Aetna Cas. & Sur. Co. v. Urner

• Decision Date: 08 March 1972
• Docket Number: No. 202,202
• Citation: Aetna Cas. & Sur. Co. v. Urner, 287 A.2d 764, 264 Md. 660 (Md. 1972)
• Parties: The AETNA CASUALTY AND SURETY COMPANY v. John H. URNER, Adm'r of the Estate of Gerald Emerson Weikel, et al.
• Court: Maryland Court of Appeals

Page 660

264 Md. 660

287 A.2d 764

The AETNA CASUALTY AND SURETY COMPANY v.John H. URNER, Adm'r of the Estate of Gerald Emerson Weikel, et al.

No. 202.

Court of Appeals of Maryland.

March 8, 1972.

Charles E. Iliff, Jr., Baltimore (John H. Mudd

and Semmes, Bowen & Semmes, Baltimore, on the brief), for appellant.

Ronald C. Brubaker, Cumberland, for appellees.

Argued before HAMMOND. C. J., and BARNES, McWILLIAMS, FINAN, SINGLEY, SMITH and DIGGES, JJ.

SMITH, Judge.

This case presents the single issue of whether an insurance company is responsible in damages under its policy in which the named insured was described as 'holding an FAA Private Pilot Certificate' when he in fact held no such license at the time of the crash giving rise to this litigation or at any other time.Since we conclude that there was no coverage under the policy, we shall reverse a declaratory judgment entered to the contrary.

Appellant, The Aetna Casualty and Surety Company(Aetna), is a member of United States Aircraft Insurance Group (the group).The group, composed of a number of insurance companies, issued an aircraft policy to Gerald E. Weikel.The declarations provided:

'5.Pilots.This policy shall not apply to an aircraft while in flight unless operated by the following pilot(s):

Gerald E. Weikel holding an FAA Private Pilot Certificate.Also, any pilot holding an FAA Private or Commercial Pilot Certificate who has flown a minimum of 500 hours as Pilot In Command at least 100 hours of which shall have been in retractable geared aircraft.'

On October 10, 1968, Weikel and his passenger, Diane M. Twigg, were killed when the named aircraft crashed near Fort Ritchie.At the time of the crash the weather was not suitable for flying except by instruments.Aetna pointed to the fact that Weikel held only a student pilot certificate and says this did not authorize him to fly by instruments.Regulations introduced by it clearly forbade any student pilot to 'act as pilot in command of an aircraft (t)hat (was) carrying a passenger.'

Damages as the result of the crash were claimed by the parents of Miss Twigg in a suit filed in the Circuit Court for Washington County against John H. Urner as Administrator of Weikel's estate.One provision of the policy granted '(a)ny one of the Companies (named in the policy) * * * the power to institute and maintain suits in its own name * * * for breach of any * * * obligation arising from or by reason of (the policy) and any judgment so obtained * * * by any one of the Companies * * * (is to) be binding on all of the Companies * * *.'Invoking that provision, Aetna instituted a declaratory judgment action naming as partiesdefendant the administrator of the Weikel estate, the parents of Miss Twigg, and the administrator of her estate.It sought a declaration that none of said parties was protected by the subject policy 'for any liability arising from the accident of October 10, 1968,' that Aetna 'and its associated companies are not required to defend any claims or actions growing out of the aforesaid accident,' and that Aetna 'and its associated companies are not required to pay any judgments, or any part of any judgments, which (might) be rendered as a result of the suit now filed arising from the alleged injuries to, and the death of, Diane M. Twigg by reason of the aforesaid accident.'

In the circuit court a certificate was filed from the Federal Aviation Administration to the effect that Weikel never had had 'a private pilot certificate' and that he never had held 'any other of higher level,' a point not here disputed.

We do not see this case as involving the question of whether the fraud of Weikel made the policy void from the beginning, whether the insurer had a duty to inquire about the exact licensing of the insured, or whether the insurer waived its right to rescind the policy, all as contended by the appellees, nor do we see the case as involving the question of the circumstances under which a company may rescind, as seen by the trial judge, but rather we see the point as one of coverage.

Of course, what we have here is a contract and we are obliged to interpret that contract.Recognition has previously been given to the right of an insurer to limit by contract its potential liability.In Galford v. Nicholas, Adm., 224 Md. 275, 167 A.2d 783(1961), this Court considered, and upheld as not in conflict with our financial responsibility law, a Virginia policy providing coverage for claims arising out of the use of any motor vehicle not owned by the insured.At the time of the accident in Maryland the insured was operating his own vehicle acquired after issuance of the policy and prior to the accident.Limitation to operation in a given territory was recognized by Chief Judge Thomsen in Kelly v. Phoenix Assurance Company of New York, 225 F.Supp. 562(D.Md.1964), a point involved in the controversy that produced Pennsylvania Threshermen & Farmers' Mutual Casualty Ins. Co. v. Messenger, 181 Md. 295, 29 A.2d 653(1943), where our predecessors determined the proper means of computing radius under such a policy.A limitation on the insurer's liability is recognized in the various cases that have considered the application of the 'omnibus clause' in an automobile liability policy, e. g.Keystone Ins. v. Fidelity & Cas., 256 Md. 423, 260 A.2d 275(1970);Unsatisfied Claim and Judgment Fund v. United States Fidelity & Guaranty Co., 256 Md. 412, 260 A.2d 279(1970);andCohen v. Am. Home Assurance Co., 255 Md. 334, 258 A.2d 225(1969).

A requirement in an aircraft policy that the pilot meet certain standards would be analogous to a requirement in a motor vehicle policy relative to the operator of the vehicle.On that subject 7 Blashfield Automobile Law and Practice § 314.4(3d ed. 1966)at p. 567 states:

'The policy may provide that the insurance company shall not be liable for losses or damage caused while the automobile is being driven by any person violating any law or ordinance as to a driving license, and such a provision is not contrary to public policy, unreasonable, or void; under such a provision there can be no recovery against the insurance company when the accident occurred while the vehicle was being driven by an unlicensed driver, even though the breach of such provision was not a proximate cause of the accident, and although the law requiring a license became effective after the policy was issued.

'Under a provision excluding coverage for injuries caused by the insured vehicle while being operated by a person violating regulations governing the licensing of drivers or a person whose license to drive has been suspended or revoked, there is no liability where the driver's license had expired, regardless of whether the violation increased the hazard.A provision in the policy that the insurer shall not be liable while the automobile is being used by a person prohibited by law from driving it is not meaningless and ineffective, and defeats liability to one hit by the insured automobile while being driven by an unlicensed driver.'

7 Appleman, Insurance Law and Practice§ 4401(1942) states at pp. 349-50.

'(T)he insurer has a perfect right to restrict the operation to persons who are legally qualified under the statestatutes to operate an automobile, and such a provision will be upheld.* * * Where an accident occurs while an unlicensed operator is at the wheel, the insurer would not be liable upon a policy containing such a restriction.'

Among the decisions supporting this proposition are State Farm Mut. Automobile Ins. Co. v. Coughran, 303 U.S. 485, 58 S.Ct. 670, 82 L.Ed. 970(1938);Giacomo v. State Farm Mutual Auto. Ins. Co., 203 Minn. 185, 280 N.W. 653(1938);Mondou v. Lincoln Mut. Casualty Co., 283 Mich. 353, 278 N.W. 94(1938);andState Farm Mutual Automobile Insurance Company v. Belshe, 195 Ark. 460, 112 S.W.2d 954(1938).In Schaal v. Great Lakes Mut. Fire & Marine Ins. Co., 6 Wis.2d 350, 94 N.W.2d 646(1959), a policy under its exclusions provided that it should not apply while the automobile was operated by ...