Downing v. Travelers Ins. Co.

• Decision Date: 07 November 1984
• Docket Number: No. 14645,14645
• Parties: Marilyn A. DOWNING, Individually and as personal representative of the estate of Michael Anthony Downing, deceased, Plaintiff-appellant, v. The TRAVELERS INSURANCE COMPANY, a corporation, Defendant-respondent, and Burlington Northern, Inc., a corporation; Camas Prairie Railroad Company, a corporation; and JOHN DOE, a corporation, Defendants.
• Court: Idaho Supreme Court

Page 375

691 P.2d 375

107 Idaho 511

Marilyn A. DOWNING, Individually and as personal representative of the estate of Michael Anthony Downing, deceased, Plaintiff-appellant, v. The TRAVELERS INSURANCE COMPANY, a corporation, Defendant-respondent, and Burlington Northern, Inc., a corporation; Camas Prairie Railroad Company, a corporation; and JOHN DOE, a corporation, Defendants.

No. 14645.

Supreme Court of Idaho.

Nov. 7, 1984.

Rehearing Denied Dec. 13, 1984.

William V. McCann, Jr., Lewiston, and John C. Hoyt, Great Falls, Mont., for plaintiff-appellant.

Robert P. Brown, Lewiston, and Michael C. Geraghty, Spokane, Wash., for defendant-respondent.

BAKES, Justice.

Plaintiff has appealed the district court's grant of summary judgment to the defendant, the Travelers Insurance Company. The issues presented are: (1) whether plaintiff is a third party beneficiary of an insurance policy between plaintiff's deceased husband's employer and defendant, and (2) whether the district court had jurisdiction to hear the case as opposed to the exclusive jurisdiction given to the Railway Adjustment Board by the Federal Railway Labor Act.

Plaintiff's husband, Michael A. Downing, was a train engineer employed by Camas Prairie Railroad, a subsidiary of Burlington Northern. He was previously employed by Burlington Northern before being transferred to Lewiston. Downing would drive the train from Orofino to Lewiston and back to The union to which Downing belonged (United Transportation Union) had entered into a collective bargaining agreement with many of the nation's railroads, including Burlington Northern and Camas Prairie. The collective bargaining agreement contained a provision for accidental death benefits for employees who were killed while riding in authorized "off-track" vehicles while traveling to and from work. A payment of $90,000 ($100,000 minus $10,000 offset for automatic life insurance benefit already paid) was authorized under the collective bargaining agreement where the employee was within the covered conditions and was not within any of the named exclusions.

Orofino, where he would leave it and then "deadhead" back to Lewiston in his own vehicle. "Deadhead" is a trade term describing a railroad employee's travel, by "off-track" vehicles, to and from the starting point of the train. Under a collective bargaining agreement Downing was paid twelve cents per mile and one hour's time for deadheading in "authorized vehicles" back to Lewiston. On the day in question, after the train "tied up" at Orofino at 4:55 p.m. on July 1, 1977, Downing left Orofino for Lewiston, riding a motorcycle which he had left in Orofino prior to his shift on the train. About ten miles out of Lewiston the motorcycle ran out of gas. Downing hitchhiked the rest of the way into Lewiston where he called his wife to come and get him and take gas out to the motorcycle. Apparently, Downing was at a bar or tavern near the service station from which he had called his wife. It is alleged that he had been drinking during this time. Downing admitted to his wife that he drank "two beers" while waiting at the tavern. She drove him with some gasoline back to where he had left his motorcycle and then followed him as he rode it back into Lewiston. As they were crossing the Memorial Bridge, Downing evidently got too close to (or struck) the divider, which caused him to lose control and be thrown into the oncoming traffic lane, where he was hit by another car and killed. The accident occurred four and one-half hours after Downing had left work at Orofino. The drive from Orofino to Lewiston is a distance of 45 miles.

Appellant made a claim to Burlington Northern under Article IV of the "off-track" agreement. Burlington denied the claim, stating that it did not come under the agreement's conditions because he was traveling on a motorcycle, and his authorized off-track vehicle was an automobile; and second, he had already completed his travel to Lewiston and was returning to pick up his motorcycle. Finally, Burlington denied the claim because Downing may have come within the exclusion for driving while under the influence of alcohol. Burlington informed Mrs. Downing and her attorney that their remedy, if they wished to contest the denial, was under the Railway Labor Act since their claim involved construction of a collective bargaining agreement dealing with working conditions.

Appellant, through her attorney, chose instead to make a demand for payment directly against Travelers Insurance Company rather than prosecuting a claim with the Railroad Adjustment Board. Demand was made on Travelers because it had a policy with the Camas Prairie Railroad insuring Camas Prairie for any payouts it was obligated to make under Article IV of the collective bargaining agreement. When Travelers would not honor the demand appellant brought this action, naming as defendants Travelers, Burlington and Camas Prairie, and alleging entitlement to the benefits under the policy between Travelers and Camas Prairie (Count I) and also alleging a conspiracy on the part of all three defendants to defeat her claim under the policy (Count II).

One month after the complaint was filed, defendants Burlington Northern and Camas Prairie removed the case to federal district court. All three defendants then moved for summary judgment, and plaintiff Downing moved for an order remanding the case to the state district court on the grounds that there was no jurisdiction in the federal district court. Without giving specific reasons, the United States District After remand to the state district court, the defendants moved for summary judgment. ¹ The district court granted summary judgment on the conspiracy claim (Count II), after the plaintiff acknowledged that she had no evidence of a conspiracy. Summary judgment was then granted to Travelers Insurance Company on Count I. Plaintiff Downing has appealed only the summary judgment in favor of Travelers on Count I.

Court vacated the removal order and remanded the case to the state district court where it was originally filed to determine whether or not the issue was a "minor dispute" under the Railway Labor Act.

I

Appellant's right to death benefits stems from the collective bargaining agreement between the union and the railroad-employer, which provides:

"Where employees sustain personal injuries or death under the conditions set forth in paragraph (a) below, the carrier will provide and pay such employees, or their personal representative, the applicable amounts set forth in paragraph (b) below, subject to the provisions of other paragraphs in this Article.

"(a) Covered conditions:

"This Article is intended to cover accidents involving employees covered by this Agreement while such employees are riding in, boarding, or alighting from offtrack vehicles authorized by the carrier and are

"(1) deadheading under orders ...."

The collective bargaining agreement specifically requires the employer to pay the benefits if certain conditions are met. Nothing in the agreement requires the employer to provide the death benefit through an insurance policy; the death benefit was strictly a potential liability of the employer. After this collective bargaining agreement was entered into, the employer, Camas Prairie, opted to insure against this potential liability under the collective bargaining agreement with a policy purchased from respondent Travelers. The policy in question was a group policy, but it was not the ordinary type of group policy in which the employees form the group. Rather, the group referred to in the policy was a group of employer-railroads who had entered into similar collective bargaining agreements. The group policy was to provide coverage for the liability imposed upon them by the various collective bargaining agreements with the union. The policy covers the employer's liability under the collective bargaining agreement for bodily injury, including death, caused by an accident which is sustained by an employee of one of the participating employers while the employee is traveling in an off-track land conveyance or while deadheading under orders. All benefits are payable to the participating employer upon receipt of proof from the employer of the occurrence for which the claim is made. The policy makes no provision for payment to any employee. On the contrary, the policy specifically provides that "[a]ll benefits provided in this Article V shall be paid to the participating Employer." (Emphasis added.) It also provides that benefits are to be paid to the employer "upon receipt of written proof on the Insurer's forms," and that the employer "shall provide such reasonable information as may be necessary to the investigation and settlement of claims." The group policy does not allow for a claim to be presented by the employee or paid directly to such employee. ² As noted in the affidavit of E.J. Kinder, an employee of Travelers:

This policy was entered into directly with the railroads, as participating employers. All of the benefit payments made under the policy are made directly to the employers, not to any injured employee, or his heirs or personal representative. The policy is, in fact, a reimbursement of the respective participating employers' liability under their collective bargaining agreements with the various railway labor unions, dated September 14, 1968, together with any subsequent modifications or amendments. Any potential claim for benefits by an employee, or his heirs or personal representative, is made directly to the railroad, not to the Travelers Insurance Company, and is, in fact, investigated by the railroad and the railroad determines whether there is liability under the collective bargaining agreement. Any participating railroad employer submits a claim under policy GA822432 only after it itself has made payment, or is about to make payment. Upon proof of claim submitted by any participating railroad employer, the...