A 2016 Louisiana appellate court ruling that rejected expansive readings of aircraft liability policies and endorsements therein remains the seminal case on the issue. Specifically, in King v. Old Republic Ins. Co., the Louisiana Fourth Circuit held an aviation policy does not afford coverage where the aircraft at issue: (1) is not listed on a policy’s Declarations Page as a covered aircraft; and (2) the does not satisfy each and every clause of the applicable endorsements. 2016-0170 (La. App. 4 Cir. 9/7/16); 200 So. 3d 989
In King, the plaintiff’s minor child was killed in the crash of an amateur-built gyrocopter, an innovative aircraft characterized by free-spinning rotor blades that turn via autorotation. The gyrocopter was registered with the Federal Aviation Administration by means of an experimental category airworthiness certificate. The pilot of the gyrocopter, who was also killed in the crash, was covered under 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 the applicable liability policy, given it was not specifically listed on the Declarations Page. Specifically, Old Republic argued the policy solely covered a 1973 Piper fixed-wing aircraft. In granting summary judgment, the trial court agreed with Old Republic’s arguments concerning scheduled aircraft. The trial court’s ruling 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.
On appeal, 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, such that “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 further noted the plaintiff’s argument would afford coverage if any of the clauses (a) through (e) above applied. For instance, coverage would exist even if the aircraft satisfied clause (b), or in other words, was not listed in the policy declarations. The Court labeled this an “absurd result.”
More specifically, the Court opined 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.” The Court further characterized plaintiff’s arguments as a “strained interpretation of the policy in contravention of Louisiana law,” and declined to read the endorsement, together with the policy, in the manner advanced by the plaintiff.
Accordingly, the Court found that the criteria set forth in all five clauses must all be satisfied in order for the endorsement to extend liability coverage to an unscheduled aircraft. The gyrocopter did not satisfy all five requirements of the endorsement and, as such, the Court affirmed the trial court’s grant of summary judgment in determining the gyrocopter was not covered under the applicable policy.
The Fourth Circuit’s decision remains the seminal Louisiana case on the issue and presents a common sense interpretation of the applicable insurance policy whereby the Court refused to embrace an expansive reading of policy language to cover the damages in high-stakes litigation. King v. Old Republic Ins. Co., 2016-0170 (La. App. 4 Cir. 9/7/16); 200 So. 3d 989.