Two airplanes owned by a flight school, each occupied by two persons, collide over the Everglades. All four occupants are killed. Four wrongful death claims are filed against the flight school.
The flight school holds a fleet policy that insures all 51 of its aircraft. The policy lists the aircraft and, adjacent to each, lists a $1 million per occurrence/$100,000 per passenger limit of liability. The policy includes the following severability clause: "When two or more Aircraft are insured under this Policy the terms of this Policy will apply separately to each." The policy also provides that "[a] collision between two or more Aircraft shall be deemed one Occurrence" and that, "[r]egardless of the number of Insureds under this Policy, persons or organizations who sustain Bodily Injury or Property Damage, claims made or suits brought on account of Bodily Injury or Property Damage, or Aircraft to which this Policy applies, ... [o]ur total liability for all damages ... as the result of any one Occurrence shall not exceed the Limit of Liability stated in the Declarations as applicable to 'each Occurrence.'"
In a declaratory judgment action filed by one of the four estates, the insurer advocated for total coverage of $1 million, pointing to the one occurrence and "regardless" provisions. The estate, relying on the severability clause, argued that $2 million of coverage was available. The trial court found in favor of the estate, ruling that $2 million of coverage was available. The court of appeals reversed, ruling that only $1 million was available from the policy.
The appellate court discussed numerous rules for interpreting insurance policies, including that one should read the contract as a whole, apply the plain meaning, require clear exclusionary language, give meaning to every provision, and resolve ambiguities in favor of coverage. The parties agreed that there was but one occurrence, giving meaning to the "collision between two aircraft" clause. The nub of the dispute was how to deal with one provision that required that the terms of the policy be applied separately to each of the two airplanes and the other that required that the per occurrence limit not change "[r]egardless of the number of ... Aircraft to which this Policy applies."
The appellate court relied on three cases in reversing the trial court. Despite the fact that none of the cited cases contained an analysis of a similar severability clause, the court found them persuasive.
The appellate court did not explain how, in holding that the policy provided $1 million in total coverage, the policy's severability clause was given meaning. One possible way to harmonize the competing clauses would be by reading the liability limit to be unchanged as a result of the policy covering 51 aircraft but doubling it to reflect the separate application to the two airplanes involved in the mid-air collision. Significant to this position would be that the severability provision did not except from its operation the limits of liability and that the "regardless" clause did not refer to the number of aircraft involved in one occurrence, only to the number of aircraft insured by the policy.
The case is Endurance Assurance Corp. v. Hodges, 46 Fla. L. Weekly 648 (Dist. Ct. App. Mar. 24, 2021).
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