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Saliba v. American Policyholders Insurance Co.

Decided: December 16, 1976.

ROBERT G. SALIBA, ADMINISTRATOR AD PROSEQUENDUM AND ADMINISTRATOR OF THE ESTATE OF BARBARA J. CASSIDY, PLAINTIFF,
v.
AMERICAN POLICYHOLDERS INSURANCE COMPANY, A CORPORATION OF THE STATE OF DELAWARE, RICHARD J. BERLOW & COMPANY, INC., A CORPORATION OF THE STATE OF DELAWARE, AND CARL S. WURTZ, GENERAL ADMINISTRATOR OF THE ESTATE OF JOHN C. CASSIDY, DEFENDANTS



Gascoyne, J.c.c., Temporarily Assigned.

Gascoyne

The problem presented herein is not so much that there are no reported decisions in this State, but rather that in those jurisdictions where the issues have been presented, diametrically opposed results have been reached.

The facts in this case are relatively simple. It is undisputed that American Policyholders Insurance Company (American) issued a policy of insurance to Air Mark Aviation, Inc. (Air Mark) for the period May 1, 1971 to May 1, 1972. Covered under the policy was a Piper Cherokee PA-28-140 bearing FAA number N5923U. On September 5, 1971 the aircraft was leased to John J. Cassidy (Cassidy)

pursuant to an oral rental agreement. On September 6, 1971, while Cassidy was piloting this aircraft with his wife as a passenger, there was a crash resulting in the deaths of both.

Duly appointed representatives of decedents instituted suits, with the wife's representative suing Cassidy and Air Mark as well as others, and Cassidy suing Air Mark and others. These matters were consolidated for trial. The matter was tried as to liability and a jury returned a verdict that Air Mark was not guilty of negligence and that Cassidy was guilty of negligence which was a proximate cause of the accident that caused the deaths.

Thereafter, the present declaratory judgment action was instituted. Cassidy, through his representative, Wurtz, filed a crossclaim seeking the same relief as the representative of his wife and further seeking reimbursement for counsel fees in the prior suit as well as in the present action.

Cross-motions were filed by plaintiff and the various defendants, each seeking judgment as a matter of law. The issues, as framed by arguments of the parties, are whether (a) the pilot, being a permissive user of the aircraft for one of the designated purposes of use in the policy (lessor) was an omnibus insured, and (b) the policy excludes coverage for renter pilots. The issue presented there as here was whether the written "x" under paragraph 6 of the Declarations created an ambiguity.

The parties agree that the following portions of the policy are germane to the issues presented:

INSURING AGREEMENTS

Coverage B -- Passenger Bodily Injury Liability. To pay on behalf of the insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any passenger as defined herein, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft.

III. Definition of "Insured ". The unqualified word "Insured" wherever used in this Policy with respect to Coverage A, B, C and D, includes not only the Named Insured but also any person while using or riding in the aircraft and any person or organization legally responsible for its use, provided the actual use is with the permission of the Named Insured.

The provisions of this paragraph do not apply:

(c) to any person operating the aircraft under the terms of any rental agreement or training program which provides any remuneration to the Named Insured for the use of said aircraft.

Plaintiff and Cassidy further contend that provisions of section 6 of the Declarations, particularly ...


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