Jordan v. Reliable Life Ins. Co.
| Citation | 716 F. Supp. 582 |
| Decision Date | 03 July 1989 |
| Docket Number | Civ. A. No. 88-AR-0543-S. |
| Parties | Carolyn L. JORDAN, etc., Plaintiffs, v. RELIABLE LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Alabama |
James J. Thompson, Jr., Hare, Wynn, Newell and Newton, Birmingham, Ala., for plaintiffs.
Dan H. McCrary, Balch & Bingham, Birmingham, Ala., Robert C. von Ohlen, Jr., Lord, Bissell & Brook, Chicago, Ill., for Reliable Life Ins. Co.
This case, brought by Carolyn L. Jordan, both as executrix of the estate of James I. Jordan, deceased, and as the beneficiary of a life insurance policy on her deceased husband, was tried with an advisory jury which answered special interrogatories somewhat enigmatically. In Jordan v. Reliable Life Ins. Co., 694 F.Supp. 822 (N.D. Ala.1988), this court on September 8, 1988, held that defendant, Reliable Life Insurance Company, at that time had failed to establish that the controversy over whether or not Mr. Jordan was covered by Reliable's policy at the time of his death was governed by the Employee Retirement Income Security Act of 1974. The court, thereupon, denied Reliable's motion to strike Mrs. Jordan's jury demand. Later, based on newly developed information pressed upon the court by Reliable, and convinced that ERISA may have swallowed up, like a "black hole," even this garden-variety claim on an accidental death policy inasmuch as the contract was part of an employee benefit package, the court, sua sponte, invoked Rule 39(c), F.R.Civ.P., and empaneled an advisory jury, which heard the evidence and which answered special interrogatories as follows:
YES ________ NO X
If this had been a trial by jury as a matter of right under the Seventh Amendment and Rule 39(a), F.R.Civ.P., as is now strongly indicated by the Supreme Court in Granfinanciera, S.A. v. Nordberg, ___ U.S. ___, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989),1 the court's problem with the jury's
answer to interrogatory No. 4 would be somewhat different. Granfinanciera was closely presaged by Tull v. United States, 481 U.S. 412, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987). Granfinanciera more than Tull undercuts Chilton v. Savannah Foods & Industries, Inc., 814 F.2d 620 (11th Cir. 1987), and makes this court regret having retreated at the last moment in Whitt v. Goodyear Tire & Rubber Co., 676 F.Supp. 1119 (N.D.Ala.1987). In Whitt, this court might have been braver if the Eleventh Circuit had then written its United States v. M.C.C. of Florida, Inc., 863 F.2d 802 (11th Cir.1989), its post-Tull acknowledgement of the Supreme Court's superior wisdom as to availability of the Seventh Amendment in trials of traditionally legal issues arising during the trial of statutory causes of action. The Supreme Court, as presently constituted, most definitely believes in the Seventh Amendment, a belief this court enthusiastically shares. However, as a result of Reliable's fortuitously successful motion to strike the jury demand before Granfinanciera came along, the court is free to make its own findings of fact, with or without taking the jury's inscrutable advice. In the future this court will not hesitate to grant a jury trial in ERISA cases where the remedy sought is one not "preempted" and historically considered "legal."
In its answer to Mrs. Jordan's complaint, Reliable set up as its "First Affirmative Defense" the following:
Defendant Reliable Life alleges that the Accidental Death Group Insurance Policy issued to Vulcan Materials Company Mr. Jordan's employer does not provide coverage for loss caused by, contributed to or resulting from injuries sustained while piloting or serving as a member of the crew of any aircraft. Defendant Reliable Life alleges that plaintiff's claim is for loss which was caused by, contributed to or resulting from James I. Jordan piloting or serving as a member of the crew of the aircraft in which he sustained fatal injuries, and therefore defendant Reliable Life has no duty or obligation to plaintiff under the terms of the policy.
In "Defendant's Position" in the final pre-trial order, consistent with its answer, Reliable asserted:
Defendant contends that Plaintiff's testate was piloting or serving as a member of the crew of the flight in question and that under the applicable ERISA standard of review, policy nos. 1037-ADLP-02 and 1037-ABAKF-02 do not provide coverage for this claim.
Thereafter, Rule 16(e), F.R.Civ.P., precluded any change in the issues without an amendment to the pre-trial order. No such amendment was sought or obtained.
In Jordan v. Reliable Life Ins. Co., this court described the only issue as follows:
The action was brought on a group policy of accidental death insurance written by Reliable. The policy designated Mr. Jordan's estate as beneficiary in the event of Mr. Jordan's accidental death. The policy contained an exclusion for death occurring in an airplane in which the insured was serving as pilot or member of the flight crew. The only disputed issue of fact is a simple one, namely, whether or not Mr. Jordan, who admittedly died in an air crash, was himself acting as a member of the crew at the time of the crash.
At trial, Reliable finally conceded that its denial of Mrs. Jordan's claim should be judged de novo upon the burden of proof applicable to actions on contracts and not on the "abuse of discretion" or the "arbitrary and capricious" standard which Reliable had previously insisted upon. If the denial of Mrs. Jordan's claim by Reliable had been judged upon whether or not Reliable acted arbitrarily and capriciously, the outcome in this case would be different, because the dispute between these parties was certainly a legitimately debatable one. Apparently, however, by the time of trial, Firestone Tire & Rubber v. Bruch, ___ U.S. ___, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), had struck home, and one previously routinely interposed ERISA defense had become an anachronism.
Contrary to the way Reliable couched the issue in its "First Affirmative Defense" and in its "Defendant's Position," and contrary to the way this court stated the issue in Jordan, 694 F.Supp. at 823, Reliable, at trial, asked the court to place the burden of proof on Mrs. Jordan to prove, by a preponderance of the evidence, that her deceased husband was, in fact, a "passenger" at all times pertinent.
The evidence was undisputed that Mr. Jordan and his instructor-pilot took off in a private, single-engine aircraft, with Mr. Jordan at one of the dual sets of identical controls. While in the flight pattern for a landing, the engine failed. The highly-trained instructor-pilot immediately took over the controls from the much less experienced Mr. Jordan. For approximately the last thirty seconds of the flight Mr. Jordan did not touch the controls. When the plane could not reach the runway, it crashed, and Mr. Jordan was killed. The instructor lived to become the key witness.
The policy language here pertinent is as follows:
(emphasis supplied).
There is no dispute but that the subject aircraft was "previously tried, tested and approved." The real issue, then, as previously stated, was whether Mr. Jordan was riding as a "passenger," on the one hand, or as a "pilot or member of the crew," on the other.
In another section of the policy, entitled "EXCLUSIONS," the following appears:
(emphasis supplied).
Reliable first argued to the court, and then to the jury, that this language is unambiguous in two crucial respects: (1) that the status of an Insured Person must be established during the flight at some time earlier than at the moment of the injury or death; and (2) even if the Insured Person's status is to be determined as of the moment of injury or death, Mr. Jordan was clearly then a "pilot" or "member of the crew," and therefore not a "passenger." These were the same arguments Reliable made in support of its motion for summary judgment, which earlier was denied.
The advisory jury obviously either found that the contract was ambiguous as to the time at which Mr. Jordan's status was to be established and thus to be resolved against the drafter, Reliable, or that the contract...
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