Illinois National Insurance Co. v. Wyndham Worldwide Operations, Inc.

Jet Aviation contracted with Wyndham Worldwide Operations, Inc. (plaintiff) to maintain Wyndham’s aircraft, including providing insurance for any Wyndham aircraft operations facilitated by Jet Aviation. Initially, Jet Aviation purchased insurance from Illinois National Insurance Co. (defendant) that clearly provided coverage for any “Named Insured” if the aircraft was operated by Jet Aviation. Wyndham was a Named Insured under the policy, along with other Jet Aviation clients. However, one year, Jet Aviation convinced Illinois National to change the wording to provide coverage for any aircraft operated by a “Named Insured.” Both Jet Aviation and Illinois National meant for this change only to clarify that the policy covered Jet Aviation’s clients in many situations; they did not intend to extend the coverage to include any aircraft operation by a client without any involvement from Jet Aviation. A Wyndham employee rented an aircraft without Jet Aviation’s involvement and crashed the plane into a house, killing five people. Illinois National sued for a declaratory judgment that Illinois National’s policy with Jet Aviation did not cover the crash, arguing that the language change that had extended coverage to a client’s use of an aircraft unaffiliated with Jet Aviation was a mutual mistake. Illinois National asked the court to use its equitable powers to reform and rewrite the contract to reflect the parties’ actual contractual intent. The trial court held that because Wyndham had not been a part of the policy negotiations and drafting, there could not be a mutual mistake between Wyndham and Illinois National about the term’s meaning. Therefore, the contract could not be rewritten to eliminate Wyndham’s contractual benefit.