Old Republic Ins. Co. v. Gormley, CIV. S 99-19.

Decision Date10 December 1999
Docket NumberNo. CIV. S 99-19.,CIV. S 99-19.
Citation77 F.Supp.2d 705
PartiesOLD REPUBLIC INSURANCE COMPANY v. Michael B. GORMLEY, et al.
CourtU.S. District Court — District of Maryland

Jonathan M. Stern, Schnader Harrison Segal & Lewis LLP, Juliet M. Stoudt, Schnader, Harrison, Segal & Lewis, Washington, DC, for Old Republic Insurance Company, plaintiffs.

Charles Edward Mentzer, Law Office, Baltimore, Patrick M. Regan, Regan, Halperin & Long, Washington, DC, Johnny E. Dollar, Dollar Laird, LLP, Monroe, LA, for Michael B. Gormley, Latta Patel, Arthur H. Mensch, as Personal Representative of The Estate of Edward S. Mehlman, Deceased, Connie M. Caffef, as, Personal Representative of The Estate of Andrew L. Simon, Deceased, defendants.

MEMORANDUM OPINION

SMALKIN, District Judge.

This is a diversity case, in which the plaintiff, insurer of a 1969 Fairchild-Hiller FH1100 helicopter, N1345Q, seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 that it is not obliged to provide a defense or coverage in connection with litigation arising from the fatal crash of the helicopter.

The aircraft crashed on Maryland's Eastern Shore on April 26, 1998, killing both of its occupants, Dr. Edward Mehlman and Mr. Andrew Simon. Neither of these individuals was the owner of the helicopter; it was owned by Michael Gormley and Latta Patel, who were not on board. The owners and the personal representatives of the deceased are the defendants in the present case. The plaintiff has moved for summary judgment, which the defendants have opposed. No oral hearing is needed. Local Rule 105.6, D.Md. In that there is no triable issue, for reasons to be articulated below, the plaintiff's motion will be granted.

To understand this case, one must have a bit of background in the federal regulations governing the piloting of aircraft. After required training, experience, and testing, pilots are issued an "airman certificate" under Title 14, Part 61 of the Code of Federal Regulations (C.F.R.), which is valid for exercising the privileges of pilot-in-command of an aircraft according to the ratings and limitations stated on the certificate.

With some minor exceptions not here relevant, all flying things that are piloted are aircraft. Some are airplanes (those with fixed wings and motors), while others are rotorcraft (those with rotary wings). Helicopters are one sort of rotorcraft (gyroplanes being another, rarer sort). An airman certificate issued for airplanes does not allow one to act as pilot in command of a rotorcraft, but one may manipulate the controls of an aircraft for which one holds no airman certificate, so long as the pilot in command holds an appropriate certificate.

It cannot be determined which of the two individuals aboard was actually manipulating the controls at the time the helicopter crashed and which was acting as pilot in command; obviously, only the decedents could answer those questions. Mehlman was a low-time airplane pilot, who had logged only a few hours of flight time in a helicopter. Mehlman's airman certificate was limited to the aircraft category and class of "Airplane Single Engine Land." Thus, he could not exercise the privileges of a pilot in command of a helicopter. 14 C.F.R. § 61.63(a). Simon, on the other hand, was a high-time pilot who held an airman's certificate that permitted him to act as pilot in command of a helicopter under 14 C.F.R. Part 61. Although Simon had logged thousands of hours as pilot in command of aircraft, his logged helicopter time was below 250 hours, a fact of some consequence, as shall presently appear.

Even though, as noted above, the identity of the manipulator of the controls at the time of the crash cannot be determined, it is immaterial who was actually operating the aircraft, because, whether it was being flown by Simon or Mehlman, there is no coverage. That is, even if the helicopter was being physically piloted by Simon — who was the only person authorized to act as pilot in command — there was no coverage under the policy in question, for reasons that follow.

The policy in question is governed by Maryland law, as Maryland's choice of law rule in contract cases requires the forum court to utilize to lex locus contractus. The locus contractus in question is the place where the last act forming the contract was performed, which, in the case at hand, was the affixation of a counter-signature in Maryland. See, e.g., Ward v. Nationwide Mut. Auto. Ins. Co., 328 Md. 240, 247, 614 A.2d 85, 88 (1992); Rouse Co. v. Federal Ins. Co., 991 F.Supp. 460, 462-63 (D.Md.1998).

Under Maryland law, insurance contracts are not necessarily construed against the insurer, and their construction is a matter of law for the court where the language is unambiguous. Fed. Leasing, Inc. v. Amperif Corp., 840 F.Supp. 1068, 1077 (D.Md.1993).

The policy in question includes an unambiguous "open pilot warranty" provision (an "open" warranty covers all pilots meeting the specifications, rather than only one or more named pilots), as follows:

Pilots: When in flight the aircraft will be piloted only by ANY COMMERCIAL PILOT WITH A ROTORCRAFT RATING PROPERLY CERTIFICATED BY THE FAA HAVING A MINIMUM OF 1200 TOTAL LOGGED ROTORCRAFT HOURS, 500 OF WHICH HAVE BEEN IN TURBINE-POWERED ROTORCRAFT, INCLUDING NOT LESS THAN 50 HOURS IN THE MAKE AND MODEL ROTORCRAFT BEING FLOWN.

Mem. In Supp. Of Mot. For Summ.J. at 4.

Maryland law recognizes and enforces "pilot warranty" clauses, without a showing that a pilot's failure to qualify thereunder was a cause-in-fact of a loss. See Aetna Casualty & Surety Co. v. Urner, 264 Md. 660, 287 A.2d 764 (1972). Federal courts uniformly enforce them as well, see, e.g., U.S. Fire Ins. Co. v. Producciones Padosa, Inc., 835 F.2d 950 (1st Cir.1987), and for good reason. Pilot qualifications and experience are obviously factors bearing directly on the risk the insurer is underwriting. Aetna, 264 Md. at 667-68, 287 A.2d at 768.

Where, as here, pilot warranty provisions require a certain number of "logged" hours, that provision is implemented by reference to the actual pilot log. Pilot time accrued, but not logged, is ignored, even if the pilot was not required to log all the flight time (because he was not relying on it to obtain an FAA rating) under 14 C.F.R. § 61.51. See e.g., Ideal Mut. Ins. Co. v. Limerick Aviation Co., 550 F.Supp. 437, 440 (E.D.Pa.1982). See also Ideal Mut. Ins. Co. v. Lucas, 593 F.Supp. 466, 469 (N.D.Ga.1983)(policy required 100 logged hours; 96.8 logged hours precluded coverage). There are many other cases that stand for the same proposition. See, e.g., Monarch Ins. Co. v. Polytech Ind., Inc., 655 F.Supp. 1058 (M.D.Ga.1987), aff'd, 833 F.2d 1020 (11th Cir.1987); Ideal Mut. Ins. Co. v. Last Days Evangelical Assoc., Inc., 783 F.2d 1234, 1239 (5th Cir.1986). The Court notes that the substantive law of Texas which resulted in a remand in Ideal v. Last Days to determine if the lack of pilot qualifications contributed to the loss, is not the same as that of Maryland and the majority of the states, where no such contribution need be shown by the insurer. See cases collected in Security Ins. Co. of Hartford v. Andersen, 158 Ariz. 431, 439-40, 763 P.2d 251, 259-60 (App.1986)(accepting minority view), vacated in pertinent part, 158 Ariz. 426, 429, 763 P.2d 246, 249 (1988)(accepting majority rule (Maryland's) as law of Arizona).

In this case, there can be no genuine dispute of material fact, under the standards of Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) and Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), that both Mehlman and Simon failed to meet the pilot warranty requirements. Mehlman had only a few hours of logged time in rotorcraft, and...

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