Appeal by defendant Old Republic Insurance Company from
judgment entered 12 April 2002 by Judge Beverly T. Beal in
Mecklenburg County Superior Court. Heard in the Court of Appeals 20
Pinto Coates Kyre & Brown, PLLC, by Deborah J. Bowers, John I.
Malone, Jr. and Paul D. Coates, for plaintiff-appellee.
Dean & Gibson, L.L.P., by Susan L. Hofer, for defendant-
Plaintiff, as Administratrix of the Estate of Mark Elliott
Carlson, brought this action seeking, inter alia, a declaratory
judgment that defendant Old Republic Insurance Company (hereinafterOld Republic) provided coverage under two insurance policies
issued by it, for claims arising out of the 14 June 1999 crash of
a Cessna aircraft registered to and owned by the David Drye
Company, L.L.C. The aircraft's pilot, Kelly Ward, and three
passengers, David Drye, Ann Drye and plaintiff's decedent, Mark
Carlson, were killed in the crash. At the time of the accident,
Ward was a part owner in Corporate Air Fleet, Inc. (hereinafter
Corporate Air) and owner of Ward's Aircraft Services, Inc.
(hereinafter Ward's Services). Corporate Air maintained its own
planes and those owned by others. In addition, it used its own
planes to provide charter air service to fly persons or products.
Ward's Services supplied aircraft maintenance and service and owned
hangers for the purpose of aircraft storage.
Plaintiff, as administratrix of Carlson's estate, filed a suit
in Mecklenburg County seeking damages for his wrongful death
arising out of the aircraft accident. In the complaint, plaintiff
alleged that Corporate Air and Ward's Services failed to provide
adequate maintenance, repair, inspection or service on the
airplane, and that such negligence contributed to the crash. In
addition, the suit alleged that Ward was negligent in piloting the
airplane and that he failed to provide adequate ground maintenance.
At the time of the accident, there were in force two insurance
policies, an Airport Liability Policy and an Aviation Policy,
issued by Old Republic to Corporate Air and Ward's Services. The
Airport Liability Policy provided comprehensive liability insurance
to both Corporate Air and Ward's Services for ground services such
as maintenance, fuel and oil, and for claims arising out of airportand airport premises operations. The Aviation Policy provided
coverage to Corporate Air for bodily injury liability and property
damage liability arising from the ownership, maintenance and use of
specifically listed aircraft.
After the actions were tendered to Old Republic for defense
and indemnification of Corporate Air, Ward's Services and Ward
pursuant to these policies, Old Republic issued a reservation of
rights letter as to coverage for Corporate Air and Ward's Services,
and denied coverage for Ward. Plaintiff then filed this action
requesting a declaration that coverage existed under the insurance
policies. Old Republic answered, denying coverage and requesting
a declaration to that effect. Plaintiff moved for partial summary
judgment declaring that Old Republic is obligated to indemnify
Corporate Air and/or Ward's Services under the Airport Policy
should the plaintiff prevail in the underlying claim. Old Republic
moved for summary judgment declaring that coverage did not exist
under either policy and therefore, Old Republic would have no duty
to defend or to indemnify for the accident.
The trial court entered an order in which it determined that
Old Republic had a duty to defend Corporate Air and Ward's Services
under the Airport Policy in the underlying wrongful death action,
and that Old Republic's Airport Policy provided coverage to Ward's
Services and/or Corporate Air for damages, if any, in connection
with the maintenance or service of the airplane . . . . Holding
that genuine issues of fact existed as to Old Republic's duty under
the Airport Policy to defend and indemnify the Estate of Kelly Ward
in the underlying wrongful death action, the trial court deniedplaintiff's motion for summary judgment insofar as it sought such
a declaration. Old Republic's motion for summary judgment was
denied. Old Republic appeals.
 An order of partial summary judgment on the issue of
whether an insurance company has a duty to defend in the
underlying action affects a substantial right that might be lost
absent immediate appeal. Lambe Realty Inv., Inc. v. Allstate Ins.
, 137 N.C. App. 1, 4, 527 S.E.2d 328, 331 (2000). Therefore,
this interlocutory appeal is properly before us for review.
 [T]he standard of review on appeal from summary judgment
is whether there is any genuine issue of material fact and whether
the moving party is entitled to a judgment as a matter of law.
Bruce-Terminix Co. v. Zurich Ins. Co.
, 130 N.C. App. 729, 733, 504
S.E.2d 574, 577 (1998). "[T]he evidence presented by the parties
must be viewed in the light most favorable to the non-movant." Id.
Summary judgment is proper where "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that any party is entitled to a judgment as
a matter of law." N.C. Gen. Stat. § 1A-1, Rule 56(c) (2001).
Thus, the issue is whether a genuine issue of material fact existed
as to insurance coverage under the Airport Policy for maintenance
and service of the aircraft.
In interpreting insurance policies, we are guided by the
general rule that in the construction of insurance contracts,
any ambiguity in the meaning of a particular provision
will be resolved in favor of the insured and against theinsurance company. Exclusions from and exceptions to
undertakings by the company are not favored, and are to
be strictly construed to provide the coverage which would
otherwise be afforded by the policy.
Maddox v. Colonial Life & Accident Ins. Co.
, 303 N.C. 648, 650, 280
S.E.2d 907, 908 (1981). When an endorsement provision can be
construed as in direct conflict with the coverage provisions of the
policy, the provisions most favorable to the insured, i.e. those
in the endorsement, are controlling. Drye v. Nationwide Mut. Ins.
, 126 N.C. App. 811, 815, 487 S.E.2d 148, 150 (1997). Since
the objective of construing an insurance policy is to ascertain the
intent of the parties, the courts should resist piecemeal
constructions and should, instead, examine each provision in the
context of the policy as a whole.
DeMent v. Nationwide Mut. Ins.
, 142 N.C. App. 598, 602, 544 S.E.2d 797, 800 (2001).
The Airport Policy provides that Old Republic will pay on
behalf of the insured all damages which the insured is legally
obligated to pay because of bodily injury or property damage. In
addition, Old Republic has the right and duty to defend any such
suit. However, there is an applicable exclusion, upon which
defendant relies, stating that this coverage does not apply:
(b) to bodily injury
or property damage
out of the ownership, maintenance, operation,
use loading or unloading of
(1) any automobile
operated by or rented or loaned to
the named insured
(2) any other automobile
operated by any person in the course
of his employment by the named
According to the policy, if the named insured is designated
in the declarations as other than an individual, partnership orjoint venture, the organization so designated and any executive
officer, director or stockholder thereof while acting within the
scope of his duties as such is considered an insured.
Included in the Airport Policy, immediately after the cover
page, are Special Airport Provisions that apply to the
comprehensive general liability insurance provided by the policy.
This endorsement states:
With respect to the premises designated in the
policy as an airport and all operations
necessary or incidental thereto:
. . .
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
Although defendant argues that if Ward was operating the
aircraft as a principal or employee of Corporate, the exclusion
allowed denial of coverage, the endorsement modifies the applicable
exclusion by omitting the term operate. Reading the two clauses
together, the only time the exclusion applies, thereby disallowing
coverage, is when the aircraft is owned by, rented or loaned to the
insured, or when the aircraft was in flight by or for the account
of the insured. The intent of the Airport Policy was to cover
events arising from the insured's conduct, as long as those events
did not occur in connection with planes that were the property of
the insured. The Aviation Policy, although not at issue before
this Court, provided coverage to the insured for events involving
planes owned, maintained or used by the insured. The Cessna aircraft that crashed in this incident was owned by
the David Drye Company, L.L.C. and it had not been rented by or
loaned to Corporate Air or Ward's Services. The flight, which was
to transport the owners and an employee of the David Drye Company,
L.L.C., was in flight for the account of that company. Therefore,
the trial judge correctly ruled that the Airport Policy provided
coverage should the insured be found liable.
Defendant contends that the trial court erred in granting
partial summary judgment for the plaintiff while denying summary
judgment for defendant because the only question of material fact
was whether Ward provided piloting services as an employee of
Corporate Air or individually as an independent contractor. Since
the Airport Policy covered only ground services and airport
premises operations, the status of the pilot had no effect on
coverage of the Airport Policy. Therefore summary judgment on this
issue was proper.
Because his status as an insured depended on whether Ward was
acting within the scope of his duties as an officer, director or
stockholder with Corporate Air or as an independent contractor, a
genuine issue of material fact remained in regards to coverage for
the Estate of Kelly Ward under both the Airport Policy and the
Aviation Policy. Thus, the court's denial of plaintiff's summary
judgment motion on the issue of whether Old Republic had a duty to
defend and indemnify the Estate of Kelly Ward was proper as was the
denial of defendant's summary judgment motion seeking a declaration
that coverage did not exist under either policy.
Affirmed. Judges McCULLOUGH and LEVINSON concur.