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Keywords

tortdefendantwillleaseseizuremarine insurance

plaintiffdefendantprecedentmotionsummary judgmentappellantappellee

Related Cases

Swish Mfg. Southeast v. Manhattan Fire & Marine Ins. Co., 675 F.2d 1218

Facts

Swish Manufacturing Southeast, Inc. owned a 1970 Mitsubishi MU-2G aircraft, which was leased to Wings, Inc. for use in transporting passengers. The lease allowed Wings to use the aircraft without prior notice to Swish, but prohibited unlawful use. However, the president of Wings, William Aylin, piloted the aircraft to the Bahamas to smuggle marijuana, leading to its seizure and damage by Bahamian authorities. Swish sought payment from its insurer, Puritan, which denied the claim based on a policy exclusion for conversion.

Swish's base of operation is in Pine Mountain, Georgia, and the aircraft is used to transport company sales personnel.

Issue

The main legal issue was whether the aircraft was converted under Georgia law, thereby triggering the insurance policy's exclusion for loss or damage due to conversion.

With reference to the exclusion in sub-paragraph 11, the dispositive issue is whether, under Georgia law, there was a 'conversion' of appellee's aircraft.

Rule

Under Georgia law, conversion is defined as the unauthorized assumption and exercise of the right of ownership over personal property belonging to another, which is contrary to the owner's rights. Misuse of property beyond the owner's consent can constitute conversion.

Under Georgia law a conversion is 'the unauthorized assumption and exercise of the right of ownership over personal property belonging to another which is contrary to the owner's right.'

Analysis

The court analyzed the facts and determined that Aylin's actions constituted conversion because he used the aircraft for an unauthorized purpose, which was smuggling. The court referenced Georgia law and the Restatement of Torts, concluding that the unauthorized use of the aircraft by Wings, through Aylin, violated Swish's rights and thus fell under the conversion exclusion in the insurance policy.

On the basis of the foregoing precedents, it is the legal conclusion of this court that the facts in this case support a finding of conversion under the Georgia law.

Conclusion

The court reversed the district court's ruling, concluding that the conversion exclusion applied and that no coverage was available to Swish under the insurance policy. A judgment was entered in favor of the defendants.

The district court was therefore in error in finding in favor of the plaintiffs-appellees on their motion for partial summary judgment.

Who won?

The prevailing party was the Manhattan Fire & Marine Insurance Company (Puritan), as the court found that the conversion exclusion in the insurance policy applied, negating coverage for Swish's claim.

The decision of the district court is reversed and a judgment hereby entered in favor of the defendants-appellants.

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