Court Opinion

ID: 9473528
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:32:09.757402+00
Date Added: 2024-06-11T17:43:34.870891
License: Public Domain

RALPH B. GUY, Jr., District Judge,
dissenting.
The majority faults the district court because “it violated well-established principles governing the construction of insurance policies and similarly well-established Kentucky case law.” I do not disagree with the majority’s construction of Kentucky case law. I do not disagree with its conclusion that any construction of the insurance clause in question is in fact necessary other than affording it its plain and obvious meaning.
It is first necessary to set forth the entire language of the additional insured clause of the policy. The plaintiff relies on the truncated version of the language cited in the majority opinion. No citation of authority is necessary for the proposition that, in interpreting the clause in question, it should be read in its entirety.
“Insured” means the Named Insured and, with respect only to the Liability Coverages, also means any person while using or riding in the aircraft and any person or organization legally responsible for the use thereof, provided the actual use of the aircraft is by the Named Insured or with his permission; and further provided that, other than the Named Insured none of the following shall be insured:
(a) any person or organization or any agent or employee thereof, engaged in the manufacture or sale of aircraft, aircraft engines or aircraft accessories or in the operation of an aircraft repair shop, aircraft sales agency, aircraft rental service, commercial flying service or flying school with respect to any occurrence arising out of any such manufacture, sale or operations, but this provision does not apply to any employee of the Named Insured while acting in the course of his employment by the Named Insured;
When the above clause is read in its complete form, it appears clear that the insurance company, in plain and easily understandable language, has set forth those persons and classes of persons who are likely at some point in time to have temporary contact with or control of a privately owned aircraft. There is no doubt that any of these persons when in temporary control of the aircraft owned by D & R Coal could generate liability for D & R Coal by the commission of a tortious act and resultant injury to a third party. To that end, I have no fault with the instruction of the state trial judge to the effect that for purposes of determining third-party liability, Buck could be considered the agent, servant, and employee of both Bates Aviation and D & R Coal. The flaw in plaintiff’s reasoning adopted by the majority, however, is to equate this third-party liability with coverage as an additional insured under the policy-
It is not in dispute that Buck was an employee of a commercial flying service and thus was excluded from coverage as an additional insured by the express language of the policy. Plaintiff would obviate the clear meaning of this exclusion by citing the language which follows the identification of the excluded persons and classes:
[B]ut this provision does not apply to any employee of the named insured while acting in the course of his employment by the named insured.
The clear purpose of the above language is to enable persons or organizations engaged in airplane manufacture, sales, maintenance, repair, commercial flying services, and such other related enumerated businesses to be able to have coverage for their own employees. In other words, if Bates Aviation were the insured under this policy, it is clear that Buck would be covered notwithstanding that he is “engaged in ... the operation of ... a commercial flying service____”
From an underwriting standpoint, the insurance company can take reasonable measures to evaluate the risk it is under taking when it insured D & R and its employees. To suggest that in writing this policy it also insured everyone who might at any *229time have any legitímate contact with the airplane in question appears to me to be a distortion both of the policy language and common sense business practices.
I would affirm the District Court Judge since the construction that I would place upon this policy language does not implicate the rule that requires insurance companies to defend cases of questionable liability, The issue here is not liability but coverage.