Opinion ID: 3011844
Heading Depth: 1
Heading Rank: 3

Heading: Policy Stacking

Text: Before turning to the factual question, we consider Air Sunshine’s contention on cross-appeal that the policy does not allow for the stacking of coverage for multiple occurrences under any facts. We exercise plenary review over the District Court’s legal determination regarding the scope of coverage under the policy. See On Air Entertainment Corp. v. National Indem. Co., 210 F.3d 146, 150 (3d Cir. 2000). Because this case arose under diversity jurisdiction, we must apply the law of the Virgin Islands. The Virgin Islands Code provides that [e]very insurance contract shall be construed according to the entirety of the terms and conditions as set forth in the policy and as amplified, extended or modified by any rider, endorsement, or application attached to and made a part of the policy. 22 V.I.C. S 846. Further, under Virgin Islands law, in the absence of express local laws to the contrary, the ‘rules of the common law, as expressed in the restatements of law approved by the American Law Institute, and to the extent not so expressed, as generally understood and applied in the United States, shall be the rules of decision in the courts of the Virgin Islands . . . .’  Buntin v. Continental Ins. Co., 583 F.2d 1201, 1204 n.3 (3d Cir. 1978) (quoting 1 V.I.C. S 4). A court  ‘should read policy provisions to avoid ambiguities, if possible, and not torture the language to create them.’  Coakley Bay Condo. Ass’n v. Continental Ins. Co., 770 F.Supp. 1046, 1051 (D.V.I. 1991) (quoting Northbrook Ins. Co. v. Kuljian Corp., 690 F.2d 368, 372 (3d Cir. 1982)). [A]n insurer’s failure to ‘express clearly and 17 unequivocally its intent’ to exclude when it could have done so easily supports a conclusion that the relevant language is ambiguous. Id. at 1050 (quoting Buntin, 583 F.2d at 1206). The District Court, in its initial January 14 opinion, stated that the policy caps the amount of recovery for bodily injury or property damage for all claims arising from one occurrence at $10,000,000 and that the policy also further limits recovery per passenger to $500,000 for bodily injury, but it does not indicate that this sum is dependent on the number of occurrences. App. at 22-23. The court concluded that under the policy, an individual may not recover more than $500,000 from Air Sunshine in the event of bodily injury during a flight arising from one accident. Id. at 23. The court clarified this statement from its April 6 opinion, which has been vacated but still explains the holding on stacking that was never reversed: [i]f Plaintiffs were able to prove that a second occurrence was responsible for the death of Flemming, Plaintiffs could recover an additional $500,000 for the second occurrence. Id. at 29. We agree that the policy allows coverage to be stacked. The policy states that liability for bodily injuryas the result of any one occurrence shall not exceed $10,000,000, which is the limit of liability stated in the Declarations as applicable to ‘each occurrence.’  Id. at 357, 362. Because the Declarations include the phrase passenger liability limited internally to, the policy further limits liability as respect any one passenger to $500,000, which isthe amount stated in the Declarations as applicable to‘each person.’  Id.9 _________________________________________________________________ 9. In a footnote discussing this policy limitation, the District Court stated: The policy provides 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 or property damage to passengers shall not exceed . . . as respect to any one passenger, the amount stated in the Declarations as applicable to ‘each person.’  The Declarations do not contain such a phrase and limit individual recovery to $500,000. 18 This language could be read to mean, as Air Sunshine argues, that the policy delineates distinct liability limits for each person as opposed to the $10 million total limit for each occurrence and therefore the court impermissibly inserted unstated terms into the policy to conclude that it allowed stacking. Air Sunshine Br. at 57. However, no clear policy language prevents stacking. The policy language fails to state clearly that the each person limitation is an independent cap that works separately from the each occurrence limitation. The policy may be reasonably interpreted to mean that coverage for one occurrence may not exceed $10,000,000 total, and, within that cap, liability per passenger is limited internally to $500,000 under the each person limit. The language is at best ambiguous as to whether the $500,000 each person cap applies to a single passenger regardless of the number of occurrences to which that passenger is subjected. No clear policy language excludes policy stacking, and any ambiguity in the policy should be interpreted in favor of Sabine Flemming. See C.H. Heist Caribe Corp. v. American Home Assur. Co., 640 F.2d 479, 481 (3d Cir. 1981) (All ambiguities must be resolved against the insurer and in favor of coverage.). We find that the policy allows stacking of the $500,000 each passenger coverages for multiple occurrences. Therefore, we must now consider whether the circumstances surrounding James Flemming’s death constituted multiple occurrences under the policy.