National Union Fire Ins. Co. of Pennsylvania v. Carib Aviation, Inc.

Citation759 F.2d 873
Decision Date07 May 1985
Docket NumberNo. 84-5636,84-5636
PartiesNATIONAL UNION FIRE INSURANCE COMPANY OF PENNSYLVANIA, Plaintiff-Appellant, v. CARIB AVIATION, INC., and Gregg C. Fiddyment, Defendants-Appellees. Non-Argument Calendar.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

Thornton, David & Murray, P.A., Kathleen M. O'Connor, Miami, Fla., for plaintiff-appellant.

Robert J. Schaffer, Coral Gables, Fla., for Carib Aviation, Inc.

Richard A. Friend, Ordonez & Friend, Miami, Fla., for G. Fiddyment.

Appeal from the United States District Court for the Southern District of Florida.

Before RONEY, FAY and JOHNSON, Circuit Judges.

PER CURIAM:

National Union Fire Insurance Company of Pittsburgh, Pa. (National) appeals the summary judgment granted by the district court in favor of National's insureds, Carib Aviation, Inc. (Carib) and Gregg Fiddyment (Fiddyment). The district court found that an exclusionary clause in the insurance policy at issue was ambiguous and did not insulate National from liability because in Florida "only those exclusions that are clearly delineated by the express language of the policy" are effective. National Union Fire Insurance Co. v. Carib Aviation, 566 F.Supp. 1489, 1491 (S.D.Fla.1983). We however, conclude that the language of the exclusion is unambiguous and clearly excludes coverage under the facts of this case. We therefore reverse.

I. FACTUAL BACKGROUND

The essential facts in this case are not in dispute. We thus consider it appropriate to quote the following from the district court's opinion:

This case concerns the crash of an airplane at sea during the attempted smuggling of marijuana into the United States. At the time of the crash, the airplane was leased by ... [Carib]. It was insured by National.... The airplane had been rented to a third party pilot/smuggler [Marchand] who had stated that he intended to fly from Tamiami Airport in Miami to Orlando and back. The pilot actually flew to the Bahamas. Had Carib known of his intention to fly outside of the United States, it would have required additional documentation.

On the return from the Bahamas, the airplane crashed in the Atlantic Ocean, twenty nautical miles east of Fort Lauderdale. The pilot and a passenger were rescued from a liferaft found floating amid several bales of marijuana. The pilot pled guilty to conspiracy to possess with intent to distribute marijuana and was sentenced to five years in prison.

The insurance policy named Carib and ... Fiddyment ... as insureds. The policy provided coverage for property damage to the aircraft, but contained the following exclusion: "This policy does not apply to: ... loss or damage due to conversion, ... by any person in possession of the aircraft under a bailment, lease, ... or other encumbrance, nor for any loss or damage during or resulting therefrom.

Id. at 1490 (emphasis added).

After the crash, Carib and Fiddyment demanded that National pay for the loss of the airplane. National refused, and filed a complaint seeking a declaratory judgment to the effect that coverage was excluded under the policy. The defendants, on the other hand, argued that the language of the coverage exclusion is ambiguous, and, therefore, should be strictly construed against National so as to provide coverage. The district court, faced with cross-motions for summary judgment, ruled against National. This appeal followed.

National argues on appeal that the district court erred in granting the insured a summary judgment because, based on the unambiguous language of the exclusion, there is no coverage provided under the policy for damages resulting from a conversion of the airplane by anyone in possession of the airplane under a lease. In National's view, the only real question in this case is, based on the undisputed facts, did Marchand "convert" the airplane under Florida law? Appellees, on the other hand, contend that the district court acted properly since the conversion exclusion in question is ambiguous. Specifically, appellees argue that: (1) the phrase "in possession" really means "in lawful possession;" (2) the phrase "under a lease" really means "under a valid lease;" and (3) Marchand did not "convert " the airplane within the meaning of the exclusion.

II. THE LAW

Florida law is clear that "[o]nce the insured establishes a loss apparently within the terms of an 'all risks' policy, the burden shifts to the insurer to prove that the loss arose from a cause which is excepted." Hudson v. Prudential Property & Casualty Insurance Co., 450 So.2d 565, 568 (Fla. 2nd Dist.Ct.App.1984). Moreover, ambiguities in exclusionary provisions must be construed in favor of the insured since the insurer usually drafts the policy. See Excelsior Insurance Co. v. Pomona Park Bar & Package Store, 369 So.2d 938, 942 (Fla.1979); Southeastern Fire Insurance Co. v. Lehrman, 443 So.2d 408, 409 (Fla. 4th Dist.Ct.App.1984); Collins v. Royal Globe Insurance Co., 368 So.2d 941, 942 (Fla. 4th Dist.Ct.App.1979); accord, Ideal Mutual Insurance Co. v. C.D.I. Construction, 640 F.2d 654, 657 (5th Cir. Unit B 1981) (applying Florida law). If, however the language found in the policy is not ambiguous or otherwise susceptible of more than one meaning, the court's task is simply to apply the plain meaning of the words and phrases used to the facts before it. Lehrman, 443 So.2d at 408-09; see also Excelsior, 369 So.2d at 942 (rule of strict construction in favor of insured is apposite "[o]nly when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction"); Denman Rubber Manufacturing Co. v. World Tire Corp., 396 So.2d 728, 729 (Fla. 5th Dist.Ct.App.1981) (same); Ideal Mutual, 640 F.2d at 657-58 (same). In other words, a court is not free to rewrite an insurance policy or add meaning to it that really is not there. Excelsior, 369 So.2d at 942; Ideal Mutual, 640 F.2d at 658.

III. APPLICATION OF THE LAW

Appellees' first argument in support of the district court's judgment is that the exclusion is not effective because Marchand, who misrepresented his true intentions to Carib, was never "in possession" within the meaning of the exclusion. Appellees contend that Florida courts have consistently held that "lawful possession" of the insured property must exist before the exclusion is triggered. In support of this position, appellees refer us to National Casualty Co. v. General Motors Acceptance Corp., 161 So.2d 848 (Fla. 1st Dist.Ct.App.1964); Security Insurance Co. v. Investors Diversified Ltd., 407 So.2d 314 (Fla. 4th Dist.Ct.App.1981), and Progressive American Insurance Co. v. Florida Bank, 452 So.2d 42 (Fla. 5th Dist.Ct.App.1984). We have reviewed these decisions and find them clearly distinguishable from the case sub judice.

In National Casualty Co., the insurer issued an insurance policy to the purchaser of an automobile. The policy contained a mortgage clause in favor of G.M.A.C. as the lienholder. The purchaser, who had defaulted in making payments pursuant to the purchase contract, deliberately drove the insured vehicle off a bridge into the waters of Pensacola Bay. G.M.A.C. brought suit to recover for the loss; the insurer defended on the ground that the acts of the purchaser constituted a conversion of the automobile within the meaning of an exclusion similar 1 to the one involved in this case. In holding that the purchaser's acts did not constitute conversion of the lienholder's interest, the court noted that the "words 'embezzlement or secretion,' as used in [the exclusion], suggest crimes falling within the general category of theft or larceny, the difference being that the original possession was obtained by lawful means." Id. at 852 (emphasis added); see Progressive American Insurance Co., 452 So.2d at 45 (quoting same).

We agree with appellant that National Casualty Co. and a recent case relying on that decision, Progressive American Insurance Co., do not hold as appellees would have us believe. The portion of National Casualty Co. discussing "lawful possession" was clearly directed only to the policy language dealing with "embezzlement or secretion." Conversion, however, can be committed by someone who wrongfully acquires possession of the property. See W. Prosser, Law of Torts 84 (3rd ed. 1964). The reference in National Casualty Co. to "lawful possession" accordingly does not counsel holding that a conversion exclusion will be ineffective unless the converter lawfully acquired possession of the insured property.

Security Insurance Co. is also inapposite. In that case, the exclusionary clause referred to "loss ... resulting from misappropriation ... or any dishonest act on the part of ... any person ... to whom the property may be entrusted." Security Insurance Co., 407 So.2d at 315-16 (emphasis deleted). After framing the issue as whether the insured could "entrust" property to a thief, the court held that the policy exclusion did not encompass larceny by trick. Id. at 316. The court arrived at this conclusion by likening "entrustment" to "lawful possession." See id. (relying on Collins, 368 So.2d 941, a case interpreting a policy exclusion with "lawful possession" language).

Appellees fail to appreciate that the exclusion in this case refers only to "possession," not "misappropriation" by one to whom property has been "entrusted" or "lawful possession". No amount of judicial alchemy can change these fundamental distinctions in policy language. In our view, neither Security Insurance Co., nor its predecessor, the Collins case, support appellees' position.

We also are unpersuaded by appellees' contention that the exclusion contains a hidden requirement that the converter be in possession of the property under a "valid" lease. The exclusion states that it applies "to loss [occurring during or resulting from] conversion ... by any person in possession of the aircraft under a ... lease." The exclusion does not mention any requirement that the...

To continue reading

Request your trial
53 cases
  • Edelman v. Western Airlines, Inc., 88-3856
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 27, 1989
    ...... The Association of Flight Attendants (the Union) filed a grievance pursuant to the collective ... by its terms only to decisions of the National Railroad Adjustment Board, but the same standard ......
  • U.S. v. Bailey, 601CV875ORL22KRS.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • October 22, 2003
    ...of the property; rather it is the wrongful deprivation") (internal citations and quotations omitted); Nat'l Union Fire Ins. Co. v. Carib Aviation, Inc., 759 F.2d 873, 878 (11th Cir.1985) (accord); Seibel v. Society Lease, Inc., 969 F.Supp. 713, 718 (M.D.Fla.1997) (accord); Florida Dept. of ......
  • RK Mech., Inc. v. Travelers Prop. Cas. Co. of Am., Corp.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • August 1, 2011
    ...an insurer has a right to decide which risks it will and which it will not insure against. Nat'l Union Fire Ins. Co. of Penn. v. Carib Aviation, Inc., 759 F.2d 873, 876 (11th Cir.1985). A sue and labor clause “represents a specific, material provision of the insurance policy that imposes it......
  • GOLDEN DOOR JEWELRY v. Lloyds Underwriters, 83-1409-CIV
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • October 11, 1990
    ...See Security Ins. Co. v. Investors Diversified Ltd., 407 So.2d 314, 316 (Fla. 4th DCA 1981); see also National Union Fire Ins. Co v. Carib Aviation, Inc., 759 F.2d 873 (11th Cir.1985). Such principles of construction were invoked by the court in the case of Highlands Ins. Co. v. Galveston, ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT