Opinion ID: 690774
Heading Depth: 1
Heading Rank: 3

Heading: Application of the Montana Residency Test

Text: 45 It is agreed that Montana law governs the insurance policy at issue. In Farmers Union Mutual Insurance Co. v. Blair, 817 P.2d 1156 (Mont.1991), the court construed the phrase resident of the named insured's household, the precise phrase in the policy relied on by the Estate in this case. The court adopted a four-factor test from Iowa National Mutual Insurance Co. v. Boatright, 516 P.2d 439 (Colo.App.1973). That test considers: 46 the subjective intent of the individual, the formality or informality of the relationship, the existence of another place of lodging by the alleged resident, and the relative permanence or transient nature of the individual's residence in the household. 47 Blair, 817 P.2d at 1158 (emphasis and citations omitted) (quoting Boatright, 516 P.2d at 440). The objective of the test, however, is to determine the intent of the parties to the contract. Id. The Montana court declined to view the term resident as an ambiguous term to be construed against the insurer. Id. 48 The Estate contends that the district court's application of these four factors was erroneous. The district court's determination of contractual issues in light of the facts is reviewed de novo. See Islamic Republic of Iran v. Boeing Co., 771 F.2d 1279, 1287 (9th Cir.1985), cert. dismissed, 479 U.S. 957 (1986). Mixed questions in which the applicable legal standard provides for a strictly factual test, such as state of mind, are reviewed for clear error. United States v. McConney, 728 F.2d 1195, 1203 (9th Cir.) (en banc), cert. denied, 469 U.S. 824 (1984). 49 With regard to the first factor, the court found that John Becktold only spent short periods of time at home after the accident. This strongly supports an inference that, at the time of the accident, he did not intend to return to live there for any significant period of time. Becktold also testified directly that he had no intention of living with his parents after 1983. RT 214. The court's conclusion that the first factor does not favor a finding of residence is thus not clearly erroneous. 50 In applying the second factor, the more intimate and informal the relationship, the more likely it is that residency will be found. See Pamperin v. Milwaukee Mutual Ins. Co., 197 N.W.2d 783, 787 (Wis.1972) (close, intimate and informal relationship; cited by Blair ). The district court properly found the relationship to be informal, based on factual findings that Becktold did not help out with expenses or pay rent, did not have a room of his own, had no key of his own, and did not drive any family vehicles. 51 The third factor, the unquestioned existence of alternate residences with Becktold's friends and at the ranch, also favored the ultimate finding that Becktold was not a resident of his parents' household. The fourth factor, permanence or transience, also favored the ultimate finding because Becktold's stays at his parents' home were found to be sporadic. 52 State Farm also argues that under Montana law, the expressed intent of the insured is relevant to deciding whether a particular person was a resident for purposes of an insurance policy. In Continental Insurance Co. v. Bottomly, 817 P.2d 1162 (Mont.1991), decided the same day as Blair, the Montana Supreme Court also interpreted an insurance policy with a clause identical in wording to the one here. It considered statements from the insured in reaching its holding. Id. at 1165. 4 Consequently, it appears that Montana courts would take the stated intent of the insured into account as an additional factor besides the four in Blair. Because the insured testified in this case that he did not consider Becktold a resident, RT 396, taking into account this fifth factor further supports the trial court's decision. 53 The Estate objects also to conclusions of law numbers 11, 12, and 13. These conclusions cite for general guidance cases applying the definition of residence in Montana Code Sec. 1-1-215, which is in a part of the code entitled General Definitions of Terms Used in the Code. ER at 47-48. Montana cases have applied this definition solely to construe state statutes, not to construe private contracts. 54 It would have been error for the district court to base its decision primarily on the definition of residence in Sec. 1-1-215, because the Montana Supreme Court in Blair and Bottomly chose not to rely on (or even mention) that definition when construing identical policy language. Also, Bottomly held that a number of relatives time-sharing a vacation home were all residents of one household. Since those relatives presumably had separate non-vacation homes of their own, of which they were also residents, that holding appears to be at odds with Sec. 1-1-215(2), which states that [t]here can only be one residence. However, because application of the Blair factors suffices to affirm the district court's decision, the district court's reference to Sec. 1-1-215 was at worst harmless error. 5 55 AFFIRMED.