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Berne v. Continental Insurance Co.

January 22, 1985

GARY BERNE AND BERNE'S ICE CO., INC.
v.
CONTINENTAL INSURANCE CO. AND UNDERWRITERS AT LLOYDS OF LONDON, AETNA INSURANCE COMPANY, INTERVENOR, UNDERWRITERS AT LLOYDS OF LONDON, APPELLANT



On Appeal from the District of the Virgin Islands (St. Thomas).

Seitz, Gibbons and Sloviter, Circuit Judges.

Author: Gibbons

GIBBONS, Circuit Judge

We review a declaratory judgment rendered in an action by an insured with respect to coverages under several insurance policies. Gary Berne and Berne's Ice Company, Inc. filed the original complaint against Continental Insurance Company and an amended complaint against Underwriters at Lloyds of London seeking a declaration that policies issued by those insurers provided coverage for liability arising out of injuries caused by the accidental discharge of a gun. Aetna Insurance Company intervened. The trial court held that the Lloyds policy applied to the incident, but that neither the Continental nor the Aetna policies applied. Lloyds appeals. We affirm in part and reverse in part.

I.

Gary Berne is the owner of Berne's Ice Company, Inc. He is licensed to carry a pistol. On August 4, 1980 Berne met Joseph Flynn, the general manager of the Sapphire Beach Hotel, at the Slipaway Bar in St. Thomas. The purpose of the meeting was to discuss the Hotel's indebtedness to the Ice Company. After some conversation and several drinks Flynn and Berne became involved in a game of darts. Initially Flynn played while Berne scored the game. While awaiting his turn to throw the darts, Berne realized that the pistol he was carrying was loaded, and he moved to an adjacent corridor to unload it. While he was unloading the pistol it accidentally discharged. The bullet passed through a wall, and hit a customer of the bar.

At the time of the incident Berne was an insured under three separate policies.

A. The Lloyds Policy

Berne is a member of the National Rifle Association. By virtue of that membership he is an insured under a master policy in which Lloyds agrees:

To pay on behalf of the Insured all sums which the Insured shall become legally obliged to pay as damages, all as defined by the term "ultimate net loss", excess over any other valid and collectible insurance because of:

(a) Bodily Injury, or

(b) Property Damage

caused by an occurrence and arising out of the use of public or private land by the Insured for hunting, trapping, fishing or other use of firearms, bows and arrows and fishing or trapping equipment and all activities sanctioned or sponsored by the National Rifle Association or National Rifle Association affiliated clubs.

Lloyds contends that the phrase "other use of firearms" should be read to mean "use of firearms' in a hunting, trapping, fishing or other N.R.A. related activity." The trial court rejected this contention, holding that under the plain language of the policy "other use of firearms" is disjunctive, and provides a distinct coverage. We agree. The policy does not limit coverage to activities sanctioned by the National Rifle Association. Examination of the listed exceptions to coverage, none of which apply to the incident at the Slipaway Bar, confirms that Lloyds intended liability coverage for ...


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