01-0327 Frost, by her Guardian Ad Litem v. Whitbeck

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“Stated another way, by excluding the claims of only those resident relatives who are closely enough connected by blood or marriage to the policyholder that their relationships are likely to be considered in the policyholder’s personal decisions, such as contracting for homeowner’s insurance, claims that are essentially first-party claims are precluded. Additionally, defining ‘relative’ in an unlimited manner does not further the purpose of the intra-insured suit exclusion because excluding coverage for the claims of remote resident relatives would exclude third-party claims, a result inconsistent with the provisions of Section II. Furthermore, we note that if Tina were to be construed as a resident-relative insured under the policy, American Family would have exposure for third-party liability claims against Doreen, Tina and any number of shirttail relatives who may stay with Doreen. We question whether this level of consanguinity is what American Family bargained for in selling $100,000 of coverage for liability claims against any insured.”

We conclude that the term, “relative,” used in the policy as an exclusion from coverage, is ambiguous and therefore, as construed against American Family, it does not exclude the Frosts’ claims.

Accordingly, the judgment and order of the circuit court are reversed, and we remand for further proceedings.

Recommended for publication in the official reports.

Dist IV, Dane County, Callaway, J., Roggensack, J.

Attorneys:

For Appellant: Michael S. Anderson, Madison

For Respondent: Virginia L. Newcomb, Madison; Paul Graves, Madison