Ochs v. Avemco Ins. Co.

• Decision Date: 23 December 1981
• Docket Number: No. 7504,7504
• Parties: Ronald B. OCHS, Appellant, v. AVEMCO INSURANCE COMPANY, Respondent. ; CA 19089.
• Court: Oregon Court of Appeals

Page 421

636 P.2d 421

54 Or.App. 768

Ronald B. OCHS, Appellant, v. AVEMCO INSURANCE COMPANY, Respondent.

No. 7504; CA 19089.

Court of Appeals of Oregon.

Argued and Submitted June 24, 1981.

Decided Nov. 16, 1981.

Reconsideration Denied Dec. 23, 1981.

James W. Laws, Madras, argued the cause for appellant. With him on the briefs was Shepard & Stewart, Madras.

John L. Langslet, Portland, argued the cause for respondent. With him on the brief was Martin, Bischoff, Templeton, Biggs & Ericsson, Portland.

Before GILLETTE, P. J., and ROBERTS and YOUNG, JJ.

YOUNG, Judge.

This is an action on an insurance policy for property damage to the insured aircraft. Defendant's motion for summary judgment was granted. ORCP 47. We affirm.

The insurance policy excluded coverage for property damage to an aircraft that did not have a current "airworthiness certificate." The issue is whether the exclusion applies when there is no causal connection or relationship between the policy exclusion, i. e., failure of the aircraft to have the appropriate certificate, and the cause of the accident. A summary judgment may be granted:

" * * * if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." 47 C ORCP.

Plaintiff was in the process of landing the aircraft. It ground-looped and flipped on its back. The cause of the accident was a defective or broken tail wheel spring. Plaintiff, in his reply, admitted the allegations in the answer, that the aircraft did not bear a valid and currently effective "standard" airworthiness category certificate issued by the Federal Aviation Agency, in that the aircraft did not have an annual inspection within the 12 calendar months prior to the accident as required by Federal Aviation Regulations.

Under the policy definitions, an aircraft is covered while "in-flight," which includes landing. Policy coverage C:

"The term 'in-flight' means the time commencing when the aircraft moves forward in attempting to take-off and continuing thereafter until it has completed its landing run."

The policy excludes:

"(g) Under (coverage C) to any aircraft, while in flight

"(1) not bearing a valid and currently effective 'standard' Airworthiness Category Certificate issued by the Federal Aviation Agency * * *."

The language of the exclusion is clear and unambiguous. There is no "in-flight" coverage if the aircraft does not bear the appropriate certificate. Unambiguous language does not require construction. Inglis et ux. v. Gen. Casualty Co., 211 Or. 116, 118, 316 P.2d 546 (1957). We understand plaintiff's theory to be that defendant is not entitled to a summary judgment as a matter of law.

Plaintiff argues that there must be a causal connection between the cause of the accident and the policy exclusion to enable defendant to avoid payment of the loss. Based on an affidavit in opposition to the motion, plaintiff contends that the broken tail wheel spring and the absence of the airworthiness certificate have no causal relationship. He reaches that conclusion by reasoning that the mandatory annual aircraft inspection required by federal regulations would not include the inspection of the tail wheel spring, and, even if it did, a visual inspection would not necessarily reveal a defective spring. ¹ No Oregon case has been cited that deals directly with the basic question presented.

Plaintiff places considerable reliance on South Carolina Ins. v. Collins, 269 S.C. 282, 237 S.E.2d 358 (1977). There, the court held that the insurer must show a causal relationship between the crash of the aircraft and the pilot's failure to possess a valid medical certificate as required by the terms of the policy. The court based its decision in part on earlier South Carolina cases involving automobile liability and life insurance policies. In Fireman's Fund Ins. v. McDaniel, 187 F.Supp. 614 (Miss.1960), aff'd on other grounds, 289 F.2d 926 (5th Cir. 1961), the district court held that under Mississippi law there must be a causal connection between a policy exclusion for operation of an aircraft in violation of the pilot's certificate and the loss. Compare Halls Aero Spraying v. Underwriters at Lloyds, London, 274 F.2d 527 (5th Cir. 1960), applying Texas law; see also, Annot., 166 A.L.R. 1118 (1947), discussing "violation of law" exclusions in life and accident insurance policies.

There is contrary authority which we consider to be the better reasoned. In Underwriters at Lloyds of London v. Cordova Airlines, 283 F.2d 659 (9th Cir. 1960), the court found that no causal relationship was required. There, an aircraft was carrying dynamite. The crash was not caused by the dynamite. The policy excluded coverage of flights that required a waiver from federal authorities. Flying dynamite required a waiver. The court held there was no coverage. The court in Hollywood Flying Service v. Compass Ins. Co., 597 F.2d 507, 508 (5th Cir. 1979), considered a policy that excluded coverage of an aircraft in flight which did not have a valid airworthiness certificate at the time of the crash. The court (applying Florida law) held:

" 'An aircraft insurance policy may validly condition liability coverage on compliance with a governmental regulation and, while non-compliance with such a regulation continues, the insurance is suspended as if it had never been in force. There need be no causal connection between the non-compliance and the loss or injury.' Glades Flying Club v. Americas Aviation & Marine Ins. Co., 235 So.2d 18, 20, Fla.App. (1970). It therefore does not matter that the cause of the crash is unknown and that no causal relationship has been established between the missing manual or the inoperative equipment and the loss of the plane. See Electron Machine Corp. v. American Mercury Insurance Co., 5 Cir. 1961, 297 F.2d 212, 214." ²

In Royal Indemnity Co. v. John F. Cawrse Lumber Co., 245 F.Supp. 707, 710 (D.Or.1965), the policy provided coverage only while the aircraft was piloted by a person holding a valid and current pilot certificate. The federal regulation distinguished between a current pilot certificate and a current medical certificate. The policy did not require the pilot to have a current medical certificate, and he did not have one. The court held there was coverage on the basis that it would not imply an exclusion not expressed in the policy. The court said

" * * * (W)e must also remember that it is the fundamental right of the insurer to decide what it will and what it will not insure against, providing that the provision is not against public policy * * *

"* * *

"We must not confuse the language of this endorsement with broad exclusions, limitations or exceptions, employed in some policies, such as 'operation in violation of law,' or 'operation...