Hutzel v. U.S. Aviation Underwriters, Inc.

Decision Date03 December 1987
Citation522 N.Y.S.2d 301,132 A.D.2d 45
PartiesShayne HUTZEL et al., as Administrators of the Estate of Wolfgang Hutzel, Deceased, Respondents, v. UNITED STATES AVIATION UNDERWRITERS, INC., et al., Appellants, and Karen V. Molinari, as Executrix of the Estate of Joseph P. Molinari, Jr., Deceased, et al., Respondents, et al., Defendants.
CourtNew York Supreme Court — Appellate Division

Windels, Marx, Davies & Ives (Anthony A. Dean, Thomas J. Mulligan and Laura E. Longobardi, of counsel), New York City and Coughlin & Gerhart (James P. O'Brien, of counsel), Binghamton, for appellants.

Joseph T. Pondolfino, Oneonta, for Shayne Hutzel and another, respondents.

Daniel Donnelly (Norman E. Frowley, New York City, of counsel), Garrison, for Karen Molinari, respondent.

Powers & Santola, Daniel R. Santola, Albany, for Connie L. Place, respondent.

Philip J. Devine, Oneonta, for Henry W. Lyall, respondent.

Before MAHONEY, P.J., and KANE, MAIN, YESAWICH and LEVINE, JJ.

MAIN, Justice.

On March 21, 1984, Wolfgang Hutzel (hereinafter decedent) was killed when the Piper Chieftan airplane which he was piloting crashed as it approached Oneonta Municipal Airport in Otsego County. All other persons on board the Piper Chieftan, which was owned by defendant Kar-San Development, Ltd., were killed, including Kar-San employees Joseph P. Molinari, Jr., Darryl L. Place and John H. Lyall, who are represented in this action by the personal representatives of their estates, and decedent's wife. It is undisputed that at the time of the crash the Piper Chieftan was returning from a Kar-San business trip, but that decedent was not employed by Kar-San; he piloted the plane as an independent contractor (see, Molinari v. Kar-San Dev., 117 A.D.2d 194, 195, 502 N.Y.S.2d 552, affd. 69 N.Y.2d 910, 516 N.Y.S.2d 457, 509 N.E.2d 910).

In 1983, Kar-San obtained an aircraft liability policy (hereinafter the policy) issued by defendant United States Aviation Underwriters, Inc. (hereinafter USAU). Initially, this policy covered a 1970 Beech Bonanza aircraft owned by Kar-San. When Kar-San sold the Beech Bonanza and purchased the Piper Chieftan, however, Kar-San and USAU executed an endorsement to the policy substituting the Piper Chieftan for the Beech Bonanza. At the same time USAU executed a second endorsement designating pilots who were approved to fly the Piper Chieftan. Decedent was named as an approved pilot. Following the execution of these endorsements, USAU inquired of its agent whether decedent was an employee or independent contractor and advised that if he was the latter, he would not be covered under the policy. In reply, the agent advised that decedent was not an employee. A third endorsement to the policy subsequently increased the policy's liability coverage to $10,000,000.

The policy is written in "clear, easy-to-understand language" and notes that "you and your refer to the person or organization named on the Coverage Summary page" (emphasis in original); on this page, Kar-San is named as the policy holder. The policy further provides that, "To be covered under this policy the aircraft must be * * * flown only by a pilot or pilots described [on the coverage summary page]"; decedent was named as a pilot on the coverage summary page. Next, the "Who's covered" section extends coverage to "[a]nyone who is using or riding in your aircraft with your permission". There is no serious dispute that decedent was using the aircraft with Kar-San's permission. Finally, under a section entitled "Who's not covered", the policy recites:

Although the person or organization named on the Coverage Summary page is covered, we won't cover any liability claim against:

Any other person or organization or their agents or employees that manufacture or sell aircraft, aircraft engines or aircraft accessories. Nor will we cover people or organizations that operate an aircraft repair shop, aircraft sales agency, aircraft rental service, commercial flying service or flying school or any person engaged in commercial aviation (emphasis supplied).

The primary issue on this appeal requires us to consider the import of the term "engaged in commercial aviation".

Following the crash, Molinari's estate commenced a wrongful death action against plaintiffs as representatives of decedent's estate, as well as others. Plaintiffs forwarded the summons and complaint to USAU, demanding a defense in that action. USAU refused to provide a defense, claiming that decedent, as an independent contractor, was not an insured under the policy. Plaintiffs then commenced this action against Kar-San and USAU seeking a judgment declaring that decedent was covered under the policy and that USAU was required to provide a defense to the action brought by Molinari's estate. Subsequently, the representatives of the estates of Molinari, Place and Lyall were added as defendants in plaintiffs' action. These parties have interposed cross claims against USAU seeking, inter alia, a judgment declaring that decedent was covered under the policy.

USAU and Kar-San (hereinafter collectively referred to as defendants) moved for summary judgment declaring that decedent was not covered under the policy. Plaintiffs cross-moved for summary judgment and the estates of Molinari, Place and Lyall joined in plaintiffs' opposition to defendants' motion. Supreme Court denied defendants' motion and granted plaintiffs' cross motion, and further awarded summary judgment to the estates of Molinari, Place and Lyall on their cross claims against defendants (even though these parties had not requested such relief [see, CPLR 3212(b) ] ) on the ground that USAU had failed to give timely notice of disclaimer to all involved. Defendants appeal from Supreme Court's order. *

Initially, we reject defendants' claim that decedent was not covered under the policy. As noted, there can be no serious dispute that decedent was piloting the Piper Chieftan with Kar-San's permission and, thus, that he falls within the provisions of the "Who's covered" section of the policy. The language concerning persons "engaged in commercial aviation", however, by appearing in the section of the policy entitled "Who's not covered" and stating exactly what is not covered under the policy of insurance (see, e.g., Schiff Assoc. v. Flack, 51 N.Y.2d 692, 697, 435 N.Y.S.2d 972, 417 N.E.2d 84), is clearly an exclusion. Thus, the more difficult question on this appeal is whether decedent was excluded from coverage because he was "a person engaged in commercial aviation".

Defendants submit that decedent was "a person engaged in commercial aviation" because he had previously flown for a commercial...

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    • U.S. District Court — Southern District of New York
    • October 4, 2010
    ...Smith's Coll. of Arts & Sciences, 247 A.D.2d 859, 859, 668 N.Y.S.2d 813, 813 (4th Dep't 1998); Hutzel v. U.S. Aviation Underwriters, Inc., 132 A.D.2d 45, 49, 522 N.Y.S.2d 301, 303 (3d Dep't 1987) (“an ambiguity exists ... when a term ‘is capable of more than one meaning’ ”), appeal denied, ......
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