Ludwig v. Massachusetts Mut. Life Ins. Co.

• Decision Date: 17 October 1975
• Docket Number: No. 75-1119,75-1119
• Parties: Benno P. LUDWIG, as Administrator of the Estate of Dean E. Cane, Deceased, Plaintiff-Appellant, v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 376

524 F.2d 376

Benno P. LUDWIG, as Administrator of the Estate of Dean E Cane, Deceased, Plaintiff-Appellant, v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 75-1119.

United States Court of Appeals Seventh Circuit.

Argued May 29, 1975.

Decided Oct. 17, 1975.

Edward L. Overtree, Ward A. Meythaler, Chicago, Ill., for plaintiff-appellant.

Owen Rall, Chicago, Ill., for defendant-appellee.

Before PELL and SPRECHER, Circuit Judges, and EAST, ^* Senior District Judge.

EAST, Senior District Judge.

THE APPEAL

The plaintiff-appellant Benno P. Ludwig, as Administrator of the Estate of Dean E. Cane, deceased, (hereinafter for convenience referred to as Cane) appeals from an adverse summary judgment denying his claim for double the amount of accidental death benefits under a life insurance

policy (policy) issued by the defendant-appellee Massachusetts Mutual Life Insurance Company (hereinafter for convenience referred to as Insurer). We reverse and remand.

FACTS

The undisputed facts are:

Cane then a resident of the state of Michigan and within that state applied to the Insurer for the policy on August 27, 1970, which policy was finally made, delivered, and became effective within Michigan on October 27, 1970. Thereafter and prior to July 26, 1972, Cane changed his residence to the state of Illinois and on that date made a change of beneficiary under the policy to his estate.

On the following August 2, while still a resident of Illinois and while the policy was in force and effect, Cane purchased a Burlington Northern Railroad commuter passenger ticket from Lisle, Illinois to Chicago, Illinois. He entered the railroad station in Lisle with the intention of boarding the appropriate train. As he attempted to cross the tracks to reach the proper boarding location for his eastbound commuter train, he was struck and killed by a westbound mail freight train proceeding through the station area. The commuter train had not yet arrived in the station at the time of the accident.

The Insurer had paid the estate the ordinary death benefits as provided in the policy and an additional $20,000 accidental death benefits, but had denied further liability for double benefits as provided in the accidental death benefit agreement provisions of the policy (hereinafter for convenience referred to as accidental provision). The accidental provision in its pertinent parts reads:

"If such death was the result of an injury sustained while the insured was a passenger in or upon a public conveyance then being operated by a common carrier to transport passengers for hire the amount which otherwise may be payable under this agreement ($20,000) will be doubled."

PROCEEDINGS IN THE DISTRICT COURT

Cane asserted and the District Court agreed under the command of Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), and Erie R. R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), that the conflict of law doctrine and rule of the forum, the State of Illinois, determined whether the laws of the State of Illinois or the State of Michigan governed the rights and duties of the parties under the policy. Cane urged and the District Court concluded under the Illinois law that the interpretation and construction of the policy and its disputed accidental provision specifically must be governed by the laws of the place of making, namely: the State of Michigan, citing as authority Gray v. Penn Mutual Life Insurance Co. of Philadelphia, 5 Ill.App.2d 541, 126 N.E.2d 409 (1955), and Hartliep Transit Co. v. Central Mut. Ins. Co., 288 Ill.App. 140, 5 N.E.2d 879 (1936). Gray 126 N.E.2d at 413, quoting Hartliep, states:

"The general rule is that a contract of insurance is deemed to be executed at the place where the last act is done which is necessary to make the same binding upon the parties (here the payment of the first premium) . . . Another general rule in the construction of contracts in matters affecting their validity and the rights of the parties is that they are governed by the law of the place where the contract is made, at the time of the making thereof, and that such law is as much a part of the contract as if incorporated therein. This rule prevails in the absence of any agreement of the parties to the contrary. Gaston, Williams & Wigmore of Canada v. Warner, 260 U.S. 201, 43 S.Ct. 18, 67 L.Ed. 210, 211 (1922)." (Italics supplied).

Cane claims recovery on the accidental provision under the holdings of the Supreme Court of Michigan as delineated in the following cases: Quinn v. New York Life Ins. Co., 224 Mich. 641, 195 The Insurer, acknowledging the undisputed facts asserted, first, that under the rationale of Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593 (1970) (hereinafter cited as Ingersoll ), as extended by P. S. & E., Inc. v. Selastomer Detroit, Inc., 470 F.2d 125 (7th Cir. 1972) (hereinafter cited as P. S. & E.), the law of Illinois governs the rights and duties of the parties under the policy; ¹ and secondly asserted non-liability under the laws of either state.

N.W. 427 (1923) (hereinafter cited as Quinn ); Spangler v. Saginaw Valley Traction Co., 152 Mich. 405, 116 N.W. 373 (1908); Rice v. Michigan Ry., 208 Mich. 123, 175 N.W. 454 (1919) (hereinafter cited as Rice ); Moffit v. Grand Rapids Ry., 228 Mich. 349, 200 N.W. 274 (1924) (hereinafter cited as Moffit ); Wilson v. Detroit United Ry., 167 Mich. 107, 132 N.W. 762 (1911) (hereinafter cited as Wilson ); and the federal case of Preferred Acc. Ins. Co. of New York v. Ladd, 299 F. 562 (6th Cir. 1924).

The District Court noted that the Michigan Supreme Court in Quinn had concluded that the word "on" appearing in the language of the accidental provision reading " 'while traveling as a passenger on a streetcar . . . .' did not necessarily mean physically 'on' the streetcar"; however, the District Court thought "(t)he basic problem in the instant case (to be) somewhat different," and "focus(ed) on the (accidental provision) words 'in or upon a public conveyance then being operated' " and concluded "that the use of the phrase 'in or upon' restricts the definition of 'public conveyance' (as used in the policy) to the actual car or boat used for moving the passengers. Thus where the passenger has not yet entered his train and is merely crossing the railroad tracks, he is not yet 'in or upon' a 'public conveyance'. This precludes the liability under the policy urged by (Cane)."

DISCUSSION

We conclude that the District Court erred in concluding to give or brand the phrase "in or upon a public conveyance" with the narrow and restricted interpretation and meaning to be in or upon "the actual car or boat used for moving" a passenger and thereupon granting the summary judgment. The ruling is in direct conflict with the rationale and holding in Quinn and cannot stand.

The District Court ignored Quinn's expressly stated Michigan rule or test in determining the mutually intended meaning of the common carrier-passenger status ("while the insured was a passenger") required under the accidental provision and in lieu thereof concluded it was "obvious (that) the language in the (accidental provision) is somewhat different from that in the (Quinn policy and the) factual situation in the two cases are quite substantially different." The District Court having thus, we believe, mistakenly swept away Quinn "sought assistance from other courts which have faced similar problems to reach its decision," and ill-advisedly selected London Guarantee & Accident Company v. Ladd, 299 F. 562 (6th Cir. 1924) (hereinafter cited as London) as its guide.

The insurance coverage in London read: Double benefits will be paid "if such injuries are sustained while riding as a passenger . . . (in a passenger elevator)." At 563. The insured's death "came (about) from falling down an elevator shaft in the Garfield Apartments . . . . There were no eyewitnesses of the accident, but, as the insured was found in the bottom of the shaft in the basement, the carriage found standing at the second floor, and the door of the shaft on the first floor found to be open, it would seem that he must have walked through the door on the first floor into the open elevator shaft." At 564. The court held that "the meaning of the expression 'while riding,' the term 'passenger elevator,' as here used, cannot be held, in (its) judgment, to refer to more than the car or carriage," and denied double indemnity liability under the policy since it was "clear that the insured never entered the car itself." At 565.

The District Court drew from its comparison of the wording of the London coverage with that in the Cane accidental death provision the definition and meaning of the Cane phrase "in or upon" as above stated, and following London, denied liability.

We are not able, as was the District Court, to discern any material difference in the wording of the Quinn and Cane accidental death provisions, respectively. Each of the provisions grant coverage to the respective insured "while . . . a passenger on (in or upon) a public conveyance." The placing of any material difference in the meaning of the prepositions "on" or "in or upon" would be rooted in a mere quarrel with words and most unrealistic. If we were restricted to a comparison of policy language for disposition of Cane's claim, we would liken the Cane coverage to that in Preferred Acc. Ins. Co., supra, the companion case to London, which allowed coverage.

However, and in any event, we are satisfied that making a comparison of the language of the two coverages to reach the meaning and definition of the Cane insurance coverage is beside the point and traveling on the wrong track.

We conclude the insured's apartment house elevator-passenger status involved in London and its companion case to be inapposite to the Cane common carrier-passenger status involved in this case, which is all that is required under Quinn.

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