Flying clubs often market themselves as a practical middle ground between sole ownership and traditional aircraft rental. Insurance policies, however, are not always drafted with that middle ground in mind.

A recent Fifth Circuit decision shows what can happen when a policy uses broad permissive-user language, separately excludes “renter pilots,” and then endorses “instruction and/or rental” for a charge without clearly reconciling those provisions. In an unpublished per curiam opinion issued March 11, 2026, a panel of three federal judges reversed summary judgment for an insurer, holding that there was a genuine issue of material fact as to whether the pilot was covered under the aircraft policy. James Kenneth Clark; Agape Broadcasters, Inc. v. American National Property & Casualty Co., No. 25-20215 (5th Cir. Mar. 11, 2026).

Case Background

Mackem Aviation, LLC operated a flying club called Space City Aviators, and Marcus Todd Sampson was one of its members. Under an Aircraft Use Agreement, Sampson was allowed to use Mackem’s leased aircraft in exchange for paying “recurring club dues, fees, and membership-related costs,” as well as “club aircraft rental fees.”

On August 31, 2018, Sampson flew the aircraft into a communications tower, killing himself and his six-year-old daughter and causing property damage to the tower and the land on which it stood. The tower was leased by Agape Broadcasters, Inc., and the land was owned by James Kenneth Clark. Both later obtained federal judgments against Sampson’s estate; Clark obtained a judgment of $412,543.12 plus interest and costs, while Agape obtained a judgment of $6,023,642, plus interest and costs. Each then sought to recover those amounts from the aircraft insurer, American National Property and Casualty Company, or ANPAC.

After obtaining their judgments, Clark and Agape filed separate suits in Texas state court against ANPAC, arguing that Sampson was covered under the policy. ANPAC removed both suits to federal court under diversity jurisdiction and then moved for summary judgment, arguing that Sampson was not covered because he was not a named insured and, in any event, was specifically excluded as a “renter pilot.”

The district court agreed and entered judgment for ANPAC. Clark and Agape jointly filed an appeal, however.

Policy

The policy — an Aircraft Insurance Policy — named “Macke[m] Aviation, LLC and its individual executive officers and members” as the insured. It defined a “member” as “any person having an ownership interest in the aircraft or [Mackem].” Sampson did not appear to fit that definition, so the plaintiffs did not seriously dispute that he was not a named insured in that sense. Instead, they relied on the broader category of “someone we protect,” which the policy defined as “any person or organization, other than [Mackem], we provide liability coverage through this policy.” The policy further stated that “someone we protect” means “any organization or person [Mackem] permit[s] to operate the aircraft” and includes “any person riding in the aircraft and any person or organization legally responsible for the use of the aircraft, provided such use is with [Mackem’s] express permission.” On its face, that is expansive permissive-user language.

ANPAC, however, did not need to dispute that Sampson had permission to operate the aircraft. It pointed instead to a separate exclusion. Under a paragraph entitled “Who Is Not Protected,” the policy provided that “bodily injury and property damage coverage does not protect . . . renter pilots.” “Renter pilot,” in turn, was defined as “any person or organization who is renting the aircraft from [Mackem], including student pilots.” That provision was the insurer’s principal answer to the permissive-user language: even if Sampson would otherwise qualify as “someone we protect,” he still would not be covered if he fell within the excluded class of renter pilots.

Coverage

Complicating the case was a Coverage Identification Page and an endorsement to the policy. Under a paragraph entitled “The Use of the Aircraft,” the policy originally stated that “[t]he aircraft will be used for [Mackem’s] pleasure and business-related purposes where no charge is made for such use and also may be used for Other Uses described below[.]” Listed under “Other Uses” was “NO EXCEPTIONS.” But Endorsement 3 changed that language. After the endorsement, “Other Uses” read: “Instruction and/or Rental for which [Mackem] make[s] a charge to others.” The plaintiffs seized on that change. They argued that once the policy expressly authorized “Instruction and/or Rental” for a charge, the policy could reasonably be read to cover a pilot using the aircraft under precisely such an arrangement.

ANPAC offered a narrower reading. In its view, Endorsement 3 did not expand liability coverage to include renter pilots at all. Rather, as the Fifth Circuit summarized the insurer’s position, the endorsement merely “ensured coverage for damage to the Aircraft when it was being used for instructional or rental purposes.” In other words, the insurer argued that the endorsement broadened permitted use of the aircraft without altering the separate section excluding renter pilots from liability protection. That textual distinction mattered to the court because the endorsement amended a paragraph titled “The Use of the Aircraft,” while the exclusion remained in a different paragraph titled “Who Is Not Protected.”

(ANPAC argued that the plaintiffs could not argue both that Endorsement 3 expanded coverage to renter pilots and that Sampson was not a renter pilot. The court treated these simply as alternative arguments, however.)

Reasonable Explanation x 2 = Ambiguity

The Fifth Circuit Court of Appeals opined that both readings were reasonable, and under Texas law, that was enough to defeat summary judgment. The court cited the Texas rule that an insurance policy is ambiguous if it is “susceptible to two or more reasonable interpretations.” It also cited the familiar proposition that endorsements generally supersede conflicting printed terms in the main policy. That made the plaintiffs’ reading plausible.

Interestingly, the appellate court acknowledged that ANPAC’s reading appeared “more convincing on its face,” but even so, the court emphasized the settled principle under Texas law that the “intent to exclude coverage must be expressed in clear and unambiguous language.” Because both sides’ textual readings were reasonable, the court concluded that the policy was ambiguous.

The court also identified an issue with Sampson’s status. Even if the policy excluded “renter pilots,” there was still the question of whether Sampson was one. The plaintiffs argued that Mackem was not functioning as an ordinary rental company but as a flying club through which members were able to use aircraft. On that view, Sampson was not a renter pilot in the conventional sense, but a club participant operating the aircraft with Mackem’s express permission and therefore falling within “someone we protect.” ANPAC, however, had a substantial textual response: the Aircraft Use Agreement required Sampson to pay “recurring club dues, fees, and membership related costs” and, “most convincingly,” “rental fees.” The Fifth Circuit found both characterizations reasonable. That created another genuine issue of material fact, independent of the endorsement dispute.

Altogether, the federal appellate court relied on Texas law, holding that when a contract is ambiguous, consideration of extrinsic evidence may be appropriate. Citing Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc., the court held that summary judgment was improper and remanded the matter for further proceedings—a result that gave new life to the multi-million dollar judgment the insurer had earlier avoided.

The insurer thus lost its early dispositive motion not because the Fifth Circuit declared there was coverage, but because the policy language was not clear enough to foreclose further factual development about the parties’ intent and the character of the flying-club arrangement.

Takeaway

For aviation lawyers, underwriters, brokers, owners, and club operators, the significance of Clark lies in the operational setting as much as the doctrine. Flying clubs often occupy a hybrid space. They involve dues, access rights, scheduling privileges, and per-use charges. They are not always cleanly analogous to traditional commercial rentals, yet they are not traditional ownership structures either. Insurance forms, meanwhile, often assume cleaner categories than the real world provides. A policy may broadly extend liability coverage to persons the named insured permits to operate the aircraft, separately exclude “renter pilots,” and elsewhere endorse “Instruction and/or Rental” for a charge. Each clause may make sense in isolation. Together, if not coordinated carefully, they can create precisely the kind of ambiguity that defeats summary judgment.

With respect to drafting insurance policies, Clark teaches that if an insurer intends to permit rental or club-style operations while still excluding liability coverage for certain operators, the policy must say so directly and consistently across the declarations, use provisions, endorsements, and liability definitions. And if the insured expects flying-club members to be covered when operating the aircraft under a dues-and-fees arrangement, that expectation should not depend on inference from a broad permissive-user clause that sits uneasily beside a renter-pilot exclusion.

In aviation insurance, the problem is rarely a lack of words. The problem is that the words do not always work together. Clark provides an important reminder that when policy provisions pull in different directions, courts may refuse to resolve the matter on summary judgment and instead require the parties to litigate what the policy actually means in the context of how the aircraft was being operated.

About Timothy M. Ravich

Timothy M. Ravich concentrates his practice in the areas of aviation, product, and general civil litigation. Recognized as one of only 50 lawyers qualified as a Board-Certified Expert in the area of aviation law, Tim focuses on traditional areas of aviation litigation, including product liability and airline defense, and pioneering areas such as unmanned aerial vehicles (drones) and advanced air mobility. Click here to read Tim’s full attorney biography.