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Northwest Airlines, Inc. v. Prof'l Aircraft Line Serv.

United States Court of Appeals, Eighth Circuit

January 14, 2015

Northwest Airlines, Inc., Creditor - Appellee
v.
Professional Aircraft Line Service, Debtor, Westchester Fire Insurance Company, Garnishee - Appellant

Submitted October 8, 2014

Appeal from United States District Court for the District of Minnesota - Minneapolis.

For Northwest Airlilnes, Inc., Creditor-Appellee: Brian W. Thomson, Aleava Rael Sayre, Steve Paul Zabel.

For Westchester Fire Insurance Company, Garnishee-Appellant: Robert W. Vaccaro, Timothy Riley Schupp, Erin Fury Parkinson, Kirk Christopher Jenkins.

Before RILEY, Chief Judge, WOLLMAN and BYE, Circuit Judges.

OPINION

Page 576

RILEY, Chief Judge.

This case began with an uncontrolled, runaway commercial aircraft at Las Vegas's McCarran International Airport (McCarran Airport). After the aircraft came to a rest at the bottom of an embankment, the resulting property damage and loss-of-use of the aircraft totaled over $10 million. The aircraft's owner, Northwest Airlines, Inc. (Northwest), obtained a default judgment in Minnesota state court against Professional Aircraft Line Service (PALS), the maintenance company responsible for the wreck. In this garnishment action, Northwest seeks to recover part of the amount of this default judgment from PALS's insurer, Westchester Fire Insurance Company (Westchester). The district court granted summary judgment in Northwest's favor. Although this case raises unanswered questions of state law, we ultimately agree with the district court's[1] reasoning, and therefore affirm.[2]

I. BACKGROUND

A. Insurance Coverage and Requirements

PALS is an aircraft maintenance company that services commercial airplanes at McCarran Airport in Clark County, Nevada. PALS obtained a Temporary Operating Permit (permit) with Clark County allowing PALS to operate at McCarran Airport.[3] The permit required PALS to maintain a minimum level of insurance for certain specified coverage types, none of which included hangarkeepers liability insurance.

Clark County also has a compulsory insurance ordinance relating to McCarran Airport:

Each operator not otherwise providing insurance as hereinafter set forth pursuant to an existing agreement with Clark

Page 577

County, Nevada, shall, at its own expense, keep in force insurance of the following types and in not less than the following amounts, . . . insuring itself against all liabilities for accidents arising out of or in connection with the operator's use and occupancy of and/or operations at the airport . . . :
. . .
(c) Hangarkeepers liability insurance in an amount adequate to cover any non-owned property in the care, custody and control of the operator on the airport, but in any event in an amount not less than five million dollars, combined single limit.

Clark County, Nevada, Code of Ordinances (Clark County Code) § 20.10.020.

PALS obtained hangarkeepers liability insurance from Westchester with $5 million per occurrence and per aircraft limits. As a condition of coverage, the policy required PALS to ensure that Westchester was notified " as soon as practicable" of any covered claim or suit against PALS. The policy also required PALS to cooperate with Westchester " in the ...


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