Columbia Helicopters, Inc., a Corporation, and Marvin E. Lematta v. Transport Indemnity Co., a Corporation

On May 22, 1964, a helicopter crashed outside of Bishop, California. The pilot, Marvin E. Lematta, vice-president of appellee Columbia Helicopters, Inc. (Columbia), was severely injured and the only passenger, R. R. DeFoor, president of R. R. DeFoor Transportation Co., Inc., the owner of the helicopter, was killed. The helicopter, which is the subject matter of this litigation was destroyed.

On April 28,1967, DeFoor Transportation, Inc., and its insurer filed suit in the Oregon courts against Lematta and Columbia for the loss of the helicopter. As amended, the complaint alleged that Lematta, while acting within the scope of his employment for Columbia, had been negligent in piloting the helicopter, which negligence was the proximate cause of its destruction.

Columbia tendered the defense to its insurer, Transport Indemnity Co., appellant herein. The tender was refused on the ground that at the time of the crash the helicopter was “in charge of the insured” through its employee, Lematta, and therefore specifically excepted from coverage. A default judgment was eventually entered against Columbia and Lematta and Columbia commenced this diversity action against Transport to recover…