Transport Indem. Co. v. Sky-Kraft, Inc.

• Decision Date: 14 July 1987
• Docket Number: INC,No. 9052-0,SKY-KRAF,9052-0
• Citation: 740 P.2d 319,48 Wn.App. 471
• Court: Washington Court of Appeals
• Parties: TRANSPORT INDEMNITY COMPANY, Appellant, v., Vancouver Aircraft Maintenance, Inc.: Mary Crittenden and John Doe Crittenden, husband and wife forming a marital community; Steven Hempe and Jane Doe Hempe, husband and wife forming a marital community; Clark Dechant and Jane Doe Dechant, husband and wife forming a marital community; Sandra Schaefer, personal representative of the estate of Robert Leon Schaefer, Respondents.

Page 471

48 Wn.App. 471

740 P.2d 319

TRANSPORT INDEMNITY COMPANY, Appellant, v. SKY-KRAFT, INC., Vancouver Aircraft Maintenance, Inc.: Mary

Crittenden and John Doe Crittenden, husband and wife forming

a marital community; Steven Hempe and Jane Doe Hempe,

husband and wife forming a marital community; Clark Dechant

and Jane Doe Dechant, husband and wife forming a marital

community; Sandra Schaefer, personal representative of the

estate of Robert Leon Schaefer, Respondents.

No. 9052-0.

Court of Appeals of Washington,

Division 2.

July 14, 1987.

Barbara J. Gazeley, Martin, Bischoff, Templeton, Biggs & Ericsson, Portland, Or., for appellant.

Susan A. Schmid, Richards & Kinerk, Seattle, for respondents.

UTTER, Judge Pro Tem. ^*

Transport Indemnity Company (Transport) appeals a summary judgment in favor of the estate of Robert Leon Schaefer, holding that an Aircraft Hull and Liability Policy (Hull policy) provided coverage for Schaefer's death. Schaefer's estate cross-appeals from a summary judgment in favor of Transport, holding that coverage did not exist under an Airport/Fixed Based Operator's Liability Policy (FBO policy). We affirm the judgment in favor of Transport, but reverse the judgment in favor of Schaefer's estate, and remand for trial on the issue of whether coverage exists under the Hull policy.

On July 1, 1981, Robert Schaefer was issued a private pilot certificate by the Federal Aviation Administration (FAA). Schaefer received instruction, supervision and examination from Sky-Kraft, a fixed base operator, located at Pearson Airpark in Vancouver, Washington. The FAA ratings granted by Schaefer's certificate were limited to "airplane single engine land", and did not include an instrument flight rules (IFR) rating. As a result, Schaefer was required to comply with visual flight rules (VFR) under the FAA visibility regulations. ¹

On August 13, 1981, Schaefer rented an aircraft from Sky-Kraft for a flight to Klamath Falls, Oregon. The aircraft was owned by several third parties who leased the plane to Sky-Kraft. Schaefer took off from Pearson Airpark at 6:11 a.m. and crashed approximately 4 minutes after takeoff in a wooded area 3.5 miles from the Airpark. An eyewitness observed Schaefer's aircraft plummet out of the clouds before it crashed.

Prior to takeoff, at 5:50 a.m., Schaefer obtained a weather report from the Portland flight service station, indicating that the weather at Portland International Airport was "marginal VFR." Based on this information, Schaefer filed a VFR flight plan. ² By the time Schaefer actually departed at 6:11 a.m., however, the Portland flight service station reported IFR weather conditions existing at Portland International Airport, located across the Columbia River and approximately 4 miles from Pearson Airpark. There is no showing that Schaefer ever was aware of this, however.

On June 14, 1983, Sandra Schaefer, personal representative of Schaefer's estate, filed a wrongful death action against Sky-Kraft. The wrongful death complaint alleged that Schaefer's death was caused by the negligent entrustment and instruction by Sky-Kraft in operation of its flightschool business.

At the time of the accident, Sky-Kraft possessed two insurance policies, a Hull policy and an FBO policy. Both policies were issued by Transport. On June 22, 1984, Transport commenced a declaratory judgment action claiming that neither the Hull policy nor the FBO policy provided coverage for the claims asserted by Schaefer's estate in the wrongful death action.

In May and June, 1985, Transport and Schaefer filed cross motions for summary judgment, seeking a determination of whether there was coverage under either policy. The trial court ruled that the Hull policy provided coverage for the allegations of negligence made by Schaefer's estate against Sky-Kraft and granted the estate's motion for summary judgment. The court, however, concluded that there was no coverage under the FBO policy and granted summary judgment in favor of Transport. Transport appeals the summary judgment pertaining to the Hull policy and Schaefer's estate cross-appeals the summary judgment concerning the FBO policy.

Four issues are raised on appeal: (1) whether Schaefer was "properly rated for the flight" within the meaning of the Hull policy's pilot declaration clause; (2) whether under the Hull policy Schaefer's death was an occurrence "arising out of the ... use of the aircraft"; (3) whether Schaefer's death was caused by an accident arising "in or about the premises" or "elsewhere in the course of any work or of the performance of any duties carried out by the insured" within the meaning of the premises liability clause in the FBO policy; and (4) whether Schaefer's death was caused by an accident "arising out of the possession, use, consumption or handling of any goods ... supplied or distributed by the insured or his employees after such goods or products have ceased to be in the possession or under the control of the insured" within the meaning of the FBO policy's completed operations and products liability clause.

A motion for summary judgment will be granted only when the pleadings, affidavits, depositions, and admissions on file demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. CR 56(c); Hartley v. State, 103 Wash.2d 768, 774, 698 P.2d 77 (1985). An appellate court reviews a summary judgment by engaging in the same inquiry as the trial court, assuming facts most favorable to the nonmoving party. Hartley, at 774, 698 P.2d 77. With this standard in mind, we proceed to the issues before this court.

I

Under the liability portion of the Hull policy, Transport agreed:

to pay on behalf of the Insured all sums which the Insured [Sky-Kraft] shall become legally obligated to pay as damages because of ... bodily injury [defined to include death] sustained by any person ... caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft ...

Clerk's Papers, at 20. The declarations page of the policy provided in pertinent part:

Item 7. PILOTS: The coverage afforded by this policy shall not apply while the aircraft is operated in flight by other than the following pilots who hold a current and valid medical certificate from the Federal Aviation Administration and who are properly rated for the flight involved.

(Italics ours.) Clerk's Papers, at 18.

Transport contends that Schaefer did not have the rating required "for the flight involved" because the flight was an instrument flight rules (IFR) flight, while Schaefer held only a visual flight rules (VFR) rating. Therefore, according to Transport, Schaefer was not properly rated for the flight involved and thus was not covered by the Hull policy. Schaefer's estate claims that Schaefer was properly rated for the flight involved because he had filed a VFR flight plan, and because the weather briefing he received and weather at the field at the time he took off permitted a VFR flight.

The trial court agreed with Schaefer's estate and held that the Hull policy provided coverage for Schaefer's death. Nevertheless, in its memorandum opinion, the trial court found that a question of fact existed as to whether Schaefer was properly rated for the flight. The court concluded that this was a factual dispute and that it would not rule as a matter of law whether Schaefer was properly rated for the conditions existing at the time of the crash. However, a week later, the trial judge wrote to counsel to clarify his reference to a "question of fact." The judge stated that his reference to Schaefer's rating was surplusage. The judge determined that "[t]he fact that Mr. Schaefer may not have been properly rated to fly the aircraft at that time and place may be an issue in the negligence action, but has no bearing on my determination that the liability policy does apply." Clerk's Papers, at 309.

In this case, the parties do not contest the meaning of "properly rated for the flight involved" as described in the Hull policy. Both parties assume that this language refers to the FAA ratings characterized above. The parties also do not dispute Schaefer's authorization to fly the aircraft or his VFR rating. Therefore, the dispositive issue is whether the fatal flight should be characterized as a VFR flight or an IFR flight.

The two leading cases for purposes of characterizing a flight as VFR or IFR are National Ins. Underwriters v. King Craft Custom Prods., Inc., 368 F.Supp. 476 (N.D.Ala.1973), aff'd, 488 F.2d 1393 (5th Cir.1974); and Glover v. National Ins. Underwriters, 545 S.W.2d 755 (Tex.1977). In King Craft, a pilot, holding only a VFR rating, began his flight under VFR conditions, but later flew into IFR weather and crashed while attempting an instrument landing. King Craft, at 477-78. The pilot's insurer denied coverage based on a pilot declaration clause similar to the one at issue in the instant case, which required the pilot to be "properly rated for the flight involved." The insurer argued that the pilot was not properly rated because he crashed in the IFR weather conditions, but the trial court disagreed.

Initially, the court noted that the pilot at most violated the FAA regulations by attempting to land under IFR conditions. King Craft, at 478. The court then determined that the words "the flight" used in the pilot clause referred to the entire time the aircraft was in flight. King Craft, at 478. The court rejected the insurer's attempt to break the flight into segments which would require different ratings for each segment. King Craft, at 478-79. The King Craft court reasoned that the segmented flight analysis would result in coverage "flickering on and off" as the aircraft entered differing weather conditions and therefore such an interpretation should be avoided unless the policy required it. King Craft, at 479.

Similarly, in Glover, a pilot holding a VFR...