This case tells us what a “household” is.

UIM applies to relatives residing in the insured’s household. Eric Gallegos lived with his parents. Eric’s brother Martin used to, until he rented a house (because his parents’ home unduly restricted his “partying”). But he spent most of his days and nights at his girlfriend’s apartment; she didn’t consider that he was living with her, though, because he didn’t pay any of the bills. He had a meal at his parents’ house on weekends, got his mail there, and “did laundry” there (that’s what the opinion says; we wonder how likely it is that this young hustler did his own laundry). But he “intended to move back in  with his parents . . . whenever he was done partying.” Along the line Martin bought car insurance; he listed his parents’ house as his residence.

Eric was then injured while riding in a friends’ car and made a UIM claim against Martin’s policy. Mendota sued for declaratory judgment to establish that Eric was not a resident of Martin’s household, i.e., that Martin didn’t really live at the parents’ house.

The trial court ruled for Eric. Mendota appealed.

“Mendota’s argument,” the Court of Appeals tells us, “focuses solely on the physical presence aspect of a  household.” But the “existence of a household” is demonstrated by “the totality of the circumstances.” A household has three aspects: “a close-knit group of individuals who treat each other like family, and deal with each other intimately and informally,” “a connection to a shared dwelling place where its members develop and maintain their close-knit, intimate, and informal relationships,” and “a degree of permanency and intention to integrate into the family unit and remain a member for more than a mere transitory period.” “Determining where an insured ’s household is thus 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.”

In addition, “a court may consider 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.”

And so, of course, the court affirms. And, of course, it blames its result on the policy, which “did not do a very good job of capturing the real world.”

In passing the court mentions, in one sentence, that “from time to time, Martin gave Eric rides because Eric did not have a car.” Was the court’s intention to show that Eric was therefore within the scope of the risks reasonably foreseen by the parties and charged for by the insurer? It doesn’t seem to have entertained such a novel concept. It also doesn’t bother much to talk in terms of plain or commonly-accepted meanings of “household” objectively held by average people entering into contracts, which used to be what contract cases were about back in the days before we all got so enlightened and sophisticated   It doesn’t even seem to place much emphasis on the fact that Martin gave Mendota his parents’ address. Pretty clearly, it’s intention – and achievement – was to write the word “household” out of auto policies and replace it with “it takes a village.”

(link to opinion)

                                  THE SUPREME COURT HAS AFFIRMED THIS OPINION

This jurisdiction case offers about as slender a basis for it as you’ll find.

Beverage’s accountant, Fitzpatrick, wanted him to invest in a tax shelter. Fitzpatrick called Pullman, a Connecticut law firm, to get an opinion letter on the shelter. Pullman sent Fitzpatrick its brochure and a fee agreement for Beverage to sign. It had two phone calls with him to  discuss the facts. It then issued an opinion letter favorable to the shelter. When the IRS later disallowed the shelter Beverage sued various defendants including Pullman. Pullman moved to dismiss for lack of jurisdiction. The trial court granted the motion.

The Court of Appeals reverses. Why? Pullman “accepted a telephone call” from Arizona, sent “promotional materials” (the brochure), “affirmatively agreed to represent Beverage knowing he lived in Arizona (one wonders what the court thinks “affirmatively” adds to its analysis, as opposed to its rhetoric), made two phone calls to get information, then sent the opinion letter “knowing that Beverage would rely on the letter in filing his federal income tax return from Arizona” (though the letter expressly did not cover state tax issues). These acts are about the least you can do for a client who calls you from another state but the court tells us that they are “purposeful contacts targeting Arizona.”

This purports to be “guided by” Planning Group of Scottsdale but in fact relies on out-of-state-lawyer cases from out of state. Its hard not to conclude that it also rests on the fact – mentioned in the first sentence and four more times in the opinion – that Pullman charged $50,000. But nobody else seemed to complain that that was excessive or out of the ordinary for this multi-million dollar deal. Why does the court go out of its way to leave the impression that the result might have been different had Pullman charged 3800 bucks? Some courts are shocked, shocked by fees they are no longer able to charge.

Its also hard to square this with some of the products-liability jurisdiction cases. In any event, the moral for out-of-state firms is apparently not to accept calls from Arizona.

(link to opinion)

Rule 67(d) is an old friend to defendants. As always happens, though (remember the notice-of-claim cases), some defendants use their tools crudely rather than carefully and the courts have to slap them down.

Thiele’s suit claimed that a city inspector hit him. Because he owned no property in the state the city, pursuant to the rule, moved that he be required to post a cost bond. For $30,000.

Now lets pause a moment. $30,000? For taxable costs? In a little he-said-she-said personal-injury case?The city tried an excuse – Thiele had sued it before and used “dilatory tactics . . . likely to . . . increase the costs of litigation.” But come on, guys, $30,000? That’s just dumb. At least pretend to be actually concerned about costs, not just about trying to set up dismissal.

In the enough-blame-to-go-around department, the trial court ordered a bond in that amount. Thiele said he couldn’t pay it, there was a hearing about that, and the court reduced it to $15,000  — but never, at least on the appellate record, required the city to justify that, or any other, amount. Thiele couldn’t pay; the court dismissed the case. Thiele appealed.

The first question was whether the rule is constitutional. The court holds that under the rational-basis test it is. It has the legitimate purpose of protecting defendants from the inability to satisfy a cost judgment but does not exclude from the legal system those who can’t afford to pay since 67(e) exempts them.

The next question was the amount of the bond. “In fixing the amount of a security, the trial court must consider the estimated taxable costs of the litigation.” Nothing in the record supported even $15,000 and the facts “strongly” suggested that that’s too high.

The dismissal is reversed and the case is remanded with instructions to reconsider the amount of the bond.

In the old days a trial judge would have spotted this problem before getting reversed for it – and would probably have chewed you out for pulling such a stunt. Now that trial judges are bureaucrats who mostly sign whatever their JAs put in front of them you are less likely to get tough love from the bench but more likely to get reversed.

(link to opinion)