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April 24, 1964

Josephine MESSINA, Plaintiff,

The opinion of the court was delivered by: YOUNGDAHL

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 Maryland. 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 Department 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 travel from Seoul, Korea, to Maryland was pursuant 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. Messina 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 Airport; 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 airports. 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 submitted the required proof of loss within the ninety-day period after Mr. Messina's death. On March 16, 1960, the defendant notified Mrs. Messina that it denied her claim on the ground that 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 covered by the insurance policy which Mr. Messina purchased.

 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 Benefits for Loss of Life, 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 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 premium. On Mr. Messina's policy, the point of departure was listed as 'TAW,' which is the symbol for Tachikawa Air Force Base, Japan; the destination was listed as Washington, D.C.

 The following language then appears in small but legible 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 Insured in the Schedule against loss of life, limb or sight and other specified losses resulting, independently of all other causes, from injuries. The term 'injuries', wherever used in this policy, shall mean accidental bodily injuries received during 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 injuries 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 Public Convenience and Necessity issued by the Civil Aeronautics Board of the United States of America or its successors, (b) by an intrastate scheduled 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 for transportation 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 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 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 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) * * *,' *fn1" since none of the other specified types of flights applies.

 This Court has concluded, for reasons to be set forth hereinafter, that the fatal flight was covered by the insurance policy, and that plaintiff is therefore entitled to recover. *fn2"

 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 principle requires this Court to construe the insurance policy 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, 318 F.2d 266 (1963). The policy must therefore be interpreted from the point of view of the ordinary understanding 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 airlines, and the boldface heading and body of the contract, both of which are broader in coverage, including flights by MATS, which may well be nonscheduled. 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 appear to conflict with each other, since such reader would be unlikely to differentiate chartered flights run by 'scheduled' airlines from chartered flights run by 'non-scheduled' airlines. In short, the fact that coverage extends to 'regular, special, or chartered' flights would be more important to the ordinary reader than the limitations as to various kinds of airlines, the technical definitions of which would not be understandable even to a diligent reader. The reference to 'special' and 'chartered' flights would have led a reasonable 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.

 No such clear warning exists. In fact, other provisions in the policy would have reinforced the conclusion that the air-taxi flight was covered. Three specific references to coverage for the entire air-trip 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' (Washington, D.C.) would be covered. Two of these references are quoted above: one extending coverage to injuries received 'during any portion of the first one way or round trip which is made by the Insured * * * between the Point of Departure and the Destination designated in the Schedule * * *;' the other dealing with ground transportation 'for the purpose of beginning, continuing or completing the airtrip designated in the Schedule.' (Emphasis added.) The third reference is in the policy clause dealing with the effective date of the policy: 'This insurance shall commence on the Effective Date at 12:01 A.M., Standard Time at the Point of Departure, and shall terminate either upon completion of the airline trip described in the Schedule or upon expiration or surrender for refund or credit of said transportation 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 specifically covered by the policy. It thus would have required 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 coverage 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 coverage extended to 'special' and 'chartered' flights, as discussed above. *fn3"

 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. *fn4"

 It is in the light of these considerations that the Court must interpret the proviso that the air-taxi flight is covered 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 Commander of Travis Air Force Base (a base assigned at that time to MATS; the commander was an officer of MATS), and by the President of Travis Air Taxi Service, permitted the Air Taxi Service to use without charge the landing and parking facilities of the base 'for the express 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 personnel 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 dependents 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 in a supplement 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 longer than two hours after one passenger has contracted for the flight service.' (Emphasis added.)

 Both parties agree that a contract is an agreement between two or more parties to do (or not to do) a certain 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 position 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. *fn5" There is also a detriment to each party -- to the Air Taxi Service in being bound to supply service no longer than two hours after one passenger has requested 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 provide such service on a priority service, the Base Commander promised for MATS to let the Air Taxi Service use the facilities of the base. So long as the agreement was in force, each party was obligated, and each benefited. The essential requisites of a contract were thus present. *fn6" 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. *fn7"

 Considering the insurance policy as a whole 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 to recover the proceeds of the insurance policy purchased 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 demand. This award of interest is required by D.C.Code, § 28-2707, *fn8" since the face amount of the policy is a liquidated amount, and since interest is payable by law or usage in such cases, 3 Appleman, Insurance Law and Practice §§ 1581-1584 (1941 ed.). Defendant argues that D.C.Code, § 28-2708, *fn9" permitting discretionary interest, applies. 'But that provision (D.C.Code, § 28-2708) is not applicable where the action is for recovery of a liquidated 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, 263 F.2d 478, 482 (1959). See also Rosden v. Leuthold, 107 U.S.App.D.C. 89, 92, 274 F.2d 747 (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, 101 F.2d 689 (1938); 3 Appleman, Insurance § 1584. But apparently plaintiff does not know the actual date of demand, and is content to request interest only from the date the demand was rejected. Since the insurance policy specifies no rate of interest, the statutory six per cent per annum will be applied. D.C.Code, § 28-2701.

 Judgment will therefore be entered in favor of plaintiff 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.

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