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Carson Helicopters, Inc. v. Houston Casualty Co.

June 16, 2009

CARSON HELICOPTERS, INC. AND CARSON HELICOPTER SERVICES, INC.,
v.
HOUSTON CASUALTY COMPANY



The opinion of the court was delivered by: Norma L. Shapiro, J.

MEMORANDUM

Plaintiffs, Carson Helicopters, Inc. ("Carson") and Carson Helicopter Services, Inc. ("CHS") filed for anticipatory breach of contract and declaratory relief against defendant Houston Casualty Company ("HCC"). HCC filed a Motion to Transfer Venue, or in the Alternative, to Dismiss Plaintiffs' Complaint For Failure to Join Indispensable Parties. The court will grant HCC's motion and order this action transferred to the United States District Court for the District of Oregon.

I. FACTUAL BACKGROUND

This is an insurance action arising after one of Carson's helicopters crashed in Northern California on August 5, 2008 while under contract with the United States Forest Service ("USFS"). Nine passengers died in the crash and four were injured; wrongful death and personal injury litigation soon followed. Plaintiffs bring the present action to resolve a dispute over the insurance coverage limit on the helicopter crash.

A. The Parties

Carson is a Pennsylvania corporation with its principal place of business in Pennsylvania. CHS is an Oregon corporation with its principal place of business in Oregon. Plaintiffs and their affiliates own fifteen helicopters, which they lease for various services such as transport, wildfire suppression, and emergency search and rescue. Plaintiffs also own and develop various proprietary technologies for use on their helicopters. CHS runs Carson's Oregon service and maintenance center, the permanent base for the helicopter that crashed.

HCC is a Texas corporation with its principal place of business in Texas. HCC is not licensed to issue insurance policies directly in Oregon. Instead, HCC issues "surplus line" coverage. Linda Shaddon, an insurance broker with United Risk Solutions, Inc. ("United Risk") in Oregon, brokered HCC's insurance policy on Carson's helicopters. HCC's only communications regarding the policy prior to the crash were with Shaddon and United Risk. (Declaration of Christopher Bonnett ("Bonnett"), ¶¶ 6-7.) United Risk is only licensed as a surplus line broker in Oregon. (Id., ¶ 8.) Carson's corporate headquarters in Pennsylvania had the final authority to approve the policy, but the policy was delivered to United Risk in Oregon. (Id., ¶ 9.)

B. The Insurance Contract and the Crash

On April 1, 2008, Houston issued Aviation Insurance Policy Number 013755-016 ("the policy") to United Risk on behalf of Carson, to cover Carson's helicopters from April 8, 2008 through April 8, 2009. (Plaintiffs' Complaint, ¶¶ 12-13). Paragraph 2 of Policy Endorsement 8 provides "Aviation Products-Completed Operations Liability" coverage up to $25,000,000 for personal injury to passengers resulting from an accident, under certain specified circumstances:

This policy will pay on behalf of the Insured all sums which the Insured shall became legally obligated to pay as damages because of bodily injury and property damage caused by an occurrence and arising out of the Insured's aviation operations and/or the possession, use, consumption, or handling of any goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied, or distributed by the Named Insured or its employees, and then only after such goods or products have ceased to be in the possession or under the control of the Insured.

(Bonnett, exh.1, p. 35 (emphasis added).)

On August 5, 2008, a helicopter covered under the policy crashed while hired by the USFS to assist forest fire-fighting operations in Northern California's Trinity National Forest. (Defendant's Memorandum in Support of its Motion to Transfer (paper no. 12, "Memorandum"), p. 8; Bonnett at 8). The helicopter was carrying two Carson pilots, ten firefighters employed by Grayback Forestry, Inc. under contract with USFS, and one USFS employee. One of the pilots, seven of the firefighters and the USFS employee died in the crash, the other pilot and three firefighters were injured, and the helicopter was completely destroyed. (Memorandum, p. 7-8). HCC has paid Carson $1,900,000.95 under the policy for the loss of the helicopter. (Id., p. 4.) At the time of the crash, the pilots and the firefighters were all residents of Oregon, and the USFS employee was a resident of California. (Declaration of Harold Vines ("Vines"), ¶ 7.)

HCC denies that it is liable to cover plaintiffs for the wrongful death and personal injuries of the passengers. HCC and plaintiffs dispute whether, prior to the crash, Carson employees had relinquished possession and control of the helicopter to USFS. If so, the $25,000,000 ...


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