NW Airlines, Inc. v. Westchester Fire Ins. Co.

In 2002 an uncontrolled, runaway commercial aircraft at Las Vegas’s McCarran International Airport came to a rest at the bottom of an embankment. A maintenance worked had failed to properly engage the parking brake. The resulting property damage and loss-of-use of the aircraft totaled more than $10 million. The aircraft’s owner, Northwest Airlines, obtained a default judgment in Minnesota state court against PALS, the maintenance company responsible for the wreck, then commenced a garnishment action to recover part of the amount from PALS’s insurer, Westchester, which argued that PALS’s failure to provide notice and to cooperate extinguished Westchester’s payment obligation. While acknowledging unanswered questions of state law, the Eighth Circuit affirmed judgment in favor of Northwest. A Clark County ordinance mandates hangar-keepers liability insurance to protect parties like Northwest. Given this purpose, insurance coverage could not be avoided for an insured’s simple failure to satisfy the technical post-loss conditions on statutorily mandated coverage. View "NW Airlines, Inc. v. Westchester Fire Ins. Co." on Justia Law