Paul Revere Life Insurance Company v. First National Bank in Dallas, Administrator of the Estate of Loy Thomas Brown, Deceased

GEWIN, Circuit Judge

(dissenting):

The majority should not overrule and reverse the decisions of two United States District Judges from Texas, both of whom have had long and varied experience in deciding Texas law, without citing even one Texas case to support its conclusion on the chief issue here presented. Judge Spears of the Western District is overruled in United Services Life Insurance Company v. Delaney; and Judge Davidson of the Northern District in Paul Revere Life Insurance Company v. First National Bank in Dallas, by opinions rendered simultaneously on this date, 358 F.2d 714, and 359 F.2d 641.

The lame and specious distinction by which the majority opinion undertakes to sweep aside the decisions of these two judges and the controlling case from the Texas Supreme Court, Continental Casualty Co. v. Warren, 152 Tex. 164, 254 S.W.2d 762, affirming the Court of Civil Appeals of Texas, 248 S.W.2d 315, is unwarranted, illogical and insupportable in Texas law.

It is important to remember that the decisions of the two United States District Judges of Texas were rendered independently of each other, at different times and in separate district courts, with respect to different insurance policies. Even so, both reached the same conclusion for substantially the same reason— ambiguity in the meaning of the word “passenger.” Both decisions were rendered prior to our decision in Delaney, 5 Cir., 308 F.2d 484 (1962). If these two United States District Judges are correct, as they surely must be, then the majority is also overruling the decisions of the Court of Civil Appeals of Texas composed of three Texas judges, and five justices of the Supreme Court of Texas, making a total of ten Texas judges who have held the meaning of the word “passenger” to be ambiguous.¹ See Continental Casualty Co. v. Warren, supra; Delaney v. United Services Life Insurance Company (W.D.Texas 1961) 201 F. Supp. 25. The decision by Judge Davidson is not reported.

I take my stand with the Texas judges on what constitutes Texas law. That is our duty under the Erie Doctrine, whether or not we like the Texas law.

The first PLAIN ERROR of the majority is the following unsupportable conclusion :

“The term [“passenger”] is not inherently ambiguous when used in its common or popular meaning.”

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“We hold that common or popular meaning of ‘passenger’ does not include the pilot.”

The majority opinion is anchored to the two quoted sentences; both are wrong. If the quoted statements are the law of Texas, the following statements from the Texas Warren decisions have been overruled ; the two are in direct and irreconcilable conflict with each other:

“We find the word ‘passenger’ has no universal or inflexible meaning which will apply to all cases. There is stated in 13 C.J.S., Carriers, § 544, p. 1047: ‘It is difficult to lay down a comprehensive definition of the word “passenger,” or to exhaust in a single statement all the possible circumstances under which the relation of carrier and passenger may exist * * *.’ Webster’s Twentieth Century Dictionary defines ‘passenger’ as ‘one who passes on his way; a traveler; a pilgrim; a wayfarer; * * 248 S.W.2d at 316 (Emphasis added)

The Supreme Court of Texas affirmed the foregoing statement by the Texas Court of Civil Appeals and stated in its own opinion that the word “passenger” is ambiguous:

“Now the mere word ‘passenger’ cannot be said to exclude the pilot, although, here too, the insurer might have excluded him beyond question by the simple insertion of a phrase such as ‘and not as the pilot.’ As sufficiently demonstrated in the opinion of the court below, such dictionary definitions as give the word a significance of non-operator of the vehicle concerned are but one of several definitions given by the same work, while common parlance undoubtedly uses it at times in the sense of ‘occupant’ of a private vehicle, as in the familiar expression ‘a six-passenger automobile.’ We are cited to no decision fixing the meaning to exclude the operator of a private vehicle, which the aeroplane in question here undoubtedly was, and the significance of ‘passenger’ as applied to common carriers has little relevance to a situation where no carriage for hire, public or private is involved.” 254 S.W.2d at 764 (Emphasis added)

The error of the majority opinion and the correctness of the Texas decision as to the ambiguous nature of the word “passenger” is further demonstrated by the fact that over 70 pages in Words and Phrases are devoted to decisions by hundreds of courts from every geographical area of the nation defining and construing the meaning of the word “passenger” and its various connotations. See Yol. 31A, Words & Phrases, (Perm. Ed.) p. 15, et seq.

Another difficulty with the majority is the fact that they fail to come to grips with the Warren decision. They refuse to recognize the question there presented, the defense asserted by the insurance company, and the ultimate holding of the court. I offer the following analysis of the Warren decision:

The Question as Stated by the Texas Court:

“The question raised by appellee’s special exception is founded upon construction to be given the word ‘passenger’ as used in the ‘injury’ clause of the policy.” (Emphasis added)

The Insurance Company’s Defense According to the Texas Court:

“Appellee answered fully and urged a special exception to appellant’s petition, asserting that since said petition alleged that Jesse C. Warren, an employee of Callery & Hurt, Inc., was piloting the aircraft when the fatal injury occurred, he was not in fact riding as a passenger and therefore was not covered.” (Emphasis added)

The Holding of the Texas Court:

“However, we note here that the word ‘passenger’ is used in general terms and will not be given the same construction as it usually carries in connection with cases involving the transportation of persons for hire. As we view it, the word ‘passenger’ is used here in the ordinary sense with the word ‘occupant’. An automobile is usually described in terms of the number of pasengers it was built to transport, including the driver, that is, ‘a five passenger car,’ etc. To some extent, this same ordinary interpretation applies to private airplanes.

“The policy describes the plane in question as being a twin engine six passenger-place Beechcraft aircraft, which statement, no doubt, would be construed by a layman to include a place for the pilot. The least that can be said is that it is susceptible to two interpretations.”

* * * •» * *

“We find the trial court erred in sustaining appellee’s [insurance company] special exception.” (Emphasis added)

All of the foregoing quotations become even more pertinent in light of the majority’s statement of the question to be decided:

“The issue in this case is whether coverage of an airplane pilot is afforded under an insurance contract which excepts death or disability resulting from flight in an aircraft except as a passenger on a civilian plane.” (Emphasis added)

Another SERIOUS ERROR in the majority opinion is a failure to recognize the proper burden of proof. If the insurance company is not liable, it must bring itself within the exclusionary provisions of the policy. Such burden is on the insurance company. The majority has stated:

“And we cannot say that the word ‘passenger’ on its face includes the pilot or operator of a plane.”

The Texas Supreme Court correctly followed the rule when it stated that there was no decision “fixing the meaning to exclude the operator of a private vehicle” —the airplane in this case. Otherwise stated, it is the burden of the insurance company to show that the insured was excluded from coverage because it is only by the exclusionary clause that the insurance company escapes liability. See opinion by Judge Bell in State Mutual Life Insurance Co. v. Dorsey, et al. (March 1966), 357 F.2d 600.² Laymen do not write insurance policies. Insurance companies do the writing, they do the selling, and they are experts in the business. They are their own draftsmen and lexicographers. If their lexicography and draftsmenship condemn them, they must suffer the consequences. If the law were otherwise, the layman would always lose as a victim of the “fine print.”³

The decision of the majority becomes more shocking and upsetting, and its manifest error is magnified and brought into sharper and more vivid focus by the fact that both of the policies involved in two cases pending in this Court (Paul Revere Life Insurance Company v. First National Bank in Dallas, Administrator of the Estate of Loy Thomas Brown, deceased; United Services Life Insurance Company v. Joan Flores Delaney) were written after the Warren⁴ decision wherein the Texas Court of Civil Appeals stated:

“If the parties intended for the contract to eliminate coverage of the pilot, it could have so provided by using some reasonable term, such as ‘exclusive of pilot,’ or, ‘this policy does not cover the pilot, mechanics or any person riding in the plane employed by the assured to manipulate, to work on, to supervise, or to assist in operation of the plane.’ ”

The Supreme Court affirmed the Texas Court of Civil Appeals and stated:

“ * * * the insurer might have excluded him beyond question by the sim-pie insertion of a phrase such as 'and not as to the pilot.' ”

Judge Spears (and I) also considered this a significant factor and stated:

“Since the Warren Case, supra, was decided more than four years prior to the date the policy herein was issued, it is even more significant that the insurer, after being put on notice, did not exclude the pilot ‘beyond question by the simple insertion of a phrase such as “and not as the pilot.” ’ ”

In order to bolster its holding, the majority abandons Texas law and seeks to justify its position by quoting from Aschenbrenner v. United States Fidelity and Guaranty Co., 292 U.S. 80, 54 S.Ct. 590, 78 L.Ed. 1137 (1934), in which the United States Supreme Court dealt with the word “passenger” in a railroad common carrier case.⁵ The Texas Supreme Court dealt with that subject in Warren and stated:

“ * * * the significance of 'passenger' as applied to common carriers has little relevance to a situation where no carriage for hire, public or private, is involved.”

Assuming the existence of a conflict between the statement from Aschenbren-ner and the statement from the Texas Supreme Court, which one should we follow in dealing with Texas law? The answer is unequivocal and undisputed under every rule. We must follow Texas. Professor Moore in his work Federal Practice (2nd ed.) 0.309 [2], Vol. 1A, p. 3238 states the rule:

“Federal courts have similarly used their discretion where questions have arisen in the ascertainment of the state’s common law. If there are no decisions exactly in point, relevant data in the shape of analogous decisions which afford a reasonably satisfactory basis for a conclusion as to the state law should be followed, even though contrary to a decision of the federal Supreme Court when exercising an independent judgment on the same point. The federal court must consider related decisions, analogies, and any reliable. data tending convincingly to show what the state law is.” (Emphasis added)

Lastly, as indicated in the beginning, we should not overrule two United States District Courts of Texas for light or transient reasons. As the Supreme Court said in Bernhardt v. Polygraphic Co., 350 U.S. 198, 204, 205, 76 S.Ct. 273, 277, 100 L.Ed. 199, 206 (1956):

“Since the federal judge making these findings is from the [local] bar, we give special weight to his statement of what the [local] law is.” (Emphasis added)

Again, the Supreme Court speaking in MacGregor v. State Mutual Life Assurance Co., 315 U.S. 280, 282, 62 S.Ct. 607, 86 L.Ed. 846, 848 (1942) stated:

“No decision of the [state supreme court], or any other court of that State, construing the relevant [state] law has been brought to our attention. In the absence of such guidance, we shall leave undisturbed the interpretation placed upon purely local law by the [local] federal judge of long experience * * (Emphasis added)

For the foregoing reasons I respectfully dissent. It is with regret that one must come to the realization that the beneficiaries of these insurance policies, purchased by deceased loved ones for the benefit of such beneficiaries, will be denied the protection purchased for them by those who paid their money for the policies. I would not take their money away from them because the law of Texas says they should have it. In its revolt against the law of Texas, the majority has unwittingly fallen into egregious error, and a grave injustice has resulted. Perhaps the only remedy in the federal judicial system left to the defeated beneficiaries is to seek the elusive and expensive Writ of Certiorari. Perhaps they will do so.

1 . The following schedule of dates is significant:

1952— April 11 —Decision of Texas Court of Civil Appeals in Warren

1953— January 18 ■ — Decision of Texas Supreme Court affirming Warren

1961— December 27 —Decision by Judge Spears in Delaney

1962— February 9 —Decision by Judge Davidson in Paul Revere

1962 — September 26 — Decision of this Court in Delaney

1962 — October 26 —Denial of application for rehearing in Delaney

Policy Dates in Question

1957— October 1 —Effective date of Delaney policy

1958— May —Effective date of the policy in Paul Revere

2 . Although dealing primarily with the law of Georgia, undoubtedly Judge Bell stated the general rule:

“We must apply the pertinent principles of law to these facts in determining the validity of the appeals. It is undisputed that Messrs. Robinson and Murphy met their deaths by reason of an accident and State Mutual asserts the exclusion in bar of recovery. The burden is on the insurer in such event to show that the deaths fall within the contract exclusion.”

In dealing with the defense of the insurance company asserting that the term “chartered aircraft” operated to exclude coverage, Judge Bell’s language is also interesting on that question:

“We agree that the term was ambiguous. This being so, and if the ambiguous language can be construed in two ways, then the interpretation which is most favorable to the insured must be placed upon it.”

3 . The universal application of this rule is demonstrated by the following quotation from the Ásehenbrenner ease, infra, so heavily relied upon by the majority:

“Nothing in the policy gives any hint that words in this clause are used more narrowly than those in any other. The insurer has chosen the terms and it must be held to their full measure in this clause, as in any other, whether its promise be for more or less.” (Citing cases) (Emphasis added)

4 . See footnote 1.

5 . We quote the full text from Aschen-hrenner, partially quoted by the majority, wherein Mr. Justice Stone dealt with the word “passenger”:

“We think the word ‘passenger’ can not be restricted to the technical meaning which may be assigned to it by the law of common carriers, for it also has a common or popular meaning which would at least include the insured who, with a ticket in his possession, was riding on the steps of the train. In its usual popular significance the term, when applied to one riding a train, in-

dicates a traveller, intending to be transported for hire or upon contract with the carrier, and distinguishes him from those employed to render srevice in connection with the juorney. (citing cases) None of the standard dictionaries defines the term in a fashion suggesting that its meaning is to be limited in terms of the legal liability of the carrier. While for the purposes of judicial decision dictionary definitions often are not controlling, they are at least persuasive that meanings which they do not embrace are not common.”