Wilmington Trust Company v. Travelers Insurance Co.
| Decision Date | 14 September 1954 |
| Docket Number | Civ. A. No. 487,488,500. |
| Citation | 125 F. Supp. 520 |
| Parties | WILMINGTON TRUST COMPANY, etc. v. The TRAVELERS INSURANCE CO., etc. Allaire Crozer DU PONT v. The TRAVELERS INSURANCE CO., etc. WILMINGTON TRUST COMPANY, etc. v. AETNA LIFE INSURANCE COMPANY, etc. |
| Court | U.S. District Court — District of Delaware |
E. Ennalls Berl and Frank O'Donnell (of Berl, Potter & Anderson), Wilmington, Del., and Donovan, Leisure, Newton, Lumbard & Irvine, New York City, for plaintiffs.
James R. Morford (of Morford, Bennethum & Marvel), Wilmington, Del., and Charles I. Thompson and Philip Patterson (of Ballard, Spahr, Andrews & Ingersoll), Philadelphia, Pa., for defendants.
These cases were tried by juries. The juries were unable to reach verdicts and were discharged. During trial, defendants' motions for directed verdicts were denied. Defendants now move under F.R. 50(b), 28 U.S.C., for judgments in accordance with their motions for directed verdicts. Similar motions were filed by plaintiffs but were later withdrawn. The history of this litigation may be found in the note.1
The parties conceded the facts. Five life insurance policies, containing aviation exclusion clauses, were issued in 1935 by The Mutual Life Insurance Company of New York, The Travelers Insurance Company, and Aetna Life Insurance Company on the life of Richard C. duPont, who was killed in a glider accident. Suits were instituted on the policies. Our CA 499 involved Mutual Life; CA 487-8 were brought against Travelers and CA 500 against Aetna. The same background facts related to all the policies; but the policies contained slightly different provisions as to coverage. The Mutual Life case was selected as the first and test case. Facts were stipulated, and defendant filed motions for summary judgment. Mutual Life's position was tentatively sustained. See, D.C.Del., 68 F.Supp. 83. Plaintiff then amended the complaint. Thereafter, on further motion and argument, summary judgment was entered for Mutual Life, D.C.Del., 76 F.Supp. 560. The Court of Appeals affirmed, 3 Cir., 177 F. 2d 404. Reargument before the Court of Appeals was denied. Certiorari was then denied by the Supreme Court of the United States, 339 U.S. 931, 70 S.Ct. 665, 94 L.Ed. 1351. Finally, plaintiff filed a "Renewed Petition for Rehearing" with the Court of Appeals. This was denied.
As the Mutual policies had been delivered in Wilmington, the substantive law of Delaware governed. The policies of Travelers and Aetna were delivered in New York, and I held they were governed by the law of that state. As in the Mutual Life case, in the Travelers and Aetna cases the same facts were stipulated, but each side reserved the right to object to any fact on the grounds of relevancy and materiality, and the parties reserved the right at trial to introduce additional evidence.
Prior to the jury trials in the Travelers and Aetna cases, the parties filed, once again, cross-motions for summary judgment. Defendants contended the Mutual Life decision controlled. Plaintiffs argued, as to the Travelers and Aetna cases, New York law controlled and, if the policies were ambiguous, the court should enter summary judgment against defendants; or in the alternative, the intent of the parties as to risk coverage was a fact question to be determined by a jury in each of the cases after trial. The motions for summary judgment were denied on the ground that, under New York law, the jury should resolve the question of ambiguity, which I found lurked in these particular policies, after examination of all the facts. At trial before the juries plaintiffs offered the stipulated facts in evidence. Defendants objected, as irrelevant, to paragraphs 26, 27 and 28 of the stipulation of facts, and such objection was sustained.2 Defendants Travelers and Aetna then made a proffer of evidence relating to their underwriting practices. The purpose of this proof was to demonstrate Travelers and Aetna intended for many years to exclude military as well as civilian flying from coverage liability by the use of the phrase, in their policies, that no liability would attach where death occurred as a result of "service, travel or flight in any species of aircraft". Much of this evidence offered in the Travelers case I ruled should be excluded. In the Aetna case no objection was made by plaintiff to this species of evidence.
In connection with the two Travelers policies, the application which duPont signed for $100,000 of insurance showed he was a manufacturer of sail planes, and he made aerial flights. Thereupon he executed an "Aviation Supplement" which became a part of his application for insurance and which was attached to the policies. The questionnaire related to flying and was directed to both military and civilian aviation. Answers to the questionnaire disclosed duPont was the owner of a motor-driven plane and a pilot of both motor-driven planes and gliders or sail planes. Defendant Travelers was informed duPont had exhibited sail ships in soaring meets, had been active in creating interest in soaring, and he hoped the Navy or Army would give a large enough order to enable duPont to procure capital from his relatives to manufacture gliders.3 After these facts were before it, Travelers issued two policies to duPont.4 The first page of the policies contained the following provisions:
A rider was made part of the first policy. It was called "Supplemental Agreement" and "Special Provision as to Aeronautics", and provided:
"Death as a result of service, travel or flight in any species of aircraft, except as a fare-paying passenger, is a risk not assumed under this contract; but, if the Insured shall die as a result, directly or indirectly, of such service, travel or flight, the Company will pay to the beneficiary the reserve on this contract." (Emphasis added). The same "Supplemental Agreement" was made a part of the second policy, but the phrase "except as a fare-paying passenger" was omitted.5 These riders were attached to page 3 of the policies. At the bottom of the first page of one of the policies, a stamped notice indicated the insurance was modified by the aircraft rider attached. An identical notice was also stamped on the other policy.
At about the same time duPont filed his application with defendant Travelers, he applied to Aetna for $35,000 additional insurance. He executed a form entitled "Report on Aircraft Ascensions", wherein he gave the same information as to aviation and glider activities as had been disclosed to Travelers. Aetna sought information of duPont's connections with any Officers Reserve Corps, National Guard Air Service, flying or glider club, and whether he had flown during the past two years under these conditions. To these questions, duPont answered "Yes". On the first page of the Aetna policy the following notice was typewritten:
"This agreement is subject to special condition relating to aeronautics endorsed on the reverse of this page." Stamped on the back of page 1 and signed by Aetna's Secretary appears the following rider:
The incontestable provision of the Aetna policy is printed on page 6 and reads as follows:
"This policy and the application herefor, a copy of which application is attached hereto and made a part hereof, constitute the entire contract between the parties hereto, and it shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue except for nonpayment of premium."
Stamped in large type by this paragraph appear the words:
"Amended See Back of Page 1"
At trial, evidence showed prior to 1930 defendant Aetna rarely issued policies which presented an aviation hazard. In 1930 it excluded all aviation risk. Between 1930 and 1942 the only form of aviation rider used by Aetna was the form attached to the duPont policy. It appeared that, in selecting the rider to be used, Aetna made no distinction between military and civilian flights; both were to be excluded from coverage and liability.
duPont's tragic death was described by the Court of Appeals in the Mutual Life case, 3 Cir., 177 F.2d at page 405:
After duPont's death, defendants Travelers and Aetna paid the amount of the reserves of the policies to the beneficiaries named in all three...
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