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Cammack v. Avemco Insurance Co.

January 19, 1973

CAMMACK, RESPONDENT,
v.
AVEMCO INSURANCE COMPANY, APPELLANT



Appeal from Circuit Court, Multnomah County. Clifford B. Olsen, Judge.

Lloyd B. Ericsson, Portland, argued the cause for appellant. With him on the briefs were Dusenbery, Martin, Bischoff & Templeton, Portland.

Floyd Hinton, Portland, argued the cause for respondent. With him on the brief were Deich, Deich and Hinton, Portland.

Denecke, Justice. O'Connell, Chief Justice, and Holman, Tongue and Howell, Justices. McAllister, Justice, dissents.

Denecke

The primary issue is whether the loss of plaintiff's airplane is covered by the insurance policy issued by defendant. The facts were introduced by stipulation, deposition, statement and affidavit. The trial court, sitting without a jury, held the loss was covered by insurance and the insurer appeals.

The plaintiff owned a Cessna 172 airplane. The policy provided coverage for the use of the plane for business and pleasure, "* * * but excluded (a) instruction of any person not specified by name in item 10 below, or (b) any operation for which a charge is made." Defendant contends the plane was destroyed when it was in an "operation for which a charge is made."

Plaintiff, paying no tie-down fee, kept his plane at an airstrip owned by his uncle. Plaintiff permitted his uncle and cousin, both pilots, to fly the plane and they agreed to pay $10 per flying hour, with plaintiff furnishing the gasoline. Plaintiff flew the plane seven or eight hours and his relatives and one Rutledge

flew it about 24 hours. Rutledge was a friend of plaintiff's uncle and so plaintiff agreed to let him fly it on the same terms as extended to his relatives. Plaintiff received payment from Rutledge and his uncle but not from his cousin. Rutledge was flying when the plane crashed.

Plaintiff testified he agreed to the use of his plane for $10 per hour because of his relationship with his uncle, his permission to keep the plane at his uncle's strip, friendship and his desire that the plane be used since long idleness was bad for the plane. Plaintiff computed that it cost him $27 per flying hour. He regarded the $10 per hour as helping "defray the immediate costs of flying the airplane."

The direct operating cost of using this plane was $7.25 per hour, including gasoline. Direct operating costs are those costs which are dependent upon the number of hours flown. They do not include costs such as insurance premiums or depreciation which are incurred whether or not the plane is flown. This type of plane charters for a rate of from $17 to $30 per hour.

The exclusion in defendant's policy, or one somewhat similar in intent, is apparently in common usage, judging from other decisions.

In Thompson v. Ezzell, 61 Wash2d 685, 379 P2d 983 (1963), the exclusionary clause read: "[ E ] xcluding any operation or flight for which a charge is made ('share expense' flights shall not be considered as being made for a charge), dual or solo instruction (except instruction to the Named Assured) and rental to others; * * *." 61 Wash2d at 691. Ezzell was the insured. He and his wife and four Thompsons went ...


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