In Frownfelter v Esurance Prop and Casualty Ins Co, et al, Plaintiff Frownfelter was seven years old when her parents divorced. Pursuant to the judgement of divorce, Plaintiff’s parents were awarded joint physical custody such that Plaintiff was to reside 50% of the time with her mother, Stephanie Lawrence (“Lawrence”) and 50% of the time with her father, Corey Frownfelter (“Frownfelter”). In reality, Plaintiff spent 75% of her time with Lawrence and 25% with Frownfelter.
On January 7, 2020, Plaintiff spent the night at Frownfelter’s house. On January 8, 2020, Plaintiff was severely injured and required emergency back surgery as a result of a motor vehicle accident while she was a passenger in Frownfelter’s vehicle.
Frownfelter had no-fault insurance through a policy of insurance issued by Esurance, while Lawrence had no-fault insurance through Auto-Owners. Plaintiff filed a lawsuit for first-party benefits against Esurance, and Esurance filed a third-party complaint against Progressive, Farmers, and Auto-Owners seeking reimbursement. The Circuit Court determined that Plaintiff was domiciled with Frownfelter at the time of the motor vehicle accident, and that therefore, she was also a resident of Frownfelter’s household under the terms of Esurance’s policy such that an exclusion for reduced coverage limits in that policy applied.
The Court of Appeals majority upheld the Circuit Court’s rulings, focusing on the question of which parent had physical custody of Plaintiff at the time of the accident. The Court noted that the custody order awarded joint physical custody, and granted the parents an equal amount of tome to exercise parenting time while Plaintiff resided with them. As a result, this case fell squarely within the unique circumstances to which the Michigan Supreme Court decision in Grange Ins Co of Mich v Lawrence, 494 Mich 475 (2013) applied. Pursuant to Grange, Plaintiff’s domicile was with the parent who had physical custody as established by the custody order at the specific time of the incident at issue. Plaintiff was therefore domiciled with Frownfelter.
Regarding the language in the Esurance insurance contract, the Court noted that the policy defined “family member” and “household,” but did not define “resident.” Frownfelter’s application for insurance, however, contained a “Driver and Resident Information” section in which Frownfelter only listed himself and his son, not Plaintiff. The policy also contained an exclusionary provision which limited bodily injury claims for members of Frownfelter’s household. Thus, if Plaintiff was a “resident” of Frownfelter’s household, then her claim would be limited to $20,000.00, and if she was not she could be entitled to as much as $250,000.00. The Court relied upon its determination that Plaintiff was domiciled with Frownfelter, as well as the divorce agreement, to conclude that Plaintiff was a resident of Frownfelter’s household.
Judge Anica Letica concurred with the majority’s analysis and decision. Judge Letica wrote separately to address the issue of innocent misrepresentation and the potential for rescission based on Frownfelter’s failure to disclose Plaintiff as a resident of his household on the insurance application.
Judge Kristina Robinson Garrett partially concurred and partially dissented with the majority’s analysis and decision. Judge Garrett agreed Plaintiff was domiciled with Frownfelter at the time of the motor vehicle accident but disagreed that such a determination controlled the issue of “residence” under Esurance’s policy. Judge Garrett noted that contracts require mutuality of agreement and Esurance’s policy was based in part on Frownfelter’s misrepresentation regarding who resided in his household. Therefore, Plaintiff should not have been deemed a resident.
