Charter Oak Fire Ins. Co. v. Interface Performance Materials, Inc.

340 F. Supp. 3d 437
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 25, 2018
DocketCIVIL ACTION NO. 17-4685
StatusPublished

This text of 340 F. Supp. 3d 437 (Charter Oak Fire Ins. Co. v. Interface Performance Materials, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charter Oak Fire Ins. Co. v. Interface Performance Materials, Inc., 340 F. Supp. 3d 437 (E.D. Pa. 2018).

Opinion

Schmehl, District Judge.

I. INTRODUCTION

In this insurance coverage dispute, Plaintiffs, The Charter Oak Fire Insurance Company and St. Paul Fire and Marine Insurance Company ("the Insurer"), argue that an "aircraft exclusion" contained in the two policies issued to Defendants, Interface Performance Materials, et al. , ("Interface") relieves them of their duty to provide coverage to Defendants in a separate lawsuit involving a tragic plane crash and an allegedly defective aircraft part.

II. BACKGROUND

The underlying lawsuit stems from a plane crash that occurred on August 18, 2013, in Kansas City, Missouri which resulted in the death of Mr. and Mrs. Lallo. (Complaint, ¶ 18-20.) Interface is a party to the underlying litigation because an aircraft part known as a "gasket" was discovered in the rubble of the crash with the word "Interface" stamped on it.1 (Defendants' Statement of Undisputed Facts, ¶ 32.) The underlying complaint specifically alleges that Interface "designed, manufactured, tested, inspected, trained, advertised, marketed, warranted, distributed, licensed, sold, supplied, overhauled and/or rebuilt gaskets and gasket materials used to interface between the magneto and engine accessory case."2 (Compl. ¶ 26.) When Interface requested coverage for the underlying lawsuit from the Insurer, the Insurer denied coverage and based that denial on an aircraft exclusion contained in the *439insurance agreements. (Docket No. 34, Exh. 10 and 11.)

Interface and the Insurer have two insurance agreements and both are in dispute here. See (Compl. ¶ 32-40.). The first agreement is a typical comprehensive commercial insurance policy, and the second is an umbrella policy that provides excess coverage for occurrences surpassing the commercial policy's retained limit. The pertinent parts of the commercial policy read:

1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result....
* * *
21. "Your Product"
a. Means:
1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by:
a. You;
b. Others trading under your name; or
c. A person or organization whose business or assets you have acquired; and
2) Containers (other than vehicles), materials, parts, or equipment furnished in connection with such goods or products.
* * *
Exclusions - Aircrafts Products and Grounding
* * *
2. The Following is added to the DEFINITIONS section:
"Aircraft Product" means:
a. Aircraft, including missile or spacecraft, and any ground support or control equipment used with any aircraft, missile or spacecraft;
b. Any of "your products" manufactured for, used in connection with, or incorporated into aircraft, aircraft parts, aircraft equipment or aircraft accessories, including ground handling tools and equipment;
c. Any of "your products" used for the purpose of guidance, navigation or direction of aircraft, whether an aircraft is in flight or on the ground; or
d. Training aids, navigation charts, navigation aids, manuals, blueprints, engineering or other data or advice, services and labor relating to such aircraft or products.
"Grounding" means the withdrawal of one or more aircraft from flight operations or the imposition of speed, passenger or load restrictions on such aircraft, by reason of the actual, alleged or suspected existence of any defect, fault or condition in such aircraft of any part thereof:
a. Sold, handled or distributed by the insured; or
b. Manufactured, assembled or processed by any other person or organization:
*4401) According to specifications, plans, suggestions, orders or drawings of the insured; or
2) With tools, machinery or other equipment furnished to such persons or organizations by the insured;
Whether such aircraft so withdrawn or restricted are owned or operated by the same or different persons or organizations.

(Docket No. 1, Exh. B.) In its motion for judgment on the pleadings, the Insurer argues that this aircraft exclusion unambiguously relieves it of its duty to provide coverage to Interface because Interface's alleged liability in the underlying lawsuit is based solely on its involvement with an aircraft part. (Docket Nos. 33, 39.) In its motion for partial summary judgment, Interface argues that the underlying lawsuit contains coverage-triggering allegations, and the lawsuit is meritless, requiring the Insurer to provide coverage. Alternatively, Interface argues that the Insurer has failed to meet its burden of proving that the aircraft exclusion applies. (Docket Nos. 34, 40.)

III. DISCUSSION

Interface moves for partial summary judgment under FRCP 56. Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to summary judgment as a matter of law. Fed R. Civ. Proc. 56(a). "A motion for summary judgment will not be defeated by the 'mere existence' of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd. , 584 F.3d 575, 581 (3d Cir. 2009) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

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Cite This Page — Counsel Stack

Bluebook (online)
340 F. Supp. 3d 437, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charter-oak-fire-ins-co-v-interface-performance-materials-inc-paed-2018.