National Union Fire Ins. Co. v. Miller

• Decision Date: 04 June 1987
• Citation: 237 Cal.Rptr. 632,192 Cal.App.3d 866
• Court: California Court of Appeals Court of Appeals
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, Plaintiff and Appellant, v. ESTATE OF Sterling MEYER, et al., Defendants and Respondents. * D004418.

Page 632

237 Cal.Rptr. 632

192 Cal.App.3d 866

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, Plaintiff and Appellant, v. ESTATE OF Sterling MEYER, et al., Defendants and Respondents. ^*

D004418.

Court of Appeal, Fourth District, Division 1, California.

June 4, 1987.

Review Denied Aug. 20, 1987.

Kern & Wooley, Ralph S. LaMontagne, Jr., and Elizabeth Kelleher, Los Angeles, for plaintiff and appellant.

Charles M. Finkel and Ned Good, Pasadena, for defendants and respondents.

BUTLER, Associate Justice.

An insurance policy insured the owner of an airplane for liability for death of passengers. A policy endorsement stated the insurance would be effective only when the airplane was operated by a pilot holding a current medical certificate. The airplane crashed while flown by a pilot with an expired medical certificate, killing him and his two passengers. The pilot's physical condition did not cause the crash. The carrier denied coverage for wrongful death. The passengers' heirs contended the expired medical certificate had no causal connection to the accident and their damages were covered by the policy. We shall hold the lack of causal connection does not negate the current medical certificate requirement and the policy excluded liability for the passengers' deaths, and reverse the judgment.

I

National Union Fire Insurance Company of Pittsburg, Pennsylvania (National) issued on June 29, 1981, an insurance policy insuring Sterling Meyer for liability for death of passengers carried in his Cessna 310 R airplane. A pilot warranty was attached to the policy as an endorsement. The warranty included this paragraph:

"1. Insurance will be effective only when the operation of the insured aircraft in motion is by a pilot designated below who possess[es] 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."

Ronald F. Miller and Meyer were specifically designated as pilots on the warranty.

On October 28, 1981, passengers Lawrence R. Saenz and Carl Stanley Gilbert boarded the Cessna at Calexico, California, bound for John Wayne Airport at Santa Ana. Miller was the pilot. He held a current and valid pilot certification but his medical certificate had expired and was not current. While on approach, the airplane crashed into a mountain, killing Miller and his passengers. Miller's medical condition did not cause the crash, which was occasioned by pilot error.

Saenz's widow Alice for herself and as guardian for their two children, and Gilbert's surviving son David (collectively the heirs) sued Susan Miller as representative of Miller's estate, Meyer, ¹ and others for wrongful death damages. National then filed its complaint for declaratory relief contending Miller's failure to possess a current medical certificate at the time of the crash as required under the pilot warranty endorsement prevented coverage under the policy becoming effective.

Responding to requests for admissions, National admitted the policy "was in full force and effect on October 28, 1981," the date of the crash. Motions for summary judgment and for adjudication of issues were made, denied and granted in part. On the trial date, the parties stipulated to facts and submitted the case to the court on the stipulation and their memoranda of law. The court concluded National's admission the policy was in full force and effect the day of the accident waived its contention a current medical certificate as to Miller was required to cause the coverage to be effective. The court then decided Miller's failure to possess a current medical certificate had "nothing to do with the accident" and absence of the certificate did not toll the policy's effectiveness. The court gave judgment for the heirs of the passengers declaring the policy covered their claims. National appeals. We reverse.

II

The heirs contend National's admission the policy was in full force and effect the day of the accident ended the coverage ball game. The trial court agreed. We don't. In Irwin v. Pacific Southwest Airlines (1982) 133 Cal.App.3d 709, 714, 184 Cal.Rptr. 228, we said an admission is not binding if made improvidently or unguardedly or is ambiguous in any way. There, a motion for summary judgment was granted on the issue of liability on res ipsa loquitur grounds. Following a separate trial resulting in an award of damages, the airline appealed, claiming error in the grant of summary judgment on liability. We rejected plaintiffs' contention the airline was precluded from appealing the liability issue because its counsel at the trial on damages admitted liability in his opening statement.

"In context, the admission here lacks the gravity of a complete relinquishment of rights on the issue of liability, particularly in light of the inappropriateness of a denial of liability at a trial for damages and PSA counsel's refusal to abandon the appeal. PSA is thus entitled to appeal the summary judgment granted in the liability trial." (Id. at p. 714, 184 Cal.Rptr. 228.)

Here, in the same set of requests, National denied a number of requests for admissions to the effect the policy did not afford coverage for death of the passengers. The heirs' later motions for summary adjudication of issues were denied on the basis the expiration of Miller's medical certificate and the state of his health presented triable issues of fact and National's motion for summary judgment was denied on the ground the lack of a current medical certificate was not the cause of the crash. When the cause was submitted to the trial court on stipulated facts, National and the heirs signed a further stipulation containing National's waiver of coverage defenses under the policy "with the exception of those relating to the failure of the pilot to have in his possession a current medical certificate at the time of the accident."

National's admission the policy was in full force and effect did not constitute a waiver of the policy requirement Miller possess a current medical certificate and National is not estopped from asserting the lack of a current certificate prevented the policy from becoming effective. The admission "lacks the gravity of a complete relinquishment of rights on the issue of liability." (Irving v. Pacific Southwest Airlines, supra, 133 Cal.App.3d 709 at p. 714, 184 Cal.Rptr. 228.) National reserved its right to assert noncoverage by reason of lack of the current medical certificate. National's admission was simply to the effect the policy was issued, premiums were paid and the contract for insurance had not been terminated.

III

National contends Miller's failure to possess a current medical certificate at the time of the crash compels the conclusion the policy did not afford coverage because the pilot warranty endorsement provided "Insurance will be effective only when [the aircraft is operated] by a pilot ... who posses[ses] ... a current medical certificate...."

National argues in the same vein coverage is expressly excluded under part 2 of page two of the policy headed in large print, "EXCLUSIONS," which provides, "This policy does not apply [p] ... 2. To any insured while the aircraft is in flight [p] (a) if piloted by other than the pilot or pilots designated in the Declarations...." The declarations state the aircraft will be piloted only by those named in the pilot warranty endorsement which lists Miller. National reasons Miller's failure to possess a current medical certificate means he cannot be a designated pilot and the coverage for the crash is thus expressly excluded under the exclusion part of the policy.

We address this paragraph 2(a) exclusion contention first. Assuming the policy does not apply to any insured if the aircraft is piloted by someone other than those designated, i.e., Miller and Meyer, it does not follow that Miller's failure to possess a current medical certificate ipso facto eliminates him as a designated pilot. Exclusions are narrowly construed and uncertainties resolved in favor of the insured. (Silberg v. California Life Ins. Co. (1974) 11 Cal.3d 452, 464-466, 113 Cal.Rptr. 711, 521 P.2d 1103.) The pilot warranty endorsement purports to cause the insurance to be effective only when the aircraft is piloted by a person possessing a pilot certificate and a current medical certificate. Clearly, Miller was designated as a pilot and continued to be so designated even though he lacked a...