National Aviation Underwriters, Inc. v. Altus Flying Service, Inc., 75-1656

• Decision Date: 16 May 1977
• Docket Number: No. 75-1656,75-1656
• Parties: NATIONAL AVIATION UNDERWRITERS, INC., a Missouri Corporation, Manager and Attorney-in-Fact for National Insurance Underwriters, a Reciprocal Exchange, Plaintiff-Appellant, v. ALTUS FLYING SERVICE, INC., a corporation, Orbrey O. Owens, an Individual, Major Woody R. Baker, Jr., an Individual, Buddy C. Patterson, an Individual, V. Wendell Dockum, an Individual, Dorothy Bostdorf, Individually and as next friend of Christopher Charles Bostdorf, a minor, and as personal representative of Marlin Bostdorf, Deceased, Elizabeth Rick, Individually, and as personal representative and next kin of Richard E. Capps, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 778

555 F.2d 778

NATIONAL AVIATION UNDERWRITERS, INC., a Missouri

Corporation, Manager and Attorney-in-Fact for

National Insurance Underwriters, a Reciprocal Exchange, Plaintiff-Appellant, v. ALTUS FLYING SERVICE, INC., a corporation, Orbrey O. Owens, an Individual, Major Woody R. Baker, Jr., an Individual,

Buddy C. Patterson, an Individual, V. Wendell Dockum, an

Individual, Dorothy Bostdorf, Individually and as next

friend of Christopher Charles Bostdorf, a minor, and as

personal representative of Marlin Bostdorf, Deceased,

Elizabeth Rick, Individually, and as personal representative

and next kin of Richard E. Capps, Defendants-Appellees.

No. 75-1656.

United States Court of Appeals, Tenth Circuit.

May 16, 1977.

D. C. Johnston, Jr., Oklahoma City, Okl. (Dean G. Constantine, Oklahoma City, Okl., on the brief), for National Aviation Underwriters, Inc., plaintiff-appellant.

Larry M. Weber, Altus, Okl. (Stansell E. Whiteside, Altus, Okl. and Ronald R. Hudson and Page Dobson, Rhodes, Hieronymus, Holloway & Wilson, Oklahoma City, Okl., were on the brief), for defendants-appellees, Altus Flying Service, Inc., Buddy C. Patterson, Orbrey O. Owens and V. Wendell Dockum.

John J. Clayton, San Antonio, Tex., for defendant-appellee, Dorothy Bostdorf, individually and as next friend of Christopher Bostdorf, a minor.

Before SETH and HOLLOWAY, Circuit Judges, and STANLEY, Senior District Judge. ^*

HOLLOWAY, Circuit Judge.

This declaratory judgment suit was brought by National Aviation Underwriters, Inc. (National) for a determination that National owes no obligation to the insureds (defendants Altus Flying Service, Inc., Buddy C. Patterson, V. Wendell Dockum and Orbrey O. Owens) under the liability and hull damage provisions of a 1972 aviation policy issued by National. ¹ The suit joined these insureds and additional parties as defendants, including the personal representatives of passengers Marlin Bostdorf and Richard Capps who were killed in a 1974 crash of a charter plane operated by Altus Flying Service (Altus). ²

The tragedy occurred while defendant Owens was piloting a Piper Navajo twin engine plane on a charter flight from the Dallas-Ft. Worth Regional Airport to the Altus, Oklahoma, municipal airport. On the approach to the Altus airport the aircraft crashed and Owens and one passenger were injured and passengers Marlin Bostdorf and Richard Capps were killed.

National denied coverage under its policy on the ground that the pilot, Owens, did not have the flying hours required by the policy. National's policy contained the following policy provisions as Item 7 of the policy declarations (R. I, 9) ³:

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The aircraft involved was a Piper Navajo, Model PA-31, bearing FAA registration No. N979L. It was powered by two Avco-Lycoming Engines, each having 310 rated horsepower, or a total 620 horsepower. It is National's position that this made the last line of the requirements cited above applicable. Under Item 7 it was provided that insurance is afforded, inter alia, in flight only while the aircraft is being operated by a pilot having an FAA pilot certificate and rating at least equal to that specified for the aircraft use and type, and while properly rated and qualified for the flight and the aircraft being operated, and "when having (b) Pilot Experience at least equal to that specified below for the aircraft use and type." Further, the provisions on "Pilot Experience" for "Multi-engine, 600 Total H.P. & Over," below the heading "Total Hours," stated "3000"; under "Hours in same Type Aircraft" it stated "500"; and under "Hours Dual Checkout" it stated "10."

The defendant insureds filed a motion for summary judgment, which the court considered together with depositions, affidavits and a response to the motion. A declaratory judgment in favor of the defendants was entered stating there was no genuine issue as to any material fact, that the policy issued by National to the defendant insureds was in full force and effect on or about October 24, 1974, and that it covered the aircraft bearing FAA registration N979L piloted by Owens which crashed while on a flight between Lawton and Altus, Oklahoma, near Blair, Oklahoma. Later the court filed a memorandum opinion ⁴ expressing the reasons for the ruling, which essentially were: that there were ambiguities and undefined terms in the policy, such as "Pilot Experience;" that the policy had to be construed in favor of the insured under Oklahoma law; ⁵ that the hours requirements of the policy were met by Owens; and that the evidence established that he had substantial pilot experience and other qualifications sufficient to satisfy the requirements of the policy.

On appeal, National argues that the district court erred in that there were controverted material issues of fact, as to the pilot's experience; that finding an ambiguity in the policy did not make summary judgment proper or negate the existence of fact questions; and that the terms, such as "hours," had only one meaning in the aviation industry a meaning under which Owens did not qualify.

I

The main controversy is whether Owens met the requirements for pilot experience in terms of 3,000 "Total Hours," 500 "Hours in Same Type Aircraft," and 10 "Hours Dual Checkout" and whether there was a genuine issue of fact in this respect so as to preclude summary judgment.

We first focus on the district court's basis for the ruling. In the memorandum opinion following the declaratory judgment (S.R. I, 18-23), the court essentially said that the term "Pilot Experience" was not defined by the policy; that in the absence of a specific definition the term must be construed to include all experience of the pilot which increases his aeronautical skill and knowledge, including schools, specialized training and experience; that the term was broad enough to include all flying time and time during which the pilot was the sole manipulator of the flight controls of large military aircraft, whether or not it was logged or loggable. The court further pointed out that the words "Pilot Experience" were followed by "at least equal to . . ." and were clearly "qualitative."

In dealing with the critical requirements on "hours" the court concluded (S.R. I, 22-23):

The policy does not state how the experience or "Total Hours" requirement of the policy may be satisfied. In the absence of specific policy provisions, satisfaction of the hour requirements of the policy is not limited by F.A.A. regulations, logged or loggable time, and may include all time during which the pilot manipulated the flight controls of an airplane. The reasoning and rationale of Republic Aero v. North American Underwriters, 462 S.W.2d 635, seems applicable here. (Emphasis added)

The Court finds and concludes ⁶ that the pilot Owens, has sufficient pilot experience to satisfy the requirements of the policy. The policy does not require that a pilot be able to prove his hours of pilot experience by documented evidence. He had substantial experience which is some respects is not commonly found. It includes twenty (20) years with the United States Air Force during which he logged 10,000.5 hours as a certified flight engineer and instructor flight engineer. Also, he holds a Commercial Pilot Certificate with single and multi-engine land and instrument ratings. He is a certified flight instructor in both single and multi-engine aircraft. On the date of the accident he had in excess of 1800 total logged or documented hours in civilian aircraft, and in excess of 900 logged or documented hours of multi-engine time in civilian general aviation as well as 1,100 hours as sole manipulator of the flight controls of large military aircraft and 800 to 1000 hours non-logged civilian time which includes 350 to 400 multi-engine hours. This meets the requirements of the policy even if the flight engineer time is disregarded.

Judgment has been entered accordingly.

We must determine whether the pleadings, depositions, affidavits and other papers showed that there was no genuine issue as to any material fact and that the defendants were entitled to this judgment as a matter of law. Rule 56, F.R.Civ.P. Under the rules which we must apply, we cannot agree that this record supports the summary judgment.

The critical point is the number of hours which Owens had constituting "Pilot Experience." The district court said that "Pilot Experience" was not defined in the policy and should not be construed in a strict fashion as suggested by National. ⁷ We agree that we should not apply a special meaning used by the underwriter and not known generally in the aviation business. However, in the policy declaration in Item 7 on "Pilots" there are detailed provisions on "Total Hours," "Hours in Same Type Aircraft," and "Hours Dual Control," which cannot be ignored. While the district court's views are not entirely clear to us, it appears that in fact the memorandum opinion recognized that there had to be "satisfaction of the hour requirements . . ." of the policy. The hours provisions seem pointed enough and must be applied since each term of the insurance contract should be given effect, if reasonably practicable. Board of Regents of Oklahoma Colleges v. Walter Nashert & Sons, Inc., 456 P.2d 524, 526 (Okl.); Metropolitan Life Ins. Co. v. Fisher, 382 P.2d 434, 438 (Okl.). ⁸

The proper construction of these hours provisions is of paramount importance. Generally such terms of an insurance policy must be considered not in a technical but in a popular sense, and they should be construed according to their plain, ordinary and accepted use in common speech, unless it affirmatively appears that a different meaning was intended. Webb v. Allstate Life Insurance Co., 536 F.2d 336, 339 (10th Cir.). However while the terms in question do not seem esoteric, there is some evidence in our record that there are usages of the terms in the aviation business...