Gaudina v. State Farm Mutual Automobile Insurance Company, 8 N.E.3d 588

Gaudina was injured in a December 8, 2009 car accident while working as a limousine driver.
He filed an underinsured motorist claim under his wife Maureen Rife’s State Farm policy after settling a bodily injury claim with the other driver for $250,000.
State Farm denied coverage, arguing Gaudina was not Rife’s insured because he did not reside primarily with her at the time of the accident.
The policy defines ‘spouse’ as ‘your husband or wife who resides primarily with you,’ and defines an insured for U, U1 and W coverages accordingly.
Gaudina sued for declaratory relief and, under 155 ILCS 5/155, sought damages for vexatious denial; the circuit court granted summary judgment for State Farm on both issues.
The trial court held the word ‘spouse’ unambiguous and that Gaudina did not reside primarily with Rife at the time of the accident, thus excluding him from coverage.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Gaudina qualifies as an insured under the policy’s ‘spouse’ definition	Gaudina contends the term is ambiguous and should be read in his favor.	State Farm argues the definition is clear and unambiguous and Gaudina did not reside primarily with Rife.	Not insured; definition unambiguous; Gaudina did not reside primarily with Rife.
Construction of the phrase 'resides primarily with you' in the policy	The phrase is ambiguous and could reflect multiple timeframes or meanings.	The phrase has a plain meaning that a spouse resides primarily with the named insured.	Unambiguous; 'resides primarily' means principal residence at the time of the accident.
Effect of policy timing and notice considerations on coverage	The policy’s definitions should be construed in light of the insured’s intent to return and his ongoing connection to the marital home.	The policy clearly notified insureds of the definition; coverage should be determined as of the accident date.	Coverage denied; facts show Gaudina’s primary residence was Lake Barrington, not with Rife.

Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (Ill. 1992) (insurance contract interpretation governs; policy terms control when unambiguous)
American National Fire Insurance Co. v. National Union Fire Insurance Co. of Pittsburgh, 343 Ill. App. 3d 93 (Ill. App. 2003) (defined terms in policy govern interpretation; ambiguity analysis follows)
Founders Insurance Co. v. Munoz, 237 Ill. 2d 424 (Ill. 2010) (when term not defined, look to plain meaning; defined terms control when present)
Munoz, 237 Ill. 2d 424 (Ill. 2010) (defined terms govern; dictionary if not defined)
Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352 (Ill. 2006) (consider policy as a whole; purpose and risks emphasized)
Coley v. State Farm Mutual Automobile Insurance Co., 178 Ill. App. 3d 1077 (Ill. App. 1989) (ambiguity and time-frame interpretation in coverage disputes)
Hawkeye Security Insurance Co. v. Sanchez, 122 Ill. App. 3d 183 (Ill. App. 1984) (time-frame for determining coverage in insured contexts)
Coriasco v. Hutchcraft, 245 Ill. App. 3d 969 (Ill. App. 1993) (residence and domicile considerations in coverage determinations)
Floral Consultants, Ltd. v. Hanover Insurance Co., 128 Ill. App. 3d 173 (Ill. App. 1984) (insured duties and knowledge of policy terms)
Foster v. Crum & Forster Insurance Cos., 36 Ill. App. 3d 595 (Ill. App. 1976) (insured bears burden of knowing policy contents)