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Michigan Supreme Court hears challenge to Graange rule and whether injured child was an insurer "resident"
Summary
At oral argument in McKenna Brownfelter v. Insurance Property and Casualty Insurance Company, counsel disputed whether the court’s Graange footnote should control how courts determine a divorced child’s domicile and whether an injured 14‑year‑old qualified as a "resident" of her father’s household for insurance step‑down purposes, potentially reducing available coverage from $250,000 to $20,000.
The Michigan Supreme Court heard oral argument in McKenna Brownfelter v. Insurance Property and Casualty Insurance Company over whether the court should re-evaluate its Graange rule for determining the domicile of minor children of divorced parents and whether an injured child was a "resident" under her father's insurance policy.
Appellant counsel Sean Saraphini told the court the consolidated question is both narrow and broad: who was McKenna Brownfelter domiciled with at the time of the collision, and whether this court should clarify or abandon the Graange alternating‑domicile approach for children of divorced parents. Saraphini said Graange’s footnote produced inconsistent results in at least four court of appeals decisions in recent years and has become unpredictable for courts and ordinary insureds. "When a term is ambiguous in a contract of insurance, that term is construed against the drafter and the benefit of the doubt is given to the insured party," Saraphini said, arguing the undefined policy term "resident" should be read in the insured's favor.
The underlying facts, Saraphini told the justices, are that McKenna — then 14 — lived primarily with her mother, while her brother (who undisputedly lived with their father) was driving the vehicle that collided with another car. The father’s insurer sought to apply a step‑down to family‑member limits, reducing coverage from the $250,000 the father elected to the statutory or minimum family limit of $20,000. Saraphini emphasized documentary indicators such as school and medical records and the child’s testimony about keeping most possessions at her mother's house as evidence that she was not domiciled with her father.
Several justices questioned whether the court needed to overrule Graange to grant relief and whether Graange’s footnote is more workable than applying the general domicile factors used in Workman and Dairyland. Saraphini responded that applying the multi‑factor test to minors creates the same or greater factual uncertainty in practice and that Graange has been interpreted differently by multiple appellate panels.
Arguing for the auto insurer, Chris Andress defended Graange as a workable, frequently cited rule that provides a bright‑line approach in the no‑fault context. Andress stressed the divorce decree in this case used the terms "joint legal, joint physical, and 50/50 residency," and that the child was with her father the night before the accident; under the Graange footnote, domicile could therefore rest with the father. "Graange provides people with a construct and framework for how to determine a domicile of a divorced child in a no‑fault context," Andress said.
William Parker, speaking for insurance‑interested parties, framed the dispute against the No‑Fault Act’s goal of "assured, adequate, and prompt reparation," arguing that custody orders are an important, practical source of information insurers can use to evaluate coverage exposure. From the insurers’ perspective, Parker said, underwriting requires predictability: "An insurer could obtain the custody order and thereby determine whether or not that child is domiciled in that household and therefore the insurer would conceivably be exposed to paying PIP benefits to that child."
The justices probed hypotheticals — for example, whether two nights a month or one weekend a month at a parent's house should count as residency or domicile — and discussed the practical consequences for parents and insurers if domicile shifts on a day‑to‑day basis. Counsel acknowledged no perfect solution but urged the court either to clarify Graange’s application or to confirm that family‑court orders and evidence of living arrangements should govern.
The court submitted the case for decision after closing arguments; no ruling was issued at the argument. The outcome could affect how courts and insurers resolve coverage limits in cases involving minors in shared‑custody situations and may prompt guidance about the meaning of "resident" in insurance contracts.
