Donald and Wendy McNamara commenced litigation against Starstone US Services, Inc., London Aviation Underwriters, and others, asserting a claim for breach of contract arising out of the denial of insurance coverage for damage to their aircraft. The damage occurred after Donald McNamara landed his Meridian aircraft and taxied to the hangar. After shutting down the engine, McNamara remembered there had been an aviation database update in progress during the flight, and turned the battery master and avionics back on in an attempt to complete the update. When he did so, he saw that the engine’s temperature was above the maximum limit. McNamara spooled the engine to force cool air through the compressor to cool the engine down, at which time he saw a lot of smoke coming from the engine.
McNamara filed an insurance claim for the damage, which was “denied because a mechanical failure caused fuel to continue to flow into the engine after shutdown; to the extent this may have led to engine damage, the damage resulted from heat from operation of the engine.” The trial court found that the denial of coverage was proper, and the McNamaras appealed.
On appeal, the court looked at two provisions of the policy:
1. Exclusion S, which stated that “[t]he Aircraft Damage Coverage does not apply: to loss or damage due to wear, tear, abuse, deterioration, freezing, mechanical or electrical failure, hidden or latent defect, or any combination of the foregoing causes, unless such loss or damage is the direct result of other physical damage covered by this Policy.”
2. The Aircraft Turbine Engine and Auxiliary Power Unit Endorsement, which provided: “‘This endorsement explains how the “Wear-tear” section set forth in Exclusion S. of SAV 001 will apply to damage to turbine engines and auxiliary power units. … Damage caused by heat from the operation of the engine or the starting of the engine is “wear-tear” and not covered.’”
The appellate court found that the record evidence showed a mechanical failure that allowed fuel to keep entering the still-hot engine, resulting in damage to the engine from overheating. As a result, coverage was properly denied. In so holding, the court rejected the McNamaras’ argument that the damage did not result from the operation of the engine because the engine was not actually operating at the time the damage occurred. Interpreting the policy terms “in their plain, ordinary, and popular sense,” the court held that the policy did not require that the engine be operating when the damage was caused; only that the source of heat was from the operation of the engine. The court also rejected the McNamaras’ claim that there was coverage regardless of whether a mechanical failure caused the damage because there was coverage for fire damage, and the engine caught fire.
The Washington Court of Appeals’ decision in this case is important not because it resolved complicated issues, but because of the ease with which it dispatched the insureds’ attempts to circumvent straightforward and unambiguous policy provisions. Unfortunately, the McNamaras’ attempt to read wear and tear/overheating exclusions out of an aircraft policy is not unique. Accordingly, the court’s decision here is welcomed and will be of use in supporting the application of these exclusions in other cases. McNamara v. Starstone US Servs. Inc., 2021 Wash. App. LEXIS 865 (Wash Ct. App. Apr. 12, 2021).