Transport Indemnity Co. v. W. D. Schnack

Opinion

BLEASE, J.

In this appeal we conclude that the fueling of an aircraft “arises out of” its “use or maintenance,” as provided by a policy of aircraft insurance, and that liability for damages proximately caused thereby is within the policy coverage.

Facts

The action stems from a fire which occurred while Schnack was fueling his aircraft on May 3, 1980, at a hangar owned by him. The fire totally destroyed Schnack’s aircraft and the hangar, as well as aircraft and other property owned by third parties who had rented hangar space from Schnack.

At the time of the fire, Transport had issued an aircraft liability policy to Schnack in which Transport agreed: “To pay on behalf of the

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Insured [Schnock] all sums which the Insured shall become legally obligated to pay as damages because of: ... [1Í] C. injury to or destruction of property, including loss of use thereof, hereinafter called ‘property damage’; ... [11] caused by an occurrence and

arising out of

the ownership, maintenance, or use of the aircraft . . . .” (Italics added.)

After the fire, Transport reimbursed Schnack for the value of his aircraft and undertook his defense in the separate actions filed by the third parties whose property was destroyed in the fire. Transport also initiated this action, seeking a declaration that it was not liable under the terms of the policy to defend or indemnify Schnack for damages caused by the fire.

At the trial, the jury, by special verdict, found: “1. The sole proximate cause of the fire that destroyed the hangar and its contents was Dr. Schnack’s use or handling of the gasoline fuel hose.

“2. At the time the fire occurred, Dr. Schnack was using or handling the fuel hose in connection with the fueling of his aircraft.. .. ”

Based upon these verdicts, the trial court held Schnack entitled to coverage under the policy, ruling that “[t]he fueling process ... is inherently a part of the ‘use, ownership or maintenance’ of the aircraft.” Transport appeals. We affirm the judgment.