A federal district court in New Jersey has ruled that a “parachute jumping” exclusion in an airport liability policy precluded coverage for claims for bodily injuries allegedly suffered during a skydive at the airport.
|The case
For a period of time, Skydive Sussex LLC paid Sussex Airport Inc. $1,200 per month during the skydiving season to operate a parachute-jumping concession at Sussex Airport, which is located in Wantage Township, N.J. The airport and Paul and Jean Styger, in their capacity as officers, employees or stockholders of Sussex Airport Inc., authorized a drop zone for parachuting activities operated by Skydive on the southwest side of the airport's runway.
During a tandem skydive, Reginald A. Wood allegedly landed outside of the established drop zone on the airport site and collided with a parked motor vehicle. Wood sued to recover damages for the injuries he allegedly sustained during his skydive.
Houston-based U.S. Specialty Insurance Co., which had issued an airport liability policy to the airport, sought a judgment that its policy did not cover the claims in Wood's action because of the policy's “parachute jumping” exclusion.
The insurer moved for summary judgment, that is, a court order ruling that a decision could be rendered without trial.
|The U.S. Specialty Insurance policy
The policy provided that U.S. Specialty:
- |
- Will pay those sums that [Sussex Airport Inc.] becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies …
- Will have the right and duty to defend any suit seeking those damages [except where certain exceptions apply].
The policy included a “parachute jumping” exclusion that stated:
This insurance does not apply to … [b]odily injury or property damage arising out of the conduct of or participation in, or preparation for, any parachuting activities. (Emphasis in original.)
|The court's decision
In its decision granting U.S. Specialty's motion, the court rejected the airport's argument that the parachute-jumping exclusion only applied if the insureds themselves were directly involved in the parachuting activities, which they were not because Skydive operated the activities at the airport.
The court reasoned that the insured's interpretation would require the exclusion to be rewritten so that it only applied when bodily injury occurred because of actions taken directly by the insureds. In the court's view, a “far more natural reading” of the exclusion, in the context of the policy, was that the exclusion was “not limited based on which party physically conducted the parachuting activities” but that it did not cover “[b]odily injury … arising out of the conduct of or participation in, or preparation for, any parachuting activities.”
The exclusion was unambiguous, the court concluded, and it applied to the claims in the lawsuit by Wood “given that those claims ar[o]se out of parachuting activities.”
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