Steven v. Fidelity and Casualty Company of New York

George Steven purchased a $62,500 insurance policy from Fidelity and Casualty Company of New York (defendant) before embarking on a round-trip flight from Los Angeles to Dayton. Mr. Steven purchased the policy from one of several vending machines Casualty had throughout the airport. The policy cost $2.50 and covered losses or injuries incurred during flights. It was unclear whether Mr. Steven was able to view the terms of the policy before it was vended. However, the terms were stated in roughly 2,000 words on a receipt of the policy. The terms limited coverage to flights on scheduled carriers as opposed to flights on nonscheduled carriers or air taxis. For emergency alternative transportation, the policy covered various modes of ground transportation but was silent on alternative air transportation. Policy receipts allowed travelers to insert their flight information and indicate beneficiaries and were vended with envelopes to mail the policies to intended beneficiaries. Mr. Steven mailed his policy to his wife (plaintiff) and had no issues on his trip to Dayton. However, on his return, Mr. Steven had a layover, and his connecting flight was grounded due to mechanical issues. The grounded flight’s airline tried booking stranded travelers on other scheduled flights and tried arranging ground transportation. However, the only available connection was an air taxi. The air taxi crashed en route to the connecting city, and Mr. Steven suffered fatal injuries. Mrs. Steven filed a claim with Casualty for payment under the policy. Casualty refused coverage because Mr. Steven was not flying on a scheduled air carrier when he died. Mrs. Steven sued Casualty in state court to recover under the policy. The trial court found in Casualty’s favor, and Mrs. Steven appealed.