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Most home and auto insurance policies contain one or more clauses implicating the coverage afforded based on the residency of a named insured or someone seeking coverage under the insurance policy. Although determining one’s place of residence may seem like a straightforward issue, it can require a very fact-intensive analysis under a variety of circumstances. Such an analysis is one of the main focuses in a 2022 Supreme Court Rule 23 Order from the Fifth District Appellate Court. In addition, through the Order, the Fifth District Appellate Court discusses issues involved with the presentation of claims along with the scope and purpose of witness testimony in a trial stemming from consolidated declaratory judgment actions.

Case Background

The Fifth District Appellate Court case of State Farm v. Bierman, 2022 IL App (5th) 210001-U (Sept. 2, 2022), stems from an individual who was seriously injured and later died as the result of a single-vehicle accident in Marion County, Illinois.  The vehicle in which the decedent was a passenger at the time of the accident was uninsured. Subsequent to the accident, the mother of the decedent’s child, Brittany Bierman (“Bierman”), made a claim for uninsured motorist coverage and medical payments coverage under three State Farm motor vehicle policies issued to the decedent’s former stepmother, Winnie Robertson (“Robertson”).

Ultimately, State Farm filed a declaratory judgment seeking a declaration that the decedent was not an “insured” under Robertson’s policies because he was not a named insured or a “resident relative,” as defined in the policies.[1] State Farm’s policies defined “resident relative” as “a person, other than you, who resides primarily with the first person shown as a named insured on the Declarations Page and who is: 1) related to that named insured or his or her spouse by blood, marriage, or adoption, including an unmarried and unemancipated child of either who is away at school and otherwise maintains his or her primary residence with that named insured; or 2) a ward or a foster child of that named insured, his or her spouse, or a person described in 1. above.”

Bierman filed an answer to State Farm’s declaratory judgment complaint, which included a counterclaim for declaratory judgment. It was Bierman’s assertion that the decedent was an insured under Robertson’s policies because the decedent and his former stepmother were related by marriage and because the decedent resided with Robertson on and prior to the date of the accident.

Ultimately, the trial court consolidated claims for trial, and the case proceeded to a bench trial. At the time of trial, the only real issue in dispute was the primary residence of the decedent at the time of the accident. At trial, State Farm declined to put on any evidence first, and instead, it opted to stand on its pleadings. Bierman was then obligated to put on evidence in support of her claim that coverage applied to the decedent, i.e., that his primary residence was with Robertson at the time of the accident. State Farm was then allowed to put in evidence on “rebuttal,” which contradicted the claims of residency.

Following the conclusion of the trial, the court held that “the insured’s abode was not the decedent’s primary residence”; therefore, the decedent was not an insured under the State Farm policies issued to Robertson. The court entered a judgment in favor of State Farm and against Bierman, and Bierman filed her appeal.

Appellate Ruling

In her appeal, Bierman claimed that the trial court’s findings were against the manifest weight of the evidence. Bierman argued that the trial court erred in considering the “rebuttal” testimony offered by State Farm to satisfy its burden of proof that the decedent did not primarily reside with its insured at the time. Bierman further argued that she presented sufficient evidence to demonstrate that the decedent had been residing primarily with Robertson at the time of the accident.

Order of Presenting Evidence in Consolidated Proceedings

In its Rule 23 Order, the court first addressed the issue of the presentation of claims at trial. In so doing, the court cited to the general rule that “the parties proceed at all stages of the trial in the order in which they appear in the pleadings unless otherwise agreed by the parties.” See Ill. S. Ct. R. 233. However, as the underlying case involved a consolidated proceeding, the court pointed out that the trial court has the authority to designate the order in which the parties proceed with the presentation of evidence and witnesses. Ill. S. Ct. R. 233.[2]

The Appellate Court held that the trial court did not abuse its discretion in directing Bierman to present her evidence first. The court noted that under the general tenets of insurance law, the insured bears the burden of establishing that a claim falls within the terms of the insurance coverage. However, because the deceased was not an insured, the court pointed out that rationale for placing the burden on the party seeking coverage to prove coverage was not wholly applicable. Either way, the court was clear that “the tenets of insurance law do not displace, or render irrelevant, the rules of civil procedure or the supreme court rules.” In the end, the Appellate Court held that the trial court did not abuse its discretion when it directed Bierman to present her evidence that the decedent resided primarily with Robertson, as alleged in her counterclaim for declaratory relief, and then directed State Farm to present evidence in its defense against the counterclaim and in support of its complaint for declaratory relief.

Elements Considered in Determining Residency

Turning to the issue of whether the decedent primarily resided with Robertson at the time of the accident, the court stressed that the determination of whether a person is a resident of a household requires a case-specific analysis of a person’s “intent, physical presence, and permanency of abode.” Coriasco v. Hutchcraft, 245 Ill. App. 3d 969, 970-71 (1993). Intent is the key question, which is evinced by the acts of the person whose residency is in question. Gitelson, 344 Ill. App. 3d at 894; Farmers Automobile Insurance Ass’n v. Williams, 321 Ill. App. 3d 310, 314 (2001).

In analyzing the deceased’s residency, the court outlined the testimony of three witnesses who presented evidence as to this issue. However, because the decedent’s own intent was the determinative issue, the trial court specifically noted how it considered the testimony as to the decedent’s intent, rather than the intent of the three witnesses. In that regard, the court was persuaded, “not necessarily what [the decedent] did as much as what he didn’t do” in reaching a decision on the residency issue. Specifically, the court found that “the decedent never spent more than two nights a week at Robertson’s home; ... he did not have his own room at Robertson’s home; and ... he did not leave any of his belongings at Robertson’s home.” Additionally, it was clear that the decedent did not receive mail at or invite visitors (other than his minor daughter) to Robertson’s home. At the end, the Appellate Court held that the trial court’s decision that the decedent did not reside primarily with Robertson at the time of the accident was supported by the evidence and was not against the manifest weight of the evidence.

Although there were differing claims as to the residency of the decedent, at the end of the day, it was thorough analysis of the intent of the decedent that won the day. This, coupled with the latitude provided to judges in their authority to run a trial, resulted in the Appellate Court upholding the ultimate verdict in favor of State Farm. State Farm v. Bierman, 2022 IL App (5th) 210001-U (Sept. 2, 2022).

The Takeaway

Any residency analysis will be affected by if and how the insurance policy defines “residency.” Regardless, any insurer faced with a residency question would be well served to understand the analysis required to make a sufficient determination and consult with an attorney when necessary.

[1] State Farm also claimed that the decedent was not a “resident relative” because he was not related to his former stepmother. However, in a prior appeal, the appellate court for the Fifth District found that the “related by marriage” provision in the State Farm policies was ambiguous, and therefore should be construed against State Farm and in favor of coverage. State Farm Mutual Automobile Insurance Co. v. Bierman, 2019 IL App (5th) 180426, ¶ 27. In the prior appeal, the court also found that there was a genuine issue of material fact as to whether the decedent resided primarily with his former stepmother at the time of the accident. Bierman, 2019 IL App (5th) 180426, ¶ 27.

[2] The court also cited to Ill. R. Evid. 611(a) and Ill. R. Evid. 611(b) for the propositions that trial court also has: A) authority to exercise “reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to (1) make the interrogation and presentation effective for the ascertainment of the truth, (2) avoid needless consumption of time, and (3) protect witnesses from harassment or undue embarrassment”; and B) discretion to permit a party cross-examining a witness to inquire into additional matters as if on direct examination, respectively.