From Baby-Sitting to Child Custody: When Is a Person 'In Your Care' for Purposes of Homeowner's Coverage?

Courts holding that “in your care” is ambiguous conclude that the phrase is open to multiple, reasonable meanings. In Western Protectors Ins. Co. v. Shaffer et al., minor children brought suit against the named insured for damages arising from a sexual assault. 624 F. Supp. 2d 1292 (W.D. Wash. 2009). The named insured, who was the minor children's grandmother, was baby-sitting the children at the time of the assault. Western Protectors denied coverage for the children's damages based on an exclusion for personal injury to an “insured,” defined to include a person under the age of 21 in the named insured's “care.” Not surprisingly, Western Protectors reasoned the children were in their grandmother's “care” at the time of the loss.

Finding that “in your care” was ambiguous as an undefined policy term, the court reasoned that the average insurance purchaser could equally understand that phrase to refer to a casual relationship, such as baby-sitting, or a relationship that required a more direct custodial role:

Plaintiff [Western Protectors] argues that [the children] were “insureds” under the Policies ' The Underlying Complaint describes [the insured's] relationship with [the children] as “grandmother/babysitter.” ' Because [the insured] was either the minors' grandmother or babysitter at all material times, Plaintiff concludes that the minors were in the care of [the grandmother] and should be considered insureds under the contract ' The Court does not agree with Plaintiff's broad interpretation of this provision.

Even if the Court did agree with Plaintiff's proposed interpretation, it would create an ambiguity in the insurance contract. An average insurance purchaser could reasonably interpret the “in your care” provision to include situations where the insured claims the child as a dependent, exercises a general supervisory or custodial role over the child, or having a legal responsibility for the child as a noncustodial parent or foster parent. Expanding the spectrum of “in your care” to informal “babysitting,” even by a relative, would at least create a different but reasonable interpretation of this specific provision. (Citations omitted.)

Accordingly, the court read “in your care” against Western Protectors and in favor of finding that the children were not insureds for purposes of the bodily injury exclusion. Other courts have reached the same holding, reasoning that “care” is equally subject to a broad or narrow meaning and must be read in favor of the insured and coverage. See e.g., Oregon Mut. Ins. Co. v. Clemens et al., 861 P.2d 372, 375 (Ore. App. 1993) (reasoning that “in your care” is ambiguous because it can “reasonably be given a broader or narrower meaning, depending upon the intention of the parties in the context in which such words are used by them.” The court interpreted the phrase as an “ordinary purchaser of insurance” would understand it to mean “supervision, management, responsibility for or attention to safety and well-being.”

Other courts have held that the phrase “in your care” is made ambiguous by the modifying language around it. In Comisford et al. v. Erie Ins. Property Casualty Co., the insureds sought coverage under a homeowner's policy issued by Erie for damages arising from the death of their granddaughter during a fire. 2011 Ohio 1373 (Ohio App. 2011). Erie denied coverage for the child's death under an exclusion for bodily injury to an insured, defined to include a person under the age of 21 in the named insured's “care.” Erie reasoned that the granddaughter, who was five years old at the time of her death, was in her grandparents' care because she regularly resided at the insured premises. Discovery revealed that the child's biological parents had relinquished temporary custody of the child to the insureds prior to the fire, but the child was only visiting her grandparents at the time of the loss.

Stopping short of holding that “in your care” was ambiguous, the Ohio appellate court reasoned that the phrase became ambiguous because of the exclusion's modifying phrases:

We find the language of the Policy Exclusion to be ambiguous. In relevant part, the Policy Exclusion applies “to you and if residents of your household, your relatives, and persons under the age of 21 in your care or in the care of your resident relatives.” ' Here, one could reasonably conclude that, for the Policy Exclusion to apply, only “your relatives” need also be “residents of your household.” Under this interpretation, the clause “if residents of your household” applies only to “your relatives” and has no bearing on “persons under the age of 21 in your care[.]” Although this is a reasonable interpretation, one could just as reasonably conclude that the clause “ if residents of your household” applies to both categories in the subsequent list ' that is, it applies to both “your relatives” and to “persons under the age of 21 in your care or in the care of your resident relatives.” ' Because we believe that both interpretations of the Policy Exclusion are reasonable, we find that the Policy Exclusion is ambiguous.

Finding that any ambiguity must be read in favor of coverage, the appellate court held that the exclusion would only apply if the child was both in the insured's care and was a resident of the insured's household at the time of the fire. The court previously opined that the child could not have been a resident of her grandparent's home when the fire occurred because she had returned to the physical custody of her parents. Erie was therefore obligated to indemnify the insureds for damages associated with their granddaughter's death.

Interpret Using Plain and Ordinary Meaning in Accordance with Specific Facts

In contrast to Western Protectors and Comisford, a handful of other courts have held that “in your care” is unambiguous, despite the availability of multiple dictionary definitions. In American Family Mut. Ins. Co. v. Wemhoff, 972 S.W.2d 402 (Mo. App. 1998), the insured father sought coverage for bodily injury to his minor child. The child was spending the night at her father's home at the time of the loss pursuant to a court ordered visitation schedule. American Family denied coverage based on an exclusion for bodily injury to an “insured,” defined to include any person under 21 “in the care” of the policyholder. The insured argued that “in your care” was ambiguous and should be read in his favor because it was open to many different meanings, several of which could be found in standard dictionaries.

Unpersuaded by this reasoning, and agreeing with American Family, the court refused to find an ambiguity in the first instance simply because “in your care” could be defined in multiple ways. On the contrary, the court reasoned that coverage was excluded because the facts of this case fell within one of those reasonable interpretations:

The respondent claims that “care” as used in both policies is not ambiguous when interpreted in the overall context of the policies with respect to [the child]. We agree. In construing an insurance policy, we need not apply every possible definition given in the dictionary for the disputed term. Rather, we simply must give the term its “plain meaning, consistent with the reasonable expectations, objectives and intent of the parties.” While the term “care” is a word of variable meaning, it can “usually be interpreted in the context” of its use. Furthermore, “the policy must be reasonably construed in light of the specific situation with which the parties are dealing.” (Citations omitted.)

The court therefore held, relying on a definition of “care” that included “charge, protection, and custody,” that the insured's child was in his care for purposes of the exclusion because she was within his custody at the time of the loss. See also Horace Mann Ins. v. Stark et al., 987 F.Supp.562 (W.D. Mich. 1997) (reasoning, without holding, that “in your care” was unambiguous when applied to facts of the case. The court noted that the child was not in her grandfather's care when the grandfather did not exercise any supervisory control over her).

A Multi-Factor Test

As an extension of decisions like Wemhoff and Stark, other courts have held that “in your care” is unambiguous and have relied on a multi-factor test to define that phrase. For example, in Cierzan, et al. v. Kriegel, et al., the named insured's granddaughter caused a fire at the insured premises, injuring the granddaughter's friend who was visiting. 259 Wis. 2d 264 (Wis. Ct. App. 2002). Discovery revealed that the granddaughter, along with her other siblings, often visited and routinely stayed the night with her elderly grandmother at the insured premises to assist the latter with daily tasks. The granddaughter lived with her parents in a separate residence when she was not visiting her grandmother, and the grandmother did not consider her granddaughter as living with her. The granddaughter sought coverage under a homeowner's policy issued by Pella Mutual Insurance on the grounds that she was an insured because she was in her grandmother's “care” at the time of the fire.

Consistent with Wemhoff and Stark, the Wisconsin appellate court disagreed with the blanket proposition that “in your care” was ambiguous because it was subject to more than one dictionary definition, reasoning that a word is not ambiguous if “only one meaning applies in the context and comports with the parties' objectively reasonable expectations.” In contrast to Wemhoff and Stark, however, the appellate court did not apply the most appropriate definition to the facts at issue, but rather separately evaluated eight factors to determine whether, as a matter of law, the granddaughter was in her grandmother's care. The following “common sense” factors were considered:

(1) whether the insured has a legal responsibility to care for the person; (2) whether the person has some form of dependency on the insured; (3) whether the insured has a supervisory or disciplinary responsibility for the person; (4) whether the insured is providing substantial and essential financial support for the person; (5) if the person is living with the insured, then whether the arrangement is temporary or permanent, the length of time the arrangement has existed, and whether and how long the arrangement is expected to continue; (6) the age of the person allegedly in the insured's care (because the younger the person is, the more likely it is he or she is in the insured's care); (7) the person's physical or mental health status (because a person with health problems is more likely to be in the insured's care); and (8) whether the person allegedly in the insured's care is gainfully employed (because someone so employed is less likely to be dependant [sic] on the insured).

Based on an evaluation of these factors, the court reasoned that an insufficient number of factors supported the conclusion that the granddaughter was in her grandmother's care at the time of the loss. The factors supported, instead, a finding that the granddaughter was an aide to her grandmother, but was not sufficiently dependent on the same to qualify as being “in her care.” See also Henderson v. State Farm Fire & Cas. Co., 596 N.W.2d 190 (Mich. 1994) (applying same eight-factor test).

Conclusion

Manuscript homeowners' policies often do not define “in your care” as that phrase is used in the “insured” definition. In the absence of a definition, courts have divided over whether the phrase is ambiguous and should be read in favor of the insured and coverage, or according to its plain meaning as applied to the specific facts at issue. Notably, many jurisdictions have yet to interpret “in your care,” leaving this issue wide open in many states. Insurers should be aware of these varying interpretations because they can have significant consequences for who is an “insured” and whether certain bodily injury exclusions may apply.

Samantha Evans is an associate in Cozen O'Connor's Global Insurance Group in the Philadelphia office.

The phrase “in your care” traditionally appears in the definition of an “insured” included in a homeowner's policy. “Insured” is often defined to include the named insured and, among others, persons who are under the age of 21 and “in the care” of the named insured. A homeowner's policy generally does not define “in your care” or “care,” leaving the phrase open to varying interpretations.

Although few jurisdictions have interpreted “in your care,” those few cases which have addressed that point vary significantly. Several courts have held that “in your care” is ambiguous and should be read in favor of the insured and coverage, while other courts reason that “care” is unambiguous when applied to a particular set of facts. Still other courts apply a multi-factor test to determine, as a matter of law, whether an individual is in the insured's “care.”

An Ambiguous Phrase Subject to Multiple Reasonable Interpretations

Courts holding that “in your care” is ambiguous conclude that the phrase is open to multiple, reasonable meanings. In Western Protectors Ins. Co. v. Shaffer et al., minor children brought suit against the named insured for damages arising from a sexual assault. 624 F. Supp. 2d 1292 (W.D. Wash. 2009). The named insured, who was the minor children's grandmother, was baby-sitting the children at the time of the assault. Western Protectors denied coverage for the children's damages based on an exclusion for personal injury to an “insured,” defined to include a person under the age of 21 in the named insured's “care.” Not surprisingly, Western Protectors reasoned the children were in their grandmother's “care” at the time of the loss.

Finding that “in your care” was ambiguous as an undefined policy term, the court reasoned that the average insurance purchaser could equally understand that phrase to refer to a casual relationship, such as baby-sitting, or a relationship that required a more direct custodial role:

Plaintiff [Western Protectors] argues that [the children] were “insureds” under the Policies ' The Underlying Complaint describes [the insured's] relationship with [the children] as “grandmother/babysitter.” ' Because [the insured] was either the minors' grandmother or babysitter at all material times, Plaintiff concludes that the minors were in the care of [the grandmother] and should be considered insureds under the contract ' The Court does not agree with Plaintiff's broad interpretation of this provision.

Even if the Court did agree with Plaintiff's proposed interpretation, it would create an ambiguity in the insurance contract. An average insurance purchaser could reasonably interpret the “in your care” provision to include situations where the insured claims the child as a dependent, exercises a general supervisory or custodial role over the child, or having a legal responsibility for the child as a noncustodial parent or foster parent. Expanding the spectrum of “in your care” to informal “babysitting,” even by a relative, would at least create a different but reasonable interpretation of this specific provision. (Citations omitted.)

Accordingly, the court read “in your care” against Western Protectors and in favor of finding that the children were not insureds for purposes of the bodily injury exclusion. Other courts have reached the same holding, reasoning that “care” is equally subject to a broad or narrow meaning and must be read in favor of the insured and coverage. See e.g., Oregon Mut. Ins. Co. v. Clemens et al., 861 P.2d 372, 375 (Ore. App. 1993) (reasoning that “in your care” is ambiguous because it can “reasonably be given a broader or narrower meaning, depending upon the intention of the parties in the context in which such words are used by them.” The court interpreted the phrase as an “ordinary purchaser of insurance” would understand it to mean “supervision, management, responsibility for or attention to safety and well-being.”

Other courts have held that the phrase “in your care” is made ambiguous by the modifying language around it. In Comisford et al. v. Erie Ins. Property Casualty Co., the insureds sought coverage under a homeowner's policy issued by Erie for damages arising from the death of their granddaughter during a fire. 2011 Ohio 1373 (Ohio App. 2011). Erie denied coverage for the child's death under an exclusion for bodily injury to an insured, defined to include a person under the age of 21 in the named insured's “care.” Erie reasoned that the granddaughter, who was five years old at the time of her death, was in her grandparents' care because she regularly resided at the insured premises. Discovery revealed that the child's biological parents had relinquished temporary custody of the child to the insureds prior to the fire, but the child was only visiting her grandparents at the time of the loss.

Stopping short of holding that “in your care” was ambiguous, the Ohio appellate court reasoned that the phrase became ambiguous because of the exclusion's modifying phrases:

We find the language of the Policy Exclusion to be ambiguous. In relevant part, the Policy Exclusion applies “to you and if residents of your household, your relatives, and persons under the age of 21 in your care or in the care of your resident relatives.” ' Here, one could reasonably conclude that, for the Policy Exclusion to apply, only “your relatives” need also be “residents of your household.” Under this interpretation, the clause “if residents of your household” applies only to “your relatives” and has no bearing on “persons under the age of 21 in your care[.]” Although this is a reasonable interpretation, one could just as reasonably conclude that the clause “ if residents of your household” applies to both categories in the subsequent list ' that is, it applies to both “your relatives” and to “persons under the age of 21 in your care or in the care of your resident relatives.” ' Because we believe that both interpretations of the Policy Exclusion are reasonable, we find that the Policy Exclusion is ambiguous.

Finding that any ambiguity must be read in favor of coverage, the appellate court held that the exclusion would only apply if the child was both in the insured's care and was a resident of the insured's household at the time of the fire. The court previously opined that the child could not have been a resident of her grandparent's home when the fire occurred because she had returned to the physical custody of her parents. Erie was therefore obligated to indemnify the insureds for damages associated with their granddaughter's death.

Interpret Using Plain and Ordinary Meaning in Accordance with Specific Facts

In contrast to Western Protectors and Comisford, a handful of other courts have held that “in your care” is unambiguous, despite the availability of multiple dictionary definitions. In American Family Mut. Ins. Co. v. Wemhoff , 972 S.W.2d 402 (Mo. App. 1998), the insured father sought coverage for bodily injury to his minor child. The child was spending the night at her father's home at the time of the loss pursuant to a court ordered visitation schedule. American Family denied coverage based on an exclusion for bodily injury to an “insured,” defined to include any person under 21 “in the care” of the policyholder. The insured argued that “in your care” was ambiguous and should be read in his favor because it was open to many different meanings, several of which could be found in standard dictionaries.

Unpersuaded by this reasoning, and agreeing with American Family, the court refused to find an ambiguity in the first instance simply because “in your care” could be defined in multiple ways. On the contrary, the court reasoned that coverage was excluded because the facts of this case fell within one of those reasonable interpretations:

The respondent claims that “care” as used in both policies is not ambiguous when interpreted in the overall context of the policies with respect to [the child]. We agree. In construing an insurance policy, we need not apply every possible definition given in the dictionary for the disputed term. Rather, we simply must give the term its “plain meaning, consistent with the reasonable expectations, objectives and intent of the parties.” While the term “care” is a word of variable meaning, it can “usually be interpreted in the context” of its use. Furthermore, “the policy must be reasonably construed in light of the specific situation with which the parties are dealing.” (Citations omitted.)

The court therefore held, relying on a definition of “care” that included “charge, protection, and custody,” that the insured's child was in his care for purposes of the exclusion because she was within his custody at the time of the loss. See also Horace Mann Ins. v. Stark et al., 987 F.Supp.562 (W.D. Mich. 1997) (reasoning, without holding, that “in your care” was unambiguous when applied to facts of the case. The court noted that the child was not in her grandfather's care when the grandfather did not exercise any supervisory control over her).

A Multi-Factor Test

As an extension of decisions like Wemhoff and Stark, other courts have held that “in your care” is unambiguous and have relied on a multi-factor test to define that phrase. For example, in Cierzan, et al. v. Kriegel, et al., the named insured's granddaughter caused a fire at the insured premises, injuring the granddaughter's friend who was visiting. 259 Wis. 2d 264 (Wis. Ct. App. 2002). Discovery revealed that the granddaughter, along with her other siblings, often visited and routinely stayed the night with her elderly grandmother at the insured premises to assist the latter with daily tasks. The granddaughter lived with her parents in a separate residence when she was not visiting her grandmother, and the grandmother did not consider her granddaughter as living with her. The granddaughter sought coverage under a homeowner's policy issued by Pella Mutual Insurance on the grounds that she was an insured because she was in her grandmother's “care” at the time of the fire.

Consistent with Wemhoff and Stark, the Wisconsin appellate court disagreed with the blanket proposition that “in your care” was ambiguous because it was subject to more than one dictionary definition, reasoning that a word is not ambiguous if “only one meaning applies in the context and comports with the parties' objectively reasonable expectations.” In contrast to Wemhoff and Stark, however, the appellate court did not apply the most appropriate definition to the facts at issue, but rather separately evaluated eight factors to determine whether, as a matter of law, the granddaughter was in her grandmother's care. The following “common sense” factors were considered:

(1) whether the insured has a legal responsibility to care for the person; (2) whether the person has some form of dependency on the insured; (3) whether the insured has a supervisory or disciplinary responsibility for the person; (4) whether the insured is providing substantial and essential financial support for the person; (5) if the person is living with the insured, then whether the arrangement is temporary or permanent, the length of time the arrangement has existed, and whether and how long the arrangement is expected to continue; (6) the age of the person allegedly in the insured's care (because the younger the person is, the more likely it is he or she is in the insured's care); (7) the person's physical or mental health status (because a person with health problems is more likely to be in the insured's care); and (8) whether the person allegedly in the insured's care is gainfully employed (because someone so employed is less likely to be dependant [sic] on the insured).

Based on an evaluation of these factors, the court reasoned that an insufficient number of factors supported the conclusion that the granddaughter was in her grandmother's care at the time of the loss. The factors supported, instead, a finding that the granddaughter was an aide to her grandmother, but was not sufficiently dependent on the same to qualify as being “in her care.” See also Henderson v. State Farm Fire & Cas. Co. , 596 N.W.2d 190 (Mich. 1994) (applying same eight-factor test).

Conclusion

Manuscript homeowners' policies often do not define “in your care” as that phrase is used in the “insured” definition. In the absence of a definition, courts have divided over whether the phrase is ambiguous and should be read in favor of the insured and coverage, or according to its plain meaning as applied to the specific facts at issue. Notably, many jurisdictions have yet to interpret “in your care,” leaving this issue wide open in many states. Insurers should be aware of these varying interpretations because they can have significant consequences for who is an “insured” and whether certain bodily injury exclusions may apply.

Samantha Evans is an associate in Cozen O'Connor's Global Insurance Group in the Philadelphia office.