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Melville v. American Home Assurance Co.

decided: October 5, 1978.



Before Gibbons, Hunter and Garth, Circuit Judges.

Author: Garth


This is an appeal by the defendant, American Home Assurance Company ("American"), from a judgment on a jury verdict in favor of the plaintiff, Virginia Barry Melville, in her action to recover the policy amount of $500,000 on an insurance policy covering accidental death. Three issues are before this court for review: (1) whether the district court erred in its choice of law determination that the New York presumption with respect to suicide applied in this case, rather than the presumptions of Pennsylvania or Delaware, (2) if New York law is controlling, whether the district court's instructions concerning that state's presumption against suicide were proper, and (3) whether error was committed in admitting into evidence Airworthiness Directives issued by the Federal Aviation Administration. Because the district court erred in its choice of law, we reverse.


The facts of this case are described in great detail in the scholarly opinion of the district court judge, Melville v. American Home Assurance Co., 443 F. Supp. 1064 (E.D.Pa.1977). Hence we refer here to only those facts essential to elucidate our decision.

Melville was the sole beneficiary of an accident insurance policy purchased by the insured, Josiah Marvel Scott. Following the insured's death in an airplane crash which can best be characterized as bizarre, this diversity action was commenced in the federal court in the Eastern District of Pennsylvania to recover the insurance proceeds. A previous action had been commenced in New York state court, but had been dismissed on the ground of forum non conveniens. In the instant action, diversity of citizenship existed because Melville was a citizen of Pennsylvania at the time of suit, and American is a New York corporation with its principal place of business in New York.

The principal defense asserted by American was that Scott, the insured, had committed suicide by intentionally interfering with the pilot's use of the dual controls in the small chartered plane in which he was the sole passenger. The policy excluded coverage when death occurred by reason of suicide.

Scott, the insured, had been a lifelong citizen of Delaware. He had purchased the insurance policy from the Delaware office of Johnson & Higgins, an insurance broker whose main office is in Philadelphia. The broker had placed the order by phone with American, and an oral binder was effected at American's New York office. American subsequently issued the policy and posted it in New York. It was sent to the broker's Philadelphia office, through which it eventually reached Scott in Delaware. Scott met his death in Delaware and Delaware is the locale where most of the facts relevant to the question of accident or suicide occurred.


In this diversity action, the district court's choice of law decisions must be governed by the choice of law rules of Pennsylvania, the forum state. Klaxon Co. v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941). Because of the nature of the claim and defense in this case, the district court was required to utilize Pennsylvania's conflicts rules in choosing among the Pennsylvania, Delaware, and New York presumptions against suicide. Since the differences in the New York presumption, on the one hand, and those of Pennsylvania and Delaware, on the other hand, would have a significant effect on the outcome of the trial, a conflict in terms of choice of law was presented.

Normally, the beneficiary of an accident insurance policy has the burden of pleading and proving accident. See Adams v. Metropolitan Life Insurance Company, 136 Pa.Super. 454, 7 A.2d 544 (1939). However, New York law prescribes a presumption against suicide which imposes on the party contending that violent death was self-inflicted (here American) the burdens of pleading and persuasion as to that contention.*fn1 Pennsylvania has no such strong presumption against suicide. Pennsylvania law provides that it is merely permissible for the fact-finder to infer, based on common understanding of human nature, that death was not self-inflicted.*fn2 No Delaware case has addressed itself to the presumption against suicide in suits involving accidental death insurance policies. Following the command of Klaxon Company v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941), the district court properly applied Pennsylvania's conflicts rule that when a sister state's law is unknown or unclear it is presumed to be the same as Pennsylvania's. In re Trust of Pennington, 421 Pa. 334, 219 A.2d 353, 356 (1966). For purposes of this case, Delaware's and Pennsylvania's presumptions against suicide were thus viewed as identical.

Turning to Pennsylvania's conflicts rules in order to determine whether Pennsylvania, Delaware, or New York's presumption against suicide properly controlled, the district court concluded that Pennsylvania's conflicts methodology was in disarray as regards contract actions. In an effort to apply accurately Pennsylvania's conflicts decisions, the court proceeded along two discrete lines of inquiry suggested by relevant case law. The district court first examined the traditional rules of the Restatement of Conflict of Laws ("Restatement I") which are grounded on notions of territorial sovereignty. Under either the place of contracting or the place of performance provisions, the district court judge concluded that New York law would govern.*fn3 He then applied the approach for tort actions which was adopted by the Pennsylvania Supreme Court in Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964). Griffith was read as employing a combination of Professor Currie's "interest analysis"*fn4 and the Restatement (Second) of Conflict of Laws ("Restatement II") grouping of contacts theory. These two methods were applied seriatim by the court.

The district court judge concluded that neither New York, Pennsylvania, nor Delaware had a significant interest in having its law apply. Professor Currie's suggestion that in such an "unprovided for case" the law of the forum should be applied on grounds of convenience was rejected, however. Rather, in order to prevent forum shopping, the district court turned to the contacts approach of Restatement II. Analyzing the factors listed in Restatement II § 188, it concluded that New York law should apply since that state was both the place of negotiation, and the place of performance under the policy, as well as the residence of American. The court explicitly eschewed application of Restatement II § 192, which provides that rights created by an insurance contract are generally to ...

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