Shelton

We must decide whether the term “relative” in an automobile insurance policy includes the child of-the policyholder’s unmarried cohabitant.

I

In June 1992, Karen Kohlbeck and Michael Shelton bought a house together in Anchorage, Alaska. Karen and her four children moved in with Michael and his daughter. Michael was married to Theresa Sullivan at the time, but they were in the process of divorcing.

Approximately ten or eleven months after Karen and Michael moved in, Paul Breeding struck Karen’s daughter Brittany with his ear while she was riding her bicycle. Brittany died from her injuries' on April 4, 1993. Two months after Brittany’s death, Michael’s divorce was finalized. Michael and Karen married one month later, on July 3, 1993.

Brittany’s estate, co-represented by her parents Karen (Kohlbeck) Shelton and Robert Kohlbeck, filed survival and emotional distress claims against Breeding in state court. Breeding’s automobile insurer, State Farm, and Karen (Kohlbeck) Shelton’s automobile insurer, Fireman’s Fund, filed inter-pleader actions. The resulting settlement allocated $674,000 among Brittany’s siblings, Karen (Kohlbeck) Shelton, Robert Kohlbeck, Brittany’s…