Executive Aviation, Inc. v. National Insurance Underwriters

These cross-appeals arise out of an action by the insured, Executive Aviation, Inc. et al., against its liability insurer, National Insurance Underwriters et al., in an action for damages for the loss of an aircraft in a sales demonstration flight, and for declaratory relief concerning the extent of the insurer’s obligation to defend a third party action filed by the heirs of the deceased purchaser. The insured appeals from those portions of the judgment in its favor denying prejudgment interest, and attorney fees in defense of the third party action, contending that damages were certain on the date of loss and that the insurer breached its obligation to defend because of an admitted conflict of interest. The insurer cross-appeals from the entire judgment, contending that the trial court erred in ruling that the flight in question was not in “air transportation” or “common carriage” under the Federal Aviation Act and in excluding extrinsic evidence to interpret Endorsement 14 of the insurance policy, which restricted its application to aircraft operated by a pilot qualified for such flights. We have concluded that the judgment in favor of the insured should be affirmed,…