Ranger Ins. Co. v. Kovach, 3:96CV02421 (EBB).

• Decision Date: 22 June 1999
• Docket Number: No. 3:96CV02421 (EBB).,3:96CV02421 (EBB).
• Citation: 63 F.Supp.2d 174
• Court: U.S. District Court — District of Connecticut
• Parties: RANGER INSURANCE CO. and Avemco Insurance Co., Plaintiffs, v. Robert KOVACH, et al., Defendants.

Page 174

63 F.Supp.2d 174

RANGER INSURANCE CO. and Avemco Insurance Co., Plaintiffs, v.Robert KOVACH, et al., Defendants.

No. 3:96CV02421 (EBB).

United States District Court, D. Connecticut.

June 22, 1999.

Paul A. Lange, Offices of Paul Lange, Stratford, CT, for plaintiff.

Arthur B. Harris, Charles Samuel Harris, Harris & Harris, Louis S. Ciccarello, Lovejoy & Rimer, Norwalk, CT, for defendant.

RULING ON CROSS MOTIONS FOR SUMMARY JUDGMENT

ELLEN B. BURNS, Senior District Judge.

PlaintiffsRanger Insurance Company("Ranger") and Avemco Insurance Company("Avemco") filed suit in this court seeking (1) a declaratory judgment to determine Ranger's liability under an aviation insurance policy; (2) a determination that Ranger's insurance policy with the Defendant Kovach was void ab initio; (3) a determination that Ranger is entitled to reimbursement for payments made and expenses incurred under the insurance policy; (4) a determination that Ranger and Avemco are entitled to reimbursement from Kovach under a promissory note; and (5) a determination that Ranger and Avemco are entitled to reimbursement from the Estate of Elisabeth Goulston under the promissory note.Pending before the Court are cross motions for summary judgment pursuant to FED. R.CIV.P. 56 on all counts of the complaint.Jurisdiction exists pursuant to 28 U.S.C. §§ 1332and2201.For the reasons set forth below, the Plaintiffs' Motion for Summary Judgment(Doc. No. 84) is GRANTED.The Defendants' Motion for Summary Judgment(Doc. No. 94) is DENIED.

I.Statement of Facts

The Court summarizes only those facts believed necessary to an understanding of the issues in, and the decisions rendered on, these motions.The facts are culled from the affidavits, depositions, answers to interrogatories and other exhibits submitted by both parties.Unless otherwise indicated, these facts are not in dispute between the parties.

This case arises out of the April 12, 1995 crash in Danbury, Connecticut, of a Piper Aerostar multi-engine aircraft, registration number N602PC (the "Aircraft"), owned and operated by Robert Kovach.Present on board the Aircraft at the time of the accident were Kovach, Elisabeth Goulston, Fritz Leisse and Ingrid Leisse.As a result of the crash, all aboard were injured.Although Goulston initially survived the crash, she died as a result of the injuries sustained therein on May 1, 1995.

In May 1994, Kovach and Goulston arranged to finance a major portion of the Aircraft's purchase price through Cornerstone Bank ("Cornerstone").This financing was secured by a promissory note (the "Note").On May 23, 1994, both Kovach and Goulston signed the Note as borrowers.

Also in May 1994, Kovach looked for insurance coverage for the Aircraft.He chose Benchmark Insurance Services, Inc.("Benchmark"), to act as his insurance agent.Kovach spoke to Arthur Bossler of Benchmark, who recommended the Ranger Insurance Company.All of Kovach's discussions concerning the aircraft insurance policy were with Bossler.He never spoke to any employee of Ranger or of Avemco.

Bossler gave Kovach an Aircraft Insurance Application form ("insurance application") to be completed in order to obtain an insurance policy from Ranger.In completing the form, any questions that Kovach had he reviewed with Bossler.In addition, Bossler recommended a company to finance the premium payments.

Kovach claims to have discussed fully with Bossler his prior history of flying to include the fact that he had previously improperly completed an application for a medical certificate which resulted in a revocation of his medical certificate and a 30 day suspension of his license by the FAA.The application for a medical certificate was improperly completed because more than ten years prior to its completion, Kovach had been convicted of a criminal offense and failed to disclose this information.Kovach filed a corrected application for a medical certificate which was granted and his license was reinstated after the 30 day suspension.

Question M on the insurance application asked: "Has any pilot named above had any convictions, suspensions, or revocations for: FAR [Federal Aviation Regulations] violations, use or possession of drugs, or reckless or drunk driving?"Kovach claims to have discussed this question with Bossler in relation to his prior suspension.In reliance upon Bossler's advice that the question related primarily to alcohol and drugs, that the medical certificate infraction was of minor significance and that the box for that question should be checked "no," Kovach checked the box accordingly.Kovach also stated in the application that: "I/We authorize Benchmark Insurance Services, Inc., to represent me/us in placing this insurance."

Ranger provided Kovach with aircraft insurance under policy number GA41490 (the "Policy").The Policy was issued through Ranger's aviation manager, Signal Aviation Underwriters, Inc., with an effective period of May 18, 1994 through May 18, 1995.Issuance of the Policy and determination of the premium were based on information contained in the application.The Policy provided combined single limit bodily injury and property damage liability coverage, with policy limits of $100,000 each person and $1,000,000 each occurrence.After evaluating Kovach's application, Ranger decided to offer him the Policy with an annual premium of $3,275.

The Policy's Coverage Identification Page contains a specific provision (Item 9) concerning "the pilot flying the aircraft."Item 9 refers the reader to "See Endorsement Number 1."Endorsement Number 1 is titled "Pilot Endorsement" and states that it changes Item 9 of the Coverage Identification Page.The Policy also states in at least three other places that coverage will not be provided if the requirements in Item 9 of the Coverage Identification Page are not met.

In addition to the coverages previously set forth, the Policy contains a lienholder's endorsement in favor of Cornerstone Bank.Following the accident, Ranger paid Cornerstone $135,000 pursuant to the lienholder's endorsement.

A separate policy was issued to Cornerstone by Plaintiff Avemco.This policy covered Cornerstone directly for the difference between what Kovach owed Cornerstone on the Note, less what Ranger would pay Cornerstone on the lienholder's endorsement in the event of a total loss.Avemco paid Cornerstone $15,852.10 upon its policy.After the aforementioned payments by the Plaintiff insurers, Cornerstone provided a joint, full assignment of the Note to both Ranger and Avemco.

By virtue of filing this action, Ranger demanded payment from Kovach pursuant to the terms and conditions of the Policy.In addition, Ranger and Avemco also made a joint demand to Kovach for payment upon the terms and conditions of the Note.Ranger and Avemco also made a joint demand to the Estate of Elisabeth Goulston for payment upon the terms and conditions of the Note.

On April 12, 1995, Kovach operated the aircraft on an Instrument Flight Rules ("IFR") flight plan from Washington Dulles International Airport, Chantilly, Virginia, to Danbury Municipal Airport, Danbury, Connecticut, where the aircraft crashed.Kovach acted as pilot in command of that flight.At the time of the aforementioned flight, Kovach held a private pilot certificate issued by the Federal Aviation Administration ("FAA") with ratings for airplane single and multi-engine land as well as instrument airplanes.A restriction on Kovach's airman certificate, however, stated that his operation of multi-engine aircraft was limited to Visual Flight Rules ("VFR") only.

Kovach filed and activated an IFR flight plan prior to departing from Dulles on April 12, 1995.When filing the IFR flight plan, Kovach stated that the pilot in command of the intended flight from Dulles to Danbury was Daniel Southard which in fact was not the truth.

Shortly after takeoff, Kovach entered clouds and during the flight to Danbury experienced occasional cloud penetration.While attempting to land the Aircraft at Danbury, Kovach attempted to do a go around and in the process the aircraft crashed.

As a result of this accident, the FAA revoked Kovach's airman certificate on an emergency basis for the following reasons:

(1) making a fraudulent or intentionally false entry in a record or report (the IFR flight plan)(2) improperly operating an aircraft below the authorized minimum descent altitude ("MDA");

(3) operating an aircraft in a careless and/or reckless manner so as to endanger the lives and property of others; and

(4) serving in the capacity of an airman in violation of a term of his airman certificate.

(Ex. 8, Pls' Supp. to Mot. Summ. Judg.)

In response to the aforementioned Order, Kovach surrendered his airman certificate to the FAA by letter dated June 1, 1995.(Ex. 9, Pls' Supp. to Mot. Summ. Judg.)

The Leisse's brought personal injury actions against Kovach in the Superior Court of the State of Connecticut.Ranger provided a defense to Kovach in those cases pursuant to a reservation of rights and ultimately settled the claims.Goulston's estate is currently being probated in Connecticut and the executrix is Margaret Raczkovy.Goulston is survived by adult children Oliver Goulston, Larwin Goulston and Claudia Goulston, who have sought recovery from Kovach pursuant to Ranger's Policy.By complaint dated April 7, 1997, the Estate of Elisabeth Goulston brought a wrongful death action against Kovach in the Superior Court of the State of Connecticut.Ranger is providing Kovach with a defense in that action pursuant to a reservation of rights.

II.Legal Analysis

A.Standard of Review

Summary judgment pursuant to Federal Rule of Civil Procedure 56(c) is appropriate if the Court finds, after viewing the facts in the light most favorable to the non-moving party, that there is no genuine issue of material fact pertaining to a given issue, and that the moving party is entitled to judgment as a...