Id. at 654-55 (citing State Farm Mut. Auto. Ins. Co. v. Johnson, 151 Ariz. 591, 593, 729 P.2d 945, 947 (App.1986); Nationwide Mut. Ins. Co. v. Granillo, 117 Ariz. 389, 392-93, 573 P.2d 80, 83-84 (App. 1977).

[9] Mendota, 302 P.3d at 655 (internal citations omitted).  The Court of Appeals offered the following three examples of these applied principles.  First, a wife does not become a member of parents' household because she lived with them temporarily while relocating to a different town. Id. (citing Nationwide Mut. Ins. Co. v. Granillo, 117 Ariz. 389, 393, 573 P.2d 80, 84 (App. 1977).  Second, a child who stayed temporarily with grandparents due to father's injury, unemployment and small apartment was not resident of grandparents' household. See Mendota, 302 P.3d at 655 (citing Farmers Ins. Co. of Ariz. v. Oliver, 154 Ariz. 174, 178-80, 741 P.2d 307, 311-13 (App.1987)).  Third, individuals who "reside together as roommates" do not constitute a household. See Mendota, 302 P.3d at 655 (citing Shivers v. Am. Family Ins. Co., 256 Neb. 159, 589 N.W.2d 129, 136 (1999)).

[10] Mendota, 302 P.3d at 655.

[11] Id. ("Although…Arizona courts have described a household in discussing the meaning of the phrase 'resident of the same household,' they have focused on the claimant's residence, not on the named insured's household, and therefore, those cases are not directly on point.").

[12] Id.

[13] Id.

[14] Id.


[15] Id. at 656.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Id. at 657.

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Id.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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