American Home Assurance Co. v. Firestone

Order affirmed, with costs. Memorandum: In February, 1965 American Home Assurance Company issued a policy of aircraft hull and liability insurance to four named insureds — Syracuse Flight School, Inc., Central Airways, Inc., Michael Rusyniak and Anthony Rusyniak. Various aircraft were specifically named in the policy and the policy contained standard endorsements regarding subsequently purchased or leased aircraft. On December 6, 1965 an airplane owned by Central Airways and operated by Syracuse Flight School crashed near Hindman, Kentucky. All aboard, including Anthony Rusyniak were killed. When several wrongful death actions were commenced, American was notified and asked to provide a defense. American disclaimed coverage and instituted this declaratory judgment action seeking a determination that it had no duty to defend or indemnify any of the named insureds. The airplane that crashed in Kentucky was not specifically described in the policy. Neither was it a subsequently purchased aircraft since it had been owned by Central Airways prior to the issuance of the insurance policy. Because the airplane was owned by a named insured, it was not a covered aircraft under Endorsement No. 2 which extends coverage to aircraft rented, hired or used by the named insured, but not owned by any of them (Government Employees Ins. Co. v Kligler, 42 NY2d 863). The intention of the parties as expressed by Insuring Agreement No. 5 (use of other aircraft), arguably at least, may provide coverage here. This clause reads: "Such insurance as is afforded by this policy with respect to the aircraft applies to the named insured if an individual and the owner of such aircraft with respect to the operation of any other aircraft by such named insured or with respect to the presence of such named insured in such other aircraft. This insuring agreement does *721not apply: (a) to any aircraft owned in full or in part by, licensed in the name of, hired as part of a frequent use of hired aircraft by, or furnished for regular use to the named insured or a member of his household; (b) to any occurrence arising out of the operation of an airport, aircraft repair shop, hangar, aircraft sales agency, flying school, flying club or the manufacture of aircraft accessories.” Although it is similar to Endorsement No. 2, this clause appears to express an intention to distinguish between the individual named insured and the corporate named insured. This clause is at best confusing; and such confusion must be attributed to the drafter. Construing the ambiguity against the insurer and cognizant that the duty to defend is broader than the duty to indemnify (Sturges Mfg. Co. v Utica Mut. Ins. Co., 37 NY2d 69), we find that in Insuring Agreement No. 5 American promised, at least, to defend any action arising out of the operation of other aircraft by an individual named insured, but not owned by him or "a member of his household.” As interpreted this clause is broad enough to apply to this situation where the crash aircraft was piloted by individual named insured Anthony Rusyniak, but owned by the corporate named insured, Central Airways. All concur except Hancock, Jr., and Witmer, JJ., who dissent and vote to reverse the order and grant summary judgment to plaintiff, in the following memorandum: