Bernstein v. FIDELITY U. LIFE INS. CO., 77-1058C(A).

• Decision Date: 06 April 1978
• Docket Number: No. 77-1058C(A).,77-1058C(A).
• Parties: Phyllis Ann BERNSTEIN, Plaintiff, v. FIDELITY UNION LIFE INSURANCE CO., Defendant.
• Court: U.S. District Court — Eastern District of Missouri

449 F. Supp. 327

Phyllis Ann BERNSTEIN, Plaintiff, v. FIDELITY UNION LIFE INSURANCE CO., Defendant.

No. 77-1058C(A).

United States District Court, E. D. Missouri, E. D.

April 6, 1978.

Michael D. Mulligan, St. Louis, Mo., for plaintiff.

Kenneth F. Teasdale, Richard A. Oertli, St. Louis, Mo., for defendant.

MEMORANDUM OPINION

HARPER, District Judge.

This matter is before the Court on the motion of plaintiff for partial summary judgment and the cross-motion of defendant for summary judgment.

Plaintiff, Phyllis Ann Bernstein, brought this action seeking accidental death benefits allegedly due and owing from Policy No. 366703 issued by the defendant, Fidelity Union Life Insurance Company, which insured the life of plaintiff's husband, Gary Richard Bernstein, now deceased. Plaintiff also seeks damages and attorney's fees for an alleged vexatious refusal to pay by the defendant.

Plaintiff is a citizen of the State of Missouri. The defendant is a corporation organized and existing under the laws of the State of Texas, maintaining its principal place of business in that state. The jurisdiction of this Court exists pursuant to 28 U.S.C. § 1332(a) inasmuch as diversity of citizenship exists between the plaintiff and the defendant, and the amount in controversy exceeds $10,000.00.

The pleadings, exhibits, answers to interrogatories, affidavit, insurance policy, and briefs submitted disclose the following facts: The plaintiff is the widow of Gary Bernstein and the named beneficiary on the policy at issue. Gary Bernstein was killed on June 11, 1977, while competing in an aerobatic contest over Lekrone Airport, Salem, Illinois, when his single engine Stits Playboy airplane crashed. Jack Lane, a participant in the contest, testified by affidavit that Gary Bernstein was originally flying his plane at approximately 3,500 feet over the field. Lane stated that Bernstein's plane made a 360 degree loop and then followed with an 180 degree turn. At that point, debris began to fall off the aircraft's right wing. The aircraft nose-dived and crashed into the ground. Bernstein who was the sole occupant and pilot of the plane, died immediately.

At the time of his death, Bernstein's life was insured under Policy No. 366703 which was issued by the defendant (Exhibit A to plaintiff's complaint). In addition to other coverages, the defendant's policy provided for a $20,000.00 benefit for accidental death effected through external means. However, the Supplemental Contract for Additional Benefits for Accidental Death expressly excludes from accidental death benefit coverage, "death * * * resulting directly or indirectly from * * * descent from any aircraft, riding in any kind of aircraft if the Insured participated in any kind of training or had any duties whatsoever aboard such aircraft." (Emphasis added.) (Exhibit A to plaintiff's complaint, Supplemental Contract for Additional Benefits for Accidental Death, p. 2)

After the insured's death, plaintiff duly submitted a proof of loss form prepared by the defendant and made claim for all benefits due under the policy, including the accidental death benefit. The defendant paid to plaintiff the sum of $12,765.83 representing the proceeds due under all coverages provided by the policy other than the accidental death coverage. The defendant has refused to pay to plaintiff the $20,000.00 accidental death benefit claimed due. This action followed.

Plaintiff has filed a motion for a partial summary judgment as to the question of whether the insured was covered by the accidental death benefit terms of the policy. Plaintiff contends that the insured's death falls within the terms of the accidental death coverage of the policy and that the only disputed fact pertains to damages and attorney's fees which are recoverable for a vexatious refusal to pay under V.A.M.S. 375.420. The defendant has filed a cross-motion for summary judgment contending that there is no accidental death coverage in the instant case.

There is no dispute as to the facts. This action turns solely on the applicability of the exclusionary terms of the accidental death coverage. The parties do not contend otherwise. "Disputes involving the interpretation of unambiguous contracts are appropriate cases for summary judgment." Parish v. Howard, 459 F.2d 616, 618 (8th Cir. 1972). See also Green v. Valve Corp. of America, 428 F.2d 342, 344 (7th Cir. 1970); Universal Fiberglass Corp. v. United States, 400 F.2d 926, 928-29 (8th Cir. 1968).

Rule 56 of the Federal Rules of Civil Procedure considers summary judgment and provides in pertinent part:

"(c) Motion and Proceedings Thereon. * * * The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

Summary judgment is an extreme remedy which is not to be entered unless the movant has established its right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances. Weber v. Towner County, 565 F.2d 1001, 1005 (8th Cir. 1977); Bellflower v. Pennise, 548 F.2d 776 (8th Cir. 1977); Robert Johnson Grain Co. v. Chemical Interchange Co., 541 F.2d 207 (8th Cir. 1976). In passing upon a motion for summary judgment the Court is required to view the facts in the light most favorable to the party opposing the motion. The benefit of all reasonable inferences drawn from the underlying facts are to be given to the party opposing the motion. Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Diebold, 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Weber v. Towner County, supra at 1005; Robert Johnson Grain Co. v. Chemical Interchange Co., supra at 210.

The case before the Court is one wherein summary judgment may properly be granted and judgment will be entered in favor of the defendant, since no genuine issue of any material facts exists between the parties.

Initially this Court must determine the applicable law. A federal court must apply the choice of law rules of the state in which it sits in determining what law to apply in cases invoking the court's diversity jurisdiction. Klaxon v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). The plaintiff is a Missouri resident. The insured was a Missouri resident at the time he applied for the insurance policy and at the time of his death. The accident occurred in Illinois. The insurance contract was executed in Texas. The plaintiff asserts that Missouri law applies, citing Moss v. National Life & Accident Ins. Co., 385 F.Supp. 1291 (W.D. Mo.1974). The defendant does not object to the application of Missouri law.

Missouri has adopted the principal contacts test in tort cases as set forth in the Proposed Official Draft of the Restatement (Second) on Conflicts of Law § 145. Kennedy v. Dixon, 439 S.W.2d 173, 181 (Mo. 1969). Since the decision in Kennedy, no Missouri appellate court has either adopted or refused to adopt the Restatement (Second) § 145 approach in the area of contracts. However, decisions from federal courts applying Missouri choice of law rules, have adopted the Restatement (Second) approach in anticipation of the Missouri Supreme Court's decision to do so. Moss v. National Life & Accident Ins. Co., supra; Nelson v. Aetna Life Ins. Co., 359 F.Supp. 271, 284 (W.D.Mo.1973); Foam-Tex Industries, Inc. v. Relaxaway Corp., 358 F.Supp. 8, 12 (E.D.Mo.1973); Binkley v. Teledyne Mid-America Corp., 333 F.Supp. 1183, 1185 (E.D.Mo.), aff'd 460 F.2d 276 (8th Cir. 1972).

Section 192 of the Restatement (Second), Conflicts of Law, provides:

"The validity of a life insurance contract issued to the insured upon his application and the rights created thereby are determined in the absence of an effective choice of law by the insured in his application, by the local law of the state where the insured was domiciled at the time the policy was applied for, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied."

The insured was a resident of Missouri at the time of his application for the policy, and no choice of law is contained in the policy. In light of the lack of objection by the parties, the prior decisions in Federal district courts in Missouri, and the doctrine contained in Restatement (Second) § 192 of Conflicts of Law, this Court concludes that Missouri courts would decide this case under Missouri law.

In deciding this case, this Court is bound by the general rules relating to the construction of insurance policies in Missouri. These principles are best summarized in Jordan v. United Equitable Life Ins. Co., 486 S.W.2d 664, 666-67 (Mo.App.1972), wherein the court stated:

"The construction of insurance contracts is governed by the same general rules as are applied to the construction of other written contracts. Plain and unambiguous language must be given its plain meaning. If the words used are ambiguous or capable of different constructions, the policy is to be construed strictly against the insurer and liberally in favor of the insured. The meaning of the terms is to be tested by the common understanding and ordinary speech of average men and women. The function of the court is not to make a contract for the parties, but to construe the language used, and has no authority to rewrite the contract. * * *

"Exceptions to liability are to be construed to give the insured the protection which he reasonably has a right to expect. * * * These general rules do not, however, authorize a perversion of language or the exercise by the court of

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