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Tokio Marine unit not liable for fatal plane crash

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A Tokio Marine HCC unit is not obligated to provide coverage in an airplane crash that killed a flight instructor and his student because the instructor, who was named as the pilot in the insurance policy, was not at the controls at the time of the accident, says a federal appeals court, in affirming a lower court ruling.

John Earley Jr. and Michael Schlarb died on July 4, 2014 during an instructional flight when their aircraft crashed shortly after takeoff, according to Friday’s ruling by the 10th U.S. Circuit Court of Appeals in Denver in U.S. Specialty Insurance Co. v. Estate of John Charles Earley Jr.

Mr. Earley occupied the forward seat and Mr. Schlarb was in the rear seat providing instruction to Mr. Earley, according to the ruling. The plane, a 1944 North American P-51D Mustang, was originally built as a single-seat aircraft but had been modified to add a second, rear seat, and to add limited controls to the rear seat, including a control stick, rudder pedals and a throttle control.

A policy issued to Mr. Earley by Houston-based U.S. Specialty Insurance Co. specified that Mr. Schlarb was the airplane’s pilot. After the crash, U.S. Specialty sought a declaratory judgment that the policy does not cover any potential claims arising from the crash.

The U.S. District Court in Denver ruled in the insurer’s favor, which a unanimous three judge appeals court affirmed. “The District Court first concluded that the crash isn’t covered because Earley — who isn’t listed in the policy as an approved pilot for the Mustang — was operating the aircraft. We agree,” said the ruling.

“The only question is whether Schlarb could have operated the Mustang from the rear seat,” the ruling says. “We conclude that Earley operated the Mustang in flight because he was the only pilot with access to all of the controls and instruments” needed to control the Mustang’s functioning, said the ruling, in affirming the lower court ruling.