610 F.2d 551 (8th Cir. 1979), 79-1233, Foremost Ins. Co. v. Sheppard

Docket Nº:79-1233.
Citation:610 F.2d 551
Party Name:FOREMOST INSURANCE COMPANY, Appellee, v. Chris J. SHEPPARD d/b/a Anthony Island Sea Plane Base and Kenneth Dale Landreth. Loretta June Jones, Executrix of the Estate of Garnett Jones, Deceased, Intervenor-Appellant.
Case Date:December 14, 1979
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 551

610 F.2d 551 (8th Cir. 1979)

FOREMOST INSURANCE COMPANY, Appellee,

v.

Chris J. SHEPPARD d/b/a Anthony Island Sea Plane Base and

Kenneth Dale Landreth.

Loretta June Jones, Executrix of the Estate of Garnett

Jones, Deceased, Intervenor-Appellant.

No. 79-1233.

United States Court of Appeals, Eighth Circuit

December 14, 1979

Submitted Oct. 9, 1979.

Page 552

Irene Barnes, McMath, Leatherman & Woods, Little Rock, Ark., argued, Henry Woods, Little Rock, Ark., and David Q. Reed, Kodas, Reed & Gingrich, Kansas City, Mo., on brief, for appellant.

Chester C. Lowe, Jr., Little Rock, Ark., argued, Lowe & Hamlin, Little Rock, Ark., on brief, for appellee.

Before ROSS and STEPHENSON, Circuit Judges, and McMANUS, [*] Chief District Court Judge.

STEPHENSON, Circuit Judge.

In this diversity action, defendants Chris J. Sheppard d/b/a Anthony Island Sea Plane Base, Kenneth Dale Landreth and defendant-intervenor Loretta June Jones appeal from the district court's 1 order granting summary judgment in favor of plaintiff Foremost Insurance Company (Foremost). Foremost petitioned the district court for a declaratory judgment that an aircraft insurance policy it issued to defendant Chris J. Sheppard d/b/a Anthony Island Sea Plane Base did not provide coverage for a sea plane accident which occurred on February 17, 1974. The district court held that this aircraft policy did not provide coverage for the accident. We reverse.

Some time prior to February 17, 1974, Garnett Jones made arrangements with Anthony Island Sea Plane Base to receive instruction in the operation of a sea plane. Jones was a licensed commercial pilot for Braniff Airlines but desired to qualify for a sea plane rating on his pilot's license. Anthony Island Sea Plane Base furnished Kenneth Dale Landreth, a qualified pilot instructor, to give sea plane flying instruction to Jones. A sea plane owned by Sheppard

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d/b/a Anthony Island Sea Plane Base and insured by Foremost was used for this instruction.

On February 14, 1974, Landreth gave Jones two hours of sea plane dual flight instruction which included supervision of: take-offs; landings; sailings; docking; slow and fast taxi on both pontoon floats; emergency landings and procedures; and cross-wind landings and take-offs.

On February 17, 1974, Landreth continued flying instruction for about forty minutes. During this period, Landreth demonstrated two landings, fast taxi procedure, and take-offs on a single pontoon float, one on each float. Jones then made four landings, fast taxi and take-offs on the left pontoon float, and two on the right pontoon float. During the third landing on the right pontoon float and while fast taxiing, the front portion of the pontoon float dug into the water. The aircraft flipped over on its back and sank. Garnett Jones was drowned.

On March 10, 1976, Loretta June Jones, as executrix of Garnett Jones, filed a wrongful death action in the United States District Court for the Western District of Arkansas. Named defendants in that action were Chris J. Sheppard d/b/a Anthony Island Sea Plane Base and Kenneth Dale Landreth.

On March 16, 1976, Foremost was notified that this wrongful death action had been filed and a demand for defense was asserted at that time. Foremost filed answers for the defendants but notified them that it intended to undertake defense of the suit with a full reservation of all rights to disclaim coverage for the occurrence and to withdraw from defense of the suit.

On May 24, 1976, Foremost filed this separate action for a declaratory judgment against Sheppard d/b/a Anthony Island Sea Plane Base and Landreth, claiming that Jones, as a student pilot, fell within a clause excluding coverage for pilots or crewmen and therefore the aircraft policy afforded no coverage for the February 17, 1974 accident. In an unpublished opinion, the district court granted Foremost's motion for summary judgment, holding that the aircraft policy did not provide coverage for the accident.

Before reviewing the district court's decision, we will first examine relevant portions of the Foremost aircraft insurance policy.

The first page of the policy specifies the types of coverage provided and the purposes for which the aircraft may be used. The coverages at issue here are those labeled "A" and "B".

Coverage A is entitled "Bodily Injury Liability Excluding Passengers." It states:

To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, excluding passengers as defined herein, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft. 2

Coverage B is entitled "Passenger Bodily Injury Liability." It states:

To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any passenger as defined herein, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft. 3

The purposes for which the aircraft may be used are prominently indicated on this first page to be: (a) Pleasure and Business; (b) Industrial Aid; and (c) Limited Commercial. The term "Limited Commercial" is defined as including all the uses permitted in (a) and (b) above and including Student Instruction and Rental to pilots but

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