Durango Air Services, Inc., owned an aircraft and employed Borcher as a pilot. During a flight in 1995, Borcher was piloting Durango's Cessna aircraft when it crashed, killing Borcher and two passengers, Colt and John Ross. Both Ross families filed a wrongful death and mental anguish claims against Durango and won a judgment of $4 million. At the time of the crash, Durango held a policy with Old Republic Insurance Company. The policy provided for a maximum event limit of $1 million and a per passenger sublimit of $100,000. After Durango files a claim, Old Republic agrees that it is liable on the aviation policy. However, Old Republic claims that the claims made by the passengers' families are included within the $100,000 sublimit because these claims by the passengers' families are derived from the actions for bodily injury (which included mental anguish under the terms and definitions in the policy). Should the mental anguish claims by the nonpassenger families be limited by the $100,000 sub- limit per passenger included in the policy? Discuss.

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Whether the mental anguish claims by the nonpassenger families should be limited by the 100000 subli... View the full answer