The URL can be used to link to this page

Claim, Old Republic Ins. Co. ! ~ J FOR THE LEGAl. EFFECT OF THE USE OF I THE IOWA STATE BAR ASSOCIATION Kevin J. Driscoll ISBA # Pk2045311 · =, THE IOWA DISTRICT COURT ~.__~.o~ DUBUQUE COUNTY c ~ ~ ',7 OLD REPUBLIC INSURANCE COMPANY '~ ~ O ~ <:~ i LAW LACV052588 [] I E[QUITY [] No. Plaintiff(s), DATE[ PE[TITION FILE[D: VS. CITY OF DUBUQUE, GREAT AMERICAN INSURANCE COMPANY, and CHAKTAIRE, INC. ORIGINAl_ NOTICE[ Defendant(s). ? TO THE ABOVE-NAMED DEFENDANT(S): You are notified that a petition has been filed in the office of the clerk of this court naming you as the defendant(s) in this action. A copy of the petition (and any documents filed with it) is attached to this notice. The name(~) and address(es-) of the attorney(~)for the plaintiff(s) (is) Kevin J. griscoll, FINLEY, ALT, SMITH, SCHARNBERG~ CRAIG, HILMES & GAFFNEY, P.C., 604 Locust Street, Suite 400, Des Moines, Iowa 50309 The attomey's{~) phone number~) (is) (are) 515-288-0145 facsimile number(z) 515-288-2724 You must serve a motion or answer within 20 days after service of this original notice upon you, and within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Dubuque County. at the county courthouse in Dubuque Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator at (319') 589-4448 (If you are hearing impaired, call Relay iowa TTY at 1-800-735-2942.) (SEAL) CLERK OF COURT Dubuque County Courthouse Dubuque , Iowa 52001 IMPORTANT: YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS IN TIlE IOWA DISTRICT COURT FOR DUBUQUE COUN~ OLD REPUBLIC INSURANCE COMPANY, VS. Plaintiff, CITY OF DUBUQUE, GREAT AMERICAN INSURANCE COMPANY, and CHARTAIRE, INC., Defendants. : LAW NO. PETITION DECLA~TORY COMES NOW Plaintiff, Old Republic Insurance Company, and for its Petition for Declaratory Judgment states as follows: 1. Plaintiff Old Republic Insurance Company is an insurance company organ/zed and existing under the laws of the State of Pennsylvania and is authorized to do business in the State of Iowa. 2. Defendant, the City of Dubuque, is a duly organized municipal corporation under the Iowa Home Rule Statute, located in Dubuque County, Iowa, and may be served by delivery of an Original Notice and copy of this Petition to the Mayor of Dubuque or the City Clerk. 3. Defendant, the City of Dubuque, owns and operates the Dubuque Regional Airport (DRA) through ks duly authorized Airport Commission, formed pursuant to Iowa Code Chapter 330. 4. Defendant, City of Dubuque, through the Airport Commission, and the DRA provides towing, storage, fueling of airplanes anc~ other services of a Fixed Base Operator (FBO) at the Dubuque Regional Airport. 5. Defendant Great American Insurance Company is an insurance company which insured Defendant City of Dubuque, DRA and/or the Dubuque Airport Commission and is authorized to do business in the State of Iowa, and may be served through the Iowa Commissioner of Insurance. 6. Defendant Chartaire, Inc. is a corporation organ/zed and existing under the State of Iowa with its principal place of business in Dubuque, Iowa. 7. At al/times relevant herein, the acts and events given rise to this cause of action occurred within the State of Iowa, in Dubuque County. Statement of Facts 8. This action arises out of certain property damage sustained by Defendant Chartaire's aircraft at the Dubuque Regional Airport. On March 15, 1999, an employee of the City of Dubuque and Dubuque Regional Airport (DR.A), Todd Da/sing, damaged Chartaire's Navajo aircraft 663 iL, while negligently towing Chartaire's aircraft on the DRA ramp and not while on Chartaire's leased premises. At all times, Todd Dalsing was acting in the course and scope of his employment with the City of Dubuque/DRA. 9. Chartaire maintained a policy of insurance with Old Republic Insurance Company, Policy No. AP 658204. Old Republic Insurance Company paid its insured, Chartaire, $48,413.81 for the repair damage to Chartaire's aircraft, which was caused by DRA's employee. Chartaire then commenced an action in Dubuque County, CV 052064, against the City of Dubuque seeking additional damages from the City of Dubuque. 10. Old Republic Insurance Company made Dnbuque/DRA for these sums on September 21, 1999. rejected Plaintiff's demand. 11. Defendant City of Dubuqne/DRA refuses to reimburse Old Republic Insurance Company for the amounts paid Chartaire for repair of its aircraft under the Old Republic Insurance Company policy. 12. On May 12, 2000, The City of Dubuqne, on behalf of DRA, tendered defense of the Chartaire action to Old Republic Insurance Company. (See attached Exhibit 1, May 12, 2000 correspondence of Fred Begy Iff). As a basis for tendering the defense and refusing to make payment to Old Republic Insurance Company, Defendant relies on a Limited Fixed Base Operation Agreement (herein after "Lease Agreement") entered between Chartaire, Inc. and City of Dubuque/DRA dated January 1, 1997 (attached hereto as Exhibit 2). 13. On June 1, 2000, Old Republic Insurance Company rejected the City of Dubuque's tender of defense. (See attached Exhibit 3, June t, 2000 correspondence of R. Michael Barrett, II). 14. Exhibit 2, the Lease Agreement between Chartaire and DRA provides for insurance requirements in Section 1.12: a. [Chartaire] shall insure or otherwise protect itself against losses by f~re, theft, or other cause of any personal property of [Chartaire], its agents, employees, or officers which is located on the leased Premises. demand on Defendant City of Defendant City of Dubuque/DRA [Chartaire], at its own expense, agrees to carry, and keep in force, comprehensive liability insurance in an amount not less than three million dollars ($3,000,000) and such other insurance as may be necessary to protect [Chartaire] herein from such claims and actions aforesaid. c. All policies shall: 1. Include [DRA]...as additional insured, as its interests may result from tiffs Agreement. 2. Contain a provision waiving any subrogation of the insurance company to recover damages against [DRA] by reasons of any sums paid by the insurance company under said insurance policies. f. [Chartaire] shall furnish [DRA] with a proper certificate certifying that such insurance is in force during the entire Term of this Agreement... All required insurance coverage as stated in this Section will be evidenced by a current certificate of insurance. Such Certificate(s) will include, but wilt not be limited to, the following: [DRA], its officers, employees, and volunteers must be expressly covered as additional insured with respect to liability arising out of the activities by or on behalf of the framed insured in connection with this Agreement. All insurance policies will contain a waiver of subrogation clause in favor of [DRA]. If [Chartaire] fails to maintain any of the insurance coverages required herein, then [DRA] will have the option to declare [Chartaire] in breach... See, Exiaibit 2. 15. Chartaire maintained a police of insurance, No. AP 658204 ("Policy") with Old Republic Insurance Company attached as Exkibk 4. This policy provides in pertinent part: With respect to coverage, the Policy states in relevant part: The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of ... property damage to which this insurance applies, caused by an occurrence, and this company shall have the right and duty to defend any suit against the insured seeking damages... With respect to Exclusions, the Policy states i.n relevant part: This insurance does not apply: (a) to liability assumed by the insured under any contract or agreement except an incidental contract._ (b) to...property damage arising out of the ownership...[or] use ...of: (1) .'any aircraft owned or operated by ...the named insured (i) to property damage to (1) property owned or occupied by or rented to the insured, (2) property used by the insured, or (3) property in the care, custody or control of the insured or as to which the insured is for any purpose exercising physical control... Relevant def'mitions of the Policy follow: "Incidental Contract" means any written (1) lease of premises... "Insured" means any person or organization qualifying as an insured in the "Persons Insured provision of the applicable insurance coverage... "Named Insured" means the person or organization named in Item 1 of the declarations of this policy. "Occurrence" means an accident...which results, during the policy period, in ...property damage neither expected nor intended form the standpoint of the insured... "Property damage" means injury to or destruction of tangible property. Special Airport Provisions to the Policy state in relevant part: With respect to the premises designated in the policy as an airport and ali operations necessary or incidental thereto: 2. Subdivision (3) of exclusion (i) relating to property damage to property in the control of the insured or property damage to property as to which the insured for any purpose is exercising physical control does not apply to property damage to aircraft when the insured's control is solely traffic control over the movement of such aircraft. 3. The exclusion in the policy with respect to aircraft applies only to aircraft owned by or rented or loaned to the insured or in flight by or for the account of the insured. Endorsements to the Policy state in relevant part: It is agreed that the following is hereby included as an additional insured under liability coverages, but only as respects premises operation of the named insured...Dubuque Regional Airport...Nothing herein contained shall vary, alter, waive or extend any of the terms, provisions, representations, conditions or agreements of the policy other than as above stated. See attached Exhibit 4. 16. Chartaire's policy of insurance with Old Republic Insurance Company, did not contain a provision waiving any rights of subrogation of Old Republic Insurance for recovery of damages against the City of Dubuque/DRA by reason of any sums paid under Plaintiff's policy with Chartaire. (Exhibit 4, ¶ 16 and declarations). Nor did the Policy provide coverage for property damage, loss of use or diminished value to Chartaire's aircraft. Id_=. 17. At no time did the City of Dubuque/DRA declare Chartaire to be in default of the Lease Agreement, or otherwise require Chartaire to obtain different or additional insurance. 18. David Kocher a representative for Defendant Great American Insurance Company, DRA's insurer, met with Chartaire president Chuck Clayton on March 31, 1999. Kocher advised Old Republic Insurance Company would have a subrogated right of recovery from DRA's insurers, Great American Insurance. (&xhibit 5). 19. Chartaire President, Chuck Clayton, met with Kevin Foley, DRA's Supervisor, on June 10, 1999 to discuss towing services that were provided to Chartaire by DRA which Md resulted in damage to Chartaire's aircraft. In his June 15, 1999 confirmatory letter, Foley admitted DRA was liable for towing operations, that DRA's negligent towing occurred in front of, but not on, Chartaire's leased premises, and that-DRA knew and accepted the fact that DRA was not named as an addkional insured on Chartake's insurance policy. The letter states, in relevant part: On June 10, 1999, we discussed the service provided exclusively to Chartaire, Inc. by Dubuque Air Service in towing Chartaire's aircraft to and from the ramp in front of Chartaire's leased hangar premises...I am receiving pressure to reduce our exposure and liability in our towing operations. Specifically, assuming the liability of towing akcraft for others free of charge. On June 10, 1999...we discussed the possibility of adding Dubuque Air Service to your insurance policy as an additionally named insured... See attached Exhibit 6. 20. By its course of conduct and activities and dealings with Chartaire and Old Republic Insurance Company, Defendant City of Dubuque/DRA has waived any rights under the Lease Agreement and is estopped from claiming reliance on these provisions of the Lease Agreement. City of Dubuque/DRA and Chartaire operated under the lease without those provisions in effect. After receiving notice of the damages, both Defendant City of Dubuque/DRA and Defendant Great American, failed to reserve any rights to rely on any exclusions or policy provisions in the Lease or inazrance contract issued by Old Republic Insurance Company. 21. An actual and justiciable controversy exists between the parties concerning interpretation of the above-referenced Lease Agreement and Policy of Insurance for the Court to determine. Unless the Court determines this controversy, Old Republic Insurance Company w/Il suffer damages including loss of the amount of $48,413.81 paid out on behalf of its insured, Cbartaire. COUNT I - DECLARATORY RELIEF : 22. Plaintiffs reallege and incorporate by reference paragraphs 1 through 21 of tiffs Petition as if set forth fully herein. 23. Under the terms and conditions of the Lease Agreement, section 1.12(a) and (c), Plaintiff was not required to and did not provide coverage or insurance for the damage which occurred on March 15, 1999 to Chartaire's aircraft 6631L while it was being towed by DRA employee Todd Dalsing, and was not on Chartaire's leased premises. 24. insurance requirements under the Lease Agreement with Chartaire. 25. Based on the terms and conditions of the Lease Agreement and the Old Republic Insurance policy, the City of Dubuque is not covered for the negligent acts of its employee, Todd Dalsing, in causing damage to the Clsartaire aircraft. 26. Plaintiff has made demand upon Defendants City of Dubuque/DRA and Great American Insurance Company for the damages paid on behalf of Plaintiff to Chartaire in the amount of $48,413.81. To date, Defendants have refused to make voluntary payment of those amounts. 27. Plaintiff seek a declaratory judgment from this Court that Defendants City of Dubuque/DRA and Great American Insurance Company are liable and responsible for payment of $48,413.81 to Plaintiff. WHEREFORE, Old Republic Insurance Company seeks an order of the Court declaring the parties respective rights and obligations under the Lease Agreement and the Old Republic Insurance Company policy and respectfully requests the Court to The City of Dubuque by its course of conduct and actions has waived the Order Defendant City of Dubuque/DRA and Great American Insurance Company make payment to 01d Republic Insurance Company in the amount of $48,413.81, plus interest and costs; and for such further relief as the Court deems just and appropriate. Ke{~f J. Dris~otl, PIG/t2045311 FINLEY, ALT, SMITH, SCHARNBERG, CRAIG, HILMES & GAFFNEY P.C. 400 Equitable Building Des Moines, Iowa 50309 Telephone: (515) 288-0145 Fax: (515) 288-2724 ATTORNEY FOR PLAINTIFF M.~y!2,%000 Phoenix AviaTion iVI~mag~-s $40 Adrpon Koad South St. Pa,al, Mkae~ola 55075 C~ar File No. 4700 i4-003 De, a~ Mr. write to tender ~he defoe of*he Ciw of Dttbuque to Old R~mbl~o insuz~c~ Company. As you know, we have beea defending the City ofDubuque ~p ~e c~fioneR is obli~e~ ~d~ i~ Le~e A~ent (S~fion t.12) ~ ~e Dub~ue ~aC auch~s~c~ s~H b~ d~d p~m~V. Ch~ is ~s~ ~der~oH~ ~b~ issued by Old Republic ~ Comply, w~vh w~ effec~e fl~u~ ~ ~. of~e oco~enoe atl~g~ ~ ~e map~ned cas~. O~r cH~ t~ Dub~e ~ Ad~t~og~ ~ ~d~' ~ L~ab~ C~g~ of ~a~'~ PoH~. We ~v* enclosed a copy ofbo~ ~e ~e ~e~ ~d ~c Old R~ubEo Policy f~ your During our telephone =onv~at~onthis morning I reminded you thm~ ~tz~ we origin~JJy ~poke about th~s-~a~er th&t I informed you that as a l~w firm we intended to look solely ~o Chazzaize for flse C, il]r~ ~-~iltle~nent to gon~mo~aal pro~ec~iom and for m~ attorney's fees. Yhis morning I asked you lfyou~ ad mayperso~l problem ,x, lfa om: nowT~nde~gng the defoe ~fC~s ease ~o Old Kepublio ~md you $zid that you did not. you d~mcred that the t~nder should b~ pro~ided dir=ctly ~o you_ PLAINTIFF'S EXHIBIT 005/005 M&y 2~ 2000 Page 2 We have wdt~'n to Ch~L~t~-e, Inc., ~d h~ve ~o~d Ch~m, ~o. ~a~ itwilI b~ ~e oo~ offs I~t~ga~on, ~y t~der~g th~s s~t to Otd R~ablic wc do nctwai~*e ~y ~t ~ ~e~ pa~nt of fee~ we ~1il ]ook ~o Old K~ub~c ~s~ce Comply for t~ ~'s hdemn~ ~d p~ent of~ fees FC3:jb Very w~ty yours,._ ~N, B~GY & VON O~_tBlq DUBUQUE AIRPORT COMMISSION CHARTA~, INC. LIMITED FIXED BASE :-OPERATION AGREEMENT Approved: March'?18,' 1997 EffectiVe ;'.i.,J~ary .!1 ;)1997 ' ' ,,. "'..'.','.5' .:,.:,'?,~}~.:: ':,:':,.'.:.: .. · .;~; TABLE OF CO.~'I/:NT$ 1 01 DEFI2Ni'.rIONS ' : I i 02 USE OF AIRPORT I 03 TERM OF AGREEMENT 1.04 PRF_2HISES .......................................... 7 1.05 RENTS AND FEES ...................................... 8 1.06 ADJU$~ OF RENTS AND FEES ........................ 11 METHOD OF PA~ ' ~ 12 1.07 ................................ 1 08 RECORDS AND AUDIT ' ' 13 1.09 REO?ENER DUE TO MAJOR EXPE,ND~ ................. 14 1.10 FACILITIES AND SERVICES TO BE PROVIDED BY LANDLORD ..... 14 1.11 FACILITIF~ AND SERVICES TO BE PROVIDED BY TENANT ....... 15 1.12 INSURANCE REQUIREMJgNT$ ............................. 17 1,13 METHOD OF OPERATION ................................. 20 1.14 1.15 1.16 VEIKICLE PAR ICING .................................. 24 ENVIRONME~AL POLICY .............................. 25 Chartairei Inc. CONCESSIONS ' : 30 1 17 VENDING ' -' 1.18 AIRPORT ~ oPERATING STANDARDs .............. : - 30 · .~i'.~" ·: .-:. 1.19 MOST FAVORABLE TERMS PROVISION } ~ :' ".": · 30 COMPLIANCE PUBLIC AUTItORITI~ ...... ' ' 2.02 TENANT TO ABIDE BY !':LAWS .. AND 'i~'AIRPORT RULES AND : '" '. ' - ',%- ' ."';~.~,i- -.'/ 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 '2.17 2.I8 2.19 2.20 2.21 REGUI~TIONS ' ' 31 TF_2qANT TO COMPLY Wrrl:t FEDKRAL AVIATION REGULATIONS . . 31 AUTHORrrY OF AIRPORT MANAGKR ....................... 31 AIRPORT MAINTENANCE, RI~AIR, ~ DEVELOPMENT, AND EXPANSION ......................................... 32 LANDLORD'S RIGHTS TO AIRSPACE ....................... 32 LANDLORD'S RIGHTS TO PROTECT AERONAUTICAL APPROACltE~ ........................................ 32 AIRPORT OBSTRUCTIONS ............................... 33 AIRPORT ItAZARDS ................................... 33 LANDLORD RESERVES RIGItT. TO CONSTRUCT UTILITIES ON PRF_3~SES .......................................... 33 CONTROL OF PERSONNEL .............................. 33 AIIlPORT PERSONNEL SECURITY IDENTIFICATION ............ 34 CONSTRUCTION STANDARDS ............................ 34 SIGNS ............................................. 34 ENTRY AND INSPECTION OF PREMISES ..................... 35 INTENTION OF PARTIES ................................. 35 FIRE PROTECTION ............... · ..................... 35 REDELIYER{ AND DISPOSAL OF 'I19[PROVEMENTS AT AND DH~-~'Ru~oN ..... ~':' ' 37 DAMAGE · .'.. t-..-c, · :~: . ~.'- .- Charraire, Inc. 2 22 SUBLEASING · 38 2.23 ATTORN3d~NT .................... : .................. 38 2.24 SUCCESSORS AND ASSIGNS ............................. 39 2.25 INDEM2NTrY ..................... : ................... 39 2.26 WAIVER~ AND ACr?EPTANCE OF. FE~ ...................... 39 2.27 SUS"PEN$ION AND ABA~ ........................... 39 2.28 TAXES, LICENSES, AND PERMITS ......................... 40 2.29 TERMINATION BY LANDLORD ............................. 40 2.30 TERMINATION BY TF, NANT ............................... 4t 2.31 LANDLORD'S RIGHTS OF CANCELLATION ................... 42 2.32 TENANT'S RIGHTS OF CANCRLL&TION ..................... 43 2.33 HOLDOVER/CO~ATION OF SERVICE BY TENANT .......... 44 3.01 MAINTENANCE AND OPERATION NON-DISCRIMINATION COMI::LI. ANCE ....................................... 45 3.02 NON-DISCREVIINATION IN PARTICIPATION, CONSTRUCTION, AND USE OF PREMISES .................................... 45 3.03 LANDLORD'S TERMINATION RIGHTS FOR NON-COMPLIANCE WITH SECTIONS 3.01 AND 3.02 ................................ 46 3:04 NON-DISCRIMINATION IN FIJRIglSHING ACCOMMODATIONS AND/OR SF.~RVIL'~ · ' 46 3.05 LANDLORD'S TERMINATION RIGHTs FOR NON-COMPLIANCE WITH _ SECTION 3 04 ' 46 3.06 3.07 AMERICAN'S WITH DISABILPI'r~-~ ACT ........................ 46 DISADVANTAGED BUSINE~ '~ POLICY ............. 46 ·: -:': .?[-:..~.~!: :~.'?::, · .-.~., .... -. . : -~, . . -.,. Chanaire, Inc. Limited Fixed Base- 3.08 GENERAL CIVIL RIGHTS PROVISION ....................... ,:[7 3.09 A.F'FIRMATIVE ACTION EMPLO~ FROiS. RAMS ..: .......... 47 ~.10 AGI~F..EMENTS WITH ~ UNITED STATI~S OF A3aXIIICA ........ 48 3.11 OPERATION OF AIRPORT BY Tlqlg UNITED-STATES OF AN[ERICA . . 48 ~.12 PART 77 OF FEDERAL AVIATION REGULATIONS .............. 48 3 13 NON-EXCLUSIVE 48 4 01 FORCE MAJEURE ' 49 4.02 Q~ ENJOYMENT ..................... . .............. 49 4.03 NOTICES ........................................... 49 4.04 I:IEADING$, TITI.!~.q, OR CAPTIONS ........................ 50 4 05 INVALID PROVISIONS · 50 4.06 STATE OF IOWA LAWS ................................. 50 4.07 INDEPENDENT CONTRACTOR ............................ 50 4.08 ENTIRE AGREEMENT .................................. 50 CONSTRUCTION ' 51 4.09 ...................................... 4.10 MISREPRESENTATION AND INVALID PROVISIONS ............. 51 Charraire, Inc. Limited Fixed Base TIIIS AG!~F, Ki~IENT, made mhd cn~n:d imo this ~ day of March, 1997, by and bcnveen thc City of Dubuque, Iowa, a Municipal Corporation of Iowa, by and through frs duly mithoriz~l Airpor/Co"~'rdssion (tz~-~,~a~r r~rmd m .~ "X_.ANDLORD"), and CHARTAIKE, INC. (tmr:L.m~r referred to as "TEN,~2qT"). WITNESETE: WHEREAS LANDLORD owns and Ol~mt~s t]~ Dubuqu~ Regional Ah-pon (hereinafter referred ~o as "Airport"); and WHEKEA$ LANDLORD owns land~ aM facilities on iu Airport, wlmh lands and facilities are available for lease ta bu~ and i'a~vidnals which are compatible with LANDLORD'S Airport operation; a.~ WI:t'~REAS LANDLOP,,D d~',fir=s T~red Fixed Base _Operation services for th~ convenience and n~:essit~ of those pa~.gea ~ cuxtomer~ who may requ~ such services to and from the Airport; ~'~d WHEREAS TENANT is in the busLuer, s of prov~_rq~g aeronautical services, including new and used aimraf~ salea, flight instruction, airzraft mutaI, and air chafer/air taxi service; and W1T~_ _.REAS TENANT desires to operate a T.imit~d Fixed Base Operation at the Dubuque Regional Airport; ~nd WHEREAS LANDLORD is w~dng to accept TENANT as a tenant ar the Airport; and WHEREAS it is th.c desire of the LANDLORD and TENANT that ch/s Agreement be entered purs~mnt to Iowa Code 330; NOW, TI~.R.EFORE, in comideration of the 'above recitals and the mutual covenants hereinafter set forth, the receipt ~rt mfficieacy of which is ae~owtedged by each party for - itself, the TENANT and LANDLORD do herr. by agr~ as follows: 1.01 DEFINITIONS The mnn "Airport,' wh~uever'med ~ means the Dubuque Regional Airport and all property, buildiugs, f:a~lifiea, ~ud improvements COntained within the boundarie~ of tim Dubuqu~ Regional Airport at the date of thi~ Agreement or at as it may tmrei.uaft~' be extended,/.r,l ~,~t, or mcxiified during any other future dat~ during tim Term,of th!* ~ment. '..; TENANT agrees ro tm solely ttsponsibl~ for tim cost and labor associamd with thc preventive and r~m~i~l ma{ntcn~he and r~pair for ail other items not specifically de~rik~d in S~fion 1.10, entitl~i FACII.r rl.F_S AND SERVICES TO BE PROVIDED BY LANDLORD, including, but not limited to, thc maintenance and repai~ of all windows, window glass, doors, overhead doors, overhead door supports, door seals, insulation, water h~at~rs, wamr filters, I-IVAC filters. awnings, steps, floors (i.~t'adiI~ paindny of floor~), v~clict¢ parking spaces and bumper block~, floor dmt~, inferior plumbing s~d electrical systems, interior and exterior lighti=g, mplacememt of lighi'bulbs, snow removai on sidewalks and vehicle parking sp~_ce_% and the upper l~/el of-rices ,cd storage areas_ TENANT agrees to conform with. any fumr~ laws of thc Stare of Iowa Department of Naru~ R~soutc~s pert,{n{ng to Storm Water Poilu:ion. TENANT agrm:s to be solely responsibI¢ for ali preventive and remedial mainm~ce of thc ovcrh~cl hangar doors follow~g.,a thorough inspection cud thc comple:ion of any rrpz~ks nccc. ssary to be don~ by LANDLORD no later tMn December 31, t997. 1.12 INSURANCE REQU]llEMENTS TENANT shall insure or oth~rwis~ pr°tee: itself against losses by fk¢, thafz, or othe~ cause of any personal primly of tim TENANT, irs agents, employees, or officers wkich is located on the l~sed Proem/sos. TENANT, at its own expense, agrees to c~, ~r~d kmU'p in fome, comp~hensive liabili~ ~e ~ ~ ~o~ ~t 1~ th.n ~ million dolI~ ($3,000,000) ~d ~ch o~er ~ ~ ~y ~ ~ce~ ~ pmt~t T~T herein from such c~ ~ acfiom ~o~. c. All polici~ shaH: I?-lude I. AN'DLORD, its Airport' Commission, agents. ~mptoyees, and volunm~rs as additions! insure, as its inmrcsts may resuk from ,this Agre~'m~nt. 4 Contain a pmvi~ion waiving any mbrogation of tim insurance company to recover damages agairmt LANDLORD by reasons of any sums pal~ by ~ insuran~ company uncl~ said inmmm~ policies. Charralre, Inc. 01/0U97 Insurance so provid~l_ sh~l! b~ cl~m~ primary. ' .-.Page 17 .":' ,' Limited F~ced Ba~e 'inn A ~r,'o~ont Chartaire, Inc. 01/01/97 Thc mi~mum limits of ~mumnc~ arc subject to revision by ~DLO~ upon ~te~fion ~t ~ ~.~ f~ ~ pro~fion of ~DLO~; ~vi~' ~ w~ ~y ~ ~:at ~ A~meni ~waI option TENANT wiJl famish LANDLORD with ~ proper ccrtificat~ certifying tha~ ach im-uran~ i~ in force du~ug th~ ~r~tir¢ Tccufi of this Agrccu~nt, and will furnish additional certification of ¢h~ng¢~ in such inmn-an~, not less than ten (10) days prior to any such c.~, and providing that no cmmce~on thereof shall be effective ,mtil m~r not I~-~ than tllitty (30) days written notice of such cancellation has be~n g~vea to LANDLORD. TENANT will obtain aml k~p ia full force and effect an insurance policy of general liability on an 'ock-urrta~' ba~ only and mot on a "clalmq made' basis. Tl-m caverag~ mm be provided eitl~r on ISO Commercial General Liabiliv form or an ISO Broad Form Comprchemive General Liability form. Any exceptions to coverages mu~t be folly dizdck~l on the requix~ Certifmate. Policies must include, but n¢~cl not be ltmitL~d to, co¥~agP, s for bodily injllry, prop¢~ rty damage, permrml injury, Brrrad Form propcrO' damage, Premiss ~na operations, severability of interest, Frodu~, .and completed OPerations. TENANT will rn~int~u limits of.no less than thr~ million dollars ($3,000,000) combined single lirait per eccurrear~ for bodily injury (including death), personal injury, ara property drayage. All required itlgllranr¢ coverage as stated in this Section will be evidenced by a current Certificate(s) of Immmn~. Such Certificate(s) will include, but will not be Nmked to, the following: Ail Certkficat~s for each policy am.to be signed by a person authorized by that inmr~r and ~ by tl~ St~ of Iowa. : Each immmnce company's r~ting aa shown in the latest Best's Key Rating Guide will be faily disclosed ara entered on the required Certificates of Insurame. ':: · .' · . - Ltmited Fixed Base ' ~:' Operation.Agreement Chazmire, Inc. 01101/97 TENANT will famish rem:wal Certificates for the required insurance during the period of covia'age r~a/red by th~ Agreement. TENANT will fumi.sh renewal Certif'w. ams for th~ same mi-lm,gn coverages as required in this Agreemmm The notim: for renewal will be submkred to LANDLORD thirty (30) days in advanc~ of the expiration date shown on the Certificate of lsmlrance. A second notice Will be submitted to LANDLOP,.D if tl:m inmlran~ policy is not rm~w~l within ten (10) days. If, within BVellly (20) days ~ th~ dat~ of noLice Of renewal, the Certificate trna still not b~n provid~t, LANDLORD'S Designated Repregntative may d~lare TENANT in default of irs obligation under this paragraph. LANDLORD, it~ officmm, employees, and volunteers must be expressly covered az additional inmzrects with respect to liability arising out of the activities by or on ~ of the lmmed in.tared in connection with this Agreement. Alt ~ policies will contain a waiver of subrogation clause in favor of LANDLORD. Each imurmme pol~cy supplied by THNAI~f must be endorsed to provide that the coverage will not be suspemd~[, voided, canceled, or reduced in coverage or in limits exr~t after thirty (30) days' prior written notice by certified mail "Return Receipt Requested" ~s been given to LANDLORD'S Designated Representative. This notice requirement does not waive the in.mnnc~ requirements contained herein. Ail deductibles and setf-ima~r~ mt:nlio~ will be fully disclosed in the Certificates of Insurance. No deductible or self-insured retention may exceed $5,000. If TENANT fait~ to maintain any of tI~ insurance coverages required herein, then LANDLORD will l~ve tim option to declare TENANT in breach, or may ~ replaceane, nt inma~ce or pay the premiums rlmr are due on ex~sfi~g policies in order that ~ required coverages may be maintained. TENAI~ is respomibl¢ for any expenses paid by I..,g2~LORD to malnt~in ISllch inmlranr'~ ard LANDLORD may collect the same from TI~AI~,. The in.sm~e requirements specified herein do not'relieve TENANT of ir~ responsibility or limit the amount of its liability to LANDLORD or other gm-~ons and TENANT is encOUraged m pm-chase such additional immra~ee ~ it deems .m~..essm-7. - .'.'. '~' :'...' , .'" 2. ":-:.Pa'ge 19 :'" ' ' Limited Fixed Baxe :::. ~.,..:.~. Operation Agreement TENANT is responsible 'for and must remedy all damage or loss to any property, including prop~ ~rty of LANDLORD, caused in whole or in pan by TENANT. TENANT is resp~nsibl~ for initiating, maintaining, and supervising all safety pr~.autio~ and programs in connection with this A§reemcnt. 1.13 METHOD OF OPERATION In addition ro scrvicc~, conditions, and ~m,rrro~ements required ro be provided by TENANT hereinbefore, nfENANT will conduct its I.~mk~..d Fixed Base Operation ar the Airport in the foliowhlg manner: a. TENANT will furnish serVi% on a fair, reasonable, and non-discriminatory basis. TENANT will maintain and .operate the Limited Fixed Base Operation in a first- cl~ss manner snd will provide the public with good, prompt, and efficient service and keep its Premisea in a safe, clean, orderly ccrndition at all times. TENANT will employ a sufficicctt numar of personnel to handle the operation of the business herein authorized. All such employees shall, at ail times while on duty at the Airport, conduct themselves with exemplary demeanor, be courteous and polite to the pubil¢, not engage in any raucous or offensive conduct nor use any high pressure, dec~ptiv~, or unfair sal~s tactics. Upon notice from LANDLORD'S Designated l~r~sentative of any non-conformity herewith, TF_.NANT will rake all steps nee~sary m elim/mte the condition. TENANT will not intentionally publicly display or circulate any advertising which is misle~ri~ng or ~te com/'rning any services offered at the Airport. TENANT will not allow any adv¢rtising for other fnma and their services, attractions, or products wi*hln the Premiss without the written consent of the LANDLORD'S Designated Representative. TENANT will make requests for such advertising in writ/n~ tn LANDLORD. Ch, arraire, Inc. 01/01/97 Limited Fixed Base Operation Agreement MAILING ADDRESS: POST OFFICE BOX 440757 KENNESAW, GEORGIA 30144 PHOENIX A~VlATIbN ~xANAGERS, INC. I255 ROBERTS BOULEVARD, SUITE 200 KEN-NESAW, GEORGIA 30144 June 1, 2000 Fred C. Begy, lll, Esq. Kaplan, Begy & Von Ohien 225WestWashington Street, 25th Floor Chicago, Hlinois 60606 RE: Chartaire, Inc. v. City of Dubuque Your File No. 470014-003 Our File No. H99217415 Dear Mr. Begy, I am in receipt of your May t2, 2000 letter tendering the defense of City of Dubuque to Old Republic Insurance Company. Your tender of defense is based on assertions that Chartaire, Inc. ("Chartaire") was obligated to include Dubuque Regional Airport (DRA) as an additional insured and that DRA was named as an additional insured under the Liability Coverages of Chartaire's Policy. For reasons detailed below, Phoenix Aviation Managers ("Phoenix") does not believe any defense is owed by Old Republic Insurance Company to the City of Dubuque under Policy Number AP 658204, and therefore rejects your tender of defense in this matter. FACTS OF THE CASE Chartaire and DRA entered into a Limited Fixedl Base Operation Agreement ("Agreement") which was effective January 1, 1997. Under the'terms of the Agreement, Char~aire leased 6,000 feet of hangar space from DRA. With respect to Insurance Requirements, Section 1.12 of the Lease Agreement states, in relevant part: [Chartaire] shall insure or otherwise protect itself against tosses by fire, theft, or other cause of any personal property of [Chartaire], its agents, employees, or officers which is located on the leased Premises. [Chartaire], at its own expense, agrees to carry, and keep in force, comprehensive liability insurance in an amount not less than three million dollars ($3,000,000) and such other insurance as may be necessary to protect [Chartaire] herein from such claims and actions aforesaid. TELEPHONE: (770) 5904-950 FAX: (770) 590-0599 CLAIMS FAX: (770) 919-8646 I~ -,~'""" I c. All policies shall: 1. Include [DRA]...as additional insured, as its' interests may result from this Agreement. 2. Contain a prevision waiving any subrogation of the insurance company to recover damages against [DRA] by reasons of any sums paid by the insurance company under said insurance policies. [Chartaire] shall furnish [DP, A] with a proper certificate certifying that such insurance is in force during the entire Term of this Agreement... All required insurance coverage as stated in this Section will be evidenced by a current certificate of insurance. Such Certificate(s) will include, but will not be limited to, the following: 4. [DRA], its officers, employees, and volunteers must be expressly covered as additional insured with respect to liability arising out of the activities by or on behalf of the named insured in connection with this Agreement. All insurance policies will contain a waiver of subrogation clause in favor of [DRA]. 7. If [Chartaire] fails to maintain any of the insurance coverages required herein, then [DRA] will have the option to declare [Chartaire] in breach... Chartaire maintained insurance with Phoenix under a policy of insurance, Policy No. AP 658204 ("Policy"). Old Republic Insurance Company underwrote this Policy. With respect to coverage, the Policy states in relevant part: The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of ... property damage to which this insurance applies, caused by an occurrence, and this company shall have the right and duty to defend any suit against the insured seeking damages... With respect to Exclusions, the Policy states in relevant part: This insurance does not apply: (a) to liability assumed by the insured under any contract or agreement except an incidental contract... (b) to...property damage arising out of the ownership:..[or] use ...of: (1) any aircraft owned or operated by ...the named insured (i) to property damage to (1) property owned or occupied by or rented to the insured, (2) property used by the insured, or (3) property in the care, custody or control of the insured or as to which the insured is for any purpose exercising physical control... Relevant definitions of the Policy follow: "Incidental Co(~tract" means any written (1) lease of:premises... "Insured" means any person or organization qualifying as an insured in the "Persons Insured provision of the applicable insurance coverage... "Named Insured" means the person or organization named in Item 1 of the declarations of this policy. "Occurrence" means an accident...which results, during the policy period, in ...property damage neither expected nor intended form the standpoint of the insured... "Preperty damage" means injury to or destruction of tangible property. Special Airport Provisions to the Policy state in relevant part: With respect to the premises designated in the policy as an airport and all operations necessary or incidental thereto: Subdivision (3) of exclusion (i) relating to property damage to property in the control of the insured or property damage to property as to which the insured for any purpose is exercising physical control does not apply to proper~y damage to aircraft when the insured's control is solely traffic control over the movement of such aircraft. The exclusion in the policy with respect to aircraft applies only to aircraft owned by or rented or loaned to the insured or in flight by or for the account of the insured. Endorsements to the Policy state in relevant part: It is agreed that th~ following is hereby included as an additional insured under liability coverages, but only as respects premises operation of the named insured...Dubuque Regional Airport...Nothing herein contained shall vary, alter, waive or extend any of the terms, provisions, representations, conditions or agreements of the policy other than as above stated. The Policy did not contain a subrogation clause in DRA's favor. Nor did the Policy provide coverage for property damage to Chartaire's aircraft. Notwithstanding, DRA never declared Chartaire to be in default of the Agreement, or otherwise require Chartaire to obtain different or additional insurance. On March 15, 1999, DRA employee. Todd Dalsing damaged Chartaire's Navajo aircraft 6631L during on ground towing operations. The damage occurred on a DRA ramp, and not on Chartaire's leased premises. David Kocher, DRA's insurance representative, met with Chartaire president Chuck Clayton on March 30, 1999. Kocher told Chartaire that its insurer would have a subrogated right of recovery from DRA's insurers. Thereafter, Chartaire filed a direct claim with Phoenix and made arrangements to repair the aircraft. Clayton met with Kevin Foley, DRA's FBO Supervisor, on June 10, 1999 to discuss towing services that were provided by DRA and which resulted in damage to Chartaire's aircraft. In his June 15, 1999 confirmatory letter, Foley admitted DRA .was liable for towing operations, that DRA's negligent towing occurred in frant of, but not on, Chartaire's leased premises, and that DRA knew and accepted the fact that DRA was not named as an additional insured on Chartaire's insurance policy. The letter states, in relevant par[: On June 10, 1999, we discussed the service pr~)vided exclusively to Chartaire, Inc. by Dubuque Air Service in towing Chartaire's aircraft to and from the ramp in front of Chartaire's leased hangar premises...I am receiving pressure to reduce our exposure and liability in our towing operations. Specifically, assuming the liability of towing aircraft for others free of charge. On June 10, 1999...we discussed the possibility of adding Dubuque Air Service to your insurance policy as an additionally named insured... ANALYSIS i The Agreement's Section 1,12 Insurance Provisions Are Not Applicable Because the Aircraft Was Not Located On Leased Premises When It Was Damaged. Contractual language must be given effect in accordance with its commonly accepted and ordinary meaning. Despite DRA's apparent argument otherwise, Section 1.12 contains no language, whatsoever, requiring Chartaire to insure for personal property losses occurring on unteased premises. Chartaire Was Not Required ta Insure the Aircraft Damage Which Occurred Under Section 1.12(a), Section 1.12(a) of the Agreement states, that with respect to personal property: [Chartaire] shall insure or otherwise protect itself against losses by fire, theft, or other cause of any personal property of [Chartaire], its agents, employees, or officers which is located on the leased Premises. Pursuant to the clear and unambiguous Section 1.12(a) language, the personal property insurance requirements applied only to losses to "property... which is located on the leased premises". In this case, the leased premises was Chartaire's Hangar. Chartaire was not required to insure against loss of its personal property, or that of its agents, employees, or officers, when that property was located outside of Chartaire's Hangar. B. Chartaire Was Not Required to Insure the Aircraft Damage Which Occurred Under Section 1.12(c) Section 1.12(c) of the Agreement states: Ali policies shall: 1. Include Landlord, its Airport Commission, agents, employees, and volunteers as additional insured, as its interests may result from this Agreement. 2. Contain a provision waiving any subrogation of the insurance company to recover damages against Landlord by reasons of any sums paid by the insurance company under said insurance policies, ~, Under Iowa law, contracts must be read and interpreted as a whole rather than seriatim by clauses. Accordingly, DRA cannot isolate this provision and contend its requirements applied-to any and all insurance policies carried by Chartaire. Section 1.12 contains various "insurance requirements" which can be characterized as "policy type" and "policy content" requirements. Sections 1;12(a), (b), and (g) are "policy type" requirements as they mandate that Chartaire obtain property, comprehensive liability, and general liability insurance. Sections 1.12 (c), (d), (h), and (i) are "policy content" requirements as they mandate that the policies contain specific policy limits and provisions. The contractual language makes clear that any "policy content" requirements were applicable only to the policies required by Sections 1.12(a), (b), and (g). In particular, Sections 1.12(c)(1) and (2) limit their application to DRA's "interest resulting from the Agreement" and sums paid under "said" insurance policies. Section 1.12(i)'s requirement that the certificate name DRA as an additional insured and contain a waiver of subrogation clause is applicable only to "required" insurance. The "required"-types of insurance coverage are identified in Sections 1,12(a), (b), and (g), and not Section 1.12(c). The Agreement Did Not Clearly and Unambiguously Require Chartaire to Exculpate DRA From Its Own Negligence As detailed above, Section 1.12 contains no language requiring Chartaire to exculpate DRA .when the property was d~maged by DRA on unleased premises..Section 1.12(a) limits any exculpation obligation to property located on leased premises. This obligation is inapplicable once the properb/was removed from Chartaire's hangar. I1. DRA Waived the Agreement's Insurance Requirements According to the Agreement, Chartaire was contractually required to present a certificate of insurance that (1) named DRA as an additional insured, and (2) contained a waiver of subrogation clause in DRA's favor. Chartaire never submitted a certificate that met these conditions. Notwithstanding Chartaire's noncompliance, DRA continued its contractual performance thereby waiving any dght to rely on these conditions. DRA's intentional waiver is further evidenced by events arising after it damaged Chartaire's equipment. Specifically, DRA representative David Kocher told Chartaire that its insurer would have subrogation rights against DRA'in a March 31, 1999 letter. Likewise, DRA representative Kevin Foley acknowledged that (1) DP, A, and not Chartaire or its insurer, was liable for damages caused by its towing operations, and (2) DRA knew and accepted the fact that it was not named as an additional insured on an insurance policy. DRA never demanded that Chartaire comply with the alleged insurance requirements. Nor did DRA ever declare Chartaire in default for failure to comply with these requirements. To the contrary, DRA acknowledged that iLwas liable for all towing operations, and that Phoenix would have subrogation rights. III. DRA Is Not Covered. Under the Cid Rgpublic Policy In addition to the above, under the terms of the Policy, Old Republic is obligated to defend only if the Policy applies. There are several exclusions which, clearly provide that coverage is not available to DRA as an additional insured. I Exclusion (a) states the Policy does not apply :~o liability assumed'by Chartaire under a contract, except an "incidental .contract" which is defined to include a written lease of premises. This exclusion is not applicable for reasons discussed above. Chartaire did not assume liability for damages to its aircraft which were caused by DRA's negligence and which occurred on unleased premises. Exclusion (b) states the Policy does not apply to property damage arising eut of the ownership or use of the named insured's aircraft. Exclusion (i) further provides that the Policy does not apply to damage to (1) property owned or occupied by or rented to the insured, (2) property used by the insure.d, or (3) proper~y in the care, custody or control of:the insured or as to which the insured is for any purpose exercising physical control. With resplect to exclusion (i)(3), the endorsement provides it does not apply to property damage to air~raft when the insured's control is solely traffic control over the movement of such aircraft. ' Exclusions(b) and (i) clearly provide that the damage caused by D'R~'s negligent use of Char~aire's aircraft is not covered by the Policy. The damage aros~ out of the use of Chartaire's aircraft. The damaged aircraft was owned by Chartaire and used by..DRA. The "traffic control" carve-out for exclusion (i)(3) is clearly not applicable since DRA' was actually using and operating the plane when the accident occurred. DRA's control was not limited to "solely traffic control". And, even if (i)(3) were applicable, coverage would still be excluded under exclusions (b) and (i)(2). Since there is no coverage under these exclusions, the Old Republic policy cannot be considered primary. Phoenix, on behalf of Old Republic Insurance Company, sends this letter as notification of its reservation of rights, defenses, and in.terests involving the Policy. No action taken by Phoenix in tflis action shall constitute a waiver of any of our rights under the policy. We specifically reserve all of our rights, including the right to disclaim or further disclaim coverage whenever such a disclaimer might be appropriate. Phoenix denies any respons~ility under the Policy to indemnify DP, A or the City of Dubuque for any damages or payment Of fees and costs. Phoenix further denies any obligatio~n to defend the City of Dubuque or the DRA arising out of the facts of · the incident alleged.. Phoenix also notes that DRA failed to give timely notice of its intent to claim coverage under Policy No. AP 658204. Sincerely, PHOENIX AVIATION MANAGERS, INC. Vice President Director of Claims RM B/crw cc: Char~air, Inc. Airsure Ltd. Kevin Driscoli, Finley, Alt, Smith, Schamberg, May & Craig, P.C. M~tt A. Teeuween, Phoenix AviatiOn Manager, Inc., Minnesota (19:2(I FA% 651 524 81(19 F~DENLI AVIATII)N ~[A~-AGER POLICY ~USfBER AP 65S204 2E~WAL OF: AP 6582 Airport Liability Insurance Contrsct I~sued by OLD tAEPU~LIC '!I~SLIRANcE COSi~ANY _rn consideration of the paymen~ of the premium and s~bject to all of terms of ~his policy, a~ress with the ~-~-~D INSURED as DECLA3UkTI 0NS ITEM 1. NAl~lgm INS~: CHARTAII~E, INC, 11090 A~01{T ~0~ ITEM 2. POLICY PER~0D: F~0M AUGUST D~, 1998 TO AUGUST 01, 1999 I/~SUi~ED as stated herein. Audit Period: NOT ~a-PPLICA~LE IT~4 3. The insurance afforded is only wi~h respect to such of the follow!n Coverag~ P~rts, as are indlca~e~ by specific premium charg~ or char~es. Coverage Parts Comprehensive General. Liabi!i~y Insurance $ 1,750 A~27(10~94], 1~?2 (09~93}, A~!&2(07-93], AP!QT(!2-93], AP9 ~SB {02-96). ~5C .(U4-94), Tg/e Company has caused t.his policy to be executed by its Pre~iden% a~d Secretary bu~ it shall non be valid unless approved by ~he AVIATI0~bL%~FAGEK~ and co~tersi~nsd by a duly authorized ~eprese~tatlve of the co. any ~d co~leted by th~ a~tac~eat of {1} one o~ more C~era~e Part~ for whi~ ~he C~pany~s ~ort Li~i!ity !nsur~c~ Coat,ct. FAX ~..~1 PHDENIX AVIATIOn- HANAGER OLD REPLVBLIC INSUP~ANCE CO-~PD-N'f C~IPREEENSIVE GENERAL LIABILITY ZNSIIRAI~CE - SCHEDULE COVER~/~ES _ LIMITS OF-LIABILITY ADV~N'CE P R EMI-~ A. Bodily InjuiAz Liability $ A~ ENDORSED $ A~ E/~DORSED $ AS ENDORSED Each Occurrence Property D .a~ge L/ability $ AS RNDORSED Each Occurrence Tot~! Adv-~-nce preanfp/~ $4,250. GE~%L L]LABILI?f HAZARDS --FLAT CSQARGE- - Elevators Not Covere~ Per $100 of Cost Receipt~ If ~_ny --FLAT C3{ABGE-- PA~E i OF 2 PHOENIX A%qATION h£AKAGER SPECIAl. AIRPOET PROVISIONS A~¢iceble to ComDrc'hensJve Ger~eral Liability Insurance, ,~,~%anufacturers and Contractors' Liabiii~y Insurance Owners'. Landtocds' and Tenants' Liability Insurance W[~h ¢espec[ to'~he pr~mises des;gnaWed in ~he poJicy as an alrpo~ and ali operations necessa~ or incidental thereto: 1. .Fhe~Pers~ns~nsured*p~visi~nisamendedt~iq~lude~nyairpo~manager~oranyempl~ee~ofthe"arned i.s~r~l while actfng within the scope ¢ his dudes as such. 2. Subdivision (3~ of exclusion ti) reladng to prope~ damage to prope~ in Se control of the i~u~ or g~pe~ damage to prope~ as co which the insu red for any purpose i5 exerdsin9 physical con,rot does not apply [o p~pe~ ~amage (o aircra~ when the i.sured'~ contra is solely traffic con,roi over the movement o¢ such aircra~. 3. The exclusion in fha policy with reaped' fo aircraft applies only to airo'a~t owned by or rented or loaned tO 4. The insurance does not apply: ~ 1~ to the conduct of any con,est or exhibi~io~ semitiC, ~¢on~ored or participated in. by the b~u~, or ¢il grandstands, bteacher~ or obse~a~ion pla¢orms oiher than obse~atiom dec~ or aromenade¢ which are Dart of permanent structures On the premises, or swimming pools, or lodging accommodations for the general public, or schools O~her than pilot training.~chools, or 131 with respect, to ~e~auran~s ~p~rated b~ the "an1e~ i~`'~ure'4 or b~ ~(hers [~ading und~,r h~s name~ ~ b~=dil-/inj~ or pro~ damage adCng out of cii) reliance upon a rear~ta~ion or war~nW made with respect [hereco if the bO~i~ iniu~ or ~ro~e~ d~ occurs a~er physical possession o[ such produc~ has been ranqU~shed tO Oth~r~. 5. provided sat any subdivision ¢ this subparagraph ~e) does not apply when speci'~call¥ stated below or in the policy ~o be inapplicable. to that podfon of any loss al'is/nc~ out of the ownership, mai ntenance Or use of aircral~ or alltomoliile~ with respect to which ~'he iqsured has other valid and collec%ible insurance, whether primer/or excess. The term "ill ttigt~f' means the time commencing wi[h the actual take-off run of the aircraft and con tinuing thereafter until [t has COmpleted its lending run. 09:21 FAX 6Sl -~-~4 8109 AVIATION [~£ANAGER OLD REPIT~L%C %DSIT~_~C~ CO~rY ADD!TI0~-AL INEU~ED DUBUQUE TEE CCNJEP~AGE LIMITS AFFORDED HEREUNDER S~LL BE INCLLVDED WITH!NAND NOT IN ADDITION TO TI~E LIMITS A~PL!CABLE TO THE NAMED INSURED. Nothing hsreim contained shall v~ry, alter~ waiv~ or extend a~y of the terms, provisions~ reprs~ent~tions, conditions or agreements of Zhe policy INS~CE C0~, issued ~o: ~RE, D~UQ~ !A 52003 of ~he company. Inc. Da~ of issue 08-05-199S iP~oenix Aviation ~n~r~ FAX 681 884 8I(Ig PHOENIX AVIATION ~[ANAGER OLD R~PUBL2C iNSU~A~YCE COS~--~f CO~REH~N$I~E GE/N-ERAL L%~BiLITY_ iNSI/RANCE Only with respect to A~5 (a) PP~EMiSES-OPE~ATIONS, ODE.R.~TIONS A~NID (e) PRODU~S under ~hs descr~ptlon agreed ~h~ Pr0vlslcn ZZ~ L~TS OF LZ~IL!~ of Li~i!iKy Insurance-Coverage Part is her~y ~e~ded ~egard!emS of the nLu~ber of (l] !nsureds under t persons or organizations who sustain bodily inJ~" injury or property damaqe, the cormpany's llabi! follows: · Coverage A and B Single Limit - The total l=ab=_ for d~m~ee because of Bod/ly Znj. ury sustained k as a result of any one occurrence shall no~ exes The total liability o~ thm compa~y for ~_ll PrOperty ~ar~e sustained hy One or more SubJeca to the ~bov~, the total liability of the all daaL~ges because of all bodily i~jury and all sustained by one .Or ~cre persons or organization any one occurrence shall mot ezccesd $3~O0O~0OO. The total l_ab~lzty of tt%e company for all d~ms h injury ~d all pr=perry d~m~ge included wi~ the hazard ~nd (2) all 5odi!y inju~ and all property d~ o~ $3,000,000. For the purpose of determining ~he !irni= of the bodily inJu_~y a~d properuy da~earisin~ out of con: e~osur8 to ~s~tla!!y ~he 8~e general condition te~m~ provisions, r~res~t~tlons, c~ditio~ or D~UQ~ ~f the co~oany. ~te of issue 08-05-1998 Phoen~ Avia~iom ~ ~SA (0S-92) COVERAGE P.~%T d) C0~PLETED of hazards, it is Comprehen~iv~ General to read aS follows: his policy, (2) ~y or property ccount of bo~i!y ty is limited as ity of the company any one person ~d $3~000,000. or or~nizatlons ed $3,000,000. company for proper~y damage as a ~_~ult of cause of (I) all bodily ~mpleted operations included within Lny's liability, al! :inuous or repeated shall be considered extend ~ny cf the :eemenus of the policy to be ag~ached to and hru O:5.D REPUBLIC /3%52003 the Aviation P~{I)Eb'IX AVIATt0b' ~£A~-AGER FAX 6,~1 ~4 ~I(19 pi~OE~'IX AVIATIOh- B[Ab-AGER ODD P~PrJ~DZC ZN'8~C]~ CO. AirY is agreed that,. The Comprehensive General Lia/mility Insurancm - Coveragm Part does not apply Ko BODILY INJURY or PROPERTY DA/~GE which: occurs ac premises owned by, r~mted to or controlled by the NAMED b} arises out of the .N-AS~D Z~SLTRED'S PRODUCTS manufactured, sold, hand!~ or distributed at or from premises ow~md by~ rented to or controlled arises out of operations away from pre_m/sas owmed by, re.ted to or controlled by the ~ ~LTRED if such operations ~re no~ necessary or /-ncidental to the ownership, n~!ntenanc~ or u~e of the INSURED ~en used in this endorsement "I~SQ~ED FRE~SES~ means the premises designated fm the schedule and includes the ways immediately adjoiuinf s~ch premises on lazld. This insurance does not apply to DAMAGES because of BODILY IN.trAY or inc!u~ed within the PRODUCTS ~ unless ~he operations or produc~ ar~ described in ~he ~cAed~ ~der hazard~ ~d) ~d (a) - Co~!aaed Nothing herein contained sh~Ltl Vary, alter, waive or ~xtend any of the D~UQ~ ~ 52003 ~is endors~t ~I1 not be ~!id u~]ess approved by ch~ A~ation ~nag~s .~te of issue 08-05-~998 Phoem~ Aviation ~r~ ~T~s), I~c. ~5C [04-94} (1.5/26/(1(I (lfl:~l FAX 65i ,5.54 81(I,q PHI)ENIX AYIATII)N ~fANAGER FAX 6.5i .5,~4 8109 PffDEKIX AVIATII)B- ~ANAGER LEGAL LIABILITY COVERAGE P~T ~ DOES ~OT ~PLY i~G~RS OR OFFICE BUI~/~GS OC~P~ OR US~ BY ~ N~D ENSUED. EXCEED $1O0,0OO. ~ 0~ OC~ENCE. Nothing herein cOntained shall vary, alter, waiva or ax~end any of the INSO-RJkNCE COM3AI~f, issued to: C}{ART2LIR~, i~C. ~f the 81(1§ PHDENIX AVIATION }[ANAGER OLD REPUBLIC I.~S ~UPJANCE CO~PA~YY- ~OLD FJLR~LESS IT IS AGREED T~AT'THE CO~2~Y SHALL EOLD T~E FOLLOWING _ALL CL~iMS WC.~/CK ARE CAUSED SOLELY ~Y TAq~ NEGLIGENCE OF Nothln~ herein contained ehall v~ry, alter, waive or extend ~y cf the terms, provisions, representations, conditions ox agreements of the policy INS~CE CO~, issued 5o: C~T~RE, ~C. D~uQ~ ~ ~o03 ~f~=ke co.any, Phoe~ Av!a=io~ ~n~r~ ~Te~) , BY PHOENIX AVIATION }[ANAGER OLD REPUBLIC 1-~$tIR~-Ai'~CE COMPANY BASE DEFINITIONS 2.} 3.) "COST" M~A.NS ~LE TOTAL COST TO TEE ~.~M~D INSUTLED WIT~ RESPECT TO BY i~EPE~E~ CO~CTO~ OF .~L WORK LET 0R S~-~T I~ CO~ECTIO~ ~ EQUiP~ F~IS~D, US~ 0R DELIV~ FO~ USE IN T~ E~CUT!ON 0F SUCH WORK, :~E~R F~iS~D BY T~E O~ER, CO~CTOR OR S~C0~CTOR, INCL~ING ~L FEES, ~L0~CES, BOSSES OR C0~SSIONS ~E, PAID 0R DU: PERIOD ~ ~ ~.~ O~ A RECEIPTS ~IS O~ER ~Y ~CEI~TS FROM TELE- T~S ~%~iCE T~E ~D INSTEP COLLEGE ~ A SEP~TE ITEM ~ REMITS DIREC~Y T0 A GO~~ DIVISION. "SALES" M~3%NS T~E GROSS AMOUNT OF ~OI~EY T~'$ ~ICE ~ ~ D~ R~T DIRECTLY TO A Nothing herein contained shall vary, alter, w~ivs o~ extend aaay of the terms, provisions, rspres~ntatioIls, conditions or agreements of the policy This ~mdorsemen~ becomes effectiv~ ~GUST 01, !998 to be az~ached to ~d 1' D~UQ~ IA 52003 AP138 (ig:22 FA~ 651 5~4 FHOENIX AYIATION b~A~AC-ER ~OLLUTION AND COAITA/~//A!ATION ~(112 IT IS AGRERD T~LAT_PA.D. AG_~A~E 1. (b) OP TF~E-~NOISE AND POLLUTION A~ND OTHE~ PERILS EXCLUSION CLAUSE~' IS DELETED i~_ND T:qE FOLLOWING SUBSTITUTED TEE~_EFOR: THIS POL-TCY DOES NOT COVeRt{ CLA!I~S DIRECTLY OR II,DIRECTLY OCC~I01TED BY, PL~PE~'iNG T~!--~QUGH Ok iN CONSEQUENCE OF: "BODILY Ii~JI3'RY" OR "PROPERTY D~2~E" AR-ISIbrG OUT OF THE ACTUAL, ALLEGED OR TI{.~EATEN~U DZSC.qAi~GE, DISPERSAL., SEEPAGE, MIGRATION, AT OR F~0/~ A=.N~Z PI{~MZSES, SITE 0R LOCATION W~tICI{ iS OR WAS i, AT ANY TIME OW'NED OR OCCUPLED BY, OI~ FS~TED 01~ LOAATED TO, ANY INSD.'RED; AT O.% F~OM isx%rY_ ]~i~EM/SES, SITE OR LOCATION W%!IC!~ IS OR WAS AT STORAGE, DISPOSAL, ]PROCES$Ii~G OR TREAT1ZEATT OF WASTE~ WNIC~ ARE OR WEi~E AT ~ T/24~ TRANSPORTED, F~DLED, ST0~D, ~A~D, DiSPO~ OF~ O~ D~O~SS~ ~ ~TE BY O~ FOR ~ INS~ O~ ~ ~E~0N OR OR~ZATION FOR ~0M ~ ~;S~ ~Y BE LEG~LY RESgONSIBLE; 0R AT OR FROM A~-Y PREI~ISES, SITE OR LOCATION ON ~IHICF. A/~TY INSLTRED OR ~2~T~ CO/~'£'a~ACTOP~q OR SU]BCONTR3%CTORS FYOR-KZlVG DIRECTLY Ok INDIRECTLY ON ~ INED-RED'S BEZ-L~LF ARS PER- FOP. t~I/I~ OPEILAT!'_O~S: IF THE POLLUTANTS ARE BROUGHT ON OR TO THE PREI~LISES, SiTE OR LOCATION I1~ COlV/TECT_ION WIT~=I STJ'CI~ OPEi%ATIOI~S IF T~ OPERATIONS ~ TO TEST FOR, MONITOR. CLEAN UP, P.F~MOVE, CO1TTAil~, TREAT, D~TDXIFY OR NELI~.AL~ZE, OR IN AI~TY ~L%Y PSESPO~D TO, OR ASSESS T~{~ EFFECTS OF POLLUTAAUES. AS USED IN THIS EXCLUSION, A HOSTILE FIRE ~S 0-~ 7/~:~ICH BECOME UNCONTR© ~LLA~LE O~ BREAthS OUT FROM W~W~RE iT W~ I1N'±'k/~DED TO BE. A~_zi2 PH])ENIX AYIATIDN b[ANAGER OLD KEP%~BL!C INSLrRAI~CE POLLLTT_I0/V Dd~D CONTAPL~NkTiON R~QUEST, DEPL~ND OR ORDER T~L~T ANY INSURED 0R OTMERS TEST FOR, M0~!TOR, CLE~ UP, R~OVE, CONTAIN, TREAT, DETOXIF¥ OR ~Eb~R3LD!ZE~ OR ZN ANY WAY KESPOND TO, OR ASSESS ~ EFFECTS OF POLLUTanTS; OK CLAlq~ OR SUIT BY OR ON BEPL~J~F OF A GOVEP3AM~NT~-L AUTHORITY FOR D~GES BECAUSE 0F TESTING FOR, ~O~TORIMG, CL~G UP, R~OVING, C0~G, T~T~G, DETOXI~IN~ OR ~ZI~-G, O~ iN ~ WAY EESPO~ZNG TO, OR ~EESSING ~E EFFECTS OF POLL~S POLL~S ~S ~ SOL~ LIQU~, ~EOUS, O~ ~ I~q~ OR CO~-~qI- !NCL~i~G SMOg, V~o0R, SOOT, ~S~ AC~S, ~!S~ C~iC~S ~ W~TE INCLOSE ~TE~S ~ ~E ~CYCLED, ~CO~ITIO~D OR RECOil. Nothing herein COntained shall %rary, ai~er~ waive or extend a~y of the o~her tha~ as above stated. ~2 (07-93} 05126100 0§:23 FA~ 651 .~54 8109 Unless coverage ia. purchased and specifically endorsed hereon, i~ is agreed that this policy shall not apply to the following: 2) ~o bodz_y .mn3ury or property damage ari~in~ from the ma~ufacaure sale, se~ice, d[istribution or handling of amy Ultralight, Microlight Powered Gl.ider type equipmen~ whether in 'ki~' for~ sr assembled. to bo~i!y 'injury or property d~ge claimed ~o aris~ from 'Negligent Insnr~ctton'. ~s te~ 'Negligent InsPection' wherever used herei~ shall me~' the alleqe~ failure of t~a !~sured ~o properly insa~ac~ a apply to bbth greed a~d fli~h~ inst~c~ion, provided such is givem b~ a Certified Flight I~t~actor c~eratiag On b~!f of 3) 4) ~) ~o bodily injury or proper~y damage arising from prope!ler o~erhaul, or helicopter service orrepa_~.4 bodily tnju~r/; or property damage arising from any skydiving or para'c2~utin~ activity. to bodi!y %mjury o~ property d~Ge arisin~ from T_he .~a~ufacture~ assembly or dis~ribu~icm of any home builz aircraft, ki~ built type cer~m=mca~e. Nothing herein :ontained shall vary, alter, waive or extend any of the hereby ~de a p~rt of Policy ~o. ~ 658204 issued Z~ 0~ REP~LIC INS~'~ C0~, issued to; ~T~, I~C. ; 1!09~ AIRPORT ~0~ D~UQ~ IA f ~he company.: at~ of issue 08-05-199~ APl27 {zO-F4) Inc. 09:£4 AVIATION ~Ltb'AG£R OLD REPUBLIC iNSLrPJ~CE COMPANY CQP~--REHENSiVE GENER3~ LIi~_BILITY INSLrRANCE SCHEDULE ~ (]16 (e} Products - Sales Sale of Ay{orion Fuel & oil If Any Sale of Used Aircraft If Sale of New Airc~af5 If Any Sale of Ai~crafz Parts No~ Installed If Any - - FLAT CFS%RGE - - $ /NCL~ $ INCL. $ INCL. $ INCL. Location of all' pr~_mises owned bY, rented INSU1LED. iSlE DESCRIPTION OF F3~J~DS to or controlled by the NAMY~D {a) PREMISES - OPESLATIONS. Interest o~: NAMED INSLL~ED in such occupied by I~AI~E~ INSURED (Describ~ interest, such as TENANT PORTION foregoing ~isc!oses all hazards i~sured hereunder known to sxist at effective ~a~s of this policy, unless otherwise stated herein. POLICY NO.: D_P 658204 N~/~ED iNSUltED: .CEARTA/t~E~ liNC. D~UQ~ ~ 52003 ~IS COVE~GE P~T SF~L NOT BE BI~!RG ON ~E COMP~ ~ESS ATTACEED TO L!~ILi~ i~S~CE POLICY ~u5 (02-96) ic is ap'reed their ia) The premium for this policy has been financed in whole or in part throu AICKgD!T/A~Cc0 777 SOET'i~E FIGI/EROA ST~ET SUITE 140! (herein called the Lend, r) therefura: A~i retuz~n premiums under =his policy shall be payable to ~he said Lender and the Named InSured. as their respective interests may appear; The said Lender shall have the right tO cancel or cause to be cancelled in the Named Insured's name and stead this policy; amd Nothing herein ccn~ained shall ~ra~y, alter, waive or extend any of ~e:rm~, provisioms, representations, conditions or agreements of the policy h~reby ~de a part of Policy No. ~ 658204 issued th~ OLD ~LIC ~S~CE CO~, issued to: ~T~? ~C~ 11090 AI~0RT D~UQ~ ~ 52003 Of the com9~y. PHOEMIX ASZIATII)M MANAGER OLD R~PI/SLiC II~SUi%A/gCE COPLo.~2~f ~DICAL PAYPS'~ITS t~kZA2LDS - SCHEDULE COVERAGE LI~4!T~' OF LIABILITY ADVANCE E. PR~MISES PYE, DiC_m_L PAYMEATTS $5,000. EACH PERSON EACPI ACCIDEIqT PREMISES A_ND OPERATIONS ELEVATORS (c) SPORTS ACTiVTT!ES INCLUDED NOT COVERliD NOT COVERF~D TOTAL ADV3~WCE p.~EM/Lr~ $ Ii~CLUDED D~SCRI~Ti0N OF HAZARDS .~OSE H~uF~.DS AS DESC/~IBEDUA~ERLiABILITY FZA.Zim-DfDS (5) pR25MiSES-OPE-r~ATION$ OF POLICY NO.: A1~ 65820& ~ INSURED: ~'ID~TAIRE, INC. 11090 ~PORT ~0~ D~UQ~ ~ 52G03 ~IS ~%~GE P~T S~L N~ BE B~ING ON ~ C0~ ~EES A~A~ TO T~ DEC~TiO~ P~E ~ ET~ PROVISIONS (10-92) ~vnn'l ~ mrs' ~047~ 09:2.5 FA~I 6,~1 $~ 81(19 ~] (~l-q F~'I~At,ICED 9RFX,~U'~ E~N'DO~EI~;ESTi~ It is agreed The premi~ for this policy has bean financmd in whole or in part throu AICREDiT/AIccO SUITE !401 LO~ A/~GELES CA 9001754!S (herein called the Le~der) under ~ agre~en~ assi~ing certain rlgh~s of ~e insured ~o =he L~: =hmrefore: Ail return pr~iums nnde= this policy shall be payable tQ nhe said Lende~ and the Named Insured, as their respectiv~ interests may appear; T~.e said Lender shall have the right to cancel or cause to be C~21cel!ec the Named insured~s name ~ stea~ this policy; and LoSs, if any~ under this pelicy shall be adjusted with the Named Insure r~spec~ive innerests may appear. Nothimg herein contaln~d shall vary, alter, waive or ex~end any of the uerm~, provisions, repmesentatiOns, conditions or agreemenns of the policy INS~CE CO~, issued to: ~~, INC. D~UQ~ IA 52003 ~iS endowment ~hall not be' valid ~lss~ approved by ~m Aviation AV6!~ (12 ! AVIATION POLICY POLICY PROVI:SIONS---FORM PAM - AV2 Old Republic Insurance Company, a stock insurance company (hereinafter catled the Company), in consideralion of payment of the premium and in reliance upon the statements in the Declarations and subject to the Limits of Liability, Exclusions, Conditions and all other terms of the Policy, agrees with the Named Insured identified in the Declarations Page herein as INSURING AGREEMENTS E LIABILITY COVERAGES Coverage A--Bodily lniury Liability Excluding Passengers-To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury sustained by any person excluding any passenger. Coverage B~Property Damage Liability-To pay on behalf of the Insured all sums which the Insured shatl become legally obligated to pay as damages because of property damage. Coverage C--Passenger B~Klily Injury Liability-To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily iniury sustained by any passengen Coverage D--Single Limit Bodily Injury and Property Damage Liability-To pay on behalf of the Insured ail sums which the Insured shall become legally obligated to pay as damages because of bodily injury sustained by any person (excluding any passenger unless the words "Including Passengers" appear in Item 4 of the Declarations) and property damage. caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft; and if the purpose of use stated in Item 7 of the Declarations is "Pleasure and Business," Coverages A, B and D shall apply to an occurrence arising out of the maintenance or use of the premises in or upon which the aircraft is stored. 11. EXPENSES FOR MEDICAL SERVICES COVERAGE of iniury, to or for each passenger who sustains bodily iniury caused by an occurrence, provided the aircraft is being used by or with the express permission of the Named Insured. II1. PHYSICAL DAMAGE COVERAGES Coverage F--Ali Risk Bash-To pay for any physical damage to or loss of the aircraft, including disappearance of the aircraft. Coverage G--AIl Risk Basis Not In Motion-To pay for any physical damage to or loss of the aircraft sustained while the aircraft is not in motion and which is not the result of fire or explosion foIIowing crash or collision while the aircraft was in motion. IV. DEFENSE, SETTLEMENT AND SUPPLEMEN'rARY PAYMENTS Coverages A, B, C, and D The Company shall have the right and duty to defend any suit against the Insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent. It may make such investigation and settlements of any claim or suit as it deems expedient, but the Company shall not be obligated to pay any claim or judgment or to defend any suit afte( the applicable limit of the Company's liability has been exhausted by payment of judgments or settlements. During such time as the Company is obligated to defend a claim or claims under the provision5 of the preceding paragraph, the Company will pay with respect to such claim, in addition to the applicable limits off liability: (a) all expenses incurred by the Company, all costs taxed against the Insured in any suit defended by the Company and all interest accruing after judgment upon that portion of the judgment falling within the Po[icy limits before the Company has paid or tendered or deposited in court that part of the iudgment which does not exceed the limit of the Company's liability thereon; (b) premiums on appeal bonds required in any' such suit, premiums on bonds to release attachments in any such suit for an amount not in excess of the applicable Iimit of liability' of this policy and the cost of bait bonds required of the Insured because of an occurrence or ~'iolation of law or a regulation for civil aviation arising out of the use of the aircraft, not to exceed 5250 per bail bond, but the Company shall have no obligation to apply for or furnish any such bonds; expenses incurred by the Insured for first aid to others at the time of an accident, for bodily injury to which this pobcy appties; all reasonable expenses incurred by the Insured at the Company's request, other than for loss of earnings or for wages or salar es of emp oyees)of the Insured. - -I- P.&M-AV-2 ( 7- 96) V. POLICY PERIOD, TERRITORY All Coverages This policy applies only to bodily iniury or property damage which occurs, and to physical damage losses to the aircraft which are sustained during the policy period, while the aircraft is within the United States of America, Canada or Mexico, or while being transported between ports thereof. VI. TWO OR MORE AIRCRAI:T All Coverages When two or more aircraft are insured under this policy the terms of this policy shall apply separate]y to each. SPECIAL INSURING AGREEMENTS (APPLICABLE ONLY IF THE PURPOgE OF USE SHOWN IN ITEM 7 IS LIMITED TO PLEASURE AND BUSINESS) TEMPORARY USE OF SUBSTITUTE AIRCRAFT Coverages A, B, C, D and E Solely with respect to the liability of the Named Insured: Whi[e an aircraft described in Item 5 of the Declarations is withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction, such insurance as is afforded under Coverages A, B, C, D and E is extended to apply with respect to the use, by or on behalf of the Named Insured of any other aircraft bearing a.-"Standatd!',-airwortbA~.ess cer6ficatq~ not owned in whole or in part by the Named Insured, while temporarily used as a substitute therefor. in the event that the aircraft has a passenger capacity- greater than that of any aircraft listed in the Declarations, then the Company's liability under Coverage D for passenger claims shall be determined in accordance with the pro- visions of the "Limit of Company's Liability" section of this policy, as if the aircraft involved had the same seating capacity as that aircraft listed in the Declarations which has the greatest seating capacity. USE OF OTHER AIRCRAFT Coverages A, B. C, D and E if the Named Insured is one individual or, one individual and spouse, such insurance as is afforded under Coverages A, B, C, D and E with respect to the aircraft described in Item S of the Declarations is extended to apply with respect to the use, by or on behalf of the Named Insured, of any other aircraft bearing a "Standard" airworthiness cer- tificate not owned in whole or in part by, or furnished for regular use to, such Named Insured and spouse. The insurance provided by this Agreement shall apply only to the Named Insured and spouse. In the event that the aircraft has a passenger capacity greater than that of any aircraft listed in the Declarations, then the Company's liability under Coverage D for passenger claims shall be determined in accordance with the pro- visions of the "Limit of Company's Liability" section of this policy, as if the aircraft involved had the same seating capacity as that aircraft listed in the Declarations which has the greatest seating capacity. III. AUTOMATIC INSURANCE FOR NEWLY ACQUIRED AIRCRAFT Coverages A, B, C, D and E If the Named Insured acquires ownership of an aircraft having a Standard Airworthiness Certificate in addition to the aircraft described in Item 5 of the Declarations and within thirty days thereafter reports such acquisition to the Aviation Managers, then the insurance afforded by Coverages A, B, C, D and E shall apply to such additional aircraft as of the time of such acquisition, provided the Company insured ail other aircraft owned in whole or in part by the Named Insured on such acquisition date. Unless the Named Insured and the Company agree otherwise the coverages and limits of liability pertaining to said additional aircraft shall be the same as is provided for that aircraft which is described in Item 5 of the Declarations having the greater passenger carrying capacity. The Named Insured shall pay any additional premium required because of the application of this insurance to such other aircraft, All coverages provided by this Agreement shall cease to apply upon expiration of the policy to which it is attached. This policy does not apply: EXCLUSIONS To any Insured while the aircraft is in flight with the knowledge and consent of such Insured or of any executive officer darner, or managing agent of such Insured for any unlawful purpose, or any purpose not designated in the Declarations. To any Insured while the aircraft is in flight Ia) if piloted by other than the pilot or pilots designated in the Declarations; if piloted by a pilot not properly certificated, qualified and rated under the current applicable Federal .Air Regulations for the operation involved, whether or not said pilot is designated in the Declarations; lc) if the Airworthiness Certificate of the aircraft is not in full force and effect; (d) If the aircraft h - r ^t an ' il 3. To any loss, iniury or damage arising from war, invasion, civil war, '~l.t~tior¥ rebellion insu?rection or warlike operations, whether there be a declaration of war or not. ~" ' ",' '~ . ;, 4. To any toss or damage due to radioactive contamination. 5. Under Coverages A, B, C, D and E (al to Iiabilit~ assuaged by the Insured under any contract or agree~nent, but this exclusion 5(al does not apply to the assumption by the Named Insured of the liability of others for bodily injury or property damage in any' written hold harmless agreement required by a military or governmental authority as a prerequisite to the use of an airport or an airport facility; lb) to an Insured under this poIicy who is also an Insured under,t contract of nuclear ener~ liability insurance issued by Ihe Nuclear Energy Liability Insurance Association or the Mutual Atomic Energy Liability Underwriters and in effect ar the time of the occurrence resulting in such injury, sickness, disease, death or destruction; provided, such contract of nuclear energy liability insurance shall be deemed to be in effect at the time of such occurrence notwithstanding such contract has terminated upon exhaustion of its limit of liability; (c) (il To claims directly or indirectly occasioned by, happening through or in consequence of: t. noise (whether audible to the human ear or not), vibration, sonic boom and any phenomena asso- ciated therewith, 2. pollution and contamination of any kind whatsoever, 3. electrical and electromagnetic interference, 4. interference with the use of property, unless caused by a crash or collision of aircraft or a recorded in flight emergency causing abnormal aircraft operation. (ii) with respect to any provision in the policy concerning any duty of the Company to investigate or defend claims, such provision shall not apply and the Company shall not be required to defend: 1. claims excluded by paragraph (c) (il or 2. a claim or claims covered by the policy when combined with any claims excluded by paragraph (c) fi) referred to below as "Combined Claims". (iii) In respect of any Combined Claims, the Company shall (subject to proof of loss and the limits of the policy) reimburse the Insured for that portion of the following items which may be allocated to the claim or claims covered by the policy: 1. damages awarded against the Insured and 2. defense fees and expenses incurred by the Insured. (d) To claims in respect of death, bodily in}ury, illness or disease of any person or persons and/or damage to or destruction of property caused by or resulting from the use by the Insured or his agent of any forms of chemical dispersed from the aircraft. Under Coverages A, C and D (al to any obligation for which the Insured or any carrier as his insurer may be held liable under any worker*s compensation, unemployment compensation or disability benefits law, or under any similar law; (b) to bodily inlury to any employee of the Named Insured arising out of and in the course of his employment by such Named Insured; (c) to bodily iniury or death of any person who is a Named insured. Under Coverages B and D to property damage to property owned, occupied, rented or used by, or in the care, custody or control of the Insured or carried in or on any aircraft, but this exclusion does not apply; as respects the Named Insured, to: (at damages not exceeding $250 for damage or loss of the personal effects and baggage of any g~est passenger in any one occurrence; or (bi damages not exceeding $t,O00~ny one occurrence for damage to hangars not owned by the Named Insured. Under Coverages F and G (al to loss or damage due to conversion, embezzlement or secretion by any person in possession of the aircraft under a bailment, lease, rental agreement, conditional sale, purchase agreement, mortgage or other encum- brance, nor for any loss or damage during or resulting therefrom; i lb) to wearing apparel and other personal effects; (el to loss or damage which is due and co?fln · .... ,~ 7 thereof by any government or governmental authority or agent (whether secret or otherwise) or by any military, naval or usurped power, whether any of the foregoing be done by way Of requisition or otherwise and whether in !'ime of peace or war and whether lawful or un(awful; damage to turbine engines caused by excessive heat which resul/rs from operations, attempted operation or shutdown of the engine, LIMIT OF COMPANy's LIABILITY ALL COVEP. AG ES (Other Insurance) Except with respect to insurance afforded by Special Insuring Agreements I and Il and to insurance specifically purchased by the Named Insured to appIy in excess of this policy, if there is other insurance in the Insured's name or olherwise, against loss, liabiiity or expense covered by this policy, the Company shall not be liable under this policy for a greater proportiop of such loss, liability or expense than the applicable limit of the Company's liability bears to the total applicable limit of liability of alt valid and collectible insurance against such Ioss, liability or expense. Insurance afforded by Special Insuring Agreements I and It shall be excess insurance over any other valid and collectible insurance available to the Insured, either as Insured under a policy applicable to the aircraft or otherwise and if such other itasurance shall have been written through the Aviation Mangers as primary insurance, then the Company's limits of LiabiIity under this policy shall be reduced by the appticable limits of such other policy. COVERAGES A, B, C AND D (Total Liability) Regardless of the number of (1) [nsureds under this policy, (2) persons or organizations who sustain bodily miury or property damage, (3) claims made or suits brought on account of bodily injury or property damage, or (4) aircraft to which this policy applies, the Company's liability is limited as follows: Coverages A and C. The total liability of the Company for all damages, including damages for care and loss of services, because of bodily iniury sustained by any person as the result of any one oco_:rrence shall not exceed the limit of liability stated in the Declarations as applicable to "each person". Subject to the above provision respecting "each person", the total liabdity of the Company for all damages, including damages for care and loss of services, because of bodily injury sustained by two or more persons as the result of any one occurrence shall not exceed the limit of liability stated in the Declarations as applicable to "each occurrence". Coverage I3. The total liability of the Company for all damages because of al1 property damage sustained by one or more persons or organizations as the result of any one occurrence shall not exceed the limit of liability stated in the Declarations as applicable to "each occurrence". Coverage D. The total liability of the Company for all damages, including damages for care and loss of services, because of bodily injury or property damages sustained by one or more persons or organizations as the result of any one occurrence shall not exceed the limit of Iiabdi~ stated in the Declarations as applicable to "eact~ occurrence". And f~rther provided that if the Declarations are completed to show "passenger Liability limited to", the total liability of the Company for all damages, including damages for care and loss of service because of bodily injury to pas- sengers shall not exceed: (a) as respects any one p~ssenger, the amount stated in the Declarations as applicable to "each person," "regard- tess of the number of persons bringing a claim. as respect two or more passengers, subiect to the above provisions respecting any one passenger, the amount stated in the Declarations as applicable to "each person" multiplied by the number of passengers on board the aircraft or by the number of passenger seats as stated in Item 5 for aircraft involved (whichever is less), but in no event shall the Company's Liability for all bodily iniury (including passenger bodily injury) and property damage exceed the limits stated in the Declarations as applicable to "each occurrence". For the purpose of determining the limit of the Company's liability, ali bodily iniury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one oCCurrence. COVERAGES A, B, C AND D (Severability of Interests) The insurance afforded applies separately to each Insured against whom claim is made or suit is brought, except with respect to the limits of the Company's liability. COVERAGE E (TotaI Liability) The limit of liability stated in the Declarations as applicable ~to "each person" is the m t of the Company's h~b l~ty for all medical expenses incurred by or on behalf of each person who sustains bodily injury, sickness, or dlsease, including death resulting therefrom, in any one occurrence, the limit of liability stated in the Declarations for Coverage COVERAGE F AND G (Total Liability) With respect to total loss, the Company will pay the insured value of the aircraft, as stated in the Declarations, subiect to any applicable deductible. With respect to partial loss, the Company will pay, subiect to any a~plicable deductible as hereinafter provided: (1) If repairs are made by other than the Named Insured, the cost to repair the damaged property with met-hod, of t~ansport ng new,and/or damage& pa~ts.,and/or damaged aircraft to the place of tepiir and the return of the repaired aircraft to the place where the loss occurred or the place where the aircraft is regularly based, whichever is nearer; (2) if repairs are made by the Named Insured, the total of the following: (al actual,cost to the Insured of material of like kind and quality: (b) actual wage~.paid for labor, excIuding any overtime; 100% of item (b) in lieu of overhead and supervisory services; (d) cost of the least expensive, reasonable method of transporting new and/or damaged parts and/or damaged aircraft to the place of repair and the return of the repaired aircraft to the pIace where the loss occurred or the place where the aircraft is regularly based, whichever is nearer. The amount due under this policy with respect to partial loss shall in no event exceed the amount due were the loss payable as a total loss. In any event, when the amount paid or'payable hereunder is equal to the amount payable as a total loss, any galyage value remaining shall inure to the benefit of the Company. Equipment instalIed in the aircraft subsequent to the effective date of coverage shaIt be considered a part of the aircraft, and the salvage value thereof shaB inure to the benefit of the Company. There shall, however, be no abandonment of any damaged property without the consent of the Company. if the ioss is due to theft, the Company shall have the right to return the stolen property at any time prior to actual payment of the claim hereunder, with payment for aoy physical damage sustained thereto. DEFENITION$ When appearing in this policy: "Aircraft" means the aircraft described in the Declarations or any Aircraft qualifying under the provisions of the Special Insuring Agreements and shall include propulsion systems, operating, navigation and radio~quipment-.u.suat~ attached thereto, and parts and repair equipment which are standard for the make and type of aircraft. Parts tem- porarily detached from the aircraft which have not been replaced by other similar parts shall be deemed part of the aircraft. Aviation fuel shall not be deemed part of the aircraft. "Aviation Managers" means Phoenix Aviation Managers, Inc. and Phoenix Aviation Managers (Texas), Inc. "Bodily Injury" means bodily injury, sickness, disease or mental anguish sustained by any person which occurs during the policy period, incIuding death at any time resulting therefrom "Charter" means used principally in the business of the insured, including passenger or freight carrying for hire or reward and Pleasure and Business uses, but excluding instruction of or rental to others. "Commercial" means u~ed principally in the business of the insured, including student instruction, passenger or freight carrying for hire or reward, rental to others for the purpose of Pleasure and Business and those uses defined under Pleasure and Business. "Disappearance" means missing and not reported by sixty days after commencing the last known flight. "FederaI Aviation Administration" means the duly constituted authority of the United States of America having jurisdiction over civil aviation, or its duly constipated equivalent in any other country. "In Flight" means the time commencing with the actual take-off run of the aircraft and continuing thereafter until it has completed its landing roll or, if the aircraft is a rOtorcraft, from the time the rotors start to revolve under power for the purpose of flight until they subsequently cease to revolve. "In Motion" means while the aircraft is moving under its own power or the momentum generated therefrom or while it is in flight and, if the aircraft is a rotorcraft, any time that the rotors are rotating. "instruction and RentaP' means u~ed principally in the business of the Insured, including Pleasure and Business, student instruction and rental to others for the purpose of PIeasure and Business uses, but excIuding passenger or freight carrying for hire or reward. "Insured" The unqualified word "Insured" wherever used in this Policy with respect to Coverages A, B, C and D, includes not only the Named Insured but also any person while using or riding in the aircraft and any person or orga- nization legally responsible for its use, provided the actual use is ~ith the express permission of the Named Insured. Except with respect to the Named Insured the provisions of this pa~'agraph do not apply: (a; to any employee with r~ ~t "il,, inj~ r'~ s~''~ ' d ' ' {b) To any person or organization or to any agent or employee thereof {other than any employee of the Named Insured while acting in the scope and course of his employment by the Named Insured) engaged in the man- ufacture or sale of aircraft, aircraft engines or aircraft accessories or in the operating of an aircraft repair shop, airport, hangar, aircraft sales agency, aircraft rental service, commercial flying service or flying school with respect to any occurrence arising out of such manufacture, sale or operations; ir) to any person iother than any employee of the Named Insurgd whfle acting in the scope and course of his employment by the Named Insured) engaged in providing flight instruction for hire or reward; Id) to any person operating the aircraft who has paid or agreed to pay the Named Insured for the use of said aircraft; to th~ ~wner ~r ]ess~r~ ~r any agent ~r emp~yee there~f~ ~f a;~y aircraft which is the subiect ~f the pr~v~si~ns of Special Insuring Agreements I and "Medical Expense" means expenses for necessary medical surgical x-ray or dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing and funeral services, but excluding monuments, head stones or burial plots. "Named [nsure~" means the person or organization named in Item 1 of the Declarations. "Occurrence" means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage during the policy period neither expected nor intended from the standpoknt of the Insured, but the definition shall not be construed so as to preclude coverage for bodily injury or property damage resulting from efforts to prevent dangerous interference with the operation of the aircraft. "Partial Loss" means any physical damage loss which is not a total loss. "Passenger" means any person in, on, or hoarding the aircraft for the purpose of riding or flying therein or Mighting therefrom after a flight or attempted flight therein, including pilot(s) or crew member(s). "Physical Damage" means direct and accidental physical loss or damage to the aircraft, hereinafter called loss, but doe,-not i~ciude loss of use-or any residual depreciatiolx in~value~ if any, after repairs have been made. "Pleasure and Business" means used in the business of the Insured, including personal and pleasore uses, but excluding an7 operation for hire or reward. Cost reimbursement shall be included within the definition of Pleasure and Business provided that such cost reimbursement is limited to: (1) Fuel; oil, lubricants, and other additives (2) Expenses of the crew, including food, lodging, and ground transportation, but excluding salary or wages (3) Hangar and tie-down costs away from the aircraft's base of operation {4) Insurance obtained for the specific flight (S) Landing fees and similar assessments (6) Customs, foreign permit, and similar fees directly related to the flight (7) In flight food and beverages "Premises" means such portions of airports as are designated and used for the parking or storage of aircraft, including premises owned by, or leased for more than thirty days to, the Named Insured. "Property Damage" means (a) physical injury to or destruction of tangible property which occurs during the policy ~eriod, including Ioss of use thereof at any time resulting therefrom, or (b) los5 of use of tangible property which has not been physicafly iniured or destroyed, provided such loss of use is caused by a covered occurrence. "Total Loss" means any physical damage loss for which the "cost to repair" when added to the "salvage value'~ (the value of the aircraft after physical damage and prior to repairs) equals or exceeds the Insured Value of the aircraft as set forth in item 5 of the Declarations. Disappearance or theft of the entire aircraft shall be considered as a total CONDITIONS APPLICABLE TO COVERAGES A, B, C AND D (BODILY INJURY AND PROPERTY DAMAGE) 1. NOTICE OF OCCURRENCE. When an occurrence takes place written notice shall be given by or on behalt of the Insured to the Aviation Managers at their nearest office as soon as practicable. Such notice shaIl contain partic- ulars sufficient to identify the Insured and also reasonably obiainabte information respecting the time, place and cir- cumstances of the occurrence, the names and addresses of the iniured and of availabIe witnesses. 2. NOTICE OF CLAIM OR SUIT. If claim is made or suit is brought against the Insured, the Insured shaft imme- diately forward to the Aviation Managers every demand, notice, summons or other process received by t~im or his rep- resentative. 3. St~VERABILITY OF iNTEREST. The term "Insured" is used severally and not collectively, hut the incIusion herein of rriore than one Insured shall not operate to increase the limits of the Company's liability. 4. ACTION AGAINST COMPANY. No action shall lie against the Company in res t ''~ C~ .... ~ ~ C' nr'd Any person or organization or the legal representative thereof who has secured such iudgment of written agreement shall thereafter be entitled t(> recover under this policy to the extent of the insurance afforded by this policy. Nothing contained Jn this policy shah give any person Or organization any right to ioin the Company as a co-defendant in any action against the Insured to determine the ]nsuted's liability. g. BANKRUPTCY AND INSOLVENCY. Bankruptcy or insolvency.of the Insured or of the lnsured's estate shalI not relieve the Company of any of its obligations hereunder. 6. FINANCIAL RESPONSIBILITY LAWg. Such insurance as is afforded by this policy shall comply with the pro- visions of any financial responsibility law of any State or Province which shall be applicable to aircraft with respect to any such liability arising out of the ownership, maintenance or use of the aircraft during the policy period, to the extent of the coverage and limits of liabihty required by such law, but in no event in excess of the limits of liability stated in this policy. The Insured agrees to reimburse the Company for any payment made by the Company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph. APPLICABLE TO COVERAGE E (MEDICAL PAYMENTS) 7. MEDICAL..REPORTS: PROOF AND PAYMENT OF CLAIM. AS soon as practicable the iniured person or someone on his behalf st~alI give to the Company written proof of claim, under oath if required, and shatI, after each request from the Company, execute authorization to enable the Company to obtain medical reports and copies of records. The injured person shah submit to physical examination by a physician selected by the Company when and as often as the Company may reasonably require. The Company may pay the injured person or any person ot organi- zation tendering the services and such payment shall reduce the amount payable hereunder for such iniury. Payment hereunder shall not constitute admission of liability of the Insured, or except hereunder, of the Company. 8- ACTION AGAINST COMPANY. No action shall lie against the company in respect of Coverage E unless, as a condition precedent thereto, there shaII have been full compliance with ail the terms of this policy, nor until thirty (30) days after the required proofs of claim have been filed with the Company. APPLICABLE TO COVERAGES F AND G (PHYSICAL DA2dAGE) 9, INSURED'S DUTIES X4rHEN Logs OCCURS. When loss occurs, the Insured shall: (a) protect the aircraft, provided the Insured is able to do so, whether or not the Io55 is covered by this policy., and any further Ioss due to the tnsured*s failure to protect shall not be recoverable under this policy; reason- able expense incurred in affording such protection shall be deemed incurred at the Company's request; (b) give notice thereof as soon as practicable to the Aviation Managers, and, also, in the event of theft, to the police, but shall not, except at his own cost, offer to pay any reward for recovery of the aircraft; (c) file proof of loss with the Aviation Managers, or the company, within sixty (60) days after the occurrence of loss, unless such time is extended in writing by.the Aviation Managers or the Company, in the form of a sworn statement of the Named Insured setting forth the interest of the Named Insured and of all others in the property' affected, any encumbrances thereon, the actual cash value thereof at time of loss, the amount, place, time and cause of such loss, and the description and amounts of all other insurance covering such property. Upon the Company's request, the Named Insured shah exhibit the damaged property to the Company, and produce for the Company's examination ail pertinent records and sales invoices, or certified copies if originals be lost. permitting copies thereof to be made. all at such reasonable times and places as the Company shalI designate. I0. APPRAISAL. If the Named Insured and the Company fail to agree as to the amount of loss, each shall, on the written demand of either, made within sixty (60) days after receipt of proof of loss by the Company, select a competent and disinterested appraiser and the appraisal shalI be made at a reasonabIe time and place. The appraisers shall first select a competent and disinterested umpire, and failing for fifteen (lg) days to agree upon such umpire, then on the request of the Named Insured or the Company, such umpire shall be selected by a iudge of a court of record in the county and state in which such appraisal is pending. The appraisers shah then appraise the loss, stating separately the amount of loss, and failing to agree shah submit their differences to the umpire. An award in writing of any two shall determine the amount of loss. The Named Insured and the Company shall each pay his or its chosen appraiser and shah bear equally the other expenses of the appraisal and the umpire. The Company shaIl not be held to have waived any of its rights by any act relating to appraisal. 1 I. PAYMENT FOR LOSS: ACTION AGAINST COMPANY. Payment for loss may not be required nor shall action lie against the Company in respect of Coverages F and G unless as a condition precedent thereto, the Named Insured shall have comp/ied with ail the terms of this policy nor until sixty (60) days after proof of loss is filed and the amount of loss is determined as provided in this policy, nor shall any action lie against the Company unless commenced within twelve (I 2) months after the happening of the loss. 12. NO BENEFIT TO BA~LEE. The insurance afforded by this poIicy shall not inure directly or indirectly to the benefit of any carrier or bailee liable for Ioss to the aircraft. 13. AUTOMATIC REINSTATEMENT. In the event of loss, whether or not covered by this poiicy, the amount of insurance in respect to any aircraft, shall be reduced as of the time and date o( loss by the amount of such loss and such reduced value shall continue until repairs are commenced when the amount of insurance shall be automatically increased by the value of the completed repairs until the amount of insurance is fully reinstated or the policy has expired. APPLICABLE TO ALL COVERAGES I4. ASSISTANCE AND COOPERATION OF THE INSURED. The Insured shall cooperate with the Company and, upon the Company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of stats. Further, upon the Company's request, the Insured shall submit to examinations under oath by anyone, designated by the Company. The insured si;all not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of occur- 15 INSPECTION AND AUDIT. The Company or the Aviation Managers shall be permitted to inspect the aircraft and any records pertaining thereto during the policy period or within-one year thereaften 16: SUBROGATION. Except in respect to Coverage E, in the event of any payment under this policy, the Company shall be subrogated to all the Insured's rights of recovery therefor against any person or organization and the Insured shall execute and deliver instruments and papers and do whatever else is necessary tO secure such rights. The Insured shall do nothing after the loss to prejudice such rights. 17. CHANGES. Notice to any' agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this policy or estop the Company from asserting any right under the terms of this policy; nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part hereof s;gned by the Aviation Managers. 18. ASSIGNMENT. Assignment of interest under this policy shall not bind the Company until its consent is endorsed hereon by the Aviation Managers; if, however, the Named Insured shall die or be adjudged bankrupt or insolvent within the policy period, this policy unless canceled, shall if written notice be given to the Company within sixty (60) days after the date of such death or adjudication, cover (1) the Named lnsured's legal representative as the Named Insured, and (2) subject otherwise to the provisions of the definition of Insured, any person having proper temporary custody of the aircraft, as an Insured, until the appointment and qualification of such legal representative but in no event for a period of more than sixty (60) days after the date of such death or adjudication. 19. CANCELLATION. This policy may be cancelled by the Named Insured by surrender thereof to or by mailing to the Aviation Managers written notice stating when thereafter the cancellation shall be effective. This policy may be cancelled by the Company or the Aviation Managers by mailing to the Named insured at the address shown in this policy written notice stating when not less than thirty (30) days (ten (10) days if for nonpayment of premium) there- after such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice. The time of the surrender or the effective date and hour of cancellation stated in the notice sball become the end of the policy period. Delivery of such written notice either by the Named Insured, the Company or the Aviation Managers shall be equivalent to mailing. 20. RETURN PREMIUM. If the Named Insured cancels, earned premium shall be computed in accordance with the customary short rate tabte and procedure. If the Company or the Aviation Managers cancel, earned premium shall be computed pro rata. Premium adjustment may be made either at the time cancellation is effected or as soon as prac- ticable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancel- lation. The Company shall not be liabte for any return physical damage premium in respect to an aircraft on which a total loss has been paid. 21. FRAUD OR MISREPRESENTATION. This policy shall be void if the Named Insured has concealed or misrep- resented any material fact or circumstance concerning this insurance or the subject thereof or in case of any fraud, attempted fraud or false swearing by the Named Insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss. 22. TERMS OF POLICY CONFORMED TO STATE LAWS. Terms of this policy which are in conflict with the laws of the State wherein this policy is issued are hereby amended to conform to such laws. 23. DECLARATIONS. By acceptance of this policy the Named Insured agrees that the statements in tt~e Declarations are his agreements and representations, that this policy is issued in reliance upon the trath of such rep- resentations and that this policy embodies all agreements existing between himself and the Aviation Managers, the Company or any of their agents relating to this insurance. [N WITNESS WHEREOF, the Company has caused this policy to be executed and attested, but this policy shall not be valid unless countersigned on the Declarations Page by a duly authorized agent of the Company' and approved by the Aviation Managers. OLD REPUBLIC INSUR3LNCE COMPANY DECLARATIONS POLICY NUMBER AV 4502204 RENEWAL OF: AV 4502203 ITEM 1. NAMED INSURED: CHARTAIRE,' INC. 11090 AIRPORT ROAD DUBUQUE IA 52003 PREMIUM FINANCED ITEM 2. POLICY PERIOD: FROM AUGUST 01, 1998 TO AUGUST 01, 1999 12:01 A.M. STANDARD TIME AT THE ADDRESS IN ITEM t. ITEM 3. The insurance afforded is only with respect to such of the following coverages as are indicated by specific premium charge or charges. The limit of the company's liability against each such coverage shall be as stated herein, subject to all of the terms of this policy having reference thereto. This policy is completed by Aircraft Hull and Liability Form PAM-AV2. ITEM 4. LIABILITY COVERAGES D. SINGLE LIMIT BODILY INJURY, INCLLrDING PASSENGERS, AND PROPERTY DAMAGE: PASSENGER LIABILITY LIMITED TO: E. EXPENSES FOR MEDICAL SERVICES OTHER LIAB COVERAGE - SEE ENDORSEMENTS LIMITS OF LIABILITY LIAB EACH PERSON EACH OCCURRENCE PREMIUM **** $ 1,000,000 $ 9,724 $ 100,000 **** $ 1,ooo $ s,ooo $ o **** **** $ 750 LIAB. TOTAL: $10,474 ITEM 5. Description of Aircraft and Physical Damage Coverage hereunder: F.A.A. REG. SEATS INSURED AIRCRAFT NO. YEAR MAKE AND MODEL CREW PASS. VALUE 1. --NT00CG 1979 TWIN COMMANDER- 700~ 1 5 $225,000 2. N58RF 1987 DSA-1 SMITH MINIPLANE ~v 1 N/A **** 3. N6631L 1970 PIPER PA-31 1 7 $185,000 4. N55287 1973 PIPER PA-28R-200 1 3 $50,000 5. N63053 1976 CESSNA 150 1 t $23,300 6. N54958 1976 PIPER PA-31 1 6 $235,000 7. N3916X 1975 PIPER PA-34 SENECA 1 5 $120,000 POLICY NI/MBER AV OLD REPUBLIC INSURANCEcCOMPANY DECLAR3tTIONS 4502204 ~ PAGE 2 1 3 5 6 7 PHYSICAL DAMAGE COVERAGE PREMIUM F: ALL RISK: GROUND & FLIGHT $ 3,512 F: ALL RISK: GROUArD & FLIGHT $ 2,889 F: ALL RISK: GROUI~D & FLIGHT $ 2,064 F: ALL RISK: GROUND & FLIGHT $ 1,484 F: ALL RISK: GROUI~D & FLIGHT~ $ 3,666 F: ALL RISK: GROLrND & FLIGHT $ 2,580 DEDUCTIBLES NIL ON FIRE AND THEFT NOT IN MOTION IN MOTION $ lOO $ 5oo $ 100 $ 5oo $ loo $ 5oo $ 100 $ 500 $ 100 $ 500 $ ~oo $ 5oo PHYSICAL DAMAGE TOTAL: $16,195 POLICY PREMIUM: $26,669 ITEM 6. Pilots: When in flight the aircraft will be piloted only by the following pilots, provided he/she has a valid pilot's certificate and a valid medical certificate, each appropriate to the flight and the aircraft: AS ENDORSED ITEM 7. The aircraft will be used for AS ENDORSED Endorsements forming a part of this policy on effective date in Item 2 above AV337(02-92), AV807(02-92), AV712(12-96), AV307(07-97), AV3!6(03-95), AV700(07-92), AV5t2(08-92), AV206 (01-92), AV374(06-97), AV343(01-92), AV318(01-92), AV390(07-94), PA371(02-96Z), AV213(07-98), AV347(01-92), AV375(12-91), AV401(08-92). ITEM 8. LOSS PAYABLE: Any loss under coverage F or G is payable as may appear to the named insured and/or AS ENDORSED AS RESPECTS N6631L: COMMERCIAL TRUST ~ SAVINGS BANK 600 LAKE AVENUE STORM LAKE IA 50588 AS RESPECTS N55287: COMmeRCIAL TRUST AND SAVINGS BANK 600 LAKE AVENUE STORM LAKE IA 50588 interest COMPANY COPY OLD REPUBLIC INSUPJ~C~ COMPANY DECLARATIONS POLICY NUMBER AV 4502204 PAGE AS RESPECTS N54958: COMMERCIAL TRUST AND SAVINGS BANK 600 LAKE AVENUE STORM LAKE IA 50588 AS RESPECTS N3916X: COM~ERCIAL TRUST AND SAVINGS BANK 600 LAKE AVENUE STORM LAKE IA 50588 ITEM 9. The named insured is and shall owner of the aircraft and the aircraft other than as indicated in Item 8. remain the sole and unconditional is not subject to any encumbrance PRODUCER: AIRSURE, LTD. 25548 GENESEE ~P_AIL ROAD GOLDEN CO 80401 Countersigned 3 By (Authorized Representative) PAM-AV1A (0786) 19 Phoenix Aviation Managers (Texas), Inc. Approved by Aviation Managers COMPANY COPY FINANCED PREMIUM ENDORSE~NT It is agreed that: ~ The premium for,this policy has been ~[~nanced in whole or in part through AICREDIT/AICC0 ~ 777 SOUTH FIGUEROA STREET ~ :: SUITE 1401 LOS ANGELES CA 900175418 (herein. called the Lender) under an agreement assigning certain rights of the insured to the Lender, therefore: Ail return premiums under this policy shall be payable to the said Lender and the Named Insured, as their respective interests may appear; and (b) The said Lender shall have the right to cancel or cause to be cancelled in the Named Insured's name and stead this policy; and (c) Loss, if any, under this policy shall be and payable to the Named Insured and [he respective interests may appear. adjusted with the Named Insured said Lender, as their Nothing herein contained shall vary, alter~ waive or extend any of the terms, provisions, representations, conditions or agreements of the policy other than as above stated.' This endorsement becomes effective AUGUST 01, 1998 to be attached to and hereby made a part of Policy No. AV 4502204 issued thru OLD REPUBLIC INSUP~ANCE COMPANY, issued to: CHARTAIRE, !NC. tl090'AIRPORT ROAD DUBUQUE IA 52003 This endorsement shall not be valid unless approved by the Aviation Managers of the company. Date of issue 08-20-1998 Phoenix Aviation Managers (Texas), Inc. BY AV614 (12-91) OLD REPUBLIC INSURANCE COMPAArY PURPOSE OF USE - A~EN-D IT IS AGREED THAT ITEM 7 OF THE DECLAPJ~TIONS IS COMPLETED TO READ AS FOLLOWS: PURPOSE OF USE A. AS RESPECTS N63053: INSTRUCTION AND~ RENTAL TO INCLUDE PIPEL!NE/POWERLINE PATROL B. AS RESPECTS N3916X, N54958 AND N6631L: CHARTER USE- C. AS RESPECTS N700CG AND N58RF: PLEASURE AND BUSINESS USE DJ AS RESPECTS ALL OTHER AIRCP~AFT: INSTRUCTION AND RENTAL USE Nothing herein contained shall vary, alter, waive or extend any of the terms, provisions, representations, conditions or agreements of the policy other than as above stated. This endorsement becomes effective AUGUST 01, 1998 to be attached to and hereby made a part of Policy No. AV 4502204 issued thru OLD REPUBLIC INS~CB COMPANY, issued to: CPLARTAIRE, INC. 11090 AIRPORT ROAD DUBUQUE IA 52003 This endorsement shall not be valid unless approved by the Aviation Managers of the cQmpany. Date of issue 08-05-1~98 Phoenix Aviation Managers (Texas), Inc. AVT00 (07-92) BY COMPANY COPY OLD REPUBLIC INSURANCE COMPANY PURPOSE OF USE - APLEN]D IT IS AGREED THAT ITEM 7~OF THE DECLARATIONS IS COMPLETED TO READ AS FOLLOWS: A. PURPOSE OF USE - AS RESPECTS N63053: INSTRUCTION ANDRENTAL TO INCLUDE PIPELINE/POWERLINE PATROL B. AS RESPECTS N3916X, N54958 AND N6631L: CHAR~ER USE C. AS RESPECTS N700CG AND N58RF: PLEASURE AND BUSINESS USE D. AS RESPECTS ALL 0TEER-AIRCP~AFT: INSTRUCTION AND RENTAL USE Nothing herein conta'ined shall vary, alter, waive or extend any of the terms, provisions, representations, conditions or agreements of the policy other than as ~-bove s~ated. This endorsement becomes effective AUGUST 01, 1998 to be attached to and hereby made a part of Policy No. AV 4502204 issued thru OLD REPUBLIC INSUP_ANCE CONfPANY, issued to: CHA~TAIRE, INC. 11090 AIRPORT ROAD DUBUQUE IA 52003 This endorsement shall not be valid unless approved by the Aviation Managers of the cQmpany. Date of issue 08-05-1~98 Phoenix Aviation Managers (Texas), Inc. AVT00 (07-92) BY COMPANY COPY 05/26/00 09:25 FAX 651 554 810g PHDEb-tX AYIATIDN ~[ANAGER L~021 COMPRFHI:N$iV~: GENE'I:LAL LIABILITY INSURANCE -- COVEI:LAGE PART . COVEP. AG[ A -- BODILY IN[JURY COVEP-J, GEE -- PROPER~-¢ DAMAG~ Th e ccm pc~y wdl p~ on behalf ~[ ~he insur~ all sums wh B. p~Fe~ the comp~ n7 sh~ll h~e ~he ff~ht and du~ ~o ~efen~ cny su~ ~inst ~r~ g~und]e~, Fake or ~audule~l, and m~ mck~ ~ucn inv~g~ tion a~ se~iemcnl o[ any'claim ar suit as ~t deems ex~bn~, · e c~mpany ~ha[l nat be ~blig~d tO ~7 any claim or judgement ~i~b[li~ h~s be~n ~hau~ by payment of iudgemen~ ~r ~a~le [al to liab~J~ as~m~ by ~a ~umd un,ar ~y c~n~acf ~nsvre~s p~ducfs or ~ w~r~n~ tha~ ~rk pmr~ by 'bi ~ bodily ]njuff ~ p~ d~m~ ~d~in~ ou~ ~[ own~h~p, m~Mten~nc~, operation, use, J~d~ng or unload- ing ~ (2) any ~ih~r automobile or ~ra~ aperot~ by any bu~ th? ~c~v~ion does not apply ~ ?he,~n~ ~ ~n aut~mob~[~ is n~ owned by o~ ren~ or b~n~d to th~ ~o the nomad ~e o~urs ~ ~m p~em~ o~d by, ~nted to ~n~oll~ by ~he named i~l but ~hls ~lus[on ~ the ~su~d vnd~ a~ incid~l or no~ d~[~r~, c~vfl w~r. ~n~rr~ff~n, reb~lron or lo bodily ir~jur7 or propar'~' damag~ far which': th or org~n[Za~on eng~ed i~ ~e business a~ monu~C~urM~ d;~ibutiag, :ailing ar se~ing alcoholic beve~ges or own ~r ar ~essor of ~re~i~.s u~d ~r sU~ pure,es, by =[ ~he ~ell~n~. se~fng or g~fn~ o~ a~ akoholic bever0g~ {I) b Wolatlon oF any stem., o~in=nc~ or r~vl~t~on, {3) r= a persan under the in~uence aF akoh~[, ~o ¢~y 0blTg~an [or w~ the insu~ er any co. er [n:urer may be hei~ [~obJ~ under ~ny workers' compe~ati:n unempl~en~mpen:~f~n or di~abil~ ~ne~ I~, orun~ any ~m[lar I~; ~o b~[ly iniu~ ~o =~y emp[o~ O~ ~e ;~u~d crfs~nc ~o p~pe~ d=ma~e b {1) pro~ ~n~ or ~cup]~ by =r rented to ~ ;nsu~ [2} prap~ us~ ~ the insured, ar or =s to which th~ ;nsu~d ~: ~r any pu~o~ ~ercisi~ physical ~o J;ab[f[~ under a wfi~n =Me~ =gr~men~ an~ p~ [3] ~gm [other ~an ~ ele~f~) o~fn8 out oF thc use an eleva~r at premises 0~ ~ renl~ ~ =r ~n~[~ed by ta p~pa~ dGmage ~ prem~se~ ~l~en~ ~ ~. named i~u~d ~ng our =[ su~ premis~ ac any pa~ ther~ ~ bod;~ ~niu~ er ~pe~ damage resulting Dom by or far the n~ad {ns~d ~ pe~ ~s ~o. or the pu~ inte~ ~ Ih~ named insu~, ;fsu~ is due la a mi~l~ or de~c~n~ ~n o~ d~i~n, ~ulO, pith, sp~ti~, adve~ng mu~da{ or print~ fn~=n: ~r~ OC}=ing =~t 0~ :u~ pr~u~ ar ~ pad a~ such ~e~F, ~ out aC m~ierf~, p~ or equipment ~shed in conn~Jion fa d~ma~es c{oim~ ~r the wi~r~c{, ~n~p~on, repair, replacement, ~ [=~ oF uae OF Ihe named ]nsu~ u~ ~r work completed by ~ ~ ~e named ~u~d oF cny p~r~ d which ~uch p~uc~s ~ ~:k ~?m ~ ~rt. Page One 470014-00.3 a0487 PAM-APS.W(9/95) 05/26/00 0fl:26 FAX 65]- 5.54 81(I.q PHOENIX AVIATION B[ANAGER market or ['rom us~ becau:a oF any known ar :uspeet.d defect ar deFic~en~ therein. (:) ~c b~ily in[u~ or F~p~ d=m~ arising ou~ oF fiat. [n connection wRh ~h~ preset/an or ~uppre~don use. ~r acqubiHon or intolerance with Ih, proper~ ar ~rsp~ce. U. P~R$ON5 a parm~;p or joint ~.~e, the pa~ner~hip or joint ~nture other ~n an ~hd~dua~, po~ner~[p or [o~nt venture, Or ~toc~oldmr ther~ while o~n~ ~n th~ ~pe oF h~ duff~s upc;n o ~ub[/c highway, oF mobi[~ ~qu[pment (i) an .mployee of the named ins~d while operatbg [i~] ~ny other p~rs~n while opera,nD ~ith the n~mm oF the n~ i~u~ and any per~n or org~niz=~on ]~]ly ~nsible ~r such operaKan, but ~nty i~ ther~ is no othe~ ~a~d and co~ib]e ~vaiJable, either an o pdma~ or ~s ~, ~rsan or orga~iz~n; pro~ed that no per~ ~ o~nJ~tion sh~ll bm an insu~ under :h[~ paragraph (~ ~th res~ ~: Thfs insur~ce d~ no~ app~ to b~ly i~ju~ or p~ d~a~e ~ds~n~ ou~ oF the condua o~ ~ny p~nersh~p or venture ~ ~hich the msu~d ~ a ~r~er or member and which N not ~csi~nct~ ~n ]h~ p~{i~ as a n~med ~nsured, p~ damage. ~e ~m~'s Ibbili~ [s ~he ~chedule as apptic0ble t~ %ach per:an" is ~he ][mi~ company's liab~llb~ for all damcrges because oF bodily ~usroine~ by on. person a~ the resu/f aF any one occurre'nc.; b~ ~ub~l ~ th~ abov~ proYbia~ r~specfing %cch Ferscn'. ~he habili~ oF ~he company ~r ail da modes because o} ~di~ fence shal/n~t exceed the limit a~ bodily inju~ li~fl[~ i~ the schedule =s ~pp~;cabb ~o "~och occurr~nc.'. Sublet )o the ~bm~e provisions r~s~cting %ach person' "e~ch ~¢currence"~ ~he Intel [iabi~i~ 0F thc comocny damages because 0[ [l] all badl~ in[u~ ~nclud~d ~ithln the completed cpevafions hazard and [2} ail bodily Tn~u~ oF bcdily i-iu~ IiabiIi~ ~l¢led in the :chedul. as Co~ra~e ~ ~ The ta~a~ }Ja~]i~ ¢ fha company F~r ~}~ dam- ages b~vse o[ ail ~p~ damaSe sustained by on~ sholt not ~c~ed th~ ~[m;} ~ pmpe~ al=moDe ]i~bili~ sidled in th. ~hedule as oppli~ble fo %ach ocCu~nce% sub[~ r~ the ~ve provis/~ respe~ing '~ch ~u~enceZ p~pe~ damage ~ which this courage applies and d~crib~d in ~ny ~ the numbere~ ~ubpara~roph~ ~1~ ~all no~ ~c~e~ menl rat~ on o re:eipb b~b, including p~pe~ dam- ~an~ct rel~Hng ~o ~uch premTs~ ~r opera,ions, be eluding p~pe~ damage i~uded ]n ~ubparagrcph byT~p~ndent can~ors 0~d gencra~ suFfix[on ~hereo~ ~ tha named insured. Mcluding any mch damage Jar whlch I;~bili~ ~ a:sum~ u~dar Cny inciden- frei contact re~ting Io :such ap~al~ons, b~ thi~ oF maintenanc~ ~ repairs ~1 premises owoed by or rented ~ the n~med Ins~d ar st~ral al~eea~ion~ mt such pr~ buildings ~ o~r structures; a~ and ~l] p~pe~ damage inciud~ within the ~m- pl~d ope~ons under subparagraphs (Ti ~d (2}, s.p~a~eiy with r~pec~ to etch p~[~ ¢w~ ~om prambes o~ed by or renl~ ta the n~med ¢a~r~es A ~d B -- ~r ~ha ~urpo~ Of determini~ the I~m~ or ~he ~m~a~ s ][chiliS, ~ll bo~dy iniu~ ~d p~pe~ IM POUCY PERI~; ~R~TORY age wh/~ oc~ra during th~ p~i~ period w~tMn the Page Two 0.5/26/00 (]9:26 FA.I 651 .554 8109 PKO~NLE AVIATION bL~\'AGER ~]023 ST~uNDARD PROVL~ONS pAA~r - AIRPORT/F/XED ~ OPERATOI~'S LLABILITY POLICY apply for ~r ~¢n~h any su~ bond~: ~easo~pen~ fncu~ bythe J~[~ecom~/'s D~Nmo~ tnju~' mean~ bod~y f~ju~. ~iCkn~ ~r dise~ r~ar~cnta~On or w~n~ made at any time wire r~p~ lh~e:o, but wh~ alt operafi~n~ (o be ~o~ed by or on ~haif of Ce ~ J~u~ ~l ~ ~e of ~e open,ohs h~e ,p~do¢~ wh[~ may r~ulre ~se~e ormain~nancework, unloading thereo[ ot pmpe~ r~s~dm~ ~rom ~ the li~ of the company's ~enera:or$. i~c~uding 5p~ng, welding and buil~ng cleaning ecu~p m~ and g~ph~t explora~io~ ~d ~ell se~ic}~ ~uipmen~: Paqe 'Pnree 05/28/00 09:27 FAX 8-51 -~S4 8109 PHOENI3: AVIATIOn,' 5[ANAGER "~OIkTy terr~or3~' me~ns CONDITIONS ~¥ In~ pol,cy for b~|r~ ~jur), limb{li~/ or for graph. 4. I~u~d's Duties in the Event of Occun-~nce, Claim ~he comp~ of any a~ ~s obligations hereunOer. 05/28/(10 0g:28 FAX 851 $$~ 810§ P[{0ENIX AYIATIOh- MANAGER ~02.~ SO p~Jd ~he remaining insurers tner~ cominue ta contribute equ@t ~r~ o~ bhe re~ini~g amount of ch~ ~o~ undl each sucht~erh~ enid [b~imi~in [ult or,he ~[la~ou~[ or,he IO~ . is pai~ ~o preju¢ce ~u~ ~ of B~ poli~ cr ~D [~e company ~Om ~ng any dgh[ ~r I O. Th_re~. y~ll' l~olbcy. If [his policy iS [~u~ ~r a period o~ three yea~. ~he limi~ 0f the compa~'s li8 bf~i~/s h~l app~ sepa rate~ ~o eec- 1 ~ ~~ By acce~anC~ Ol ~is pnli~. ~he NUCJ ~ [Nr:.R~Y UM~LITYEXCL. USION-(Broad Forf¢ Sure,s1 to ~he Provisions o~paragraph agr~ ~a~ ~e ~1~ and any endo~ement ~ ~ith, r~ardl~ OF ~e~er such endo~em (1~ ~ r~ to ~hi~ an I~a~ under ~e pol[~ polJ~i~ ~ Nucl~r UBbJJ~ ~on, M~ ~mic ~ Ua~i[~ Und~te~ or N~l~r tn~n~ ~da~on Of ~nada, or be an i~ under any ~ch ~o11~ but for m~al a~ r~p~ ~0 ~ich ~l a~ pe~n ar o~¢n~don ~ ~ir~ don P~a~ to ~e Atomic ag~ (h~f. ~der by ~e Uni~ S~ ~, wi[h any ~n or o~nizadon. B. Und~ any Medici ~ym~ Core.e. expenses Mcurred with respect (o ~ injury resu ~t- ing ~om ~e ~ ~e5 ct nu¢~r ~1~ by any pe~on or Und~ ~y Uabilf~ Coverag e, to ~i~ ~ ~ r~ul/in~ from ~e ~ owned ~y. O? Ope~(~ i~ Or ~) h~ ~n di%harged O~ of ~e ~mishing by an I~u~ O~ ~mCe~. 4700q 4-003 00471 Page Five PtII)ENIX AVIATION bIANAGER L~ (126 on~ ~ mea ns any ~ ~ e~men; or ~d compan~L solid Or organi;~don t3~ ~n~ equipment or d~ice d~igned or u~ f~ [t I s~p~r~ng ~illzmg IlL any -~quipment or device used rot the prace~.~n~, ~bdr~ or alloying o~ s~ numar m~i ~f ~t any ~me ', to~l amount ~such mamrial in t~e cu~;ody of We Imun gra~ ai u~ni~m 235. na~O~ O~ prope~, ~ile. c~mprehe~ive p~hal ~q~ ~eFs compreh~sive per so,al i~surance ~ to ~ lia~li~ afis~ out of me ~ne~hb, r~i~er~ ~O ~he 5~e o~ New yar~ POllUTION AND OTi4F.-R Pf.J~L~ E~C]-U:~OH (:L~I.I:c~E ~. ,~appening through o~ i~ co~umc~ 0~: :d~ ~nceff~ce ~th ~e use nf Or~e~ un~ ~us~ by 0r not apD~ and ~he ~mpany shall not be r~uk~ ~o defend; ia} claims exclude~ Dy parag~ph 1 or' eny claims exdud~ by proof of ]~ and ~e [imi~ ~hat pO~on o[the follo~Dg cla~ or claims ~vered by la) ~ a~arded again~ ~e l~ and ~J a~e fees and ~pa~es ;ncu~ ~ t~e ]~. 4. No~ing herein s~it o~rride 47g014...~03 004?'2 0;5/28/00 09:~§ ~,&%. 651 ,5~4 81119 P}D)ENIX AVIATIOM ~[ANAGER ~ 027 L C,~,"/ER.AG E E -- PR -~M kS E5 ~ ~O IC~L 9Ay,',~ F. NTS The ~ompany witf pay to Or for each person who ~ns bod]~ b~di~ [nju~ lia~ili~ Un~er ~ia poti~. Jo/eing or unloaCio~ of ~ny ~ i~ ~he bo~ ~u~ bev~g~ (D in ~oladon a~ ~ ~- ordi~ or ~e b~n~ of menu ~ng. ~budn~ s~fin¢ or S~ or any emoloyee Of any of ~e f~f~Jd~ ~ ~e ~i~ inju~ occu~ on :he :enan(s pz~ 0F me ~u~ p~ ~ and ~es ou~ of and in ~e c~ur~e Of h?s emDfoy- t~ ca any pecan cra~Jcin~, ~n~ng or pa~dpadng ~n a~ pr~i~ ~harge ~ en:ar~ f~r ~O~ a~d~ M me po~i~ su~, any ~play~ ~eof or any pe~on ar ~r~n~ad~n pr~endon or suppr~icn of any o~ ~ for~obg, u, UMl~ OF ~81~ ~e flm[[ of ]fablE~t for Prem~ M~/~I Paymen~ Cove~e ~e campa~'~ Jlabiti~ recall m~i~J ~e for ~o~ [.ju~ eom party und~ ~m~,~{~l ~men~ Cove~e fOral] m¢~ r~uit of a~y o ne ac~d~: call no~ ax~ ~e limit :f lie bfli~ ~ ~ · ~ poI~ appE~ ~ ~e la~, me ~mp~ sha~ no[ ~e ~able for ~0~ ~n ~e ~ount O/~e high~ acpl~ble Ci~ Of I~abili~. me~ fo~in~ a pa~ of ~e ~o,~): "i~ p~m~~ mea~ all ¢~ a~¢ ~ ar adjo~ing On ~d: 470014.-003 00474 0,5/26/00 09:2g ~',&.~. 65~ 55-~ 810§ PEOEKI% AYIATION- 3[ANAGER beha~ .¢r~Jl give to ~he compa.m/*~m;'~ten prOO[ of claim, undo, cop/~ of ~or~ ~e ip~ured pe~on s~fl su~m~ ~o p~ O~efl ~ ~e ~pa~ may r~on~b~ require. ~e company f p~ ~e in~ur~ ~:on or a~ pe~on or o~an~o~ r~deHng se~ ~d ~e pa~ent ~ha~ r~u~ ~e am~[ p~'ab~e her~ c~pany. 470014-003 0047'5 D~vid W. Koche~ Aviation Accident Investigation & Management 131 Stirrup Lane Burr RkJge, Illinois 60521 (630) 654-2727 (630) 654-2772 Fax March 31, 1999 Mr. Chuck Clayton Chartaire Inc. Dubuque Regional Airport Dubuque, Iowa 52003 Sent Via Fax 319-583-9418 & U. S. Mail 3 pages Piper Navajo, N6631L D/L: March 15, 1999 My File: LC993t Dear Mr. Clayton: This letter will confirm our meeting of March 30, 1999 and document our conversation. I have been retained by the insurers of Dubuque Regional Airport and Dubuque Flying Service, to investigate and handle this matter on their behalf. My investigation has revealed that your aircraft was damaged during a towing incident on March 15, 1999. Every effort has been made to promptly address your problem and conclude it in an expeditious and reasonable manner. During our initial meeting on March 22, 1999, you indicated that you desired a quick resolution to this issue, as possible future revenue could be lost while your aircraft was out of service for repair. You further stated that a replacement aircraft was a desirable possibility, as that option could avoid future down time and other potential problem areas. Based on your desires, I indicated that I would i~Lmediately attempt to .obtain settlement options that included the possibility of allowing you to. sell the aircraft- in "as is" condition. During our meeting yesterday, I attempted to present the options available to you at this time. They are as follows: 1) The insurers of Dubuque Regional Airport are willing to offer a total cash settlement of $150,000.00 in exchange for a full release of all claims. This includes providing them with clear title to your aircraft, as well as the aircraft and all components attached to, normally attached to, included in the equipment list, loqbooks and all related aircraft paperwork. The aircraft would be delivered in "as is" condition. 2) A repair estimate has been obtained from Myers Aviatien in the amount of $59,262.53, which includes a time frame of 45 to 60 days to accomplish the repair. All parts necessary to perform the repair have been located by Myers Aviation, and your aircraft will be returned to service with parts of like kind and quality, or new where applicable. This estimate is acceptable and~ Page 2 Mr. Chuck Clayton March 31, 1999 is a very reputable and capable repair facility. You may have the aircraft repaired at this or any facility of your choice based on this figure, and it will be acceptable to the insurers of Dubuque Flying Service. 3) You may have your hull insurers respond to your hull claim, and they will then have a subrogated right of recovery from the insurers of Dubuque Flying Service. You made several statements during our meeting that included the fact that you wanted $185,000.00 for your aircraft, and that figure was not negotiable. Unfortunately, your aircraft was not worth $185,000.00 prior te this da~age~ or a figure even close to that. You provided me with a copy of the current Aircraft Bluebook that indicates a 1970 Piper Navajo. has a current retail price of $147,000.00. This is based on average engine times, etc., and your aircraft, with the exception of paint, is average. The paint is below average and by your own admission, you intended to have the plane painted in the near future. In addition, your aircraft has. had previous damage to the radome, wh'ich has never been repaired, for which you collected an insurance settlement of $9,500.00. ~is fact alone, reduces the market value of the aircraft from whatever figure is applicable. Keep in mind, that the total cash offer of $!50,000.00 accepts the aircraft in "as is" condition, which includes the existing damage. Based on the fact that you have already collected $9,500.00 for unrepaired damage, that increases your total reimbursement accordingly. Your o%rnhull insurers would reduce the value of your aircraft based on existing and unrepaired damage. You further stated that you did not need the insurance money to purchase another aircraft, that you could do so now with your own funds, but that wo~ld jeopardize your potential loss of use claim by doing so. You also added that your insurers would be willing to pay you $185,000.00 for your aircraft at this time. Based on these two statements, you must mitigate your loss, and cannot arbitrarily increase your loss of use or revenue claim, when aiterna~ive options exist. The insurers of Dubuque Regional Airport cannot address an artificially inflated claim, which may be done intentionally. The insurers of Dubuque Regional Airport would like to conclude this matter with you in a fair and reasonable manner, as well as expeditiously. This has been attempted with the offers made yesterday, to which you vehemently responded "no". To date, you have provided no documentation to support your claim of lost revenue, and the estimate from David Flying Service is not representative of the reasonable cost of repair and includes numerous items suck as a complete paint job, new engine cowling, complete propeller and other items that are not acceptable. Page 3 Mr. Chuck Clayton March 31, 1999 ' Another interesting comment made by you yesterday, was that if the aircraft is repaired, you will have it done by Des Moines Flying Service, yet you have not obtained a repair estimate from them. Rather, you provided an estimate from David Flying Service, when you apparently had no intention of using them. The insurers of Dubuque Regional Airport have made an attempt to offer settlement options in an expeditious and fair manner. You rebuked those offers and have not presented them with an actual figure that you expect. Further, you have not presented any documentation to support a claim in excess of what has been offered at this time. I requested, and you agreed to provide me with a .~itten figm~reand supportiDq documentation of your claim, which I await. The cash offer of $150,000.00 is valid until April 9, 1999, afterwhich time it is considered withdrawn. In the event that you choose to repair the aircraft, loss of revenue will only be considered with documentation including all business records and tax returns to support your claim. An arbitrarily inflated loss of revenue claim will not be considered. In the event that you do not wish to deal with us directly, you should, and already should have, reported this to your insurers and have them address your hull claim. It is also important, for you to understand that no settlement will be made, and no money will be paid, without execution of a full and final release. We would certainly like to conclude this matter with you as quickly as possible, and await your reply. Very truly yours, AVIATION ACCIDENT INVESTIGATION David W. Kocher & MANAGEMENT DW-K/dk cc. Mr. Kevin J. Foley Dubuque Regional Airport June 15, 1999 Charles Clayton Chartaire, Inc. P:O. Box 288 Colesburg, Iowa 52035 De/~r Chuck, On June 10, 1999, we discussed the service provided exclusively to Chartaire, thc. by Dubuque Air Service in towing Chartaire's akcraft to and from the ramp in front of Chartaire's leased hangar premise. Dubuque Ak Service has provided this service for nearly five years with some small incidents and glitches, but for the most part, efficiently and unevenlfuliy~ until recently. As I k~formed you in our meeting on June 10~, I am mcei,,qng pressure ro reduce our exposure and liability in our towing operations. Specificatly~ asmming the liability o£towing aircraft for others flee of charge. On June 10, t999, after reviewing your letter dated December 9, 1994, wttich outlines our original towing agreement, we discussed the possl'bility of adding Dubuque Ak Service to your insuraiace policy as an additionally named insured_ This would have allowed Dubutgiu Ak Service to continue transitioning your akcraf~ to and from the ramp in front of your leased premise without any operational interruption. You explained that this *,'as not an option since you would not be covered for loss of use if another incident should occur. We briefly discussed the posa'bility of your employees using our tug to tow. We both dismissed this option. 'You explained that you would not tow, or allow your employees to tow your aiierai5 on the ramp due to the liability involved. Finally, we briefly discussed the possibility of charging f~r towing services. I explained thai: 14a~as reluctant to institute a towing charge for Chartake, or anyone else, for several reasons, not the least being that this was not our intention when we began providing this service to you. We ended our conversation,,~/thout coming too mutually acceptable solution to this situation, at which time you asked for written confirmation of our Jment. The closing paragraph of your letter dated December 9, 1994, which outlines our towing agreement states, "Again, we both realize that operational experiences may necessitate changes in these procedures." Unfommatety, operational experiences have dictated that we change the procedures used to transition your akerai~ from the ramp in front of your leased hangar. Dubuque Air Service can no longer tow airerat5 to and fi`om others' exclusively leased areas, including Chartake's airer- 'ai:[ We witl, of'course, continue to provide our facility, lobby, and support for your passengers as we have in the past. Chuck, I believe this pretty well summarizes the $ilualion and our ¢onversatim~ conomaqing matter. If you have a differem recollection of our eonversa/ion, please do not he~itate to bring it to my attention. I am more than wiltimg to continue searching for an acceptable solution and would invite you to presen~ any ideas you may have. Sincerely, Ke~Sn $. Fol~y FBO Supervisor enclosure: December 9, 1994, Letter ce Kenneth Kraemer, Airport Manager Tom Baklwin, Airport Commission Cl~k~person Doug Brothertdn, Airport Commission Vice-C~person Terry Stanton, Airport Commission Secretar~frreasurer Paul Frommett, Airport Commissioner Rick Ooodi~ Airport Commissioner