Town's Insurance Won't Cover Skydive Suit Damages

By: Tim Wood

Topics: Airport , Skydiving

Tandem skydivers descend over Chatham in 2012.

CHATHAM – The town's insurance won't cover damages being sought in a lawsuit by Skydive Cape Cod.

In January, Skydive filed a lawsuit charging the town with breach of contract and civil rights violations for its failure to renew its contract to operate at Chatham Municipal Airport in 2013. The company is seeking $100,000 in damages.

In an April 11 letter to the town, Stephen Hall, the attorney for Old Republic Insurance Company, stated that because the claim does not seek damages for bodily injury or property damage, coverage was declined.

The lawsuit, filed by Barnstable attorney Robert Lawless on behalf of Skydive Cape Cod, does not allege that either the town or the airport commission did anything to injury or destroy the company's tangible property or that Skydive lost the use of its property, according to the letter. The lawsuit also does not provide specific occurrences when such damages happened.

“In light of the allegations made by Skydive in the lawsuit, Old Republic respectfully declines coverage, under Coverage A of the policies, both with respect to defense and indemnity for any liability that Chatham and/or the individual defendants may have to Skydive,” the letter states.

Old Republic Insurance held the town's airport liability policy covering both the town and airport commission from February 2013 to 2015, which covers the period Skydive Cape Cod alleges the town failed to renew its contract.

Skydive operated as a subcontractor to airport operator Cape Cod Flying Circus from 2010 to 2013, but after noise complaints and concerns about safety were raised by residents, Town Manager Jill Goldsmith declined to renew the agreement in November 2013. The agreement had been endorsed by the airport commissioners.

The lawsuit states that because the town had accepted some $6 million in federal aviation funds, it was required to allow all general aviation activities, including skydiving. Skydive filed a complaint with the Federal Aviation Administration in February 2014 charging that the town had violated the so-called Federal Grant Assurances that it signed when receiving airport grants requiring “economic nondiscrimination.” The FAA ruled in favor of Skydive.

The town was subsequently ordered by the FAA to allow skydiving and to issue a request for proposals for skydiving services. Skydive Cape Cod was one of two companies that submitted proposals. However, after a group of residents organized as Citizens for a Safe Chatham Airport sued the town to prevent skydiving from returning to the George Ryder Road facility, the town did not go forward with awarding a contract for skydiving services at the airport.

The town is currently battling civil suits by both Skydive Cape Cod and Citizens for a Safe Chatham Airport. The latter case is scheduled to go to trial in December.