A unit of Axa XL, a division of Axa SA, does not have to provide more than $100,000 each in coverage to two passengers who suffered “gruesome” injuries when their hot air balloon touched a power line, a federal appeals court said Friday, affirming a lower court ruling.

In 2015, near the end of a balloon flight operated by Lancaster, Pennsylvania-based New Horizon Balloon Team, wind and gravity interacted to cause the balloon to move laterally and come into contact with a nearby power line, resulting in passengers Melyndia Davis and Robert Spencer suffering “gruesome” injuries, according to Friday’s ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, in T.H.E. Insurance Co. v. Melyndia Davis; Robert Spencer, and Robert Fisher, d/b/a New Horizon Balloon Team, Todd Plank, d/b/a New Horizon Balloon Team, Mary Fisher.

T.H.E.’s coverage provided a $1 million coverage limit applicable to non-passengers, and a $100,000 per balloon passenger limit, according to the ruling.

Ms. Davis and Mr. Spencer had contended they were outside the balloon’s basket when they were injured, and therefore subject to a $1 million per occurrence limit.

The district court in Baltimore awarded the insurer summary judgment, limiting its liability to $100,000 per passenger, and rejecting the plaintiffs’ bad faith claims.

It was affirmed by a three-judge appeals court panel. “Applying Pennsylvania legal principles to this situation – and assuming that Davis and Spencer were outside the balloon’s basket at the time of their injuries – they were nevertheless ‘oriented’ to the balloon and were in the process of ‘alighting’ therefrom. 

“As a result, even if Davis and Spencer were partially or completely outside the balloon’s basket at the time of their injuries, they were ‘passengers’ under the Policy” and subject to the $100,000 per passenger limit, said the appeals panel, in also affirming dismissal of the bad faith claim.

Attorneys in the case had no comment or did not respond to a request for comment.