United States Court of Appeals,

                                             Fifth Circuit.

                                            No. 92-8513.

   RANGER INSURANCE COMPANY on Behalf of Steven BERNSTEIN, d/b/a Levelland
Aviation, Plaintiff-Appellee,

                                                   v.

                         The ESTATE OF Max MIJNE, et al., Defendants,

  Roland Potzner and Margot Potzner individually and as representatives of the estate of Marc
Potzner, Defendants-Appellants.

                                            May 21, 1993.

Appeal from the United States District Court for the Western District of Texas.

Before JOHNSON, SMITH, and EMILIO M. GARZA, Circuit Judges.

       EMILIO M. GARZA, Circuit Judge:

       Marc Potzner and Max Mijne, Jr. died when the small plane they were operating crashed.

Marc Potzner had rented the plane from Levelland Aviation ("Levelland"). Levelland's insurance

carrier, Ranger Insurance Company ("Ranger"), filed an interpleader action to determine which

estate—Mijne or Potzner—was entitled to insurance proceeds. All parties filed motions for

declaratory and summary judgment. Finding that the insurance policy excluded "renter pilots" such

as Marc Potzner from its coverage, the court granted declaratory and summary judgment for Ranger,

and denied Potzner's request for the same. Because the court erred in its interpretation of the policy's

coverage provisions, we reverse the district court's decision, and render judgment for Potzner.

                                                   I

       In July 1991, Marc Potzner rented a Piper Tomahawk Aircraft from Steven Bernstein, doing

business as Levelland. Marc Potzner had the proper medical and pilot certificates to meet Levelland's

requirements. The aircraft was a two-seater, capable of being piloted from either side of the cockpit.

Ranger, a Texas company, provided insurance coverage for the plane.

       Marc Potzner was accompanied in the aircraft by Max Mijne, Jr., also a licensed pilot. The

plane crashed near Witharrall, Texas. Marc Potzner and Max Mijne, Jr., both foreign citizens, were
killed. It is uncertain which of the two men was piloting the plane when it crashed.

          Ranger and the estates of Potzner and Mijne ("Potzner" and "Mijne") apparently entered into

settlement negotiations some time after the accident.1 Ranger seems to have offered $100,000 for

the estates to divide. After much disagreement, Ranger interpleaded $100,000 into the district court's

registry, and requested a declaratory judgment as to whom to pay the insurance proceeds.

          Potzner filed a counterclaim and cross-claim for declaratory judgment, asserting that each

passenger in the plane was entitled to $100,000 under the insurance policy. Shortly thereafter, Mijne

filed a similar counterclaim and cross-claim. All parties subsequently filed motions for summary

judgment.

          The insurance policy between Ranger and Levelland contains the following relevant

provisions:

          Part One

          General Provisions and Conditions

          ....

          1. Words and Phrases

          The following words and phrases have special meaning throughout the policy:

                 a. You and your mean the person or organization named in Item 1 of the Coverage
                        Identification Page under the heading "Named Insured";2

                 ....

                 c. We, our and us mean the insurance company named on the Coverage Identification
                        Page;3

                 ....

                 i. Passenger means any person who is in the aircraft or getting in or out of it;

                 j. Bodily injury means physical injury to a person, including sickness, disease or

   1
    The facts concerning the settlement negotiations are taken from Ranger's brief on appeal, see
Brief for Ranger at 4, and are not disputed by Potzner.
   2
    Levelland is the named insured on Coverage Identification Page. See Record on Appeal, vol.
1, at 33.
   3
       Ranger is the named insurance company on the Coverage Identification Page. See 

               m. Occurrence means a sudden event or repeated exposure to conditions, involving
                     the aircraft during the policy period, neither expected nor intended by you,
                     that causes bodily injury or property damage to others during the policy
                     period. All bodily injury or property damage resulting from the same general
                     conditions will be considered to be caused by one occurrence;

               ....

               o. Renter pilot means any pilot meeting the requirements of Item 9 of your
                     Coverage Identification Page who is renting one of your aircraft from you;4

                                             ******

       Part Three

       Liability to Others

       ....

       1. What We Cover

       We will pay damages you, and anyone we protect, are legally required to pay for bodily
       injury or property damage caused by an occurrence during the policy period.

               e. Coverage DL covers bodily injury to passengers and others and property damage
                      in a combined limit of liability for each occurrence which includes a lower
                      limit for each passenger.5

                       The most we will pay for bodily injury to each passenger is shown in Item
                       6DL opposite "each person." The most we will pay for all bodily injury and
                       property damage is shown in Item 6DL opposite "each occurrence."6

       2. Who Is Protected

       Except for those listed below, your bodily injury and property damage liability coverage
       protects you and any of your employees while in the scope of his or her employment whom
       you permit to fly your aircraft while it is operated by you or your employee. You and such
       employee, person or organization are protected separately, but the limits of liability shown
       in Item 6 of the Coverage Identification Page do not increase regardless of the number

   4
    Those requirements are possession of a "proper medical certificate" and "pilot certificate with
necessary ratings as required by the FAA for each flight." 

of Coverage Identification
Page).
   5
   Although several kinds of coverage were available, Levelland only paid premiums on
coverage DL. See 

of Coverage Identification Page).
   6
   The limit for "each person" is $100,000.00, while the limit for "each occurrence" is
$300,000.00. See 

of Coverage Identification Page).
        protected.

        3. Who Is Not Protected

        Your bodily injury and property damage coverage does not protect:

                ....

                d. Renter Pilots

                        Any renter pilot.

        4. What Is Not Covered

        We do not cover any:

                a. Pilots and Use

                        Bodily injury or property damage unless the requirements of the Coverage
                        Identification Page regarding Pilots (Item 9) and Use (Item 10) are met;7

Record on Appeal, vol. 1, at 25-33 (emphasis in original).

        The district court found no ambiguity in the insurance policy. The court interpreted the policy

initially to cover both passenger and pilots because Part One, Sec. 1.i, explicitly defines a passenger

as "any person who is in the aircraft." The court went on, however, to interpret Part Three,

3.d—stating that renter pilots are not "protected" under the policy—as excluding from coverage any

bodily injury to renter pilots. Since Marc Potzner was indisputably a renter pilot, the court concluded

that Marc Potzner's death was excluded from coverage. The court therefore granted Ranger's motion

for declaratory and summary judgment. Since the court concluded that Marc Potzner's death was not

covered under the policy, the court ordered that Ranger interplead only $100,000.00—the amount

Mijne would be entitled to receive due to Max Mijne, Jr. being either a passenger or pilot. The court

also denied Potzner's motion for summary judgment. Potzner filed a timely notice of appeal.8


   7
     Item 10 of the Coverage Identification Page limits the use of the aircraft to Levelland's
personal and business related purposes, and Levelland's "rental to anyone for their receiving
instruction in the aircraft or [Levelland's] rental to anyone for their personal and business related
purpose." See Record on Appeal, vol. 1, at 33.
   8
     Potzner does not challenge, either in its brief on appeal or at oral argument, the district court's
declaratory judgment regarding its order that Ranger "acted in conformity with the duty of good
faith and fair dealing in accordance with Article 21.21 of the Texas Insurance Code." Record on
Appeal, vol. 3, at 708 (Declaratory Judgment). We therefore need not address the issue.
                                                   II

        We review the district court's grant of a summary judgment motion de novo. Davis v. Illinois

Central R.R., 

, 617-18 (5th Cir.1991). Summary judgment is appropriate if the record

discloses "that there is no genuine issue of material fact and that the moving party is entitled to a

judgment as a matter of law." Fed.R.Civ.P. 56(c). The underlying facts of this action are not

disputed. Therefore, we are left with determining whether the district court erred, as a matter of law,

in interpreting the terms of the insurance policy. See Guaranty Nat. Ins. Co. v. North River Ins. Co.,

, 135 (5th Cir.1990) (holding that the "[i]nterpretation of an insurance policy is a

question of law").

                                                  III

        Potzner argues that the district court erred in construing the terms of the insurance policy so

as to exclude Marc Potzner's death from coverage. Applying Texas rules of construction,9 we note

that when the terms of an insurance policy are plain, definite, and unambiguous, a court may not vary

these terms. Royal Indemnity Co. v. Marshall, 

, 181 (Tex.1965); see also Barnett

v. Aetna Life Ins. Co., 

, 665 (Tex.1987) (stating that "if the insurance contract is

expressed in plain and unambiguous language, a court cannot resort to the various rules of

construction [favoring the insured]"). An insurance policy is ambiguous only when it is "reasonably

susceptible to more than one meaning ... but if only one reasonable meaning clearly emerges[,] it is

not ambiguous." Universal C.I.T. Credit Corp. v. Daniel, 

, 

, 157

(1951). When no ambiguity exists, a court must give the words used their plain meaning. Puckett

v. U.S. Fire Ins. Co., 

, 938 (Tex.1984).

        The policy expressly states that Ranger "will pay damages [Levelland], and anyone [Ranger]

protect[s], are legally required to pay for bodily injury." Record on Appeal, vol. 1, at 30 (Part Three,

Sec. 1). The policy further states that "Coverage DL covers bodily injury to passengers." 

Sec. 1.e). The policy defines a passenger as being "any person who is in the aircraft." 

    We apply Texas laws of construction to this diversity suit since Texas is the forum state.
Ideal Mut. Ins. Co. v. Last Days Evangelical Ass'n, Inc., 

, 1238 (5th Cir.1986)
(applying substantive law of forum state to diversity suit).
27 (Part One, 1.i). We find these terms unambiguous, and thus must give them their plain meaning.

See 

. The term "passenger" plainly includes pilots because a pilot is a

"person who is in the aircraft." We therefore agree with the district court's initial conclusion that the

policy covers the bodily injury to pilots—in this case, the deaths of both Marc Potzner and Max

Mijne, Jr.10

        We disagree, however, with the court's subsequent conclusion that bodily injury to "renter

pilots" is excluded from the policy's coverage. In drawing this conclusion, the court relied upon Part

Three, Sec. 3.i, which states that Levelland's "bodily injury ... coverage does not protect ... renter

pilots." Record on Appeal, vol. 1, at 30 (Part Three, Sec. 3.d). That secti on, however, lists the

persons protected, rather than the things covered under the policy, and thus is not relevant to

determining whether Marc Potzner's death is covered under the policy. See 

Sec. 3

(entitled "Who Is Protected") and Part Three, Sec. 1 (entitled "What We Cover") (emphasis added)).

We construe the term "protected" to refer to those insured under the policy—i.e., those persons who

are legally required to pay damages which Ranger must cover. If, for example, Mijne sued Potzner

as a result of the plane crash, Levelland's coverage would not protect Marc Potzner, as the renter

pilot, from damages which his estate may be legally required to pay. This result, however, has no

bearing on the fact that Marc Potzner's death is "covered" under the policy since the policy expressly

covers "bodily injury to passengers." See 

Sec. 1.e).

        The distinction between those "protected" and what is "covered" under the policy is evident

when comparing Sec. 3 to Sec. 4.a of Part Three. In Part Three, Sec. 3, the policy states that

Levelland's coverage does not protect renter pilots. See Record on Appeal, vol. 1, at 30. In Part

Three, Sec. 4.a, the policy states that Ranger will cover bodily injuries as long as the requirements

   10
     Ranger's reliance upon Paul Revere Life Ins. Co. v. First Nat'l Bank in Dallas, 

(5th Cir.1966) (en banc), is misplaced. In Paul Revere, we held that the common and popular
meaning of the term "passenger" did not include pilots. See 

at 644. In doing so, we
noted that "[t]here is no additional language in the contract ... which has logical bearing on the
intended coverage." 

policy expressly defines "passenger" in such a way to
include pilots, Paul Revere is not applicable to our facts. See also Guardian Life Ins. Co. of
America v. Scott, 

, 65 (Tex.1966) ("Terms used in an insurance contract are given
their ordinary and generally accepted meaning unless the policy shows the words were meant to
be used in a technical or different sense." (emphasis added)).
pertaining to (1) pilots11 and (2) use of the aircraft are met. See 

proper use of the

aircraft, the policy further states, inter alia, that the aircraft must be used for "your rental to anyone

for their receiving instruction ... or your rental to anyone for their personal and business related

purposes," see 

(Item 10 of Coverage Identification Page), suggesting that injuries to pilots

renting from Levelland would be covered under the policy. We interpret these sections, unambiguous

in their terms, to mean that while the policy does not protect renter pilots from damage suits, it

nevertheless covers the injuries suffered by renter pilo ts for which Levelland is obligated to pay.

Consequently, we hold that Marc Potzner's death was covered under the terms of the policy.

                                                   IV

        For the foregoing reasons, we REVERSE the district court's grant of declaratory and

summary judgment for Ranger, and RENDER judgment for Potzner.




   11
     See Record on Appeal, vol. 1, at 33 (Item 9 of Coverage Identification Page) (listing the
"pilot requirements" as being the possession of a proper medical certificate and pilot certificate
ratings as required by the FAA).