Security Ins. Co. of Hartford v. Commercial Credit Equipment Corp.
| Citation | 399 So.2d 31 |
| Decision Date | 19 May 1981 |
| Docket Number | No. 80-1449,80-1449 |
| Parties | SECURITY INSURANCE COMPANY OF HARTFORD, Appellant, v. COMMERCIAL CREDIT EQUIPMENT CORPORATION, Appellee, The Glassworks, Inc., Jay Marden and Richelle Marden, Cross-Appellants. |
| Court | Florida District Court of Appeals |
McDonald & McDonald and David McDonald, Miami, for appellant.
Walton, Lantaff, Schroeder & Carson and Carey A. Randall and Joan S. Buckley, Miami, for appellee.
Nicholson, Bender & Chandler and Don G. Nicholson, Miami, for cross-appellants.
Before BARKDULL, NESBITT and BASKIN, JJ.
An order granting summary judgment holding in effect that the mortgagee of an airplane was insured under a breach of warranty endorsement for loss of the aircraft confiscated by the Colombian government is the subject of this appeal by the insurer. We affirm upon a holding that exclusionary clauses in the insurance policy are inapplicable to the breach of warranty endorsement which provides coverage for the mortgagee. We do not decide either the insured owner's right to recover under the policy or the applicability of policy exclusions to the owner's claims.
In November, 1978 The Glassworks, Inc. purchased a Cessna airplane and financed it through Commercial Credit Equipment Corporation (CCEC). Glassworks obtained insurance from Security covering its interest in the aircraft. In addition, Glassworks obtained coverage of CCEC's interest under a breach of warranty endorsement to the policy through a Telex binder later confirmed by letter. The binder provided "all risk ground and flight hull" coverage.
Subsequently, a Glassworks' pilot flew the airplane to Colombia, South America, where it was detained by Colombian government officials who arrested and fined the crew. Although the crew was released, the airplane remained with the Colombian government.
CCEC sued to recover upon Glassworks' default of its promissory note which had been guaranteed by Jay and Richelle Marden, cross-appellants. CCEC also sued the aircraft owners and Security for Security's failure to pay under the breach of warranty endorsement. Security maintained that its policy insured direct physical loss, disappearance, or damage to the aircraft, not detention or restraint by a governmental authority. The trial court granted summary judgment in favor of CCEC against Security on the insurance question and against Glassworks and the Mardens on the promissory note.
Security's appeal challenges the entry of summary judgment on the ground that genuine issues concerning the nature of the loss and the applicability of the exclusionary provisions of the policy remain to be decided. CCEC argues in response that the exclusions in the policy are inapplicable. It contends the breach of warranty endorsement constitutes a separate insurance agreement between Security and CCEC. Glassworks, Inc. and the Mardens agree with CCEC. They have, however, filed a cross-appeal to protect their position should summary judgment be reversed on the insurance question but affirmed as to their non-payment of the note. Security's policy insuring Glassworks provides: 1(Security) agrees with the insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements of the declarations and subject to the limits of liability, exclusions, conditions, and other terms of this policy to afford those of the following coverages as specified in the declarations.
....
COVERAGE F All Risks, Ground and Flight. To pay for any direct physical loss of or direct physical damage to the aircraft, including disappearance provided the aircraft is missing and not reported for sixty (60) days after take-off.
COVERAGE G All Risks, Ground only excluding Taxiing. To pay for any direct physical damage to the aircraft while not in flight or taxiing.
COVERAGE H All Risks, Ground only including Taxiing. To pay any direct physical loss of or direct physical damage to the aircraft while not in flight.
The exclusions relied upon by Security include:
EXCLUSIONS
This policy does not apply and no coverage is afforded:
....
6. To any loss, or damage or legal liability directly or indirectly occasioned by, happening through or in consequence of war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation or nationalization or requisition or destruction of or damage to property by or under the order of any government or public or local authority.
....
With respect to Coverages F, G, and H (Physical damage):
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17. To any loss or damage arising from war, invasion, civil war, revolution, rebellion, insurrection or war like (sic) operations, whether there be a declaration of war or not, or capture, seizure, arrest, restraint, or detention, or the consequences thereof or of any attempt thereat, or any taking of the property insured, or damage to or destruction thereof, by any government or governmental authority or agent whether secret or otherwise or by any military, naval or usurped power, whether any of the foregoing be done by way of confiscation, requisition or otherwise and whether in time of peace or war, and whether lawful or unlawful.
CCEC relies upon the breach of warranty endorsement furnished for an additional premium. It provides:
BREACH OF WARRANTY ENDORSEMENT COVERAGE F, G, OR H
In consideration of an additional premium of $130.00 (Incl.), it is hereby agreed
Loss or damage, if any, to the aircraft insured under this policy shall be payable as interest may appear to the insured and Commercial Credit Equipment Corporation, Addision, Ill. whose interest in the aircraft is that of a Bailment Lessor, Conditional Vendor or Mortgagee or Assignee of Bailment Lessor, Conditional Vendor or Mortgagee and who hereinafter shall be called the Lienholder. This insurance as to the interests of the said Lienholder shall not be invalidated by any act or neglect of the Lessee, Mortgagor or Owner of the within described aircraft nor by any change in the title or ownership of the property; provided, however, that the wrongful conversion,...
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