Petition for Writ of Certiorari — Mutual Benefit Health & Accident Ass'n v. Messina

Supreme Court brief1966

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Text

atories it was admitted by her that the alleged covered

flight was one referred to as type (d)“ in the insuring

clause of the policy, viz., one "contracted for by MATS."

(R. 7) It was agreed and found that none of the other

types of flights applied. (App. 24)

At trial the Respondent put in evidence a document ex-

pressly designated a Revocable Permit“ issued by the

Base Commander, Travis Air Force Base, for and on be-

half of the United States, to the said air taxi carrier, ap-

proved by Charles W. Stark, Colonel, U.S. A. F., Command-

er. (App. 3-10) She also showed that, at the time, Colonel

Stark was assigned to MATS. It was also established how-

ever that other commands of the U.S.A.F. were occupying

the base, S.A.C., A.T.C., etc., (R. 73) and that MATS at

the time simply happened to be assigned the maintenance

function of host“ command in addition to its basic func-

tion of providing air transportation to military personnel

and material. (App. 13)

Less than a year before, S.A.C., the Strategic Air

Command of the United States Air Force, completed an

assignment of these same "housekeeping chores.“ (App.

13-14)

Although the Petitioner adduced no evidence at trial,

the Respondent herself put into the record three deposi-

tions taken by the Petitioner. These included the testi-

mony of Lt. General Joe W. Kelly, Commandant of MATS,

and William S. Jamieson, president of the air taxi carri-

er. In his deposition General Kelly stated that the fatal

flight was not contracted for by MATS (R. 64-65), and

that Colonel Stark had no authority to contract on behalf

of MATS for such a flight as the fatal one herein. (R. 64)

The president of the air taxi carrier in his deposition as-

serted that he had no contract with Mfrs. (R. 527 53;

App. 14)

The Respondent neither pleaded nor raised at trial any

question of an ambiguity in the policy. Neither did she

elect to base her right to recover in accordance with the

law of any jurisdiction (App. 24). After introducing, over

objection, evidence tending to show that the air taxi car-

rier was required to approach the air base from a higher

altitude than the Civil Aeronautics Board required of an

inté&rstate commercial carrier (R. 103), and evidence of

the possible recovery by the deceased from his employer

of the $15 expended for the fatal flight ticket (R. 75-81),

the Respondent rested. The Petitioner stood on its Mo-

tions to Dismiss and for Judgment in its favor. (R. 84)

In a Memorandum opinion, the District Court, restated

the issue to be whether the fatal flight was "a regular,

special or chartered flight * * * contracted for by, the

Military Air Transport Service (MATS) * * *, since none

of the other specified types of flights applies." (App. 24)

It then mentioned "the impression that the policy covered

the continuous flight from Japan to Washington, D.C.",

maintaining principally that the reference to special

and chartered' flights would have led a reasonable per-

son in Mr. Messina's position to believe that the air taxi

flight was covered—unless some clear warning to the con-

trary canbe discovered in the terms of the policy.“ (App.25)

Asserting that the warning stamped diagonally and in

a different color on page one of the policy was difficult to

read, the Court then held that in the light of these con-

siderations, interpreting the policy, if the ordinary per-

son in Mr. Messina's position had inquired whether the

flight was or was not ‘contracted for by MATS," he would

have been shown a document called a "Revocable Permit“.

After noting the passenger priority basis, the maximum

prices to be charged its passengers from the air base,

adherence to certain FAA and other operational require-

ments, to which the air taxi carrier agreed, the Court

held that there is benefit flowing to both parties—to the

Air Taxi Service from the fares it can collect from per-

sons flown from Travis; to the Base Commander (and

MATS) from the quicker connections between air fields

and the priority seating arrangements." (App. 29) This

led finally to the conclusion therefore that "since the is-

& -

—

6 ‘

sue in this case is whether a reasonable man would have

been justified in relying upon the Base Commander's ap-

parent authority (as distinct from actual authority) in

‘contracting’ in behalf of MATS" (App. 30), for the pur-

pose of determining whether this flight was covered by

the insurance policy, the flight was one ‘contracted for

by' MATS," (App. 30). (Italics supplied.)

On appeal to the United States Circuit Court of Appeals

for the District of Columbia the Petitioner urged, inter

alia, that the fatal air taxi flight was,not contracted for

by MATS, but by the decedent himself with $15 of his own

money (App. 12); that the Revocable Permit did not con-

stitute a contract between MATS and the air taxi carrier

(App. 5); that if arguendo it were construed as one, it

was not a contract for a flight covered by the policy sued

on (App. 5); that the District Court improperly assumed

that Japanese law contains the same governing principles

of law of contracts as American Contract law“ and that

its holding that it need not decide which state law governs"

(App. 24) was in conflict with the applicable decisions of

this Court (R. 147), witz the views of the other Circuit

Courts of Appeals (R. 148), and with the law of the Dis-

trict of Columbia since 1831 (R. 145-146); and that the

District Court's holding that the fatal flight was one con-

tracted for by MATS" because a reasonable man would

have been justified in relving upon the Base Command-

er's apparent authority (as distinct from actual author-

. ity) in contracting in behalf of MATS" was in conflict with

the applicable decisions of this Court (R. 154).

In a thirteen line Per Curiam, a majority of the Divi-

sion affirmed the judgment of the District Court. Because

of the importance of the case and the failure of the ma-

jority to "undertake any analysis of the issues, however,

Judge Burger, in a vigorous dissent devoted nine pages

to a rectification of that failure. In so doing he scored

the fallacy of the District Court's bringing the Messina's

possibly being misled" argument to the aid of its "taxi-

license - as - MATS - contract theory." (App. 15-16) He

—

also noted that the critical issue of "whether MATS con-

tracted for the fatal flight under the terms of the policy"

was not.resolved. (App. 5)

In a petition for rehearing, the Petitioner again em-

phasized the failure of the majority of the Division of the

Circuit Court to.analyze the issues herein (an award of

interest was demanded and granted although the Respond-

ent had accounted for @onsiderable delay) despite the naz

tional importance of the case and the obvious affect this

decision will have on the underwriting and actuarial bases

of air travel insurance — so vital to the traveling public

and the industry. (R. 156) Again this was rejected with-

out comment except for the repeated disagreement of

Judge Burger with his brethren. (R.129)

REASONS FOR GRANTING THE WRIT 2 J

This Court should grant this writ, if it does not reverse

and order the entry of a judgment for the Petitioner, for

at least four reasons:

(1) The decisions of the Circuit Court of Appeals

(which by a majority of its Division affirmed without any

analysis that of the District Court) is in conflict with a

rule adhered to in all applicable decisions of this Court, H

and the other Circuits, that requires—for its validity by

a government officer—express authority for the execu-

fion of a contract.

The ruling herein that the fatal flight was one con-

tracted for by MATS" was based upon the apparent au-

thority of Colonel Stark to bind MATS in a contract for a

flight such as the fatal one herein (App. 30) despite the

complete absence of any showing of such express author-

ity and the uncontradicted testimony of the head of MATS

quoted above that he had none. ¢

On appeal to the Court below, the Petitioner protested,

to no avail, that express authority must be shown where

it is alleged that a Government agent acted to bind his

principal. (R. 155) N

r w

In United States v. North American Co., 253 U.S. 330,

this Court in an alleged condemnation case restated the ,

said rule thus:

In order that the government shall be liable it must

appear that the officer who has physically taken

possession of the property was duly authorized to

do so, either directly by Congress, or by the offi-

cial upon whom Congress conferred the power.

Similarly, as cited to the Court below, this Court in

Whiteside v. United States, 93 U.S. 247, previously de-

clared that: *

Individuals as well as courts must take notice of

the extent of authority conferred by law upon a per-

son acting in an official capacity, and the rule ap-

plies in such a case that ignorance of the law fur-

nished no excuse for any mistake or wrongful act.

Most recently this Court has in Sutton v. United States,

256 U.S. 575, declaimed:

No contract can be implied from the acts or omis-

_ sions of a government officer, if an express con-

tract by him would have been unauthorized.

The decision below is also in conflict with the view of

the Fourth Circuit which recently held in United States v.

Willis, 164 F. 2d 453, that:

- He who deals with an agent of the government must

look to his authority, which will not be presumed

but must be established. He cannot rely upon the

scope of dealing or apparent authority as in case

of private agent. Citing Sutton v. U.S., supra, and

The Sot Acceptances, 7 Wall. 666, 677. (Italics

supplied.) .

Similarly, the holding below is in conflict with the fol-

lowing Circuit Courts of Appeals decisions:

D.C. Circuit: Blake Construction Co. v. United States,

296 F.2d 3935 3d Circuit: R. F. C. v. Martin Dennis Co.,

195 F. 2d 698; 5th Circuit: United States v. Holley, 199

F. 2d 575; 6th Circuit: Fries v. United States, 170 F.2d

726, cert. den., 336 U.S. 954; 7th Circuit: Brubaker v.

‘@

United States, 342 F.2d 655; 8th Circuit: United States

v. Hoffart, 256 F.2d 186.

(2) This application presents an opportunity to this

Court, in the exercise of its supervisory capacity over

lowey federal courts, to.correct the failure of a majority

of the Circuit Court Division to undertake any znalysis

(as stated by the minority member who filed a vigorous

dissent) of a presented issue of wide and continuing im-

portance; namely, in affirming without discussion a hold-

ing of the District Court, ignoring the clear language of

the policy which carefully and plainly limits its coverage

to specified types of air flighis, and to surface vehicles

operated by or for covered airlines and airports for in-

ter- airport transportation between connecting flights, it

departed from the accepted and usual course of judicial

proceedings and rewrote the insurance policy sub silen-

tio.

The only issue in this case is whether the insurance

policy covered the fatal flight. (App. 13) It is conceded '

that the said flight was not actually operated by MATS,

thus limiting the issue to the portion of the policy deal-

ing with flights "contracted for by MATS." (App. 13)

Nevertheless, despite the complete absence of am-

biguities“ as an issue it was neither pleaded nor raised

at trial the District Court in its Opinion, sua sponte,

treated three words in the policy, regular, special or

chartered," qualifying the six — types of flights enu-

merated immediately thereafter, as "ambiguous." The

observation of dissenting Judge Burger that if those pro-

visions are ambiguous, there are no unambiguous insur-

ance policies" (App. 15) is, of | course, pertinent. But,

more importantly, it emphasizes the departure from the

accepted and usual course of judicial proceedings the

courts have resorted to herein to inject and passively ap-

prove an agonizingly strained interpretation" (App. 16) in-

to policy provisions entirely unrelated to the sole issue

in the case in order to find for the Respondent.

So finding, without being asked, instead of resorting to

the usual judicial procedure of applying appropriate rules

of construction to the allegedly ambiguous words, the

District Court concluded that the policy would have led a

reasonable person in Messina's position to believe that

the air-taxi flight was one contracted for by MATS" un-

less some clear warningtothe contrary can be discovered

in the policy. Rejected, as insufficient, was the following

admonition appearing in its largest type, and in green—a

different color—stamped diagonally across its first page:

"READ CAREFULLY: THIS POLICY IS LIMITED: TO

AIRCRAFT ACCIDENTS: ON SCHEDULED AIRLINES."

The said conclusion also deviated from the ancient and

universally accepted axiom, express io unius, exclusio al-

ter ius, which means literally that when the agreed cov-

ered hazards are specifically enumerated, all others are

inferentially excluded.

This was only another stepping stone however to a

sudden shift in the District Court's reasoning.“ Having

first dealt with the possibility of Messina's having been

misled by the supposed ambiguities, the court, admittedly

"in the light of" the allegedly misleading provisions, went

on to conclude that the fatal flight was one contracted for

by MATS because, "if an ordinary person in Mr. Messina's

position had inquired whether the flight was or was not

contracted for by MATS, he would have been shown a doc-

ument called a Revocable Permit.“ (Italics supplied.)

As Judge Burger noted however, the interpreted proof“

does not come to the aid of the premise. (App. 15-16)

The absurdity of such a basis for holding that the land-

ing license was a contract ought to be so apparent that ar-

gument thereon should be superfluous. As Judge Burger

remarked, it is hardly conceivable that Messina could

have relied on a private arrangement for an air taxi

service to use an air force base as amounting to a MATS

contract within his insurance coverage; he simply would

not have known of such arrangements. (App. 15-16)

Next, if he had asked the heads of either the carrier

or MATS if the instrument was a contract he would have

been told No.“ The only evidence adduced at trial on

the question was by them and they not only gave their

negative opinions, but General Kelly, the Commandant

of MATS, defined a MATS contract for airlift as a de-

fined service the price therefor to be paid by the gov-

. ernment. (R. 65) =

The Respondent, over objection, raised the question

about the possibility of Messina's having later recovered

the $15 fare he paid, but she admitted that it might have

been denied. (R. 81) But even if it were reimbursable

the fact remains that the coverage of this type of hazard

was not agreed to by the Petitioner. Only a particular

flight contracted for (and agreed to be paid for) by MATS

was bargained by the parties to the insurance policy.

And no one other than Messina himself (and the air taxi

carrier) contracted for the fatal flight. The decision of

the majority of the Division of the Circuit Court which in

a thirteen line Per Curiam affirmed the holdings of the

District Court was in short the sanctioning of a judicial

hold up which should not he countenanced by this Court

in its supervisory capacity.

(3) These decisions, unsupported by any competént or

material evidence, which ignore both the pla in language

of the policy and the canons of construction, if left undis-

turbed will seriously-jeopardize the continued availabil-

ity of economical short-term accident insurance cover-

age by the great portion of the air-traveling public and

military personnel and their dependents who travel main-

ly on flights of scheduled carriers and those of the Mili-

tary Air Transport Service of the United States.

—

This is a specific illustration of the extent of the na-

tional importance of the issue herein, present and in-

creasing, for despite the readily measurable risks of

travel on regularly scheduled and rigidly supervised air-

‘lines, the holding below pays no heed to the actuarial fac-

tors that enter into the obviously greater risks of the rel-

atively unregulated non-scheduled air taxis. (App. 19)

As the dissenting judge observed, the decision now

blankets the more hazardous nonscheduled travel under

coverage obviously calculated on the risks of scheduled

airlines. The only alternative to such a threat naturally

would be to raise the cost of air travel coverage to all.

The inevitable result of that would be the deprivation of

such protection to many who need it most but could not

afford it. This will particularly affect the many service-

men who every day now are being transferred to critical

mili posts in increasing numbers.

(4) The accepted and usual course of judicial proceed-

ings was also departed from herein with respect to the

conflict of laws question which arose by virtue of the fact

that the policy was purchased in Japan. The manner in

which the courts below decided this question ignored

their duty to first look to the common law of the forum,

and from that to determine the particular jurisdiction to

which it should look for the applicable substantive law.

In failing to perform this duty, the courts below allowed

the Respondent to recover without pleading or proving /

the substantive law of any jurisdiction, by applying al-

leged American Contract law“ which invokedthe doctrine

of "a transcendental body of law outside of any particular

state" rejected by this Court in Erie R. Co. VJ. Tompkins,

304 U.S. 64.

The rulings herein that:

(a) American Contract law will therefore be applied,

(App. 24) and :

(b) The court need not decide which American juris-

diction governs" (App. 24)

are violative of the decisions of this Court in Klaxon v.

Stentor, 313 U.S. 487, and Griffin v. McCoach, 313 U.S.

498, which enunciate the rule that the

Federal courts in diversity of citizenship casesare

governed by the conflicts of laws rules of the courts

of the states in which they sit. (Quoted from Grif-

fin.) 25

In Klaxon, this Court reproved the Circuit Court of

Appeals sitting in Delaware for its application of a New

York statute pursuant to the Court's "independent deter-

mination of the 'better view' without regard to Delaware

law.“ It did so in this language:

We are of opinion that the pag declared in

Erie R. Co. v. Tompkins, 304 U.S. 64, against such

independent determinations by the federal courts,

extends to the field of conflict of laws. Theconflict

of laws rules to be applied by the federai court in

Delaware must conform to those prevailing in Del-

aware's state courts.

And again, therein,

It is not for the federal courts to thwart such local

policies by enforcing an independent ‘general law'

of the conflict of laws. :

The rulings herein which failed first to look to the law

of the forum for a determination of what jurisdiction pro-

vides the Respondent with her substantive rights are, in

addition, contrary to the views of all the Circuit Courts

of Appeals including the District of Columbia, which have

consistently followed said Klaxon-Griffin rule. Boland v.

Love, 222 F.2d 27, D.C. Cir.; Mertens v. Flying Tiger

Line, Inc., 341 F.2d 851, 2d Cir.; Rutas Aereas Nacion-

ales, S.A. v. Robinson, 339 F.2d 265, 5th Cir.; Myers v.

_Alvey Ferguson Co., 331 F.2d 223, 6th Cir.; Muller v.

Groban, 346 F.2d 263, 7th Cir.; and Glick v. Ballentine

Products Inc., 343 F.2d 839, 8th Cir.

This principle indeed applies to all federal courts

wherein jurisdiction in a given case is based upon a di-

versity of citizenship. The rie should be no different

for the federal courts sitting in the District of Columbia,

especially in a case such as the instant one in which all

the requirements of diversity of citizenship are met. The

—

et de

WP Lewes Pare se AEN ~

limitation of the application of this rule to diversity of

citizenship cases is merely a convenient method of cate-

gorizing those cases in which the cause.of action arose

under the laws of some state or a foreign country, not

under federal law. It was. not intended that the rule of

Erie R. Co. v. Tompkins, supra, be excluded from appli-

cation in a case such as this which could have been enter-

tained by any other federal court solely on this one juris-

dictional basis.

Not only was the requirement that the appropriate sub-

stantive law be applied swept under the rug, but the court

below failed to apply the said law of any particular juris-

diction as requested by Petitioner.

The rulings of Erie, supra, West v. A.T. & T. Co.,311

U.S. 223; and Huddleston v. Dwyer, 322 U.S. 232, insist ~~

that:

It is the duty of the federal appellate courts, as well

as the trial courts, to ascertain and apply the state

law where, as in this re it controls decision.

(Quoted from Huddleston

Implicitly this means the application of the substan-

tive law of some particular state, as asserted by Judge

Learned Hand in Phelan v. Middle States Oil Corp., 220

F.2d 593, cert. den., Cohen v. Glass, 349 U.S. 929, where-

in he said:

. . (The rights and liabilities of the parties) A

depended upon the law of some siate and not upon

federal law. {italics supplied.) \

Clearly then, in failing to analyze the posture of this

case as presented by the Respondent, the courts below

decided the sole issue herein in her favor on the basis of

federal common law; as revealed by the use of the term

"American Contract law." This is in clear conflict with

this Court's declaration in Erie R. Co. v. Tompkins,

supra, that "There is no federal general common law."

The only exception written into that rule is one appli-

cable to contracts entered intobythe Federal government. o

y 15

See Clearfield Trust Co. v. United States, 318 U.S. 363,

366-67. But that exception is narrow and precise. See

Bank of America v. Parness, 352 U.S. 29; see also United

States v. Yazell, 334 F.2d 454 (C.A.5), certiorari ed

379 U.S. 957.

The body of law to which the District Court below

looked for its substantive contract principles was not the

law of the District of Columbia, nor that of any of the

States, nor of Japan. Nor was it the federal common law

of Swift v. Tyson or of Clearfield Trust. Rather it was

to the general federal common law of Swift v. Tyson, 16

Pet. 1, characterized as American Contract law“ which

was repudiated by this Court in Erie v. Tompkins, supra.

The Court cited no precedent for the existence of this

body of law, and, we respectfully submit, it could not do

so, for none now exists.

One who contracts does so in view of the law of a par-

ticular jurisdiction. Language is drafted and rights and

obligations are calculated upon the basis of the substan-

tive law which all have presumed prevails. This is par-

ticularly so when rights and obligations are the basis of

the calculations of risk and the setting of rates underly-

ing the contract. Thus, we respectfully submit, the con-

flict of laws principle is too important to be go manifest-

ly disparaged. A failure to determine the applicable rules

of substantive law, whether they be the laws of Japan, Ne-

braska, Maryland, or of any particular jurisdiction, is

such a departure from the accepted and usual course of

judicial proceedings as to call for an exercise of this

Court's power of supervision to promote uniformity.

wem

CONCLUSION-

For the foregoing reasons it is respectfully submitted

that this petitidnfor a writ of certiorari should be granted,

unless this Court sees fit to reverse the judgment of the

Circuit Court and order the entry of a judgment for the

Petitioner herein.

Respectfully submitted,

JOHN JOSEPH LEAHY

532 Munsey Building

Washington, D.C. 20004

Attorney for Petitioner

App. 1

n NAA rere 3

* 2

This Policy Is Nonrenewable and ovides We for Loss of see Limb or Sight.

and Other Specified Losses Resulting from Accidental Bodily Injuries —

Wwile a Passenger on Scheduled Airlines and Other Specified —

or While on the Premises of an Airport to the Extent Herein Pro a

Assessment Association : Cet 1.

MUTUAL BENEFIT HEALTH & ACCIDENT ASSOCIATION

OMAHA, NEBRASKA 2. — .

(Herein called the Association)

Imame Name Alu TORE A. uu |

street LA KAL CZ City e g H

Beneficiary’s N Name ACE vs MESS. NA

1000

tnt ele tty dee eee

ry :

pe €

In consideration of the | 2 of the premium shown in the ule, the Association, subject to the

limitations and 1 i

limb or sight and other 2 losses resulting, ind

( wherever used in this policy, shall mean accidental

trip which is made by the Insured, while this p

S designated i in the Schedule and for which iure

provided such injuries are received (1) while ridin

craft operated on a regular, or

=( craft operated

=( of Public Convenience and Necessity issu t Acaonaytit successors,

=( (b) by an intrastate scheduled airline of * — regular published schedules and licensed for the

=( transportation of passengers by a duly « q 1 ority having jurisdiction over civil aviation in the state in which

said airline operates, (e) hy a scheduled 9i maintaining regular published schedules and lie licensed for

;

8 |

eee ee -

Hid

nll

— of Untied Sates

Seard of United States —

a ign registry

transportation of passengers by the duly b onstituted governmental authority heving jurisdiction over civil aviation in the

country of registry of such airline, (d) by, or contracted for by, t the Military Air T — Service (M 2 of the United

= Form T6AV - Series 597S

Sisal j Fr rrr rer j Aira

States, (e) by the Royal n Force Air Transport Command or the Royal Air Force Air Transport Command of

ie he Bich ut 22nd Ar Divisione ofthe . Tranaporation Squadron ofthe United States

Air Force; or (2) while in or upon an premises or surface vehicle used for passengers e

anh sialine or the autherttien con ing an established airport, but only while the Insured is in or upon such premises

or surface vehicle for the purpose of beginning, continuing or completing the airtrip designated in the the Schedule.

A —

SCHEDULE Policy 60 N 18228 4

App. 3

Travis Air Force Base, California

27 February 1959

REVOCABLE PERMIT

The Base Commander, Travis Air Force Base, for

and on behalf of the United States, hereby-grants to the

Travis Air Taxi Service, hereinafter referred to as

TAS, a pefmit to use without charge the aircraft land-

ing and parking facilities at Travis Air Force Base,

California for the express purpose of providing air taxi

service from Travis Air Force Base to the San Fran-

cisco bay area. Said permit shall be subject to and

limited by the following terms and conditions:

GENERAL:

This permit does not purport to grant any exclusive

franchise or license to TAS concerning the services

contemplated hereunder. It is expressly understood

that no exclusive rights inure to TAS by reason hereof.

DURATION:

This permit shall be effective until terminated, ; as

follows:

A. The parties named above may mutually termi-

nate at any time.

B. Either party may terminate upon thirty days'

written notice, at will.

0 a

C. The Commander, Travis Air Force Base, may

ter minate immediately, without notice, upon non-

compliance by TAS with any of the terms and condi-

tions set forth below.

D. The Commander, Travis Air Force Base, may

terminate immediately, without notice, when he de-

, ne App. 4

termines in his sole discretion that an emergency

condition exists or that operational necessity makes

continuation of the permit unfeasible.

III

SEAT PRIORITY:

The following. seat priorities will be maintained:

A. FIRST PRIORITY:

Department of Defense personnel travelling on

official orders at the expense of the United States

Government.

B. SECOND PRIORITY:

Military personnel travelling on emergency leave.

C. THIRD PRIORITY: |

All Department of Defense personnel, including

contract employees and dependents thereof.

D. FOURTH PRIORITY:

Non-priority seating will be on a first-come,

first-serve basis.

PRICES:

The maximum prices which TAS will charge are as

follows:

a A. Travis AFB to San Francisco- 515.00 per seat

B. Travis AFB to Oakland - 15.00 per seat

C. Charter rates, Travis AFB to

San Francisco or Oakland, single

engine aircraft -------------- 37.50

, D. Charter rates, Travis AFB to

San Francisco or Oakland, twin

engine aircraft -------------- 75.00

App. 5

SERVICE

Aircraft will be non-scheduled and will depart at dis-

cretion of TAS. However, weather conditions permitting,

flight@ will depart after no longer than two hours after

one passenger has contracted for the flight service.

PROTECTION OF GOVERNMENT:

TAS will sign and maintain current-ifi-effect the

standard Hold Harmless Agreement, AF Form 180.

VII

INSURANCE:

A. TAS will maintain at all times a minimum of

$50,000 liability Insurance per person in respect to

any passenger of any flight undertaken by the company.

B. The insurance coverage shall indicate the United

States as an insured party.

C. TAS will assure that the insurer will not invoke

the defense of sovereign immunity and such condition

will be included in the terms of the policy. A copy of

the policy will be sent to the Base Transportation Office,

Travis Air Force Base, California.

VIII

FUEL AND MAINTENANCE:

TAS will refuel, obtain ordinary repairs and main-

tenance (other than minor repairs) at airport facilities

other than those at Travis Air Force Base, except under

emergency conditions.

—

App. 6

FLIGHT AND GROUND RULES:

TAS will comply with all flight and ground rules as

are now or may hereinafter be established by the Base

Commander, Travis Air Force Base, or other desig-

nated Air Force official.

PARKING AIRCRAFT:

The aircraft of said company will be parked in areas

designated by the tower. When conditions permit, the

aircraft will be parked as close to the passenger’en-

trance as possible.

SOLICITATION OF TRADE:

TAS will solicit trade only in a prudent manner, ac-

ceptable to the Base Commander, and then only in the

facilities presently occupied by the E and J Travel

Agency at the Base Terminal.

XII

CONDUCT OF EMPLOYEES:

TAS will be responsible for the conduct, actions, and

neat appearance of all employees.

XIII

COMPLAINTS:

Complaints and disagreements in re services will be

referred to a senior member of TAS, and to the Base

Transportation Officer.

XIV

NOTIFICATION OF ETA:

TAS agrees that all aircraft departing enroute to

will cause Travis Tower and the E and J Travel

App. 7

Agency to be notified of their estimated time of arrival

at or about their time of departure.

OPERATING CONDITIONS:

A. Under no circumstances will one-engine aircraft

be operated except in VFR flight rule conditions as de-

fined by FAA rules.

B. TAS agrees to employ only competent and quali-

fied FAA rule pilots and to maintain all aircraft in top

mechanical condition.

C. TAS agrees to maintain a passenger manifest on

all passengers, copies to be retained for a period of one

year in a file located at the office of the E and J Travel

Agency. Said file may be inspected by the Base Com-

mander or his designate at any time.

XVI

SECURING AIRCRAFT:

Upon receipt by the Eand J Travel Agency of reported

adverse weather conditions, TAS will assure.that i

aircraft are properly secured.

XVII

ABORTIVE FLIGHTS:

Any abortive flights returning to point of origin will

result ina complete refund to passengers or to the United

States Government, where the service was contracted

for the Government.

XVIII

LICENSE, ETC. REQUIREMENTS

“TAS agrees to maintain current any and all licenses,

permits, etc., required by law and regulation at its ex-

pense. Hens

Neo

App. 8

XIX

REPRESENTATION BY EMPLOYEES: 8

No officer or employee of TAS will represent himself

in any manner as having any off ic ial connection with the

United States Government or the United States Air Force.

FURTHER CONDITIONS:

Further conditions may be hereinafter imposed by the

Base Commander.

TRAVIS AIR TAXI SERVICE

/s/

President

APPROVED:

CHARLES W. STARK

Colonel, USAF

Commander

PRESIDENT

„

This is to certify that William S. Jamieson whose

signature appears above, is an authorized officer of E&

J TRAVEL BUREAU, NC., a Corporation, 715 Marin

Street, Vallejo, California, and as such has been granted

authorization by the Board of Directors to effectively

bind and obligate said E & J TRAVEL BUREAU, INC.,

a Corporation.

SECRETARY

CORPORATION SEAL

APPROVED:

CHARLES W. STARK

Colonel, USAF

Base Commander

App. 9

CHANGE #1 TO REVOCABLE PERMIT DATED

27 FEBRUARY 1959

1. The following changes to Revocable Permit dated

27 February 1959 are effective immediately:

a. Hereafter, the name Travis Air Taxi Service

or TAS as it is amended to read Travis Transportation

Company Incorporated doing business as Golden Gate

Airways." :

b. With the above change, the Travis Transporta- © ~~

tion Company Incorporated hereby accepts and is bound

by all of the provisions of the above reference Revocable

Permit.

TRAVIS TRANS POTATION CO. INC.

By: /s/ William S. Jamieson

President

APPROVED:

CHARLES W. STARK

Colonel, USAF

Base Commander

A TRUE COPY:

/s/ Robert D. Lichty

Captain, USAF

Commercial Transportation Officer

SUPPLEMENT #1 TO REVOCABLE PERMIT

DATED 27 FEBRUARY 1959

1. In accordance with Section IX of Revocable Per-

mit dated 27 February 1959, the following changes to

GROUND AND FLIGHT RULES will be effective imme-

diately: .

a. All new pilots will be briefed by Travis Base

Operations Officer prior to operating in and/or out of

Travis Air Force Base.

rt,

App. 10

b. When operating with passengers ahoard from

Travis Air Force Base, San Francisco International Air-

port, or Oakland airports with destination listed as any

one of the above air fields and from Travis AFB to any

other destination and a VRF flight plan is filed, the VFR

flight will be conducted in accordance with Civil Air

Regulations and the following stipulation.

(1) The reported ceiling and visibility for the

departure base, en route, and airport of intended landing

will be at least 1500 foot ceiling, prevailing ground visi-

bility at least three miles, in forward flight visibility at

cruising altitude at least five miles.

c. When landing at Travis AFB, the traffic pattern

and altitude will be as prescribed in 323rd Air Division

Supplement #1 to Air Force Regulation 55-19.

d. Passengers will wear seat belts at all times

when the aircraft is in motion.

e. Aircraft filing into Travis AFB for a passenger

stop will be required to file a new clearance if the pas-

senger stop exceeds fifteen minutes.

f. Passengers will be carried on multi- engine air-

craft only.

g. Aircraft filing into or out of Travis AFB will

not operate when the crosswind component is above that

established by the Base Commander for the type of air-

craft operated. °

h. United States Air Force personnel, as directed

by the Base Commander, will periodically accompany

the flights for the purpose of observing the operation and

to insure adherence to the provisions of this permit.

Received by Travis Transportation Company Incorporated:

DATE SIGNATURE

App. 11

Anited Staten Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 18,815

Mutua. Benerit HRALTR AND ACCIDENT ASSOCIATION,

APPELLANT

JOSEPHINE L. MESSINA, APPELLEE

Appeal from the United States District Court

for the District of Columbia

Decided June 3, 1965

Mr. John Joseph Leahy for appellant.

Mr. Austin P. Frum, with whom Messrs. Thomas S.

Jackson, Robert M. Gray and John L. Laskey were on the

brief, for appellee.

Before Enazrton and Bastian, Senior Circuit Judges,

and Burcer, Circuit Judge.

PR Curmum: This is an appeal from a judgment of the

District Court, after trial, in favor of appellee, who sued

as beneficiary to recover the face amount of an air travel

insurance policy purchased by her husband from an agent

of appellant at Tachikawa Air Force Base, Japan, before

App. 12

embarking on a trip to Washington, D. C. He was fatally

injured, while a passenger, by the crash of an air taxi

between Travis Air Force Base and San Francisco Inter-

national Airport. The question is whether the policy

covered the taxi flight. The facts are fully stated in the

District Judge’s memorandum of April 24, 1964, as amend-

ed May 8, 1964. We agree with his opinion and therefore

affirm the appealed judgment.

Affirmed.

Bunaxn, Circuit Judge, dissenting: The majority af-

firms the judgment of the District Court without undertak-

ing any analysis of the issues. Since this is an important

case and will probably affect the entire air travel insur-

ance industry and its underwriting and actuarial bases I

deem it imperative to analyze the issues so that what the

court does will be apparent.

This is an appeal from a judgment of the District Court

in favor of Appellee, who sued as beneficiary to recover

the face amount of an air travel insurance policy pur-

chased by her husband Messina from an agent of Appel-

lant at Tachikawa Air Force Base, Japan, before em-

barking on a flight to Washington, D.C. The decedent

was a civilian employee of the Department of the Army

traveling on government travel orders. The travel or-

ders covered passage from Tachikawa to Travis Air Force

Base, California, on a commercial carrier flight contracted

for by the Military Air Transport Service (MATS). On

his arrival at Travis, Messina bought a United Airlines

ticket from San Francisco to Washington with a govern-

ment transportation request. With $15 of his own money he

obtained a ticket for an air taxi flight operated by Travis

Transportation Company, Inc., a nonscheduled carrier op-

App. 13

erating between Travis Air Force Base and San Fran-

cisco International Airport. <The air taxi crashed, fatally

injuring ‘Messina. |

The only issue before the District Court, and before us

on appeal, is whether the insurance policy covered the

fatal flight. No fact issues are involved; stipulations of

the parties have narrowed the issue to whether the air

taxi flight between airports was one “contracted for by

*, .. the Military Air Transport Service (MATS) of the

United States”; if so, it was expressly covered by the

words just quoted from the policy.

Appellant’s primary contention is that a document

styled “Revocable Permit” to authorize landings and take-

offs by the air taxi company and issued by one Colonel

Stark, an officer assigned to MATS, is a MATS “con-

tract” within the terms of the insurance policy and that

flights of the air taxi are therefore flights “contracted for

by ... the Military Air Transport Service . . of the

United States.” I think this theory untenable. The

revocable permit is simply a consent to the use, without

charge, of the air base facilities by the air taxi company

for the purpose of providing air taxi service under condi-

tions laid down in the document. It was issued by Col.

Stark as the “Base Commander, Travis Air Force Base,

for and on behalf of the United States.”* MATS is not

mentioned in the permit. l

inte ATE fonction —— —

tary personnel. cage ag Cig ely alo gy om ert

mit, MATS happened to hse Ree” aed ah the

Travis base. As “host,” MATS was responsible for the op-

erations of the Base, including

for all aircraft to land and take off at the

argument thus rests on the fortuity that MATS was the

housekeeping unit for the Air Force at Travis when the

App. 14

Whether there is evidence to support the contention

of Appellee, adopted by the District Court, that the taxi

flight was “contracted for” by MATS depends upon the

document constituting the taxi license read against the

background shown by this record. 0

Appellee put in evidence a deposition taken by Appel-

lant from the MATS commandant, General Kelly, to the

effect that

Airlift contracted by and for MATS is. . furnished

by a commercial carrier pursuant to a contract be-

tween the carrier and the U.S. Government, “aaa

sented by MATS as an airlift service agency .

The contract defines the terms of service to be pro-

vided and the price to be paid therefor by the gov-

ernment.

In addition to this affirmative definition of what consti-

tutes MATS-contracted-for air carriage there is similarly

undisputed testimony of the president of the air taxi com-

pany that his taxi service was not “under contract“ with

MATS.” His views are-not controlling; but when neither

of the two alleged “contracting” parties considers that

they have contracted, and the claim of a contrac side .

only by a third party, a legal stranger to the alléged con-

permit was issued; had the permit been issued at an earlier

date, it would have emanated from a unit of the Strategic

Air Command.

2In view of the unchallenged testimony discussed in the

text, I find inexplicable the District Court’s assertion that

“If the ordinary person in Mr. Messina’s position had in-

quired whether the flight was . . ‘contracted for’ by MATS,

he would have been shown a document called a ‘Revocable

Permit.’” The record seems to me to indicate clearly that

those to whom such an inquiry might appropriately have

been directed—i.e., the spokesmen for the supposed “con-

tracting” parties—believed the taxi license to have nothing

whatever to do with the existence of a contract of carriage

such as the insurance policy contemplated.

App. 15

tracting parties, I should think a court would need some-

thing resembling evidence in order to spell out a contract,

especially when such important rights are rested on the

claimed contract. Even if it is assumed arguendo that

the revocable operating permit has some characteristics

of a “contract” in a purely technical sense, we must recog-

nize that the issue is not simply whether that permit is

a contract but whether the particular air taxi flight from

one terminal to the other was one “contracted for” by

MATS within the meaning of the insurance policy. The

record does not make it clear, but for the purposes of this

opinion I am prepared to assume, that Messina could have

been reimbursed by the government for the cost of the

air taxi ticket; however, this does not resolve the critical

issue whether MATS contracted for the fatal flight under

the terms of the policy.

I have great difficulty in following the District Court’s

reasoning. As I read the opinion of that Court, however,

it first sets out some examples of supposed ambiguities

in the policy. (If those provisions are ambiguous, there

are no unambiguous insurance policies.) From these ex-

amples the Court concludes that the contract should have

had a provision warning clearly that the air-taxi flight

was not covered. Having thus started to develop a posi-

tion focusing on Messina’s possible reliance on language

thought niisleading, the Court suddenly shifts into a dis-

cussion of the taxi-license-as-MATS-contract theory dis-

cussed above. 4

The Court seems to believe that its previous discussion

concerning possible ambiguities in the contract bears on

its technical analysis of the revocable-permit argument,

for the opinion proceeds to that analysis “in the light of”

its treatment of the supposed ambiguities and absence of

warning. But the previous discussion of Messina’s pos-

sible detrimental reliance is here out of place. It is hardly

conceivable that Messina could have relied on private ar-

9 App. 16

rangements for an air taxi service to use an air force base

as amounting to a MATS “contract” within his insurance

coverage; he simply would not have known of such ar-

rangements. For this reason I believe the first part of

the District Court’s opinion—that dealing with Messina’s

possibly being misled by ambiguities—cannot come to the

aid of the second part—the agonizingly strained interpre-

tion which construes the revocable permit.into a MATS

“contract.” So viewed, the taxi-license argument must

stand or fall on its own. And it must fall, as I have indi-

cated above.

No language in the policy suggests—and I do not think

a reasonable traveler who reads his policy would believe

that a nonscheduled “air taxi” flight between airports was

covered by a policy which in the boldest type restricts

coverage to “Scheduled Airlines.” To succeed, Appellee

must show—and has not—that some provision of the pol-

icy her husband purchased provided coverage for inter-

airport travel by nonscheduled air service. Such cover-

age must first be found within the insuring clause and

second it must not be excluded by any specified exceptions

or exclusions. By one of the policy’s express terms“ the

insured is covered “while riding as a passenger in, board-

ing or alighting from, or by being struck by an aircraft

operated . . by a scheduled airline . . by, or contracted

for by, the Military Air Transport Service (MATS) of

the United States. . or... while in or upon any premises

or surface vehicle used for passengers and provided or

arranged for such airline or the authorities controlling

an established airport, but only while the Insured is in or

upon such premises or surface vehicle for the purpose of

beginning, continuing or completing the airtrip designated

in the Schedule.” (Emphasis added.)

Thus the poliey deals in precise and explicit terms with

Following is a copy of the face of the contract:

NN A Veet Vref err “

600 N K 9

This Policy Is Nonrenewable = Provides Benefits for Loss of 2 Limb or Sight

and Other Specified Losses Resulting from Accidental Bodily Injuries Received

While a Passenger on Scheduled Airlines and Other Specified Conveyances

( or-While on the Premises of an Airport to the Extent Herein Provi ° ee

=( „ Assessment Association 17e. Exhibit No. Fe

K MUTUAL BENEFIT HEALTH & ACCIDENT ASSOLIATION

( OMAHA, NEBRASKA

( (Herein called the Association)i UL d wt Bot

1 SCHEDULE r TGA Ne 18228 A

‘ sa ie al — — aes

( stret Tl A K ST City fru u MDP

= Beneficiary’s — CPHINE Ps - (YESS /NA

8 Street. 7 AME — ssasn Ear

9 Point 4 Departure / AC Destination n ET aS Qo —

9 Prineipal Sum , 000 krete eee, ee. 14.22

* —

4 In consideration of the payment of the premium shown in the S#hedule, the Association, subject to isi

woot of life,

4 — ——— A soning hereby insures the person named as Insured in the Schedule

( limb or sight and other specified losses resulting, independently other causes, from injuries. The term “injuries”

tei hich js made b th 9 — sie thie ‘nol Poi .

is e by the while 8 K oint 1e is

R . eee or by being struck b

provided such injuries are receiv while nthhig 4s Abessénger in, phränk e or by van air-

=( 332 lig 1 CROC BICC ir of United — — art ificate

=( f Pulls Canvoniants — — > Civil\AeronguticaA uad i i its successors,

=( (b) by an intrastate scheduled airline of Uni Registry ng@intaining regular published schedules and licensed for the

( transportation of passengers by a dulf Ny having jurisdicti i i i

( said-girline operates, (e) by a scheduled irland e foreign registry maintaining regular published schedules and licensed for

Sato — 1 ted governmental authority having jurisdiction over civil aviation in the

STALL DALLA AMAL LAAAL AAAI AAA AMAA LAMAR AAAS AMAL Aa

Ol ll el rr Freer,

My,

Form T6AV - Series 3978

—— . —— . nA — — — — wD el — A, we F— 8

States, (e) by the Royal Canadian Air Force Air Transport Command or the Royal Air Force Air Transport Command of

Great Britain, or (f) by the 315th or 322nd Air Divisions or the 5060th Transportation Squadron of the United States

Air Force; or (2) while in or upon any premises or surface vehicle used for passengers and provided or arranged for by

such airline or the authorities controlling an established very wage but only while the Insured is in or upon such premises ;

or surface vehicle for the purpose of beginning, continuing or cofnpleting the airtrip designated in the Schedule.

App.A8

inter-airport transportation and the scope of insurance

coverage between connecting flights; it carefully and plain-

ly limits insurance coverage to surface vehicles operated

by or for covered airlines and airports, and obviously an

air taxi is not such. As to what the insured probably un-

derstood, assuming for the moment that is relevant, I

suggest that no person capable of reading could have been

“misled” or in doubt. As to how judges ought to con-

strue this contract language, we have the ancient and uni-

versally accepted axiom of construction, expressio unius,

exclusio alterius.” Unless we ignore both the language of

the policy and the canons of construction I fail to see how

we can sustain the judgment, for here we have a contract

carefully drawn to cover only one form of inter-airport

travel, i.e., by specified “surface vehicles.”

The only way we can sustain this award is to rewrite

the contract, and the majority does this sub stlentto.* That

this is what is being done is shown by that portion of

the policy reproduced by facsimile in the margin. See

n.3, supra.

As an appellate court we need no specific record evidence

to recognize that insurance actuaries, in calculating pre-

miums on insurance, must gauge the premium to the scope

of the risk. It is similarly well within the range of judicial

notice that the risks of the relatively unregulated nonsched-

uled air taxis operating in and around airports are greater

than the readily measurable risks of travel on regularly

scheduled and rigidly supervised airlines. The cost of- air

travel insurance covering scheduled airlines is only a frac-

tion of the cost for comprehensive coverage for air travel

generally. |

Apart from the erroneous result in this case the majority

has approved an interpretation of a standard form of air

policy which could easily have wide reverberations in the

underwriting of air travel insurance generally because the

court now blankets the more hazardous nonscheduled travel

under coverage obviously calculated on the risks of scheduled

—

App. 19

airlines. If, as is now held, nonscheduled air taxis are cov-

ered by this poliey, it may well be argued that nonscheduled

flights generally are covered; no legal distinction can be

seen between a nonscheduled air taxi flight between two

airports and a nonscheduled flight from California to New

York. . ;

PEELE SOS PTT aa NS ergy Pen

BR RF:

App. 20

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

MRS. JOSEPHINE L. MESSINA

5605 Patterson Road

Riverdale Heights, Maryland

Plaintiff,

v. Civil Action

No. 3776-60

MUTUAL BENEFIT HEALTH &

ACCIDENT ASSOCIATION

Ring Building

Washington, D.C.

[Filed April 24, 1964]

MEMORANDUM

This is a suit by the beneficiary of a life insurance

policy against the defendant insurance company for the

proceeds of a $50,000 policy purchased by plaintiff's

husband while en route from Korea to his home in Mary-

land. The issue is whether the flight which crashed,

killing plaintiff's husband, was within the risks covered

by the policy,

Salvatore Messina, a civilian employee of the De-

partment of the Army, Corps of Engineers, was employed

as a construction representative in Seoul, Korea, in

January 1960. Due to a reduction in force, Mr. Messina

was ordered back to his home in Brentwood, Maryland.

His travél from Seoul, Korea, to Maryland was pursuant

App. 21

to Government travel orders. Mr. Messina travelled

from Korea to Tachikawa Air Force Base, Japan, and

there he purchased from the defendant herein a policy

of insurance in the face amount of $50,000, naming his

wife as beneficiary. He mailed the policy to his wife at

his home address. Mr. Messina flew from Tachikawa

Air Force Base to Travis Air Force Base, California,

on a commercial air carrier on a flight contracted for by

the Military Air Transport Service (MATS). Upon his

arrival at Travis, on January 25, 1960, Mr. Messina

purchased, with a Government transportation request,

a ticket on a United Airlines flight from San Francisco

International Airport to ‘Washington, D.C. Mr. Mes-

sina also purchased, with $15 of his own money, a ticket

on a flight operated by Travis Transportation Company,

Inc., from Travis to San Francisco International Air-

port; Travis and San Francisco Airport are about sixty-

seven miles apart, and the flight was by "air-taxi" —a

non-scheduled service operating between the two air-

ports. The plane on which Mr. Messina was riding

crashed en route to San Francisco International Airport,

and Mr. Messina suffered fatal injuries. The plaintiff,

his widow, gave timely notice to the defendant and sub-

mitted the required proof of loss within the ninety-day

period after Mr. Messina's death. On March 16, 1960,

the defendant notified S. Messina that it denied her

claim on the ground Mr. Messina was not covered

under the terms of the policy. Thereafter the plaintiff

filed her suit herein. :

The sole issue is whether the fatal flight was cov-

ered by the insurance policy which Mr. Messina pur-

chased.

On the first page of the four-page form contract, the —

following words appear at the top in bold-face:

This Policy is Nonrenewable and Provides Bene-

fits for Loss of Life, Limb or Sight and Other

Specified Losses Resulting from Accidental Bodily

atm eee

App. 22 *

Injuries Received While a Passenger on Scheduled

Airlines and Other Specified Conveyances or While

on the Premises of an Airport to the Extent Here-

° in Provided. (Emphasis added.)

Then follows a "SCHEDULE," on which the purchaser

fills in his name and address, the beneficiary's name

and address, the point of departure, the destination, and

: the amount of the policy, the effective date, and the pre-

mium. On Mr. Messina's policy, the point of departure

was listed as TAW, which is the symbol for Tachi-

kawa Air Force Base, Japan; the destination was listed

as Washington, D. C.

-The following language then appears in small but leg-

ible type beginning on the first page and running over to

the second:

In consideration of the payment of the premium

shown in the Schedule, the Association, subject to

the provisions, limitations and exceptions of this

policy, hereby insures the person named as In-

sured in the Schedule against loss of life, limb or

sight and other specified losses resulting, inde-

_ pendently of all other causes, from injuries. The

term "injuries," wherever used in this policy,

shall mean accidental bodily injuries received dur-

ing any portion of the first one way or round trip

which is made by the Insured, while this policy is

in force, between the Point of Departure and the

Destination designated in the Schedule and for

which the Insured has purchased a transportation

ticket or has been issued a pass; provided such in-

juries are received (1) while riding as a passenger

in, boarding or alighting from, or by being struck

by an aircraft operated on a regular, special or

chartered flight (a) by a scheduled airline of

United States Registry holding a Certificate of Pub-

lic Convenience and Necessity issued by the Civil

Aeronautics Board of the United States of Ameri-

App. 23

ca er its successors, (b) by an intrastate sched-

uled airline of United States Registry maintaining

regular published schedules and licenses for the

transportation of passengers by a duly constituted

authority having jurisdiction over civil aviation in

the state in which said airline operates, (c) by a

scheduled airline of foreign registry maintaining

regular published schedules and licenses fortrans-

portation of passengers by the duly constituted

governmental authority having jurisdiction over

civil aviation in the country of registry of such

airline, (d) by, or contracted for by, the Military

Air Transport Service (MATS) of the United

States, (e) by the Royal Canadian Air Force Air

Transport Command or the Royal Air Force Air

Transport Command of Great Britain, or (f) by the

315th or 322nd Air Divisions or the 5060th Trans-

portation Squadron of the United States Air Force;

or (2) while in or upon any premises or surface

vehicle used for passengers and provided or ar-

ranged for by such airline or the authorities con-

trolling an established airport, but only while the

Insured is in or upon such premises or surface

vehicle for the purpose of beginning, continuing or

completing the air trip designated in the Schedule.

(Emphasis added.)

All of the above provisions are in black ink, except for

the portions of the "SCHEDULE" filled in with blue ink.

In addition, in very light-faced, pale green printing, the

following words appear:

Read Carefully:

This Policy Is Limited

To Aircraft Accidents

on Scheduled Airlines

These words are set on a diagonal and are covered with

the small black type of the long contractual provision

App. 24

set out above, making both the green printing and the

black printing over it difficult to read. A casual reader

would be likely to fail to read the green type at all.

The issue in this case is whether the fatal flight was

"a regular, special or chartered flight * * * contracted

for by, the Military Air Transport Service (MATS) *

* * *,' since none of the other specified types of flights

applies.

The Court has concluded, for reasons to be set forth

hereinafter, that the.fatal flight was covered by the in-

surance policy, and that plaintiff is therefore entitled to

recover. 2

It is hornbook law that ambiguities in a standard-

form contract are generally to be resolved against the

party who drafted the document. In this case, this prin-

. It is conceded that the flight was not actually by“ MATS,

thus limiting the issue to the above-quoted portion of the pol-

icy dealing with flights "contracted for" by MATS. +

2 At the request of the Court, the parties have briefed the

question of which law should govern the substantive issues

in this case. Defendant has argued that the-law of Japan

should govern, since the contract was purchased in Japan,

and that since plaintiff has offered no proof of Japanese law,

the case should be dismissed. The Court, however, agrees ,

with plaintiff that it would be contrary to the intention of the

parties and contrary to sound judicial administration to apply

the law of Japan to the interpretation of this contract when |

the contract was purchased by an American citizen passing

through Japan on his way back to the United States to his

permanent residence in Maryland, and was sold by an Ameri-

can insurance company with home offices in Nebraska. See

Auten v. Auten, 308 N. v. 155, 124 N. E. 2d 99 (1954). Ameri-

can Contract law will therefore be applied. The Court need

not decide which American jurisdiction governs, since nei-

ther party has suggested that the courts of any one state

would decide the issues presented herein any differently from

the courts of other states. In any event, the court would be

justified in assuming that Japanese law contains the same ~

governing principles of the law of contracts.

— a enna entertains

App. 25

ciple requires this Court to construe the insurance poli-

cy liberally in favor of the purchaser and his widow, the

plaintiff herein. Smith v. Indemnity Ins. Co., 115 U.S.

App. D.C. 295, 298 (1963). The policy must therefore be

interpreted from the point of view of the ordinary under-

standing of a reasonable person in the position of Mr.

Messina at the time of purchase. We all know that a

contract of insurance, drawn by the insurer, must be

read through the eyes of the average man on the street

or the average housewife who purchases it. Neither of

them is expected to carry the Civil Aeronautics Act or

the Code of Federal Regulations when taking a plane."

Lachs v. Fidelity & Cas. Co., 306 N.Y. 357, 118 N.E:2d

555, 558 (1954).

There are a number of important ambiguities in the

policy. First, there is a clear conflict between the light

green print, which limits coverage to scheduled air -

lines, and the boldface heading and body of the contract,

both of which are broader in coverage, including flights

by MATS, which may well be non-scheduled. Second,

the policy specifically covers all "regular, special or

chartered" flights by the designated airlines, while the

light green print limits coverage to scheduled airlines;

to the ordinary reader, these provisions would appearto

conflict with each other, since such reader would be un-

likely to differentiate chartered flights run by "sched-

uled" airlines from chartered flights run by non-

scheduled" airlines. In short, the fact that coverage ex-

tends to "regular, special, or chartered” flights would

be more important to the ordinary reader than the lim-

itations as to various kinds of airlines, the technical

definitions of which would not be understandable even to

a diligent reader. The referenceto "special" and "char-

tered" flights would have led a redsonable person in Mr.

Messina's position to believe that the air-taxi flight was

covered — unless some clear warning to the contrary

can be discovered in the terms of the policy.

App. 26 —

No such clear warning exists. In fact, other provi-

sions in the policy would have reinforced the conclusion

that the air -taxi flight was covered. Three specific

references to coverage for the entire airtr ip described

in the "SCHEDULE" (filled in by the purchaser) would

have led the ordinary reader in Mr. Messina's position

to conclude that all connecting flights between the point

of departure" (Tachikawa) and the "destination" (Wash-

ington, D. C.) would be covered. Two of these refer=

ences are quoted above: one extending coverage to in-

juries received "during any portion of the first one way

or round trip which is made by the Insured * * * be-

tween the Point of Departure and the Destination desig-

nated in the Schedule ; the other dealing with

ground transportation "for the purpose of beginning, con-

tinuing or completing the airtrip designated in the Sched-

ule." (Emphasis added.) The third reference. is in the

policy clause dealing with the effective, date of the poli-

cy: "This insurance shall commence on the Effective

Date at 12:01 A.M., Standard Time at the Point of De-

parture, and shall terminate either upon completion of

the airline trip described in the Schedule or upon expira-

tion or surrender for refund or credit of said transpor-

tation ticket, but in no event shall this insurance extend

beyond a period of twelve months." (Emphasis added.)

The impression left by these provisions that the policy

covers the complete airtrip from point of departure to

point of destination is made even stronger by the fact

that defendant has conceded that both the completed trip

from Japan to Travis Air Force Base and the projected

trip from San Francisco to Washington, D. C. are spe-

cifically covered by the policy. It thus would have re-

quired clear warning that an intermediate air-taxi

flight would not be covered in order to exempt the flight

from Travis to San Francisco from the continuous cov-

erage implied in the policy. Not only is such warning

completely missing; even if it had existed it would have

been made ambiguous and obscure by the specific cover-

App. 27 Ps

age extended to "special" and "chartered" flights, as

discussed above. 3

There is one further fact which bears upon the proper

interpretation of this policy. Mr. Messina filled in the

name and address of his wife on the back of the policy,

and mailed it to her before he left Tachikawa Air Force

Base in Japan. The company provided no duplicate, so

that when Mr. Messina arrived at Travis and decided to

take the air-taxi flight, he would have had only his mem-

ory to tell him whether or not the air-taxi flight was

covered under the policy. In these circumstances, the

impression that the policy covered the continuous flight

from Japan to Washington, D. C. would have been:

stronger than ever. See Steven v. Fidelity and Cas. Co.,

27 Cal. Rptr. 172, 377 P.2d 284, 294(1962), where the

fact that an insurance policy had been mailed influenced

the court in concluding that an air -taxi flight was

covered.

It is in the light of these considerations that the Court

must interpret the proviso that the air-taxi flight is cov-

ered only if it is a flight "contracted for by the Military

Air Transport Service (MATS) * * *." If the ordinary

person in Mr. Messina's position had inquired whether

the flight was or was not "contracted for" by MATS, he

would have been shown a document called a "Revocable

Permit." This document, signed by the Base Command-

er of Travis Air Force Base (a base assigned at the |

e The fact that the Army considered Mr. Messina to be in duty

status" until his arrival at Brentwood, Maryland, reinforces

the conclusion that his entire trip was a continuous one. This

conclusion is fortified by the additional fact, supported by

regulations offered in evidence by plaintiff, that Mr. Messina

could have been reimbursed for the air-taxi flight out of

Army funds. However, the Court is not relying upon these

facts as essential to its decision. The Court need not pass

upon defendant's objections to these conclusions, advanced on

various evidentiary grounds; if it were necessary to pass

upon these items of evidence, defendant's objections would be

overruled. :

— —ũ—ũä—65—ã eee eg — 4éw ñ ũ gh ecm ́ꝗ—w —- k —:

App. 29

time to MATS; the commander was an officer of MATS),

and by the President of Travis Air Taxi Service, per-

mitted the Air Taxi Service to use without charge the

landing and parking facilities of the base "for the ex-

press purpose of providing air taxi service from Travis

Air Force Base to the San Francisco bay area.“ The

document did not purport to grant the Air Taxi Service

exclusive rights. The permit was to be effective "until

terminated," either mutually at any time, by either party

on thirty-day written notice, or by the Base Commander

for non-compliance or emergency conditions. In return

for the right to land and take off, the Air Taxi Service

agreed to transport passengers on the following priority

basis:

FIRST: PRIORITY: Department of Defense person-

nel travelling on official orders at the expense of

the United States Government.

SECOND PRIORITY: Military personnel travelling

on emergency leave.

THIRD PRIORITY: All Department of Defense

personnel, including contract employees and de-

pendents thereof.

FOURTH PRIORITY: Non-priority seating will be

on a first-come, first-serve basis.

The document set maximum prices. It also incorporated

by reference certain FAA safety requirements, and ina

supplment-Specified minimum visibility ceilings more

stringent than those required by the FAA. According to

the supplement, passengers were to be carried on multi-

engine aircraft only. In addition, the following provision

governed the service to be provided:

Aircraft will be non-scheduled and will depart at

discretion of [Travis Air-Taxi Service]. However,

weather conditions permitting, flights will depart

after no longerthan two hours after one passenger

has contracted for the flight service. (Emphasis

added.) g

App. 29

Both parties agree that a contract is an agreement

between two or more parties to do (or not to do) a cer-

tain thing, based upon sufficient consideration. Even

though the Air Taxi Service and the Base Commander

did not label the above document a contract, it has all

the essential elements of a contract, at least from the

point of view of a reasonable man in Mr. Messina's posi-

tion had he been shown the document. There is benefit”

flowing to both parties — to the Air Taxi Service from

the fares it can collect from persons flown from Travis;

to the Base Commander (and MATS) from the quicker

connections between air fields and the priority seating

arrangements. There is also a detriment to each party

— to the Air Taxi Service in being bound to supply serv-

ice no longer than two hours after one passenger has re-

quested the service; and to MATS in the wear and tear

upon the runways and other facilities. In return for the

promise by the Air Taxi Service to provide service even

when there was only one person desiring it, and to pro-

vide such service on a priority basis, the Base Com-

mander promised for MATS to let the Air Taxi Serv-

ice use the facilities of the base. So long as the

5 in a memorandum dated February 2, 1959, (offered in evi-

dence by plaintiff) from the Base Commander to the Military

Traffic Management Agency, the Base Commander described

in great detail the connecting services available between

Travis and San Francisco Airport in his request for permis-

sion to grant approval to the Air Taxi Service to begin opera-

tions between the two airports. Defendant objects to the ad-

mission into evidence of the opinion of the Base Commander

that existing surface connections were inadequate since the

Base Commander was not present for cross-examination; but

defendant does not object to the admissibility of the support-

ing factual data — indicating surface travel times varying be-

tween one hour and three-quarters to three hours and one-

half. This factual data speaks for itself in supporting the

Court's conclusion that MATS received a benefit from grant-

ing the Air Taxt Service the right to operate between Travis

and San Francisco Airport.

r c

App. 30

agreement was in force, each party was obligated, and

each benefited. The essential requisites of a contract

were thus present.? This Court has therefore concluded

that for the purposes of determining whether this flight

was covered by the insurance policy, the flight was one

"contracted for by MATS.’

Considering the insurance policy as a wnole and the

governing principles of law, this Court has concluded

that plaintiff has sustained her burden of proving by a

fair preponderance of the evidence that she is entitled

8 Defendant argues that the Base Commander had no authority

to "contract" on behalf of MATS, although he does not ques-

tion the fact that the Base Commander had authority to issue

the so-called "revocable permit.“ Since the Base Com-

mander did have authority to do what he did in issuing the

permit, and since the Court has construed that permit as a

contract for the purposes of this case, any lack of authority

to "contract" on behalf of MATS in some other regard is ir-

relevant to this case. In any event, since the issue ip this

case is whether a reasonable man in Mr. Messina's position

would have interpreted thé insurance policy as covering this

flight as one "contracted for by" MATS, such a reasonable

man would have been justified in relying upon the Base Com-

mander's apparent authority (as distinct from actual author-

ity) in "contracting" on behalf of MATS.

Differences between the language of the insurance policy in

the present case and policies in other cases, cited both by

plaintiff and defendant, make the other cases not persuasive

on the issues presented in the present case. See McBride v.

Prudential Ins. Co., 147 Ohio St. 461, 72 N.E.2d 98 (1947)

(interpreting "regularly scheduled passenger flight of a com-

mercial aircraft" to bar coverage of a plane hired for a hunt-

ing trip); Lachs v. Fidelity & Cas. Co., 306 N.Y. 357, 118

N.E.2d 555 (1954) (holding the words scheduled airline“ am-

biguous enough to extend coverage to the particular flight in-

volved, an Airline Trip Insurance" policy purchased from

an automatic vending machine); Thompson v. Fidelity & Cas.

Co., 16 Ill. App. 2d 159, 148 N. E. 2d 9 (1958) (interpreting

"scheduled air carrier" as excluding coverage of the particu-

lar flight involved). None of these cases involved the phrase:

flights "contracted for by" MATS.

App. 31

to recover the proceeds of the insurance policy pur-

chased by her husband,

The Court will also award plaintiff interest on the

face amount of the policy from March 16, 1960, the date

on which the defendant company rejected plaintiff's de-

mand. This award of interest is required by D.C. Code

§28-2707,°. since the face amount of the policy is a li-

quidated amount, and since interest is payable by law or

usage in such cases, 3 Appleman, Insurance Law and

Practice § § 1581- 1564 (1941 ed.).. Defendant argues that

D.C. Code § 28-2709, permitting discretionary interest,

applies. But that provision [D. C. Code 528-2708] is not

applicable where the action is for recovery of a liqui-

dated indebtedness. In such case section 28-2707 D.C.

Code (1951) applies.“ Blustein v. Eugene Sobel Co., 105

U.S. App. D. C. 32, 36 (1959). See also Rosden v. Leut-

hold, 107 U.S. App. D. C. 89, 92 (1960). Plaintiff would

be entitled to interest from the date of demand and proof.

of death. See Royal Indemnity Co. v. Woodbury Granite

Co., 69 App. D.C. 364, 369 (1938); 3 Appleman, Insur-

ance § 1584. But apparently plaintiff does not know the

actual date of demand, and is content to request interest

8 ttn an action in the United States District Court for the Dis-

trict of Columbia to recover a liquidated debt on which in-

terest is payable by contract or by law or usage the judgment

for the plaintiff shall include interest on the principal debt

from the time when it was due and payable, at the rate fixed

by the contract, if any, until paid." D. C. Code § 28-2707.

a an action to recover damages for breach of contract the

judgment shall allow interest on the amount for which it is

rendered from the date of the judgment only; but nothing here-

in shall forbid the jury, or the court, if the trial be by the

court, from including interest as an element in the damages

awarded, if necessary to fully compensate the plaintiff. my *

D. C. Code 828-2708. Even if this provision did apply in the

present case, the Court would award such interest since it is

necessary to fully compensate the plaintiff for the amount

which the proceeds could have earned since the time when

such proceeds were due and payable.

App. 32

only fromthe date the demand was rejected. Since the

insurance policy specifies no rate of interest, the statu-

tory six per cent per annum will be applied. D.C. Code

§ 28-2701.

Judgment will therefore be entered in favor of plain-

tiff in the amount of $50,000 plus interest at six per cent

per annum from March 16, 1960.

This memorandum will be considered as findings of

fact and conclusions of law pursuant to Rule 52, Federal

Rules of Civil Procedure.

/s/ Judge Luther W. Youngdahl

April 24, 1964

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.