Court Opinion

ID: 2966098
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:48:50.3309+00
Date Added: 2024-06-11T11:43:08.651424
License: Public Domain

USCA1 Opinion

	

                 United States Court of Appeals
                     For the First Circuit

No. 99-1616

              LILIA TWOMBLY, F/K/A LILIA MAJERCZYK,

                      Plaintiff, Appellant,

                                v.

                   AIG LIFE INSURANCE COMPANY,

                       Defendant, Appellee.

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                    FOR THE DISTRICT OF MAINE

           [Hon. Morton A. Brody, U.S. District Judge]

                              Before

                      Selya, Circuit Judge,
                 Coffin, Senior Circuit Judge,
                   and Boudin, Circuit Judge.
                                
                                
                                
                                
     David M. Lipman with whom Karen E. Lipman was on brief for
appellant.
     Barbara A. Cardone with whom John W. McCarthy was on brief for
appellee.

December 14, 1999

                                
                                

     COFFIN, Senior Circuit Judge.  Appellant Lilia Twombly claims
that her employer's insurer, appellee AIG Life Insurance Company,
wrongly denied her coverage for injuries she suffered in a serious
car accident that occurred while she was driving home from a work-
related meeting. The district court concluded that the insurance
policy did not cover such travel, and it therefore granted summary
judgment for the insurer.  Because we believe that the contract is
susceptible to more than one reasonable interpretation, we vacate
the summary judgment for the insurer and remand to the district
court to allow the insurer to present extrinsic evidence shedding
light on the parties' intentions.  If none is available,
longstanding principles of Maine law governing the construction of
insurance policies require that judgment be granted for Twombly.
                      I. Factual Background
     At the time of her accident in June 1995, Twombly held a field
service position with Americorps National Service Program. 
Although she worked out of the program's Bangor, Maine, office, she
regularly traveled to field sites as part of her job.  One of her
responsibilities was to educate migrant farm workers about public
health issues, including the safe handling of pesticides.  On June
16, 1995, she traveled south from her home in Lincoln to her office
in Bangor to do administrative work before heading back north
beyond Lincoln to a meeting in Houlton to plan an upcoming training
session on pesticide use.  After the meeting, while driving south
toward her home in Lincoln, along the same route that also would
have taken her back to the office in Bangor, Twombly was involved
in a one-car collision that left her severely injured.
     As an Americorps employee, Twombly was insured under an
occupational accident policy issued by AIG.  The policy and the
Master Application sheet contained three statements relating to
coverage for travel that are pertinent to our discussion.  Two of
the statements were virtually identical "Description of Activity"
provisions, one found in the application and one in the policy
itself.  Because the differences between them are irrelevant to the
issues before us, we reproduce for convenience only the application
language, section 3 of the document, which was as follows:
          Occupational Only: 24 Hr. coverage while on Business of
     a sponsoring member.  Excluding commutation to and from.

On the application, this statement was not part of the contract
boilerplate, but was typed in to describe the particular coverage
being purchased.
     The third relevant statement appears on the same page of the
Master Application.  This "Eligibility and Classification"
provision, section 4b, has two pre-printed statements of possible
coverage, each with a box beside it.  One box was checked and one
was not, and beside the unchecked box was the notation "N/A."  The
provision thus appeared as follows:
          Eligibility and Classification of Insured (Please Check):
     All members of the Policyholder as described above will
     be covered for accidental injury sustained while they
     are:

       Participating in any scheduled, sponsored and supervised activity.
            Direct travel to or from such activity.   N/A

The policy does not define the terms "activity," "travel" or
"commutation."
     Twombly contends that she was injured while participating in
a covered activity within the meaning of the "Eligibility and
Classification" provision.  She maintains that the "activity" in
which she was participating embraced her travel to Houlton from her
office and would have included the return trip south from Houlton
to Bangor had her workday not ended, causing her to travel south
only as far as her home in Lincoln.  That travel was not excluded
as "commutation to and from" under the "Description of Activity"
provision, she maintains, because it did not constitute commuting
within the generally understood meaning of that concept   that is,
repeated travel along the same route between home and one's regular
work location    and that common understanding of commutation must
apply because the term is not otherwise defined in the policy.
     Twombly further contends that the unchecked box in section 4b,
the "Eligibility and Classification" provision, does not indicate
rejection of coverage for all travel "to or from" work activities,
but considered together with the "N/A" notation (i.e., "not
applicable") beside it, indicates that the subject is covered
elsewhere in the policy.  The "elsewhere," in her view, is the
exclusion for "commutation to and from" business activities written
in under "Description of Activity."  Thus, her view is that the
"N/A" notation beside the second box in section 4b meant that the
customized "Description of Activity" entry provided the applicable
standard for travel coverage. And she construes that provision to
mean that travel other than that usually considered commutation is
covered.
     The district court, however, concluded that the two provisions
when read together must be understood to exclude coverage not only
for what is typically considered commuting but also for any travel
between an employee's home and her work assignment, regardless of
the location of the work. The court reasonably took section 4b at
face value, observing that "the empty box and the phrase `N/A'
positioned next to . . . [the travel] language indicate that such
circumstances are not covered activities under this Policy." 
Because the accident occurred when Twombly was traveling home at
the end of her workday, the court ruled as a matter of law that her
injuries were not covered and granted summary judgment for AIG.
     On appeal, Twombly re-asserts her interpretation of the
contract and contends that the policy is sufficiently ambiguous
that either its language should be interpreted as a matter of law
in her favor or, in the alternative, the dispute should be given to
a jury to resolve.  As we explain below, we find the contract to be
ambiguous, and, under Maine law governing the interpretation of
insurance polices, Twombly was entitled to have the ambiguity
construed in her favor, unless the insurer can prove through
extrinsic evidence that the parties intended the policy to exclude
the sort of business travel in which Twombly was engaged at the
time of her accident.  Consequently, the case must be remanded to
the district court for further proceedings.
                          II. Discussion
     Maine law provides a series of well established guideposts for
the interpretation of an insurance policy.  Like all contracts, an
insurance contract is to be construed in accordance with the
intention of the parties.  See Maine Drilling & Blasting, Inc. v.
Insurance Co. of N.A., 665 A.2d 671, 673 (Me. 1995); Baybutt
Constr. Corp. v. Commercial Union Ins. Co., 455 A.2d 914, 921 (Me.
1983) (overruled on other grounds).  Questions concerning the
meaning of language in an insurance policy, including whether it is
ambiguous, are to be resolved as a matter of law by the court.  See
Apgar v. Commercial Union Ins. Co., 683 A.2d 497, 498 (Me. 1996);
Banker's Life Ins. Co. of Nebraska v. Eaton, 430 A.2d 833, 834 (Me.
1981).  In seeking to ascertain the intention of the parties, the
court must examine the whole instrument.  See Apgar, 683 A.2d at
498; Baybutt, 455 A.2d at 921.  If an ambiguity in the language of
a contract does not disappear when it is examined in the context of
the other provisions of the document, extrinsic evidence may be
considered to cast light on the parties' intent.  See Apgar, 683
A.2d at 501; T-M Oil Co. v. Pasquale, 388 A.2d 82, 85 (Me. 1978).
Any ambiguities that persist are to be resolved against the insurer
and in favor of coverage.  See, e.g., Geyerhahn v. United States
Fidelity and Guar. Co., 724 A.2d 1258, 1261 (Me. 1999); Cambridge
Mut. Fire Ins. Co. v. Vallee, 687 A.2d 956, 957 (Me. 1996).
     Applying these principles to the case before us, the threshold
question of law is whether the language of the Americorps policy is
ambiguous.  We conclude that it is.  The language of a contract is
ambiguous "if it is reasonably susceptible of different
interpretations."  Cambridge Mutual, 687 A.2d at 957; see also
Peerless Ins. Co. v. Brennon, 564 A.2d 383, 384 (Me. 1989). 
Although we acknowledge the logic in the insurer's position,
accepted by the district court, that the policy provisions recited
above had the effect of excluding coverage for any travel between
an employee's workplace and home, we find that it is not the only
plausible construction of the policy.  The district court's view
gave heavy weight to the fact that coverage was checked off for
"any scheduled, sponsored and supervised activity," but that the
box beside the phrase "direct travel to or from such activity" was
unchecked.  The court reasonably construed the absence of a check
mark as an intention not to cover work-related travel.
     Twombly's interpretation, however, is similarly supportable. 
She begins with the assertion that section 3, which excludes
coverage for "commutation to and from" business activities, does
not affect coverage for her injuries because the accident did not
occur on her commuting route between Lincoln and Bangor. Any
exclusion from coverage thus must come from section 4b, where
coverage is checked off for "any scheduled, sponsored and
supervised activity" of her employer but the "travel to or from"
box is unchecked.  Twombly argues that the "activity" she undertook
on the day of the accident   planning the out-of-office training
session    included her travel to and from the meeting in Houlton. 
In her view, the unchecked box next to "direct travel to or from
such activity" does not eliminate coverage for travel in
circumstances in which the travel is part of the actual work
activity.  She also goes further to argue that the "N/A" notation
beside the travel provision indicates that that provision has no
relevance at all to the coverage provided under the policy. She
contends that the provision is, as the term indicates,
"inapplicable" to this policy.  The applicable provision on travel
is section 3, which she claims excludes only "traditional"
commuting and thus leaves all other work-related travel within the
scope of the policy.
     Both aspects of her interpretation strike us as eminently
reasonable.  It is undisputed that Twombly's responsibilities with
Americorps included regular travel to field sites for the purpose
of educating migrant farm workers about the proper handling of
pesticides.  We think it quite likely that Americorps intended to
acquire an occupational accident policy that covered travel risks
to employees whose work included such regular travel to out-of-
office locations.  Indeed, given the probable expanse of her work
area, Twombly may have spent substantial portions of some work
days traveling.  We are persuaded that a reasonable person
describing Twombly's work "activities" for the purpose of the first
part of section 4b would be likely to include as part of her job
her travel to various locations for farm worker training.  Driving
regularly occurred as part of her work day, not only as commutation
at its beginning and end.
     In addition, rather than negating coverage for workday travel,
the "N/A" notation beside the unchecked travel provision in section
4b reinforces the likelihood that Americorps' failure to check the
provision was not intended to eliminate travel coverage that
otherwise was provided through the broadly written "Description of
Activity" in section 3.  The "N/A" notation is used in at least one
other place in the policy apparently to indicate that boilerplate
language is inapplicable, rather than to exclude certain
circumstances from the scope of coverage.  In particular, in
section 3, the standard form of the contract appears to contemplate
the possibility of a policy that was issued to cover either a
particular trip or a particular activity.
     The relevant portion appears as follows:
                    Trip                Activity
     
     Destination:_____________N/A____         Description of:___N/A____________
     Mode of Transportation:__N/A____         Location:_________N/A____________
     Date of Coverage:________N/A____         Date of Coverage:_N/A____________

The message of the "N/A" notation as used in this section
reasonably is understood to be that "this provision does not apply
to this contract." It is unsurprising that these two groups of
details, although irrelevant to the sort of comprehensive
occupational coverage obtained by Americorps, appear on the
application, because the Master Application presumably is used to
secure coverage in a variety of settings.  It is logical that not
every provision of boilerplate language would be applicable to
every contract, and it is within common experience to encounter the
"N/A" label on such standardized forms. 
     A fair reading of section 4b can lead to the conclusion that
the "N/A" notation next to the provision relating to "travel to or
from" a work activity has the same meaning and serves a related
purpose as in section 3; in this instance, the notation reasonably
can be understood to mean that the provision so designated "does
not apply to this contract" because such travel is covered pursuant
to section 3, unless it constitutes typical commuting.  Indeed,
when the occupational coverage obtained is comprehensive, and when
the "activity" of the insured employees routinely includes workday
travel, it arguably would be unreasonable to reduce coverage that
is explicitly defined quite broadly   as in the Description of
Activity provision here   based on a provision that is labeled as
"inapplicable" to the contract.  At the least, the limited
exclusion for "commutation" in section 3 and the arguable exclusion
of other work-related travel in section 4b creates an ambiguity.
     We note one additional factor in support of appellant.  The
language in the policy excluding medical expenses arising from
"[a]n accident which occurs while the Insured Person is traveling
to and from work," the fourth provision referring to travel
coverage, see note 1 supra, reinforces the notion that this policy
distinguishes between regular commuting and other types of travel. 
The use of the conjunctive in "travel to and from work" seems to
designate the concept of commutation, as does the use of the
general word "work" as the destination.  In section 4b, however,
not only is the reference phrased in the disjunctive   "travel to
or from"   but also the destination is more particularized to a
given work "activity."  This comparison, although somewhat
belaboring the point, demonstrates yet again that the type of
travel normally understood to be commuting is explicitly excluded
from coverage, while there is no similarly unambiguous indication
that the parties intended to exclude other types of travel from the
coverage that facially is provided by the broad "Description of
Activity" statement.
     Having concluded that the policy is ambiguous, our attention
next must focus on any extrinsic evidence offered to provide
insight into the parties' intentions.  We have been given none.
Indeed, the insurer, which bears the burden of any unresolved
ambiguity, see supra at 6-7, emphatically asserts in the face of
Twombly's request for fact finding that there are no facts in
dispute and that the court should resolve this case based on the
contract alone.  Although this position may signal an actual
absence of any extrinsic evidence, it may simply reflect the
insurer's view that the contract itself is so clear that no further
aids to its interpretation are necessary.  If the former, the
policy must be construed in favor of the insured and coverage.  See
T-M Oil Co., 388 A.2d at 86 (although extrinsic evidence would have
been admissible, none was offered, and court therefore resolved
ambiguity in favor of insured).
     Our foremost obligation, however, is to give effect to the
intentions of the parties.  "The rule of construction that a policy
should be construed more strongly in favor of coverage `is a rule
of last resort which must not be permitted to frustrate the
intention the parties have expressed, if that can otherwise be
ascertained.'" Apgar, 683 A.2d at 500-01 (internal citations
omitted).  We therefore vacate the summary judgment for AIG and
remand to the district court to permit the insurer to shed any
further light on that issue that it can through evidence on the
preparation of the policy, its structure, discussions that may have
occurred with Americorps, or any other relevant aspect of the
contract formation.  If no such evidence is presented, judgment
must be entered for Twombly because, as we have indicated, the
policy reasonably can be construed to provide coverage for the
work-related, non-commuting travel in which she was engaged at the
time of her accident.
     Vacated and remanded for further proceedings consistent with
this opinion.