National Union Fire Ins. Co. of Pittsburgh Pennsylvania v. Zuver, s. 15952-6-

CourtCourt of Appeals of Washington
Citation736 P.2d 675,47 Wn.App. 540
Docket Number16016-8-I,Nos. 15952-6-,s. 15952-6-
PartiesNATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, an insurance company, Respondent, v. Russell ZUVER, Personal Representative of the Estate of Thomas Harold Zuver; Kathryn J. Strathy, Personal Representative of the Estates of Jennifer Lynne Strathy, Theresa Marie Strathy, and Melissa Jane Strathy; Ralph A. Strathy, Personal Representative of the Estate of Phillip Everett Strathy; Clifford W. Davidson and Jane Doe Davidson, his wife; Gerald W. Caniff and Jane Doe Canniff, his wife; Davidson's Marina, Inc., a Washington corporation; and the Estate of Phillip Everett Strathy, deceased, Appellants.
Decision Date29 April 1987

Gary W. East, David A. Garton, East & Helenius, Seattle, for appellant Russell R. Zuver.

William R. Hickman, Heather Houston Reeve, Reed, McClure, Mocieri, Thonn & Moriarty, Seattle, for respondent.

George H. REVELLE, Judge, Pro Tem *.

Phillip E. Strathy (Strathy) took off in a private plane from Martha Lake Airport at 11:20 a.m. on June 19, 1983. His passengers included his three daughters and a friend, Thomas Zuver. They were headed over the Cascade mountains for Roosevelt Lake in Eastern Washington. Approximately one-half hour after leaving Martha Lake the plane crashed into Glacier Peak killing all aboard.

Strathy's insurer, National Union Fire Insurance Company (National) brought a declaratory judgment action to determine coverage under its aviation liability insurance policy. In question are certain provisions of the policy.

First, the policy's exclusionary language states:

EXCLUSIONS

This policy does not apply:

* * *

2. To any insured while the aircraft is in flight

(a) if piloted by other than the pilot or pilots designated in the designations;

(b) if piloted by a pilot not properly certified, qualified, and rated under the applicable federal air regulations FAR for the operation involved, whether or not said pilot is designated in the declarations;

* * *

(Italics ours.)

Second, its Pilot Warranty provides in pertinent part:

1. Insurance will be effective only when the operation of the insured aircraft in motion is by a pilot designated below who possess [sic] a current and valid pilot certificate of the kind specified with appropriate ratings, and a current medical certificate; all as required by the Federal Aviation Administration for the flight involved and who meets the additional qualifications set forth below.

(Italics ours.)

The Pilot Warranty endorsement goes on to state:

"Nothing herein contained shall vary, alter, waive or extend any of the terms, provisions, representations, conditions or agreements of the policy other than as above stated."

Strathy was rated for and was required to follow visual flight rules (VFR) under FAA regulations and not under instrument flight rules (IFR). Under his rating he was required to adhere to certain FAA visibility standards. 1 After a five day trial the trial court concluded Strathy had violated FAA regulations for visual flight (VFR) for at least one mile prior to impact with Glacier Peak and was thereby excluded from coverage under this exclusion.

Before leaving Martha Lake, Strathy phoned for a weather briefing. Strathy requested weather data for pilots using VFR. The weather service reported he could fly to his destination under VFR conditions but made a flight precaution for "mountains occasionally obscured." Strathy inquired as to the "tops over the mountains", meaning the tops of clouds. He was told the tops were in a range from 8,000 to 11,000 feet.

Appellant contends the trial court erred in concluding the exclusions paragraph is not ambiguous and that it applies not only to the conditions at the inception of the flight, but also to the specific action(s) of Strathy in his direct and purposeful flight into the clouds, an operation for which he was not rated. Cleared of unnecessary language the exclusion says the

"policy does not apply ... to any insured while the aircraft is in flight ... if piloted by a pilot not properly certificated, qualified and rated ... for the operation involved...."

Insurance policies are to be construed as contracts. The interpretation of them is a matter of law. State Farm General Ins. Co. v. Emerson, 102 Wash.2d 477, 687 P.2d 1139 (1984). Ryan v. Harrison, 40 Wash.App. 395, 699 P.2d 230 (1985). The court examines the contract as a whole, and if on its face two reasonable and fair interpretations are possible, an ambiguity exists. State Farm Gen. Ins. Co. v. Emerson, supra 102 Wash.2d at 484, 687 P.2d 1139.

The meaning of the exclusionary provision can be determined only from viewing the policy as a whole, not in terms of isolated segments read alone. Therefore, the exclusionary clause must be harmonized with the coverage clause. Farmer Ins. Co. of Wash. v. Clure, 41 Wash.App. 212, 702 P.2d 1247 (1985). However, in Washington an exclusionary clause is strictly construed against the insurer. Phil Schroeder, Inc. v. Royal Globe Ins. Co., 99 Wash.2d 65, 659 P.2d 509 (1983), modified, 101 Wash.2d 830, 683 P.2d 186 (1984). This rule, however is not to be applied when the language of the exclusions is clear and unambiguous. Farmers Ins. Group v. Johnson, 43 Wash.App. 39, 715 P.2d 144 (1986); Britton v Safeco Ins. Co. of Am. , 104 Wash.2d 518, 707 P.2d 125 (1985).

The first question to be answered is whether the exclusions clause is ambiguous.

First, we consider the meaning of "while the aircraft is in flight." "In flight" is defined in the policy as:

"In flight means the time commencing with the actual take-off run of the aircraft and continuing thereafter until it has completed its landing roll ..."

Second, Appellant would then have us construe the terms "operation involved" to mean the same as "flight" or "in flight". That, however would be redundant as it had been previously stated in the exclusions paragraph that coverage would not apply to any insured while the aircraft is in flight if exclusion conditions occurred. Because the policy contains certain conditions in the exclusion section, the trial court correctly believed a plain reading of these exclusions showed an intent for the words "operation involved", which is not defined in the policy, to mean something other than "flight" or "in flight". The interpretation of a term of broad and general meaning depends upon the circumstances and context in which it is used. Farmers Home Mutual Ins. Co. v. Ins. Co. of North Am., 20 Wash.App. 815, 583 P.2d 644 (1978), cert. denied, 442 U.S. 942, 99 S.Ct. 2885, 61 L.Ed.2d 312 (1979).

The definition of "operation" is as follows:

OPERATION. Exertion of power; the process of operating or mode of action; an effect brought about in accordance with a definite plan; action; activity....

Black's Law Dictionary. 5th edition at page 984 (1979). A conclusion that the "operation involved" is the process of operating (or "driving") the aircraft is consonant with the common definition. The use of "operation involved" to mean the "driving" of the plane rather than to merely reiterate "while in flight" in the clause, impels the conclusion that the author of the paragraph meant a difference.

There was substantial evidence that Strathy purposely flew into the clouds at 10,000 feet without correcting his flight to avoid clouds. He was operating under IFR conditions in violation of his VFR rating. This flight at its inception was a VFR flight for which Strathy was rated. The question is whether his conduct during the flight was sufficient to make the operation involved fall within the exclusions of the policy.

"Though an insurance policy is intended to cover even the pilot's own acts of negligence, all insurance companies have conditions and limits on coverage. A pilot's failure to realize that his policy excludes coverage in a given situation does not prevent the exclusion from operating, whether or not the failure to realize it was negligent." United States Fire Insurance Company v. Marr's Short Stop of Texas, Inc., 680 S.W.2d 3, 7 (Texas Sup.Ct., 1984).

Substantial evidence supports, and no error is assigned to the finding of fact establishing that Strathy purposefully flew by instruments (IFR) into the clouds and the mountain, even though there was no direct evidence of the reason for the impact. Findings of fact to which no error is assigned are accepted as verties on appeal. Luxon v. Caviezel, 42 Wash.App. 261, 710 P.2d 809 (1985).

Three cases are cited to support appellants argument that the flight must be characterized at its inception and thereafter remain unchanged by subsequent flight conditions.

The cases cited are: National Insurance Underwriters v. King Craft Custom Products, Inc., 368 F.Supp. 476 (N.D.Ala.1973), Glover v. National Insurance Underwriters, 545 S.W.2d 755 (Texas Sup.Ct., 1977) and United States Fire Insurance. Co. v. Marr's Short Stop of Texas, Inc., 680 S.W.2d, 3 (Texas Sup.Ct., 1984). The language in the liability policies of these cases is different than the policy before this court. All three cases have wording about the pilot rating "for the flight" as opposed to "for the operation involved" as used in Strathy's policy. Therefore the cases cited by appellant do not apply to the policy at issue as the language interpreted by those courts had a different meaning.

Next appellants urge that the Pilot Warranty Endorsement is in direct conflict with paragraph 2(b) of the exclusions, thus rendering the exclusion ambiguous. Appellants argue there is a different use of the word "operation" in the endorsement than in the exclusions. Also, the term "flight involved" is used rather than "operation involved". They further contend the use of "flight involved" in the endorsement is a declaration that the insurance policy will be effective for the "flight involved". To the contrary, exclusion 2(b) expressly applies to limit...

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4 cases
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