The Fourth Circuit Court of Appeal recently provided the first ever Louisiana interpretation of certain provisions of an aircraft liability policy. In King v. Old Republic Ins. Co., 2016-0170 (La. App. 1 Cir. 9/7/16); 200 So. 3d 989, the plaintiff’s minor child was killed in the crash of a gyrocopter, an experimental amateur-built aircraft. The gyrocopter was registered with the Federal Aviation Administration with an experimental category airworthiness certificate. The pilot of the gyrocopter, who was also killed in the crash, had an aviation insurance policy issued by Old Republic Insurance Company. The plaintiff sued Old Republic, along with other defendants.
Old Republic moved for summary judgment, alleging that the gyrocopter was not covered under its policy. Old Republic maintained that the policy only covered a 1973 Piper fixed wing aircraft specifically listed in the policy’s declarations. The trial court granted summary judgment in favor of Old Republic. Because the gyrocopter was not listed in the policy declarations, the arguments in the district court concerning coverage centered on an “Expanded Amendatory Endorsement,” which provided:
6. THE LIABILITY COVERAGES AFFORDED BY THIS POLICY ARE EXTENDED TO APPLY TO THE USE, BY OR ON BEHALF OF THE NAMED INSURED, OF ANY AIRCRAFT WHICH:
(a) IS NOT OWNED IN WHOLE OR IN PART BY, OR FURNISHED FOR REGULAR USE TO THE NAMED INSURED;
(b) IS NOT AN AIRCRAFT DESCRIBED IN ITEM 5 OF THE DECLARATIONS;
(c) HAS A STANDARD AIRWORTHINESS CERTIFICATE;
(d) HAS A CERTIFICATED GROSS TAKE OFF WEIGHT OF NO MORE THAN 12,500 POUNDS;
(e) HAS A MAXIMUM OF SEVEN SEATS, INCLUDING CREW.
The plaintiff argued that because the different clauses of this endorsement were not separated by the conjunctive “and,” they must be read in the disjunctive, and “there is no express requirement that all elements must be satisfied for an extension of liability coverage under the policy.” The Fourth Circuit rejected the plaintiff’s argument, first noting that no Louisiana case interpreted “either the endorsement or the grammatical construction” advanced by the plaintiff. The court noted that the plaintiff’s argument allowed coverage if any of the clauses (a) through (e) applied. This meant, for example, that coverage was afforded if the aircraft satisfied clause (b), or in other words, was not listed in the policy declarations. The court labeled this an “absurd result.” As the court explained, the plaintiff’s “interpretation would mean that any aircraft other than the single listed aircraft, the Piper, would qualify as a covered aircraft, without regard to the ownership, FAA airworthiness certification, weight, or seating capacity of the aircraft. We find this to be a strained interpretation of the policy in contravention of Louisiana law, and we decline to read the endorsement, together with the policy, in the manner advanced by [the plaintiff.] Considering the facts before us, we find that the criteria set forth in all five clauses must all be satisfied in order for the endorsement to extend liability coverage to an aircraft.” Because the gyrocopter did not satisfy all five requirements of the endorsement, the Fourth Circuit determined the gyrocopter was not covered under the policy, and affirmed the grant of summary judgment.
This decision presents a common sense interpretation of the applicable insurance policy in which the court refused to stretch the language of the policy to cover the damages in this serious case.
King v. Old Republic Ins. Co., 2016-0170 (La. App. 1 Cir. 9/7/16); 200 So. 3d 989