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Airline Wins Ruling Over Vegas Airport Accident

(CN) - Northwest Airlines can try to recover $10.6 million for damages to a plane that rolled down an embankment at the McCarran International Airport in 2002, the 9th Circuit ruled.

Phil Mendez, owner of an aircraft maintenance service called Professional Aircraft Line Services, worked as a contractor at the airport in Las Vegas.

He was insured by Westchester Fire Insurance Company when a plane rolled down an embankment with one of his employees in the cockpit.

The insurer filed a declaratory judgment action claiming it had no duty to cover Mendez for the damage, because he failed to notify Westchester after the accident.

Northwest Airlines intervened, hoping to recover damages for the repair costs.

When Mendez repeatedly failed to appear for his deposition, the district court entered a $10.6 million default judgment for Westchester. The judge said the ruling applied to Northwest Airlines, too, because it chose to intervene.

The San Francisco-based appellate panel, however, said the judgment shouldn't bar Northwest from suing separately to recover damages.

"A default entered against an insured policyholder, Mendez, does not prevent an injured third party, in this instance Northwest, from proceeding on its own behalf," Judge Clifton wrote.

The court vacated the default judgment and remanded.

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