Justia Insurance Law Opinion Summaries

In this case, a woman was severely injured while moving an inoperable airplane owned by her husband. She sought recovery from her husband's homeowner's insurance policy. The insurance policy, however, excluded injuries "arising out of" the ownership, maintenance, use, loading or unloading of an aircraft. The woman argued that the policy should cover her injury because, in her view, the aircraft had become mere "parts" after her husband removed the wings, elevators, and tail rudder. The lower court disagreed and concluded that her injuries were not covered by the policy. The woman appealed this decision.The Supreme Court of the State of Alaska agreed with the lower court’s interpretation of the homeowner's insurance policy exclusion. The court maintained that regardless of whether the airplane was considered an aircraft or a collection of airplane “parts” when it injured the woman, the injury arose out of the husband’s ownership of the airplane. This interpretation was supported by the clear language of the policy which excluded coverage for bodily injury arising out of ownership or maintenance of an aircraft. As a result, the court affirmed the lower court’s decision. View "Thompson v. United Services Automobile Association" on Justia Law

Schmutzler, the owner and president of Jadair, was a pilot with decades of experience. Schmutzler applied to American National for an insurance policy on its Cessna airplane in 2019. The application listed Schmutzler as the Cessna’s only authorized pilot; Schmutzler indicated that he was a licensed pilot with an FAA medical certificate. The application included “Minimum Pilot Requirements,” which stated that “there is no coverage in flight unless the aircraft is being operated by the pilot(s) designated on this document who has/have at least the certificates, ratings, and pilot experience indicated, and who … is/are properly qualified for the flight involved.” Schmutzler initialed this provision. The Cessna crashed in May 2020, killing Schmutzler, who was piloting the plane. The crash was caused by a mechanical failure.American National denied coverage because Schmutzler did not have a current and valid FAA medical certificate at the time of the accident; his previous certificate had expired. The district court granted American National summary and declaratory judgment. The Seventh Circuit affirmed. The policy unambiguously excludes coverage for any accident involving the Cessna where the pilot lacks a current FAA medical certificate. That requirement is an exclusion of coverage, not a failed condition of coverage. View "Jadair International, Inc. v. American National Property & Casualty Co." on Justia Law

Tessco Technologies Inc. hired Landstar Ranger, Inc. as a transportation broker to secure a motor carrier to transport an expensive load of Tessco’s cargo to a purchaser across state lines. But Landstar mistakenly turned the shipment over to a thief posing as a Landstar-registered carrier, who ran off with Tessco’s shipment. Tessco’s insurer, Aspen American Insurance Company, sued Landstar, claiming Landstar was negligent under Florida law in its selection of the carrier. The district court dismissed Aspen’s negligence claims against Landstar, concluding those claims were expressly preempted by the Federal Aviation Administration Authorization Act (“FAAAA”).   The Eleventh Circuit affirmed. The court explained that just as the phrase “with respect to the transportation of property” “massively limits” the preemption provision, the court reads the phrase “with respect to motor vehicles” to impose a meaningful limit on the exception to the preemption provision. Second, the court found that the phrase “with respect to motor vehicles” has an operative effect only by requiring a direct connection between the state law and motor vehicles. The court reasoned that the specifics of Aspen’s complaint make us even more confident that Aspen’s claims are not “with respect to motor vehicles” within the meaning of the safety exception. Aspen’s complaint says nothing at all about motor vehicles. And Aspen’s negligence and gross negligence counts challenge only Landstar’s “selection of the motor carrier.” The complaint does not purport to enforce any standard or regulation on the ownership, maintenance, or operation of “a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.” View "Aspen American Insurance Company v. Landstar Ranger, Inc." on Justia Law

The Texas Workers' Compensation Act (TWCA), Tex. Lab. Code 401.007–419.007, regulates the prices that insurers must pay to providers for various medical services utilized by their beneficiaries, including air transport services. However, those price restrictions conflict with the federal Airline Deregulation Act (ADA), which makes clear that the states "may not enact or enforce a law, regulation, or other provision . . . related to a price, route, or service of an air carrier that may provide air transportation under this subpart." 49 U.S.C. 41713(b)(1).The Fifth Circuit joined its sister circuits, which have unanimously held that the ADA preempts state price caps on air ambulance reimbursements, and that those state price caps are not saved by the McCarran–Ferguson Act. The court disagreed with the Texas Supreme Court, which has reached contrary conclusions by a divided vote. Therefore, in this case, the court affirmed the judgment and held that the TWCA regulations concerning the reimbursement of air ambulance providers like Air Evac are preempted by the ADA, and are not saved by the McCarran–Ferguson Act. View "Air Evac EMS, Inc. v. Sullivan" on Justia Law

In 2002 an uncontrolled, runaway commercial aircraft at Las Vegas’s McCarran International Airport came to a rest at the bottom of an embankment. A maintenance worked had failed to properly engage the parking brake. The resulting property damage and loss-of-use of the aircraft totaled more than $10 million. The aircraft’s owner, Northwest Airlines, obtained a default judgment in Minnesota state court against PALS, the maintenance company responsible for the wreck, then commenced a garnishment action to recover part of the amount from PALS’s insurer, Westchester, which argued that PALS’s failure to provide notice and to cooperate extinguished Westchester’s payment obligation. While acknowledging unanswered questions of state law, the Eighth Circuit affirmed judgment in favor of Northwest. A Clark County ordinance mandates hangar-keepers liability insurance to protect parties like Northwest. Given this purpose, insurance coverage could not be avoided for an insured’s simple failure to satisfy the technical post-loss conditions on statutorily mandated coverage. View "NW Airlines, Inc. v. Westchester Fire Ins. Co." on Justia Law

The insurance company sought a declaratory judgment that a plane crash that killed five people did not trigger coverage under a fleet insurance policy issued to an aircraft maintenance and charter company. The policy identifies the company's clients (including Wyndham) as "named insureds" and as "insured owners," but Wyndham did not participate in its negotiation. Wyndham filed a counterclaim seeking coverage. The crash involved a plane rented by a Wyndham employee to attend a work-related meeting, but did not involve the charter company in any way. The court held that Wyndham was entitled to coverage. The Third Circuit reversed. New Jersey law allows reformation, on the basis of mutual mistake, against a party that did not participate in negotiation of a contract and the insurance company sufficiently pled mutual mistake. Although the contract appears to provide third parties with coverage when using aircraft without the charter company's involvement, both contracting parties believed that the language did not expand coverage to entities unaffiliated with the charter company, such as Wyndham. The premium went down with the addition of the language at issue because the intent was to limit coverage for to aircraft owned, used by, or at the direction of the charter company.