North American Specialty Ins. Co. v. Myers
Decision Date | 16 April 1997 |
Docket Number | Nos. 96-1347,96-1358,s. 96-1347 |
Citation | 111 F.3d 1273 |
Parties | 46 Fed. R. Evid. Serv. 1417 NORTH AMERICAN SPECIALTY INSURANCE COMPANY, Plaintiff-Appellee, v. Shirley MYERS (96-1358), as Personal Representative of the Estate of John Myers, deceased, Phyllis Huffman (96-1347), as Personal Representative of the Estate of Arthur Huffman, deceased, and Clare Colwell (96-1358), Defendants/Third-Party Plaintiffs-Appellants, Wenk Aviation Insurance Agency, Inc., and Charles H. Wenk, Third-Party Defendants-Appellees. |
Court | U.S. Court of Appeals — Sixth Circuit |
Tobin H. Dust (briefed), Fordney, Dust & Prine, Saginaw, MI, Eric A. Cunningham, III, Michael G. McQuillen (argued and briefed), Adler, Murphy & McQuillen, Chicago, IL, for North American Specialty Ins. Co.
Mark S. Lorence (briefed), Gaylord, MI, David Ian Katzman (briefed), John D. McClune (argued), Broomfield, CO, for Shirley Myers and Clare Colwell.
Mark R. Daane (argued and briefed), Angela L. Jackson (briefed), Hooper, Hathaway, Price, Beuche & Wallace, Ann Arbor, MI, for Phyllis Huffman.
Marilyn A. Madorsky (argued and briefed), Provizer, Lichtenstein & Phillips, Southfield, MI, for Wenk Aviation Ins. Co. and Charles H. Wenk.
Before: KENNEDY, KRUPANSKY, and NORRIS, Circuit Judges.
Defendants Shirley Myers, representative of the estate of John Myers, Clare Colwell, and Phyllis Huffman, representative of the estate of Arthur Huffman, appeal the grant of summary judgment by the District Court in favor of plaintiff North American Specialty Insurance Company ("NAS"). NAS sought a declaration that the insurance policy issued by it to Colwell and John Myers does not provide any coverage for the accident at issue. The Myers estate and Colwell also appeal the dismissal of their third-party complaint against third-party defendants Wenk Aviation Insurance Agency, Inc. and Charles Wenk (since the liability of Wenk and Wenk Aviation are the same, they will be referred to as "Wenk"). Finally, the Myers estate and Colwell appeal the denial of their motion for leave to amend their counter- and third-party complaints. For the following reason, we AFFIRM the rulings of the District Court.
In 1992, Colwell and John Myers purchased a 1959 single-engine Piper Comanche airplane. Colwell sought liability and hull insurance from Charles Wenk at Wenk Aviation on a recommendation from his flight instructor Tom Weiss. Wenk informed Colwell that he would search for quotes for a policy for the Piper Comanche and then call back. Wenk contacted and received a quote from Walter Weber, an underwriter at Southern Aviation, the underwriting department of NAS. Wenk called Colwell back with the quote from Weber, which Colwell accepted. Accordingly, Wenk requested Weber to bind coverage for the plane. Wenk further mailed on November 18, 1992 a binder letter and application ("binder") for the policy to Colwell and John Myers.
The binder, which represented an abbreviated description of the terms of the policy, indicated that the annual premium would be $1,013 and that coverage would include $23,000 for the hull and $1,000,000 in liability for each occurrence, limited to $100,000 for each passenger. Coverage commenced November 18, 1992. Under the section entitled "pilot information," the binder named the two insureds. The section also contained these two provisions:
Open Pilot Provisions: PVT/750TT/250RG/25M & M
The parties agree that the "Special Pilot Requirements" apply to the insureds and indicate that, before either of the insureds could fly the plane alone, coverage is conditioned upon their having had fifteen hours of flight instruction with a certified flight instructor ("CFI"). Likewise, the parties agree that the "Open Pilot Provisions" require a pilot subject to its conditions to have had a private pilot's license, 750 hours of total flying time, 250 hours of flying a plane with retractable gear, and 25 hours of flying time in the same make and model aircraft as the insured plane.
The binder provided that "the terms and conditions of this application and the policy currently in use by the insurers shall be the basis of any contract between me/us and the insurance company." The document further stated that "there is no coverage in flight unless the aircraft is being operated by the pilot(s) designated on this document who has/have at least the certificate ratings and pilot experience indicated and who, is/are properly qualified for the flight involved."
After signing it on November 23, 1992, the insureds returned the completed binder with a $300 deposit to Wenk, who forwarded the application to NAS. On November 28, 1992, NAS signed the policy and issued the pilot requirements on December 1, 1992. Although Wenk received a copy of the policy from NAS shortly thereafter, he did not send a copy to the insureds until January 7, 1993.
On December 19, 1992, John Myers and Arthur Huffman, a CFI, left Otsego County Airport in Michigan to fly to North Carolina. One purpose of the flight was for Myers to receive his requisite training from Huffman. Shortly after take off, the plane crashed and both men died. Although it is unclear which man was flying the plane at the time of the crash, all parties have assumed that Huffman was piloting the craft. The Huffman estate, however, also has proceeded on the alternative theory that NAS has a duty to defend and indemnify the Myers estate and Colwell against its claims if Myers was piloting the plane during the accident.
The policy contains a section entitled "pilot requirements endorsement," which states in part that "[t]his policy is not in effect while the aircraft is in flight or in motion unless the pilot of the aircraft meets all the requirements specified herein." The section describes "persons permitted to fly the aircraft" as:
Clare Colwell, a private or commercial, single-engine land rated pilot to receive 15 hours of dual instruction in the insured aircraft by a FAA certified single-engine land flight instructor prior to solo in the insured aircraft.
John Myers, a private or commercial, single-engine land rated pilot to receive 15 hours of dual instruction in the insured aircraft by a FAA certified single-engine land flight instructor prior to solo in the insured aircraft.
Any FAA certified single-engine land flight instructor who has flown and logged at least 25 hours in the same make and model as the insured aircraft, only while instructing a named pilot listed above in the insured aircraft.
Or any private or commercial, single-engine land rated pilot who has flown 750 total logged hours including 250 hours in an aircraft equipped with retractable landing gear and 25 hours in the same make and model as the insured aircraft.
Invoking the above language and the provisions of the binder, NAS has declined to provide coverage for the accident on the basis that Arthur Huffman did not satisfy the requirement of having flown and logged twenty-five hours in the same make and model aircraft as the insured plane.
In Count I of its complaint based on diversity jurisdiction, NAS sought a declaratory judgment that, because Arthur Huffman did not satisfy the requirements applicable to CFIs, the policy provides no coverage for the crash and NAS has no duty to indemnify or defend against any claims brought against the Myers estate or Colwell. In Count II, NAS sought a declaratory judgment that it has no duty to indemnify or defend against any claims brought against the Huffman estate by any party, including the Myers estate and Colwell, because Huffman did not satisfy the conditions for coverage under the policy. Appellants soon filed counter-complaints against NAS alleging breach of contract and fraud, and later filed third-party complaints against Wenk and Wenk Aviation alleging similar claims. 1
On June 16, 1995 NAS filed a motion for partial summary judgment on Count II of its complaint, and third-party defendants filed a motion for summary judgment on all claims against them by appellants. Further, the Myers estate filed a motion for summary judgment on its breach of contract and fraud claims.
On August 18, 1995, the District Court issued an opinion and order which granted the motions by NAS and Wenk and denied the motion by the Myers estate. Noting that the parties had assumed that Huffman was flying the plane for the purposes of Count II, the court found that the policy did not provide coverage for Arthur Huffman. The District Court also found that the Myers estate had no cause of action against appellees based on breach of contract or fraud. The District Court, however, did allow appellants leave to file a motion to amend their third-party complaints against Wenk and Wenk Aviation. The District Court later denied a motion for reconsideration filed by the Myers estate and Colwell; in that motion, appellants presented an affidavit which assertedly established that Arthur Huffman had satisfied the conditions of the policy.
The Myers estate and Colwell filed a motion for leave to amend their complaints against all appellees in order to include claims of negligence and estoppel. On October 18, 1995, the District Court denied this motion, concluding that because alleged statements and late delivery of the policy by Charles Wenk did not prevent appellees from enforcing the written terms of the policy, amendment would be futile.
On January 12, 1996, the District Court granted a motion for summary judgment by NAS as to Count I of its complaint, noting only that it was basing this ruling upon the same reasons explained in its August 18, 1995 grant of summary judgment as to Count II. This decision, coupled with other rulings which are not at issue during this appeal, resulted in the complete dismissal of the case. Appellants filed these timely consolidated appeals.
All appellants assert that there are genuine issues...
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