Olympic Insurance v. Employers Surplus Lines Insurance

This is an appeal from a judgment in an action for declaratory relief. The question presented is whether the trial court erred in holding an excess insurer liable where the primary insurance has not been exhausted.

Plaintiff is the Olympic Insurance Company (hereinafter Olympic). In 1967, Olympic had a general insurance agency contract with Landseair under which Landseair was authorized to issue insurance on behalf of Olympic.

On July 19, 1967, there was a midair collision near Hendersonville, North Carolina, between a commercial airliner and a Cessna aircraft owned by Landseair. Both aircraft were destroyed, and 81 persons were killed.

Following the accident, Olympic was named as a defendant in some 71 wrongful death actions on the theory that Olympic was vicariously liable for the acts of Landseair.

On July 19, 1967, Olympic was a subsidiary of the Pacific Finance Company (hereinafter PFC), which in turn was a subsidiary of Transamerica Corporation (hereinafter Transamerica). Olympic was insured as a subsidiary of both its parent corporations.

The trial court determined, and the parties do not contest this determination, that at the time of the accident Olympic had…