United Services Life Insurance v. Delaney

RIVES, CAMERON, JONES, JOHN’’* R. BROWN and GEWIN, Circuit Judges:

In the appeal of United Services Life Insurance Company v. Delaney, a panel of this Court, with one judge dissenting, rendered an opinion for the affirmance of a judgment of the district court holding the appellant liable on a policy of insurance on the life of Robert H. Delaney payable to the appellee, Joan Flores Delaney. Delaney v. United Services Life Insurance Co., D.C.W.D.Tex.1961, 201 F.Supp. 25; United Services Life Insurance Co. v. Delaney, 5th Cir. 1962, 308 F.2d 484. The insured was a lieutenant in the United States Army and met his death when an Army plane, of which he was the pilot and sole occupant, crashed. The insurer asserted a freedom from liability by reason of a policy provision1 which limited its liability to premiums paid or the policy reserve if death resulted from aircraft travel except as a passenger on an aircraft owned and operated by the United States Government or as a passenger on a scheduled passenger air service. This Court, construing the insurance contract, held that under the governing law of Texas, the word “passenger” in the limiting clause of the policy had the same meaning as “occupant,” and did not exclude the pilot. In reaching its decision, the Court felt it was impelled to the construction which it adopted by the pronouncements of the Texas Courts in Warren v. Continental Casualty Co., Tex.Civ.App.1952, 248 S.W.2d 315, and Continental Casualty Co. v. Warren, 1953, 152 Tex. 164, 254 S.W.2d 762.

The appeal of Paul Revere Life Insurance Company v. First National Bank is from a judgment against the insurer on policies of accident insurance issued to the appellee’s decedent, Loy Thomas Brown. The language of the policy pertinent here excludes coverage for “death or disability resulting from flight in aircraft except as a passenger on a civilian plane.” The insured was killed while piloting, operating and in control of a private plane which crashed. The insurer asserted the exclusion clauses as a defense to an action on the policies. The district court, applying what it believed to be the law of Texas, and relying upon the Warren case, supra, as the source of the applicable law, rendered a summary judgment against the insurer, and in so doing held that the insured, at the time of his death, was a passenger on a civilian plane. A reconsideration by this Court of the meaning, effect and applicability of the Warren cases resulted in a grave doubt as to whether its rationale had been correctly determined in the United Services case. The Paul Revere case was submitted to the Court en banc. To avoid a conflict in our decisions the United Services case, then pending upon a motion for rehearing, was also referred to the Court en banc.

The two appeals are to be decided by the law of Texas, by which the insurance contracts are to be construed and from which the meaning of the contracts is to be determined. The guidance of the dim light of the Texas decisions leaves the meaning' of the questioned clauses obscure. Without further enlightenment any judgment we might pronounce would be “a forecast rather than a determination.” Railroad Commission of Texas v. Pullman Company, 312 U.S. 496, 499, 61 S.Ct. 643, 644, 645, 85 L.Ed. 971. The Supreme Court has “increasingly recognized the wisdom of staying actions in the federal courts pending determination by a state court of decisive issues of state law.” Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 79 S.Ct. 1070, 3 L.Ed.2d 1058, reh. den. 360 U.S. 940, 79 S.Ct. 1442, 3 L.Ed.2d 1552. It is appropriate that this Court stay its hand until the courts of the State of Texas shall have declared the law of the State of Texas which is applicable to and controlling in the disposition of these appeals. Each of the appellants can, and should, promptly initiate a proceeding in a Texas court seeking a declaratory judgment for the determining of the meaning of the pertinent clauses of the respective insurance contracts, with a review of such judgment by a court of last resort of the State of Texas.

An order will be entered in each of the appeals staying further proceedings in this Court until the courts of Texas shall have been afforded an opportunity to determine the issues to be submitted. This Court will retain jurisdiction for the purpose of taking such further action as may be required.

1 “If this policy shall become a claim of death of the insured due to any service, training, travel, flight, ascent or descent in, on, or from any species of' aircraft at any time, except death resulting from travel as a passenger on an aircraft, owned and operated by the United States Government or as a passenger on a scheduled passenger air service regularly offered between specified airports, the liability of the company under this policy shall be limited to the premiums paid hereunder or to the then net reserve at time of death, if greater; any provision in this policy to the contrary notwithstanding. * íjí * y>