Farm Air Flying Service v. Southeastern Aviation Ins. Services, Inc.

• Citation: 206 Cal.App.3d 637,254 Cal.Rptr. 1
• Decision Date: 29 November 1988
• Docket Number: No. C000767,C000767
• Court: California Court of Appeals Court of Appeals
• Parties: FARM AIR FLYING SERVICE, Plaintiff and Appellant, v. SOUTHEASTERN AVIATION INSURANCE SERVICES, INC., Defendant and Respondent.

Page 1

254 Cal.Rptr. 1

206 Cal.App.3d 637

FARM AIR FLYING SERVICE, Plaintiff and Appellant, v. SOUTHEASTERN AVIATION INSURANCE SERVICES, INC., Defendant and Respondent.

No. C000767.

Court of Appeal, Third District, California.

Nov. 29, 1988.

As Modified Dec. 19, 1988.

Denise J. Fischer, Weintraub, Genshlea, Hardy, Erich & Brown, Sacramento, for plaintiff and appellant.

Leslie J. Mackoff, Kern & Wooley, Los Angeles, for defendant and respondent.

PUGLIA, Associate Justice.

Plaintiff Farm Air Flying Service appeals from a judgment in favor of defendant Southeastern Aviation Insurance Services, Inc. (Southeastern). Plaintiff sought a judicial declaration that a policy of aviation insurance issued by Southeastern provided coverage for a crop dusting loss. The loss occurred when plaintiff's pilot sprayed the herbicide MCPA on a wild rice crop owned by Donald Sills. Plaintiff had been hired to treat Sills's cultured rice crop which was located in a field adjacent to the wild rice crop. The application of herbicide to the wrong crop resulted in damage of approximately $34,000.

Plaintiff reimbursed Sills for the damage and sought indemnification from Southeastern. Southeastern denied the claim, citing Exclusion No. 4 in the policy which precludes coverage for "injury to ... crops ... to which the aerial application is deliberately made whether in error or not."

Prior to trial, Southeastern moved successfully for a summary adjudication to the effect that Exclusion No. 4 is clear and unambiguous. At the conclusion of trial, the court ruled the policy as a whole is unambiguous and that on the evidence presented, plaintiff has no reasonable expectation of coverage for the loss incurred. We agree and shall affirm.

I

Policy endorsement No. 1, entitled "Aerial Applicators Liability Endorsement," contains the following agreement, inter alia:

"B. Coverage B.--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 an occurrence and arising out of the ownership, maintenance or use of the aircraft including aerial application (as herein defined)."

The aerial applicator's liability endorsement defines "aerial application" as: "[T]he spraying or dropping of chemical or seed whether or not such dropping of chemical or seed occurs as a direct result of collision of the aircraft with the ground or other object."

The aerial applicator's liability endorsement contains 17 exclusions limiting the applicability of coverage B. Among these is Exclusion No. 4, pursuant to which coverage B does not apply in the following instances:

"4. [T]o injury to or destruction of any crops, pastures, trees or tangible property to which the aerial application is deliberately made whether in error or not."

We reject plaintiff's claim that Exclusion No. 4, read alone or in conjunction with the policy as a whole, is ambiguous. This provision was meant to exclude--and by its unequivocal language does exclude--coverage for damage arising from the deliberate application of a chemical to any crops. The exclusion thus contemplates the possibility of pilot error such as occurred in this case, i.e., an application of herbicide which was no less deliberate merely because it was done in error. Plaintiff's pilot was directed to spray herbicide on the cultured rice crop. The pilot deliberately sprayed the herbicide on what he thought was the proper field. As it turned out, he erroneously sprayed the herbicide on the wrong field and thus the wrong crop. This is precisely the situation which Exclusion No. 4 addresses.

Plaintiff claims the exclusion is ambiguous because the application of herbicide to the wild rice crop could not have been both deliberate and accidental at the same time. Plaintiff argues that what Exclusion No. 4 really means is that a "direct" application of chemicals is not covered under the policy. In essence, plaintiff concedes that if Exclusion No. 4 provided there was no coverage for damage resulting from a "direct" application of chemicals, whether that application was in error or not, there would be no coverage for the instant loss. Plaintiff claims, however, that because the policy uses the word "deliberate," plaintiff was not placed on notice that no coverage was afforded for the mistaken application of chemicals.

The word "deliberate" cannot be read in a vacuum, but must be construed in light of the entire exclusion. When so construed, the last five words of the exclusion--"whether in error or not"--explain what is meant by "deliberate," and place plaintiff on notice that any deliberate application of chemicals to any crops, even though in error, is not covered. The question is not whether Southeastern could have used other terms, but whether the terms used are clear and unambiguous. We hold that they are.

Plaintiff claims the exclusion is ambiguous as a result of industry usage. According to plaintiff...