## Facts

- Mrs. Russell, a Kansas resident, planned to fly from Kansas City to Lubbock, Texas, for a family funeral and expected the trip to last about four days, though her return date was uncertain.
- Mutual of Omaha sold flight accident insurance at the airport by vending machine and at a staffed booth using standard policy forms.
- The vending machine would have issued a round-trip (“trip-type”) policy (T-20) lasting for the round trip or up to 12 months.
- At the staffed booth, a Mutual of Omaha salesperson completed the paperwork and issued a time-limited policy (T-18) for four days, based on Mrs. Russell’s estimate, without discussing differences between the available forms.
- The T-18 policy began at purchase, stated a four-day coverage period, and expired before Mrs. Russell’s delayed return flight.
- Mrs. Russell died in a crash while landing on the return flight after the T-18 policy had expired.
- The insurer denied benefits because the policy was not in force at the time of the accident.
- Mr. Russell, the beneficiary, sued seeking reformation to treat the policy as covering the entire round trip.

## Issues

1. Whether Kansas law governed the dispute under the forum’s conflict-of-laws rules.
2. Whether the insurer’s failure to explain differences between a time-limited policy and a trip-type policy constituted constructive fraud or inequitable conduct supporting reformation.
3. Whether the evidence satisfied Kansas standards for reformation (mutual mistake, or unilateral mistake plus fraud/inequitable conduct, often involving a special relationship).

## Decision

- The Tenth Circuit reversed the district court’s judgment for the beneficiary.
- The court declined to reform the written policy to extend coverage beyond its stated expiration.
- The court held that, on these facts, the insurer had no legal duty to volunteer explanatory information about alternative policy forms where the issued policy was clear and unambiguous.
- Because the accident occurred after the policy expired, the insurer was not liable under the contract as written.

## Legal Principles

- Reformation is an extraordinary remedy under Kansas law and generally requires a mutual mistake in reducing an agreement to writing, or a unilateral mistake coupled with fraud or inequitable conduct.
- A clear, unambiguous insurance policy ordinarily will be enforced as written absent proof meeting the reformation standard.
- Constructive fraud is not established merely by an insured’s misunderstanding of clear policy terms when there is no misrepresentation, concealment, or special confidential or fiduciary relationship.
- An insurer selling standard-form coverage in a transactional setting does not become a fiduciary or counselor obligated to canvass and explain all alternative coverages in the absence of a duty created by law or relationship.

## Conclusion

The court refused to rewrite a plainly time-limited flight accident policy to match an asserted expectation of round-trip coverage, holding that reformation was unavailable without evidence of mutual mistake or fraud-like inequitable conduct and that the insurer had no general duty to explain alternative policy options where the issued contract was clear.


Mutual of Omaha Ins. Co. v. Russell, 402 F.2d 339 (10th Cir. 1968)