Opinion ID: 162130
Heading Depth: 2
Heading Rank: 1

Heading: The Aviation Policy

Text: 13 The Insureds purchased an Aviation Policy from Old Republic. Although both parties agree that the Insureds are entitled to coverage under the Policy regarding the crash on October 10, 1995, they disagree as to the precise amount. The Insureds contend that the Aviation Policy entitles them to $700,000 in coverage. Old Republic asserts that the Policy limits the Insureds' recovery to $200,000. The district court ruled in favor of the Insureds. 14 The Aviation Policy's general liability provision represents an agreement by Old Republic: 15 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 4 of the Declarations) and property damage, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft. 16 (App. 77 (emphasis added).) 17 Item 4 of the Declarations contains the phrase including passengers. (App.32.) Pursuant to the Policy's Definitions, bodily injury is defined as bodily injury, sickness, disease or mental anguish sustained by any person which occurs during the policy period, including death at any time resulting therefrom. (App. 81 (emphasis added).) 18 Old Republic's exposure is limited under the Aviation Policy, however, by a liability limitation provision which reads, in pertinent part: 19 The total liability of the Company for all damages ... shall not exceed the limit of liability stated in the Declarations as applicable to each occurrence. 20 And further provided that if the Declarations are completed to show passenger Liability [sic] limited 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: 21 (a) as respect any one passenger, the amount stated in the declarations as applicable to each person. 22 (b) as respect two or more passengers, subject to the above provisions respecting any one passenger, the amount stated in the Declarations as applicable to each person multiplied by the number of passengers on board the aircraft ... but in no event shall the Company's Liability for all bodily injury ... exceed the limits stated in the Declarations as applicable to each occurrence. 23 (App.80.) The Declarations limit the amount applicable to each occurrence to $1 million, and to each person to $100,000. (App.32.) 24 Old Republic argues, and the Insureds do not contest, that the Aviation Policy limits recovery for bodily injury for each passenger to $100,000. Old Republic then goes on, however, to argue that this limit pertains to all claims made in connection with the October 10, 1995 crash. More specifically, Old Republic maintains that the Decedents' families' claims for mental anguish are included within the liability limit for each passenger because these claims derive from the actions for bodily injury to each passenger, i.e. they could not have been made but for the injury to the particular passenger. 25 We are not persuaded by Old Republic's derivative argument. In this case, the Policy clearly provides coverage for non-passengers' claims of emotional distress as well as passengers'. As we have recited, the Policy's definition of bodily injury specifically includes mental anguish sustained by any person, (App.81), and its general liability provision expressly states that coverage is available to any person 7 who suffers from mental anguish that is caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft. (App.77.) The Decedents' families' mental anguish claims clearly arose from the use of the crashed aircraft, and are therefore covered by the Policy's general liability provision. 26 Old Republic argues, however, that under its Policy 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... (b) as respect two or more passengers... the amount stated in the Declarations as applicable to each person multiplied by the number of passengers on board the aircraft.... (App.80.) According to Old Republic, the phrase for all damages limits the Insureds' coverage to $100,000 per passenger, regardless of any injury that non-passengers may have experienced as a result of the crash. 27 We can not agree. The Policy provision relied upon by Old Republic explicitly refers to passenger liability. (App.80.) That provision makes no mention of limiting liability for non-passenger bodily injury. (App.32.) This makes it clear that the Policy limitation was intended to apply to bodily injury sustained by passengers, but not to injuries sustained by non-passengers. 28 In short, if Old Republic had meant to limit its coverage for mental anguish and other noneconomic injuries to non-passengers by including such claims within the scope of coverage for injury to passengers, it could have done so explicitly. The language of the Policy clearly explains that non-passengers' claims for mental anguish are covered and are independent of the $100,000 limitation for passenger injury. 8 29 Finally, the cases relied on by Old Republic are distinguishable from the one at hand. In In the Matter of the Estate of Daigle, 634 P.2d 71 (Colo.1981) (en banc), the policy in that case did not include mental anguish within the definition of bodily injury, as it does in the Old Republic Policy. Hence, the non-passenger claimants in Daigle were limited to a $100,000 per passenger recovery because they were not covered for mental anguish by the Daigle policies. Moreover, since the decision in Daigle, the Colorado Wrongful Death Act, Colo.Rev.Stat. Ann. § 13-21-202 et seq., has now been amended to include noneconomic damages similar to those found in the Old Republic Policy. Because it involved different policy language and was decided under different Colorado law, the Daigle case is inapposite. 30 Spaur v. Allstate Insurance Co., 942 P.2d 1261 (Colo.1997), is similarly inapposite. Admittedly, Spaur was decided after the amendment to the Wrongful Death Act and did find that the liability provision at issue plainly restricts coverage to those who have sustained bodily injury and includes within that coverage any derivative claims of other persons. Id. at 1263. What distinguishes Spaur from this case, however, are the differences in the two policies. Unlike the Aviation Policy in this case, the policy in Spaur defined bodily injury only as bodily injury, sickness, disease or death, and did not include mental anguish as an element of damages. Id. at 1263. By contrast, the Aviation Policy here explicitly includes all non-passengers in its coverage provision and defines mental anguish as a compensable bodily injury. 31 Because the Aviation Policy clearly provides coverage for all persons suffering from mental anguish as a result of aircraft operation, the Decedents' families' mental anguish claims are not limited by the $100,000 each person limitation. They are limited, however, by Colo.Rev.Stat. § 13-21-203, which prohibits recovery for noneconomic loss or injury in wrongful death cases in excess of two hundred fifty thousand dollars. This limit is applied collectively for each decedent, see Mitson v. AG Eng'g & Dev. Co., 835 F.Supp. 572 (D.Colo.1993), and is not contested by the Insureds. As a result, the Insureds are entitled under the Aviation Policy to a total recovery of $700,000; $500,000 for mental anguish to each of the Decedents' families ($250,000 × 2), and $200,000 for the injuries to the Decedents themselves ($100,000 × 2). 32