*This order and judgment is not binding precedent except under the doctrines of

law of the case, res judicataand collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### MAR 31 1999 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

__________________________ FIRST MARINE INSURANCE COMPANY, Plaintiff-Appellee,

v. CHARLOTTE ANN GIBBS, Defendant-Appellant. No. 98-6117 (W.D. Okla.) (D.Ct. No. CIV-96-1868-T)

____________________________ ORDER AND JUDGMENT *

Before ANDERSON, BRORBY , and MURPHY , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1.9(G). The case is therefore ordered submitted without oral argument.

Appellant Charlotte Ann Gibbs brings this appeal ch allenging the district-2-

court’s entry of summary judgment in favor of Appel lee First Marine Insurance Company (First Marine). Ms. Gibbs contends the dis trict court erred in finding she resided in the household of Mr. James Bibbs, th e insured, and therefore is subject to exclusion from coverage under Mr. Bibbs’ policy with First Marine. We exercise jurisdiction under 18 U.S.C. § 1291 andaffirm.

BACKGROUND Ms. Gibbs was injured in an accident on April 17, 1 996, while riding as a passenger in a boat owned and operated by Mr. Bibbs . Mr. Bibbs maintained an insurance policy for the boat with First Marine, an d the policy was in effect at the time of the accident. After the accident Ms. Gibbs made a claim against First Marine for bodily injuries she suffered. However, First Marine refused to pay her claim and instead sued for a declaratory judgme nt in federal court arguing Mr. Bibbs’ policy did not cover Ms. Gibbs because s he resided in his household. First Marine cited a specific clause in the policy expressly excluding coverage for bodily injury to “any other regular resident of the insured’s household.”

Meanwhile, collateral to the federal court proceedi ngs, Ms. Gibbs sued Mr. Bibbs personally for negligence in the District Cou rt of Cleveland County, Oklahoma. First Marine agreed to defend Mr. Bibbs in the state court lawsuit,-3-

promising to indemnify him under the terms and cond itions of the policy but noting also that a question remained concerning cov erage under the policy for Ms. Gibbs’ injuries. Before reaching the merits of the state case, the parties decided to settle. They mutually agreed to dismiss Ms. Gibbs’ suit on the condition that if First Marine did not prevail in i ts declaratory judgment action against her in federal court, it would pay as if th e state court had entered judgment in Ms. Gibbs’ favor.

Following resolution of the state court suit, the d eclaratory judgment action in federal court continued with the parties filing cross-motions for summary judgment. The district court granted FirstMarine’s motion determining Ms. Gibbs and Mr. Bibbs resided in the same househo ld and, therefore, the policy excluded Ms. Gibbs from coverage. The district cou rt based its decision on the fact that although not romantically involved, Ms. G ibbs and Mr. Bibbs had lived together and slept in the same house in Oklahoma Ci ty for approximately five years before the accident occurred. Mr. Bibbs clai med his formal address was at a separate house he owned in Midwest City, Oklahoma , where he continued to receive mail and maintain electrical and telephone service. Nevertheless, because Mr. Bibbs never inhabited the house and described i t in his own words as “unlivable,” the court found that Mr. Bibbs and Ms. Gibbs resided together as-4-

members of the same household in Oklahoma City at the time the accident occurred.

Ms. Gibbs now appeals claiming the district court e rred in holding: (1) First Marine is not estopped from denying coverage for her injuries because it defended Mr. Bibbs in the state action without rese rvation of its rights; and (2) Ms. Gibbs is excluded from coverage because she and Mr. Bibbs, the insured, resided at the same household. In addition, Ms. Gi bbs argues the evidence regarding the question of whether she and Mr. Bibbs qualified as residents of the same household at the time of the accident is confl icting and creates a question of fact inappropriate for resolution through summary j udgment.

DISCUSSION We review the district court’s entry of summary judgment de novo employing the same legal principles as the districtcourt and construing the factual record and the reasonable inferences theref rom in the light most favorable to the party opposing summary judgment. See Byers v. City of Albuquerque , 150 F.3d 1271, 1274 (10th Cir. 1998). Summary judgmentis appropriate if the record shows “no genuine issue as to any material f act and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c); Anderson v.-5-

Liberty Lobby, Inc. , 477 U.S. 242, 247 (1986). An issue of material f act is genuine only if the nonmovant presents facts suffic ient to show a reasonable jury could find in favor of the nonmovant. Liberty Lobby, 477 U.S. at 248. If our inquiry reveals no genuine issue of material fact i n dispute, then we review the case to determine if the district court correctly applied the substantive law. Kaul v. Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996). In this div ersity action, we apply the law of Oklahoma. See Braun v. Annesley , 936 F.2d 1105 (10th Cir. 1991).

As an initial matter, we must respond to Ms. Gibbs’ argument that First Marine is estopped to deny coverage because it info rmed Mr. Bibbs it planned to defend and indemnify him in the state action. As ageneral rule, only the insured possesses standing to argue estoppel, and third parties may not raise the issue unless they stand in the same position of potential prejudice as the insured. See Transamerica Ins. Co. v. International Broad. Corp. , 94 F.3d 1204, 1208 (8th Cir. 1996). However, it is unnecessary for us to a ddress the issue of Ms. Gibbs’ standing to raise an estoppel claim because the arg ument fails whether asserted by the insured or Ms. Gibbs as a third party. An i nsurer is not estopped from denying coverage when it defends an insured if it a lso notifies him it is reserving its right to later contest coverage. Cf. Braun , 936 F.2d at 1110-11. The record-6-

clearly shows First Marine gave adequate notice to Mr. Bibbs of its dispute regarding coverage in its letter to him dated Augus t 6, 1996. In the letter, First Marine informed Mr. Bibbs it had filed the declarat ory judgment action challenging its obligation to pay the claim for bod ily injury made by Ms. Gibbs, and described in some detail the legal process it w as pursuing against her. First Marine also expressly stated it felt “there is a qu estion as to whether or not there is liability coverage under the policy for damages sustained by Ms. Gibbs while a passenger in [Mr. Bibbs’] boat.” In addition to th e letter, Mr. Bibbs’ own deposition testimony reflects the fact that he knew as a result of his dealings and correspondence with First Marine that it questionedwhether coverage extended to Ms. Gibbs. Upon these facts, we agree with the district court that the statements in the letter, combined with Mr. Bibbs o wn testimony showing his actual knowledge of First Marine’s coverage dispute , sufficiently articulated a reservation of rights and preserved First Marine’s right to deny coverage.

We must now address the substance of this appeal an d determine whether the district court appropriately found Ms. Gibbs qu alified as a “regular resident of [Mr. Bibbs’] household” at the time of the accid ent and therefore properly excluded from coverage under his policy with First Marine. The scope and meaning of “household” and other terms within the c ontext of the insurance-7-

policy, ordinarily depend on the precise language o f the policy and the particular circumstances present. See Okla. Stat. tit. 36, § 3621 (“Every insurance contract shall be construed according to the entirety of its terms”). However, in this case the policy itself does not define “household” or gi ve any guidance for interpreting what persons fall within the scope of the term. Consequently, we turn our attention to general definitions from acce pted authorities to determine the plain, ordinary meaning of the word “household. ”

Under Oklahoma law, the precise meaning of “househo ld” is difficult to ascertain. In Indemnity Ins. Co. of North America v. Sanders , 36 P.2d 271 (Okla. 1934) the Oklahoma Supreme Court cited several defi nitions of “household,” including one from Arthur v. Morgan , 112 U.S. 495, 499 (1884), where the Supreme Court stated that “[p]ersons who dwell toge ther as a family constitute a ‘household,’” and a definition from Webster’s New I nternational Dictionary stating a household consists of “[t]hose who dwell under the same roof and compose a family.” Sanders , 36 P.2d at 273. See also Henderson v. Eaves , 516 P.2d 270, 274 (Okla. 1973). Building on this foundation, in Hardesty v. State Farm Mut. Auto. Ins. Co. , 361 F.2d 176, 177 (10th Cir. 1966), we validated as a proper definition of a household under Oklahoma law , a jury instruction stating that “for a place to be the household of one there must be therein a dwelling-8-

together as a family and said household must be sup ported by and under a single head or management. In other words, persons who dw ell together as a family constitute a household.” All these traditional def initions of a household consistently accentuate familial relationships as the common thread. However, it is evident from more recent Oklahoma case law that a familial relationship may no longer be required. In Flitton v. Equity Fire & Cas. Co. , 824 P.2d 1132, 1134 (Okla. 1992), the Oklahoma Supreme Court specifical ly states the “[c]lassification of those individuals coming withi n the definition of a ‘family’ or ‘household’ is not necessarily dependent upon the p resence of a connection by affinity or consanguinity.” We believe Flitton reflects the Oklahoma’s attempt to broaden the traditional scope of what constitutes a“household” in order to adjust to modern social trends and encompass other types o f domestic relationships like cohabiting unmarried couples who, while probably co mprising a “household,” might otherwise escape inclusion under the conventi onal definition of the term and undermine the exclusion’s purpose to avoid the potential for unfair collusion between the insured and the injured “household” mem ber. With these principles in mind, we distill the general definition of “hous ehold” under current Oklahoma law for the purposes of the insurance policy at iss ue to constitute a home or residential establishment consisting of people dwel ling together under the same roof, regardless of kinship by blood or marriage.-9-

Applying this definition to our de novo review of the facts presented, we find Ms. Gibbs qualifies as a “regular resident” of Mr. Bibbs’ “household.” Ms. Gibbs argues the exclusion clause in the insurance policy by its own terms cannot apply to her because she is the head of her own hou sehold in a home she leases. On this basis, Ms. Gibbs contends she is not and cannot be a “regular resident of [Mr. Bibbs’] household.” However, the basic flaw i n Ms. Gibbs’ reasoning is that it equates “the insured’s household” with owne rship of a place or location rather than as a term connoting a domestic status o r relationship of persons. In other words, “household” is not synonymous with “ho use.” Simply because Ms. Gibbs leases the house where she and Mr. Bibbs resi de does not mean she cannot be a member or resident of Mr. Bibbs’ household if they reside together under the type of living arrangement or status enumerated in Oklahoma’s definition of “household.” The fact that she owns or leases the premises in her name alone is immaterial. As the record indicates, they had live d together and slept in the same house for several years; Mr. Bibbs carried on his b usiness from the house he shared with Ms. Gibbs; and even though Mr. Bibbs ow ned another house, he never actually resided there. Regardless of whethe r they were unrelated by blood or marriage or that their relationship was not romantic, the fact remains they were very good friends who enjoyed a close, personal rel ationship. Moreover, all these facts strongly indicate the potential for col lusion between Ms. Gibbs and-10-

Mr. Bibbs, which is precisely the type of unfair co nduct the exclusion clause of the policy is intended to alleviate. Mr. Bibbs tes tified in his deposition that he willingly and freely gave Ms. Gibbs and her attorne y the letter addressed directly to him from First Marine dated August 6, 1996 that discussed the status and certain strategic details of First Marine’s actions with regard to Mr. Bibbs’ policy. Sharing of this potentially confidential i nformation hardly supports Ms. Gibbs’ claim of an independent, detached living arr angement between them. Accordingly, we find these facts sufficient to brin g Ms. Gibbs and Mr. Bibbs within Oklahoma’s definition of a “household” and s upport the district court’s ruling in this matter.

Finally, we are unpersuaded by Ms. Gibbs’ argument that the district court must leave this question for a jury to decide. The facts relevant to the court’s decision are undisputed and not susceptible to comp eting interpretations or inferences. The district court appropriately found from the evidence presented that Ms. Gibbs and Mr. Bibbs lived together for a s ubstantial amount of time under the same roof and shared, at a minimum, some sort of personal, informal relationship. An examination of the record before us reveals no other evidence sufficient to disturb this conclusion and create a genuine issue of material fact with regard to whether Ms. Gibbs and Mr. Bibbs qual ified as residents of the-11-

same household.

CONCLUSION Based on the facts in the record before us on appea l, we find Ms. Gibbs was a regular resident of Mr. Bibbs’ household at t he time of the accident. Accordingly, we affirm the decision of the districtcourt.

Entered by the Court: WADE BRORBY United States Circuit Judge