Allison v. National Ins. Underwriters

• Decision Date: 02 October 1972
• Docket Number: No. 25788,25788
• Citation: Allison v. National Ins. Underwriters, 487 S.W.2d 257 (Mo. App. 1972)
• Parties: Herbert ALLISON, Respondent, v. NATIONAL INSURANCE UNDERWRITERS, Appellant.
• Court: Missouri Court of Appeals

Page 257

487 S.W.2d 257

92 A.L.R.3d 1255

Herbert ALLISON, Respondent, v. NATIONAL INSURANCE UNDERWRITERS, Appellant.

No. 25788.

Missouri Court of Appeals, Kansas City District.

Oct. 2, 1972.

Motion for Rehearing and Transfer to Supreme Court Denied

Oct. 26, 1972.

Application to Transfer Denied Dec. 11, 1972.

Brown, Douglas & Brown, Wendell E. Koerner, Jr., St. Joseph, for appellant.

Esely & Kilpatrick, William J. Esely, Bethany, Larry L. Zahnd, Maryville, for respondent.

SWOFFORD, Judge.

This is an appeal from a judgment in an equity action brought under Section 379.200 V.A.M.S., wherein the court below, sitting without a jury, held that the plaintiff-respondent was entitled to full satisfaction of a final judgment he had previously obtained against one Joe Rankin, to be paid from the proceeds of an insurance policy wherein Rankin was the insured and the appellant the insurer.

The original action involved damages to an airplane owned by the plaintiff, sustained in a windstorm while the airplane was at the Municipal Airport at Maryville, Nodaway County, Missouri.

Joe Rankin, the insured-judgment debtor, was engaged in business under the trade name of 'Aviation Services, Maryville, Missouri'. Rankin had entered into a written contract with the City of Maryville, which document is designated as a 'Lease' (Plaintiff's Exhibit No. 3), under the terms of which he leased for his own exclusive use portions of the airport and buildings known as Tracts No. 1 and No. 2, and also Tract No. 3 for the joint use of 'Aviation Services' and the City of Maryville. In this latter Tract No. 3 was located the public facilities, such as, waiting room, lunch or anack counter and restrooms, for the use of the public. The lease further provided that Rankin agreed to operate all other facilities of the airport (except a National Guard Hangar and park and farm land) for the use and benefit of the public. He was required under the contract to furnish the public specified services, at rates approved by the city, including maintenance of public facilities (part of Tract No. 3), parts, repairs, storage, ground transportation, flight instruction, rentals, charters, airplane sales and related merchandise. Rankin paid $1.00 annual rental under this contract.

Pertinent here are the following specific sections of this contract:

'(18) The Lessor designates the Lessee as manager of the Airport * * *. Said manager * * * shall be in complete charge of said Airport and devote such time as is necessary to the management thereof, shall oversee, direct and control aircraft services and aircraft operation.' (Emphasis supplied.)

It also provided:

'(14) The Lessee shall carry an adequate amoung of public liability insurance * * * on its airport operation in a reliable insurance company, which said policy shall be taken out by it in the joint names of Lessee and Lessor * * *.'

In accordance with his obligation under (14) above, Rankin applied for and was issued Policy No. 6987 in the National Insurance Group, such policy being issued by appellant-National Insurance Underwriters, and designated as 'Combination Aircraft Policy'. This is the policy of insurance here involved and there is no dispute that it was in full force and effect on June 27, 1965, the date that Allison's aircraft was damaged.

This policy and its endorsements require our close and critical scrutiny in the determination of the issues before us, as the same affect the right of plaintiff to recover his judgment for property damage from the defendant under Section 379.200 V.A.M.S.

This policy (Plaintiff's Exhibit No. 1) insured Joe Rankin d/b/a Aviation Services to the limit of $100,000 for property damage. It consists of the main printed policy and five endorsements, all issued on the same date. The policy and Endorsement No. 1 cover a specific aircraft owned by the insured, a 1946 Cessna, fully described therein, and provides for automatic coverage for additional aircraft acquired by insured. The endorsement shows an initial premium deposit of $245.00 and a monthly premium charge of $47.24. Endorsement No. 2 covers Charter Flying for Hire and Endorsement No. 3 sets forth the qualifications for Approved Pilots.

Endorsement No. 4 (which is the coverage now in question) provides as follows:

'AIRPORT LIABILITY ENDORSEMENT NO. 4

(INCLUDES PRODUCTS LIABILITY)

DECLARATIONS

Item

1. Named Insured JOE RANKIN d/b/s AVIATION SERVICES

2. (a) Location of Premises Marvville Municipal Airport, Maryville, Mo. (Airport Name) (City or Town Where Located)

(b) Description of Premises Occupied by Named Insured Entire

(c) Interest of named Insured in Premises Lessee

3. Business of named Insured is Airport Operation--Sales & Services

4. The insurance afforded is only with respect to such and so many of the following coverages and divisions hereinunder as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage and division shall be as stated herein, subject to all the terms of this policy having reference thereto.

INSURING AGREEMENTS

The Company agrees, in reliance upon the statements contained in the Declarations and Application and subject to the limits of liability, exclusions, conditions and other items of this policy:

Coverage K.--Property Damage Liability

To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the hazards hereinafter defined.

DEFINITION OF HAZARDS

Division 1. Premises-Accident(s) happening on the named insured's premises described in Item 2(b) of the above Declarations resulting or arising from the ownership, maintenance or use of the above described premises of the named insured's business operations thereon.

EXCLUSIONS

Insurance under this Endorsement does not apply:

(p) Under Coverage K to injury to or destruction of property owned, rented, occupied or used by or in the care, custody or control of the named Insured nor to the resultant loss of use thereof.

ADDITIONAL INSURED: The City of Maryville, Missouri but only to the extent to which The City of Maryville, Missouri becomes legally obligated for injury or damage arising from negligence of Joe Rankin d/b/a Aviation Services and such insurance as is afforded under this policy shall not apply in respect to any liability of the City of Maryville, Missouri arising from or caused by any act or omission of the named Insured or any officer or employe thereof in the performance of Airport Manager duties.'

The evidence presented at the trial may be summarized as follows:

The plaintiff, Herbert Allison, was the owner of a Cessna Skyline Airplane, and on June 27, 1965 with his son as pilot, and he as a passenger, this plane was landed at the Maryville Airport and was left in an area on Tract No. 3 at a point not leased for Joe Rankin's exclusive use, but upon property used generally by the patrons of the airport. The keys were left in the aircraft and Allison told Joe Rankin to either tie the plane down or put it in a hangar, and Allison and his son left the airport for their home in Stanberry, Missouri. Allison testified that he did not give Rankin permission to taxi the plane. Rankin was to service such aircraft while it was at Maryville.

Somewhat later that day, there appeared to be a storm rising, and Rankin entered the Allison aircraft and started to taxi toward the National Guard Hangar. He had access to this hangar and permission from the National Guard to store planes there, if space was available therein. After taxiing the Allison plane for several hundred feet, it was turned over by a violent gust of wind and damaged to the extent of $10,106.00.

Rankin reported this to the defendant insurance company. Allison brought suit against Rankin, based upon various allegations of negligence, and Rankin, through his personal attorney, demanded that the insurer defend him in said action and assume responsibility under its policy of insurance. This, the defendant refused to do, and a judgment was entered in favor of Allison against Joe Rankin by default in the Circuit Court of Nodaway County, Missouri at Maryville in Case No. L 4001 in the amount of $10,106.00. Upon this judgment becoming final, this action was instituted under Section 379.200 V.A.M.S. and was tried before the court without a jury.

The court entered a judgment on December 30, 1970 in favor of the plaintiff and against the defendant in the amount of $10,106.00 plus interest in the amount of $1,669.93. In connection with said judgment, the court below filed a written opinion, findings of fact and conclusions of law, as provided under Rule 73, Rules of Civil Procedure, V.A.M.R.

The court found that the plaintiff did not at any time suggest to Rankin that he taxi or operate the plane, and that the evidence failed to show that Rankin had either the express or implied authority to do so.

The court also found as conclusions of law that the plaintiff's loss was insured under Coverage K of the Airport Liability Endorsement No. 4 and that Exclusion (p) did not exclude the loss involved.

The court further found that as a matter of law, the burden of proving that the exclusion was applicable was upon the defendant and that such burden had not been met; that the exclusion provision was ambiguous and should be strictly construed against the insurer; that this ambiguity arose from the fact that the policy showed upon its face that Rankin, as Airport Manager, was in charge of the entire airport facilities and operations thereon, and that the insuring agreement K and Exclusion (p) were in direct conflict; that the evidence failed to show that Rankin was authorized to operate or taxi the Allison aircraft, and that unless such operation was authorized, the exclusion could not apply; that the operation of the plane by Rankin was not a normal...