Superior Court of New Jersey, Appellate Division
A New Jersey appellate court affirmed an order granting summary judgment, stating that the insurer owed no duty to defend or indemnify its insured in a personal injury lawsuit in Catlin Insurance Company, Inc. v. Flight Light Inc. and Traffic Safety Corporation, --- A.3d ---, 2014 WL 3407055 (N.J. Super. A.D. July 15, 2014). In the underlying lawsuit, a pedestrian, who had been struck by a car, claimed that warning lights embedded in the crosswalk and activation control stanchions allegedly made by the insured, had malfunctioned. The insured tendered the claim to Catlin under an aviation products liability policy and a commercial general liability aviation policy. The court held that there was no coverage under either policy, rejecting the insured’s claim that the policies were ambiguous.
The aviation products policy covered bodily injury caused by a “products hazard” in the insured’s “aviation products.” Pursuant to the policy, a “products hazard” included the handling or use of an aircraft product, i.e., any article furnished by the insured and installed in an aircraft or used in connection with aircraft. The court concluded that the crosswalk warning system was not an “aircraft product” within the meaning of the policy since it was “completely unrelated” to an aircraft. Although the lighting fixtures may be similar to the ones the insured installed at airports, the product at issue had no connection to aircraft.
The court reached the same result under the CGL aviation policy, finding that it only provided coverage for bodily injury that results from the insured’s “aviation operations,” i.e., operations that are necessary and incidental to aviation activities. According to the court, the policy “clearly requires some connection between the underlying claim and aviation.” Because the injury occurred at a suburban crosswalk, there was “no reasonable connection” between the claim and the “aviation operations” defined in the policy.
In reaching its conclusion, the court stressed that it will not rewrite clear policy terms to afford more coverage than was originally intended. The case thus shows that notwithstanding the otherwise broad standards applicable to a duty to defend, clear policy terms can go a long way in providing the court with the foundation it needs for concluding there is no duty.