HOUSTON – A Texas court of appeals has reversed part of a lower court decision between an insurance company and an emergency and consulting services company.
“Because we conclude that a fact issue exists about whether Starr (Indemnity & Liability Co.)'s insurance policy covers some of the sums expended, we reverse and remand on the declaratory judgment claim. We also reverse as to equitable subrogation. We affirm, however, on the breach of contract claim because Kenyon (International Emergency Services Inc.) has not established its standing to sue Starr,” Justice Jennifer Caughey wrote in the Nov. 29 court decision.
Kenyon International Emergency Services Inc. sued Starr Indemnity & Liability Co. following the bankruptcy of Seaport Airlines, which had hired Kenyon to help following an airplane crash in 2015.
According to the Appeals Court decision, Kenyon was hired by Seaport Airlines following the flight crash. However, Seaport went bankrupt and did not pay for the services. A bankruptcy court allowed Kenyon to sue Seaport over allegations of breach of contract. It was granted a default judgment that Seaport had to pay for the services. Kenyon then sued Starr, who was Seaport's insurer.
Both Starr and Kenyon filed summary judgment motions and the 80th Judicial District Court in Harris County ruled in favor of Starr.
The details surrounding the case revolve around a crash in July 2015 of a Seaport airplane, which resulted in the death of the pilot and injury to four passengers. At the time, there was an agreement between Seaport and Kenyon that Kenyon would provide emergency and consulting services in situations where it was warranted.
“At Seaport’s request, Kenyon provided, on Seaport’s behalf, services related to the plane crash, including a welfare support line, mental health support for staff and families, and other disaster response services,” Caughey wrote.
Seaport allegedly failed to pay for the services and a district court granted a default judgment to Kenyon of $214,930.07 for breach of the contract and an additional $5,000 for lawyer’s fees.
“In this lawsuit, Kenyon seeks payment from Starr on the theory that the costs it incurred on Seaport’s behalf were covered under Seaport’s aviation insurance policy,” Caughey wrote.
“We conclude that Kenyon adduced sufficient evidence to show that some of its expenditures may be covered under the terms of the policy, raising a fact issue precluding summary judgment for Starr on Kenyon’s claims (absent some other basis for judgment in Starr’s favor). But the same fact issue precludes summary judgment in favor of Kenyon. We reverse the trial court’s judgment on the declaratory judgment,” Caughey wrote.