Opinion ID: 3011844
Heading Depth: 2
Heading Rank: 2

Heading: Air Sunshine’s Insurance Policy

Text: Resolution of this appeal requires us to construe both the partial settlement agreement and the terms of Air Sunshine’s insurance policy with regard to the issue of multiple occurrences. Some of the relevant terms are found in Liability Coverage D of the policy, entitled Single Limit Bodily Injury and Property Damage Liability. Under Coverage D, the insurer agrees to pay on behalf of the Insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury sustained by any person (excluding any passenger unless the words including passengers appear in item 3 of the Declarations) and property damage, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft . . . App. at 354 (emphasis added).2 Because the words including passengers appear in item 3 of the declarations page for the Air Sunshine policy, this coverage extends to passengers. The policy limits liability under Coverage D regardless of the number of persons injured or the number of claims brought. The limitation begins: The total liability of the [insurance] Company for all damages, including damages for care and loss of services, because of bodily injury or property damage _________________________________________________________________ 2. In the Definitions section of the policy, words with specific definitions are printed in boldface type. We omit these emphases from our quotations of the policy language. 7 sustained by one or more persons . . . as the result of any one occurrence shall not exceed the limit of liability stated in the Declarations as applicable to each occurrence. Id. at 357 (emphasis added).3 The declarations page for Coverage D limits liability for each occurrence to $10,000,000. Id. at 362. Coverage D is subject to further limitations as follows: And further provided that if the Declarations are completed to show passenger liability Limited internally to, the total liability of the Company for all damages, including damages for care and loss of service, because of bodily injury to passengers shall not exceed: (a) as respect any one passenger, the amount stated in the Declarations as applicable to each person . . . Id. at 357. The declarations page for Coverage D lists Single Limit - including passengers with passenger liability limited internally to and limits liability foreach person to $500,000. Id. at 362. The parties dispute the effect of these limits, and specifically contest the extent of a person’s coverage for multiple occurrences. Coverage for multiple occurrences may also be referred to as policy stacking because Sabine Flemming seeks to aggregate or stack coverages and coverage limits for each occurrence under the policy. See, e.g., Rupert v. Liberty Mut. Ins. Co., 291 F.3d 243, 244 n.1 (3d Cir. 2002) (defining stacking in context of automobile insurance policy). Under the settlement, Sabine Flemming has received $500,000, the limit of coverage for one occurrence under the policy. Her claim for the additional recovery contemplated by the partial settlement therefore depends first on whether she can stack multiple coverage limits for more than one occurrence. The meaning of occurrence is thus central to this case. Occurrence is defined under the policy asan accident, _________________________________________________________________ 3. Bodily injury is defined under the policy as bodily injury, sickness, disease or mental anguish . . . including death. App. at 358. 8 including continuous or repeated exposure to conditions, which results in bodily injury or property damage during the policy period neither expected or intended from the standpoint of the Insured . . . App. at 359. Coverage D further defines the scope of an occurrence: For the purpose of determining the limit of the Company’s liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence. Id. at 357 (emphasis added). To address the multiple occurrences issue under the policy, Sabine Flemming submitted the opinions of three expert witnesses. Her biomechanics expert stated that multiple occurrences of negligence caused James Flemming’s injuries and death, and her aviation expert opined that the pilot committed several negligent acts and violated federal regulations. A third expert, an insurance advisor, concluded that the policy, interpreted in light of industry custom and usage, permitted stacking and that there were two insured occurrences in this case-- the crash and the pilot’s neglect to instruct or assist James Flemming. Air Sunshine submitted the opinion of an insurance consultant, Charles A. Tarpley, who concluded that the crash and subsequent death of James Flemming comprised only one occurrence under the policy and industry custom and practice. Tarpley opined that to find multiple occurrences under common insurance industry usage and the specific policy language, it is necessary to identify multiple separate accidents, each resulting in bodily injury, and that the crash into the ocean is the accident that gave rise to Mr. Flemming’s injury. Id. at 427.