Certain British Underwriters at Lloyds of London, England v. Jet Charter Service, Inc., 85-5274

• Citation: 789 F.2d 1534
• Decision Date: 27 May 1986
• Docket Number: No. 85-5274,85-5274
• Parties: CERTAIN BRITISH UNDERWRITERS AT LLOYDS OF LONDON, ENGLAND, etc., et al., Plaintiffs-Appellants, v. JET CHARTER SERVICE, INC., Defendant-Appellee, Aero Service International, Inc., Defendant/Counterclaimant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1534

789 F.2d 1534

CERTAIN BRITISH UNDERWRITERS AT LLOYDS OF LONDON, ENGLAND,

etc., et al., Plaintiffs-Appellants,

v.

JET CHARTER SERVICE, INC., Defendant-Appellee, Aero Service International, Inc., Defendant/Counterclaimant-Appellee.

No. 85-5274.

United States Court of Appeals,

Eleventh Circuit.

May 27, 1986.

Thornton, David & Murray, P.A., J. Thompson Thornton, Miami, Fla., for plaintiffs-appellants.

Kathleen M. O'Connor, Thornton, David & Murray, Miami, Fla., for Certain British Underwriters at Lloyds of London, England.

William E. Sadowski, Ackerman, Senterfitt & Eidson, Miami, Fla., for Aero Service Intern., Inc.

Robert G. David, Jr., Miami, Fla., for Jet Charter Service, Inc.

Appeal from the United States District Court for the Southern District of Florida.

Before GODBOLD, Chief Judge, FAY, Circuit Judge, and PECK ^*, Senior Circuit Judge.

JOHN W. PECK, Senior Circuit Judge:

Appellants, Certain British Underwriters at Lloyds of London ("Underwriters"), brought this action for a declaratory judgment against their insured, Aero Service International, Inc. ("Aero Service") and Jet Charter Service, Inc. ("Jet Charter"), owner of an aircraft damaged at Aero Service's repair facility. Underwriters sought a determination that an insurance policy subscribed to by Underwriters did not provide coverage for the damage to Jet Charter's aircraft while it was being repaired by Aero Service. Aero Service and Jet Charter counterclaimed for coverage under the insurance contract for the damage to Jet Charter's aircraft. The trial court granted Aero Service's motion for summary judgment. This appeal ensued.

Aero Service is an aviation repair facility located at Miami International Airport. In August 1982, Jet Charter delivered a Boeing 707 aircraft to Aero Service for maintenance. The aircraft slipped off its jacks during a weight and balance check and sustained severe structural damage. At the time of this incident a policy entitled "Airport Owners and Operators Liability Insurance" issued by Underwriters to Aero Service was in effect. Aero Service filed a claim under this policy for the damage to Jet Charter's airplane. Underwriters rejected the claim on the basis that an airplane was not a "vehicle" such as would bring the aircraft within an exception to an exclusion from coverage. The instant action ensued.

In order to determine whether the district court correctly granted summary judgment to the appellees, we must turn to the insurance contract. It is a well settled rule of Florida law that parol or extrinsic evidence may not be introduced for the purpose of construing written contract terms which are plain and unambiguous. Garcia v. The Queen, Ltd., 487 F.2d 625, 630 (5th Cir.1973). The Schedule attached to the policy states:

The risk and sum insured hereunder

Risk: Legal Liability arising out of the Assureds [sic] operation as FAA Aircraft Repair Station, Flight Crew Training School, Dispatch/Flight Following Center and Cargo Handling Agency.

Sum Insured: $5,000,000 Single Limit BI/PD any one accident.

The policy itself, a form contract supplied by Underwriters, is entitled "Airport Owners and Operators Liability Insurance." The policy is composed of three sections, plus a list of exclusions, a definitions section, and a list of general conditions. On the policy issued to Aero Service, Sections 2 and 3 and the list of exclusions are stamped "THIS CLAUSE VOID." Thus, only Section 1, Definitions, and General Conditions are the operative portions of the contract.

Section 1 provides coverage for:

Bodily injury or property damage

(a) in or about the premises specified in the Schedule, as a direct result of the services granted by the Assured

(b) elsewhere in the course of any work or of the performance of any duties carried out by the Assured or his employees in connection with the business or operations

caused by the fault or negligence of the Assured or any of his employees engaged in the Assured's business or by any defect in the Assured's premises, ways, works, machinery or plant used in the Assured's business.

Section 1 includes the following exclusions:

1. Loss of or damage to property owned or occupied by or in the care, custody or control of the Assured or of any servant of the Assured, but this exclusion shall be deemed not to apply to vehicles that are not the property of the Assured whilst on the premises specified in the Schedule.

2. Bodily injury or property damage caused by

(a) any mechanically propelled vehicle which the Assured may cause or permit any other person to use on the road in such a manner as to render them responsible for insurance under any domestic or international law appertaining to road traffic, or where no such law exists, whilst such vehicle is on any public highway.

(b) any Ships, Vessels, Craft or Aircraft owned, chartered, used or operated by or on account of the Assured, but this exclusion shall be deemed not to apply to aircraft owned by others which are on the ground and for which indemnity is otherwise granted under Section 2 of this Policy, whether such Section is insured.

Section 2 of the policy, which is stamped "void" and thus does not apply to Aero Service, provides for coverage of "Loss of or damage to Aircraft or Aircraft equipment, not the property of the Assured, whilst on the ground in the care, custody or control of the Assured."

Nowhere in the policy is the word "vehicle" defined. It is the position of the appellees that the term "vehicles" as used in the exception to the first exclusion of Sec. 1 applies to aircraft. Consequently, appellees argue that the exclusion does not apply to aircraft not the property of Aero Services but on its premises and under its care, custody or control. Under appellees' interpretation, the damage to the ill-fated Boeing 707 would be covered by the contract. Underwriters, on the other hand, contends that the exclusion is applicable because the term "vehicle," when read in the context of the entire policy, is not ambiguous and does not apply to aircraft. In the alternative, Underwriters maintains that if an ambiguity exists, it is latent and extrinsic evidence is admissible to show the intent of the parties. Landis v. Mears, 329 So.2d 323 (Fla.Dist.App.Ct.1976).

In support of its contention that the term "vehicles" is not ambiguous, Underwriters points to the second exclusion of Sec. 1. This exclusion specifically excludes from coverage "bodily injury or property damage caused by any mechanically propelled vehicle which the insured may cause or permit any other person to use on the road...." The second part of the exclusion applies to "any Ships, Vessels, Craft or Aircraft owned, chartered, used or operated by or on account of the Assured...." Underwriters submits that if "vehicle" includes aircraft, as the appellees maintain, then the second half of the exclusion specifically enumerating "Ships, Vessels, Craft or Aircraft" would be superfluous.

As appellee Aero Service notes, when a policy provision is not defined, common everyday usage determines its meaning. Security Insurance Company of Hartford v. Commercial Credit Equipment Corp., 399 So.2d 31 (Fla.Dist.Ct.App.1981). Accordingly, we address the question of whether the common, everyday meaning of "vehicle" includes aircraft within its scope. Black's Law Dictionary defines "vehicle" as [t]hat in or on which persons, goods, etc. may be carried from one place to another, especially along the ground.... Term refers to every device in, upon or by which a person or property is or may be transported upon a highway." Black's Law Dictionary 1393 (5th Ed.1979). Webster's Dictionary defines "vehicle" as "a means of carrying or transporting something;" examples of usage include "aerial vehicles such as airplanes" and "space vehicle." Webster's Third New International Dictionary 2538 (1961).

In McBoyle v. United States, 283 U.S. 25, 51 S.Ct. 340, 75 L.Ed. 816 (1931), Justice Holmes stated that "in everyday speech 'vehicle' calls up a picture of a thing moving on land." In McReynolds v. Municipal Court of City of Ottuma, 207 N.W.2d 792 (Iowa 1973), the Iowa Supreme Court found that the word "vehicle" has come to be applied to aircraft since the time of McBoyle in 1931. The court commented that frequent reference is commonly made in connection with space exploration to "space vehicles." We note that just as in the usage examples from Webster's Third quoted above, the court has included an adjective with "vehicle" when referring to aircraft, suggesting that "vehicle" standing alone is not sufficient to connote aircraft.

We find Justice Reynoldson's dissenting opinion in McReynolds to be persuasive, and we therefore quote extensively:

The difference between the etymological meaning and the man-on-the-street concept of "vehicle" has been recognized by almost all modern-day court decisions interpreting that word. (citations omitted)

The general holding is thus distilled in the annotation found at 165 A.L.R. 916:

"Although the result is always contingent on the particular wording involved, it has been almost invariably held, in the construction of statutes and regulations, that airplanes are not within the terms 'vehicles,' 'motor vehicles,' etc."

Other supportive statements are found in the following authorities: 8 Am.Jur.2d, Aviation Sec. 20, at p. 638 ("An Airplane is in a class by itself. It has usually been held, in the absence of any express provision on the subject calling for a different conclusion, not to be within the terms 'vehicle,' 'motor vehicle,' 'vessel,' or the like."); Ballentine's Law Dictionary 1334 (3rd ed. 1969), ("The word [vehicle] is commonly understood as...