Oliva v. Pan American Life Insurance

448 F.2d 217
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 22, 1971
DocketNos. 29264, 29318
StatusPublished
Cited by2 cases

This text of 448 F.2d 217 (Oliva v. Pan American Life Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oliva v. Pan American Life Insurance, 448 F.2d 217 (5th Cir. 1971).

Opinion

JOHN R. BROWN, Chief Judge:

Though Fidel Castro has now been in power over twelve years, his take-over of the Cuban Government continues to raise legal wrangles. In these two cases, we must again determine the effect of Cuban expropriation decrees upon Cuban citizens who have fled to seek refuge in the United States. Since both cases here concern the application of the act of state doctrine and both involve the same person, they will be considered together.

The two cases were dismissed separately by the District Court upon the doctrine of forum non conveniens in 1961. This Court consolidated the appeals, reversed each decision and remanded for determination of other issues raised by the pleadings. Rodriguez v. Pan American Life Ins. Co., 5 Cir., 1962, 311 F.2d 429; Menendez v. Aetna Ins. Co., 5 Cir., 1962, 311 F.2d 437. The Supreme Court of the United States granted certiorari, vacated the judgment of this Court and remanded the case for “further consideration in the light of Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 84 S.Ct. 923, 11 L.Ed.2d 804,” 376 U.S. 779, 781, 84 S.Ct. 1130, 1131, 12 L.Ed.2d 82. After a further hearing we remanded the case for the District Court “to afford the parties opportunity to be heard upon development of such record as is found necessary by the District Court for its determination of the applicability of the Act of State doctrine.” Rodriguez v. Aetna Ins. Co., 5 Cir., 1965, 340 F.2d 708. In 1969 the District Court granted summary judgment to Plaintiffs in both cases, and defendants appeal under the act of state doctrine.

The original plaintiff was Pedro Menendez.1 Mr. Menendez was a Cuban [219]*219resident until 1959. In Cuba he had been a successful tobacco farmer. In 1958 he was elected to the Cuban Senate and became Minister of Agriculture to President Fulgencio Batista. In early 1959 Mr. Menendez fled Cuba and became a resident of Tampa, Florida. But he had not become a forgotten man in Havana. In March, 1959 the new Government declared certain former Batista supporters to be traitors and that these people would have their property confiscated. On April 7, 1959 the Government published the name of Mr. Menendez in the Official Gazeta, and he thereby became such an individual.

No. 29264 — Pan American

The first claim deals with a life insurance policy that Mr. Menendez purchased from the Pan American Life Insurance Company, a Louisiana corporation, in 1945. At the time Pan American did business both in the United States and in Cuba. Among the provisions of the policy was that “all the payments * * * be they on the part of the company or the insured will be verified in the City of New Orleans in the legal money of the United States.” The policy provided for automatic premium loans if the premiums were not paid for the surrender of the policy for its cash value.

In 1951 American currency ceased to be legal tender in Cuba and thereafter all obligations contracted or payable in Cuba were required to be settled in Cuban currency. Pursuant to this Pan American sent notice in 1952 to all of its policyholders that it could no longer accept payment in dollars in Cuba. Pan American then offered two options: (i) payments in New Orleans must be made in dollars or (ii) payments made in Cuba must be made in pesos. Menendez signed a notice selecting (ii) which provided payment “on the basis of one Peso for every Dollar payable under the contract, it being agreed that upon receipt at the Pan American Life Insurance Company of this application, said application shall form an integral part of the contract executed between the undersigned and the Company.”

From 1952 until 1958 all payments were made and accepted in pesos in Cuba. Mr. Menendez did not make the premium payment due on January 5, 1959, but this payment was made pursuant to the automatic loan provision of the policy. In September 1959 Mr. Me-nendez attempted to pay the loan against the policy by sending a check on a Tampa bank to Pan American’s office. In October Pan American returned the check explaining that it was against company policy to transfer a policy from Cuban pesos to American dollars automatically. It suggested that if any changes were to be made Mr. Menendez must send his policy to the Pan American branch in Havana and request the cash surrender value. If and when this was accomplished, Mr. Menendez would be allowed 20 days to contact Pan American in the United States and the company would then reinstate the policies in United States currency in consideration for the surrender of the cash value of the policy which Mr. Menendez received from Cuba.2 The letter went on to say as long as the policies were payable in pesos, Mr. Menendez would be required to make all payments through the Cuban office.

Mr. Menendez recognized that such a course of action would be futile and therefore did not accept Pan American’s offer. In July 1960 he requested payment of the cash surrender value of the policies in United States dollars, and shortly thereafter Pan American again offered what it had offered before — to pay the value of the policies in pesos in Cuba. In August 1960 Mr. Menendez instituted suit in state court in Florida for the cash surrender value, and Defendant removed the case to federal [220]*220court. Finally in September 1960 the Cuban Government requested that Pan American pay the confiscated cash surrender value of the policy to the Ministry of the Treasury. Pan American surrendered the proceeds of the policy to the Government in Cuba which in turn absolved Pan American from all further liability on the policy.

No. 29318 — Aetna

This case deals with a fire insurance policy issued in Cuba in 1952 by Aetna Insurance Company, a Connecticut corporation. The policy originally named Cuban Land and Lease Tobacco Company, in behalf of Pedro Menendez as the assured. The policy insured barns and their contents used by Mr. Menen-dez in his tobacco business. In 1957 the policy was changed to name Mr. Menen-dez as the sole insured party.

On November 20, 1958, while the policy was in effect, a fire destroyed some of the insured property. Mr. Menendez promptly reported the loss but no settlement or adjustment had been reached by January 1, 1959 when Fidel Castro seized power.

The new Cuban Government required Aetna to assess the loss. Then, in accordance with its confiscation decree against Menendez, the Government expropriated Menendez’s claim by selling some of the securities that Aetna had deposited to gain the right to do business in Cuba. The Cuban Government retained the proceeds and in January 1960 absolved Aetna from further liability on Mr. Menendez’s fire loss. Aetna had previously informed Mr. Menendez that it would be unable to repay him for any claims arising from his Cuban fire insurance policy.

Act of State Doctrine

In Pan-American Life Insurance Company v. Blanco, 5 Cir., 1966, 362 F. 2d 167, this Court considered the claims of several Cuban refugees seeking recovery' on insurance policies that had been expropriated by the Cuban Government. The claim of Mrs. Zabaleta in

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448 F.2d 217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oliva-v-pan-american-life-insurance-ca5-1971.