U.S. Fire Ins. Co. v. Cowley & Associates, 73657

• Decision Date: 08 June 1987
• Docket Number: No. 73657,73657
• Citation: 359 S.E.2d 160,183 Ga.App. 478
• Parties: UNITED STATES FIRE INSURANCE COMPANY v. COWLEY & ASSOCIATES et. al.
• Court: Georgia Court of Appeals

Page 160

359 S.E.2d 160

183 Ga.App. 478

UNITED STATES FIRE INSURANCE COMPANY v. COWLEY & ASSOCIATES et. al.

No. 73657.

Court of Appeals of Georgia.

June 8, 1987.

Rehearing Denied July 1, 1987.

Certiorari Denied Sept. 8, 1987.

Sewell K. Loggins, Michael V. Elsberry, Brian J. Morrissey, Atlanta, for appellant.

A. Russell Blank, Winnie P. Pannell, Glover McGhee, Charles M. Lokey, Alexander J. Repasky, T. Cullen Gilliland, Atlanta, Gregory E. Stuhler, Norcross, for appellees.

BENHAM, Judge.

Appellant, United States Fire Insurance Company ("U.S. Fire") issued a policy of aviation insurance to appellee Cowley & Associates for a private plane that the company owned. The policy Mr. Cowley selected covered "personal and pleasure use and use in direct connection with the insured's business, excluding any operation for which a charge is made." Cowley used a pilot, Jeff McConnell, who flew the plane for Cowley as an independent contractor and also flew it with Cowley's permission for his own business endeavors. During a return flight from Lexington, Kentucky, to Georgia, the plane crashed, killing McConnell and his passengers. U.S. Fire filed a declaratory judgment action seeking to avoid liability to pay the claims filed under the policy, its position being that the operation was one for which a charge had been made. U.S. Fire contended that the flight was part of a charter operation McConnell had been running. After several motions for summary judgment had been made and denied and a trial that resulted in a hung jury had taken place, appellees filed another motion for summary judgment, which the trial court granted. U.S. Fire appeals, enumerating as error the grant of summary judgment and the construction of the operative exclusion as requiring that actual payment be made by the passengers to the insured prior to the incident out of which a claim arises.

Appellant contends that although McConnell charged his passengers a rate much lower than that of a regular charter service, he was using the insured plane to run a charter operation, thus excluding it from coverage. It reached that conclusion based on the testimony of a former passenger that after a round-trip flight had been completed McConnell would calculate and solicit payment in various amounts from some of his passengers, and that the passengers would make payment to Sports Air Flights, Inc., McConnell's company. More specifically, U.S. Fire relies on the fact that this same procedure was followed after an earlier flight McConnell made to a construction site in Lexington, Kentucky, with some of the same passengers who were on the fatal flight. However, there is no direct evidence that this or any other payment arrangement was used on the flight in question; appellant would have us infer that such an arrangement had been made in light of the parties' previous conduct.

Appellant further argues that the contract provision "excluding any operation for which a charge is made" is unambiguous when read in the context of the whole policy and that it means that "coverage will not extend to flights where payment for the flight in any amount is contemplated to be made from one to the insured or pilot."

It appears that this is the first time we have been called upon to interpret the language of this contract provision. To do so, we must examine whether the trial court applied the three-step process of contract construction, i.e., decide whether the contract language is ambiguous; if it is, then apply the applicable rules of construction (OCGA § 13-2-2); and if an ambiguity still remains,...