Home/Court of Appeals of Arizona/United States Fire Insurance v. Gentile

United States Fire Insurance v. Gentile

712 P.2d 436, 147 Ariz. 589, 1985 Ariz. App. LEXIS 714
CourtCourt of Appeals of Arizona
DecidedApril 1, 1985
DocketNo. 2 CA-CIV 5182
StatusPublished
Cited by2 cases

This text of 712 P.2d 436 (United States Fire Insurance v. Gentile) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fire Insurance v. Gentile, 712 P.2d 436, 147 Ariz. 589, 1985 Ariz. App. LEXIS 714 (Ark. Ct. App. 1985).

Opinion

OPINION

FERNANDEZ, Judge.

This is an appeal from a declaratory judgment entered in favor of Cochise College and the administrator of the estate of one of the passengers who was killed in an airplane crash on December 3, 1981. At issue is the amount of coverage for bodily injury to passengers under an insurance policy issued by United States Fire Insurance Co., specifically, whether the coverage is $100,000 or $1 million. The trial court found the coverage to be $1 million. We affirm.

Cochise College had originally obtained a policy to cover its aviation instruction program in 1971 from Ranger Insurance Company through the Aviation Office of America, a managing general agency, in the amount of $1 million third-party liability with passenger liability limited to $100,000 per seat and $300,000 per occurrence. The policy was renewed annually until 1975 when the state provided coverage for one year. In 1976 another Ranger policy was obtained and from 1977 through June 1983, annual renewal coverage was provided through U.S. Fire after a change in ownership of the Aviation Office of America. The same aviation underwriter, Mike Harzmann, handled the policy from 1976 through 1983, and it was he who wrote the typed-in provisions of the policy.

Cochise College’s insurance agent, Jay Jones, was responsible for obtaining insurance for the college and for recommending appropriate coverage amounts. He was neither an agent of U.S. Fire nor of the Aviation Office of America but merely submitted information to the agency for quotes and obtained the approval of the college. He handled the paperwork when airplanes were added to or deleted from the policy, obtained information on pilots and the like. The college relied on him to recommend appropriate coverage amounts.

The printed portion of the policy for 1981-1982 under “Insuring Agreements” states as follows:

[591]*591“Coverage D—Single Limit Bodily Injury (including or excluding passengers) and Property Damage Liability. To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, excluding passengers as defined herein, unless the Declarations describe Coverage D as “Including Passengers”, and for damages because of injury to or destruction of property, including the loss of use thereof, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft.”

In order to better understand the position of the parties we have included copies of the applicable portions of the following three documents that are part of the policy herein as follows: 1) Declaration Page, 2) Endorsement l,1 and 3) Endorsement 4.2 The declaration page contains the following information under the heading “Coverages”:

“D. Single Limit Bodily Injury and Property Damage Liability Z/Vcluding Passengers *SEE END 1 & 4.”

The following appears under the heading “Limits of Liability”:

“1,000,000 each occurrence”

Endorsement 1 is the crucial portion of the policy here because of the significant placement of the typed-in phrase “WITH RESPECT TO N-6015M ONLY:”. As can be seen, paragraph 9 on Endorsement 1 limits passenger liability under Coverage D to $100,000 per person and $500,000 per occurrence. The airplane involved in the subject crash was a Cessna 210, registration number N93956. Endorsement 4 is in the form of a declaration sheet and shows the following information:

“All Aircraft Insured Under This Policy N-6015M”
“Coverages
D. Single Limit Bodily Injury and Property Damage Liability Excluding Passengers”
“Limits of Liability
$1,000,000 each occurrence.”

The parties are agreed that the initial policy provided passenger liability coverage in the amount of $100,000. The only specific discussion on policy limits that either Harzmann or Jones remembered occurred some months after the accident in December 1981. The declaration sheet for the policy years 1979-1980, 1980-1981 and 1982-1983 reads the same as that quoted above under “Coverages” and “Limits of Liability”. Endorsement 1 for 1979-1980 and 1980-1981 is the same as the one in question here. No Endorsement 1 for 1982-1983 is contained in the record.

The declaration sheet for the 1978-1979 policy year is the same with regard to Coverage D except that it refers only to Endorsement 1. The only Endorsement 1 for that year, contained in the record was one issued in March or April 1979 after coverage was obtained for a Stinson aircraft, registration number N-6015M, that was purchased by the college to be used by the mechanics training classes. It was not intended to be flown. This Endorsement 1 is the first to include the disputed typed-in phrase. It. also shows $300,000 per occurrence coverage for passenger liability in paragraph 9. Endorsement 4, as it read at the time of the accident, was also issued in March 1979 after the Stinson was acquired. It was also issued for the years 1979-1980, 1980-1981 and 1981-1982.

Harzmann testified general company policy was to write no more than $100,000 passenger liability on instructional and rental type operations. Jones testified Harzmann had never told him he could not write more than $100,000 per seat passenger coverage. Jones also testified the 1981 accident was the first at the college involving passengers.

[592]*592 Reasonable Expectations of the Parties

We turn now to a discussion of the applicable case law. That discussion must, of course, begin with Darner Motor Sales v. Universal Underwriters, 140 Ariz. 383, 682 P.2d 388 (1984). In that case our supreme court held that, in order to determine both the extent of integration of and to interpret a negotiated agreement, the court can look at evidence on surrounding circumstances, prior understandings, subsequent conduct and the like. In Darner, unlike here, the terms in issue were part of the printed portions of the policy about which the insurance agent had made contrary representations. In determining that the reasonable expectations of the insured induced by the agent’s promises were entitled to be honored, the court applied established principles of contract law to adhesion contracts.

The problem with applying Darner to this case is that in Darner the loss that occurred was one about which the insured had made a specific inquiry and the agent had made specific representations. There were no specific inquiries or representations in this case, merely a continuing course of conduct in annually renewing the policy after annual increases in the premiums.

The facts here are somewhat similar to those in Gilbreath v. St. Paul Fire & Marine Ins., 141 Ariz. 92, 685 P.2d 729 (1984) and American National Fire Ins. Co. v. Esquire Labs of Arizona, 143 Ariz. 512, 694 P.2d 800 (1984).

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Cite This Page — Counsel Stack

Bluebook (online)
712 P.2d 436, 147 Ariz. 589, 1985 Ariz. App. LEXIS 714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fire-insurance-v-gentile-arizctapp-1985.