Security Ins. Co. of Hartford v. Andersen, CV-86-0616-PR

Decision Date04 October 1988
Docket NumberNo. CV-86-0616-PR,CV-86-0616-PR
Citation763 P.2d 246,158 Ariz. 426
PartiesSECURITY INSURANCE COMPANY OF HARTFORD, a Connecticut corporation, Plaintiff- Appellee, v. Darryl Don ANDERSEN, as Trustee of the Don Thomas Andersen Living Trust; Darryl Don Andersen, Dana Lyle Andersen, Boyce Andersen, and Lorene Sorensen, children of Don Thomas Andersen, deceased; Robert Wilson, Special Administrator of the Estate of Don Thomas Andersen, deceased; Mary Jean Alder, surviving spouse of Paul Jeffrey Alder Living Trust, and as natural parent and next friend of Dustin Alder, Lori Alder, and Rohn Alder, children of Paul Jeffrey Alder, deceased; Francis M. Cooper, surviving spouse of Forrest W. Cooper, Jr., deceased, Trustee of the Forrest W. Cooper, Jr. Living Trust, and personal representative of the Estate of Forrest W. Cooper, Jr., deceased, Defendants-Appellants.
CourtArizona Supreme Court

Beer & Toone, P.C. by Donald P. Roelke, Thomas L. Toone, Phoenix, for appellee/cross-appellant.

Teilborg, Sanders & Parks, P.C. by David J. Damron, Coni Rae Good, Phoenix, for appellants/cross-appellees Alder.

Miller & Pitt, P.C. by John L. Tully, Tucson, for appellant/cross-appellee Cooper.

Ryan & Ryan by Thomas M. Ryan, Chandler, Joe V. Anderson, Congress, for appellants/cross-appellees Anderson, Sorenson and Wilson.

GORDON, Chief Justice.

Security Insurance of Hartford (Security) sought review in this court of a court of appeals' opinion that held, inter alia, that in order for an insurance company to deny coverage pursuant to a policy exclusion based on an aviation regulation, there must be a causal connection between the violation of the regulation and the actual loss incurred. Security Ins. Co. of Hartford v. Andersen, 158 Ariz. 431, 439-441, 763 P.2d 251, 259-261 (App.1986). We granted review on this issue. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and Ariz.R.Civ.App.P. 23 17A A.R.S. We now reverse.


The undisputed facts of this case are presented in great detail in the court of appeals' opinion. We will repeat only those facts necessary to resolve the issue presently before us.

Security issued a comprehensive aviation insurance policy to Don Andersen on September 9, 1981. The "pilots clause" of the policy, which appeared in the Declarations, states:

7. PILOTS. The coverage afforded by this policy shall not apply while the aircraft is operated in flight by other than the following pilots:

As Endorsed.

The "approved pilots endorsement" of the policy stated:

In consideration of the premium for which this policy is written, it is under stood and agreed that the coverage afforded by this Policy shall apply only while the aircraft is operated in flight by the pilot(s) designated below and then only if the said pilot(s) is properly certificated and rated by the FAA as shown below, has the minimum flying experience, all as indicated below, and in addition holds a valid and current medical certificate of the appropriate class:

(1) Don T. Anderson [sic] providing he holds a Certificate designating him as a: Private Pilot WITH THE FOLLOWING RATING(S): Single-Engine Land.

(Emphasis added.)

Further, the "EXCLUSIONS" portion of the policy provided that:

This Policy does not apply and no coverage is afforded:


2. While the aircraft is in flight;

(a) If piloted by other than the pilot or pilots designated in the Declarations or endorsed hereon;

(b) If piloted by a person not properly certificated, rated, and qualified under the current applicable Federal Air Regulations for the operation involved whether said pilot is designated in the Declarations or endorsed hereon or not;


At the time of the accident, 14 C.F.R. § 61.3(c) provided in relevant part:

Medical certificate.... [N]o person may act as pilot ... of an aircraft, ... unless he has in his personal possession an appropriate current medical certificate issued under part 67 of this chapter.

It is undisputed that Andersen held no valid, current medical certificate at the time of the accident. His previous certificate had expired on May 30, 1981. There is no evidence concerning why Andersen did not renew his medical certificate.

On October 6, 1981, decedents Andersen, Paul Alder, and Forrest Cooper, Jr., were flying in Andersen's plane. The plane crashed, and all three men were killed.

Security, after discovering that Andersen had no medical certificate at the time of the accident, brought an action seeking a declaration that its policy did not cover the accident. The trial court resolved the issue in Security's favor by summary judgment. The court of appeals reversed, holding that Security could not enforce its policy exclusion based on Andersen's failure to have a valid medical certificate, because it found that his failure to have such a certificate was not causally related to the accident. 1


Where ambiguity in an insurance contract exists, the policy will be construed against the insurer. See, e.g., Roberts v. State Farm Fire and Casualty Co., 146 Ariz. 284, 285-86, 705 P.2d 1335, 1336-37 (1985); Stearns-Roger Corp. v. Hartford Accident and Indem. Co., 117 Ariz. 162, 165, 571 P.2d 659, 662 (1977). This is especially true where the ambiguity involves an exclusionary clause. Roberts, 146 Ariz. at 286, 705 P.2d at 1337; Mission Ins. Co. v. Nethers, 119 Ariz. 405, 408, 581 P.2d 250, 253 (App.1978).

These rules of construction apply, however, only where there is ambiguity. Where the policy language is clear, a court may not take "the easy way out" by inventing ambiguity, and then resolving it to find coverage where none exists under the policy. See Transamerica Ins. Group v. Meere, 143 Ariz. 351, 355, 694 P.2d 181, 185 (1984); Travelers Indem. Co. v. State, 140 Ariz. 194, 197, 680 P.2d 1255, 1258 (App.1984). As we have said, a "court should not attempt to revise the policy to increase the risk or extend liability just to accomplish a so-called good purpose." Stearns-Roger Corp., 117 Ariz. at 165, 571 P.2d at 662.

Applying these principles to the case at hand, there is no question that the insurance policy did not provide coverage for the plane crash at issue. The policy provided that "coverage ... shall apply only while the aircraft is operated in flight by the pilot(s) designated below and then only if the pilot(s) ... holds a valid and current medical certificate of the appropriate class."

Andersen does not really dispute this. Nonetheless, he argues, and the court of appeals agreed, that aviation insurance coverage may not be denied under an applicable exclusion where the excluded risk had no causal connection to the particular loss suffered by the insured. The court of appeals recognized that this issue has been litigated in many other jurisdictions and that the decided cases are "irreconcilably in disagreement."

Of the courts that have considered this issue, the majority has held that aviation insurers can avoid liability due to a breach of an insurance policy provision, even when the breach did not cause the accident, so long as the policy language is unambiguous. See Annotation, Aviation Insurance: Causal Link Between Breach of Policy Provisions and Accident as Requisite to Avoid Insurer's Liability, 48 A.L.R. 4th 778 (1986). See Security Ins. Co., 158 Ariz. at 439, 763 P.2d at 259 (collecting cases). The minority holds that the breach of a policy provision must be causally linked to the loss before the insurance company can avoid coverage. See Annotation, supra, at 783.

After examining the policies supporting each view, the court of appeals adopted the minority view, 2 believing that this approach was more consistent with Arizona law. Security Ins. Co., at 440, 763 P.2d at 260 (citing Zuckerman v. Transamerica Ins. Co., 133 Ariz. 139, 650 P.2d 441 (1982); Kepner v. Western Fire Ins. Co., 109 Ariz. 329, 509 P.2d 222 (1973); Lindus v. Northern Ins. Co., 103 Ariz. 160, 438 P.2d 311 (1968) ).

We disagree, and hold that under the facts of this case, where the exclusion was narrow and specifically delineated what was and what was not covered, where the relevant clause was an exclusion of coverage (as opposed to some kind of condition subsequent), and where the exclusion was completely unambiguous, the majority approach is more consistent with Arizona law. In this case, no causal connection need be proved.

The rationale for a court not imposing a causal connection when none is indicated in the policy is clear.

An insurance policy is a contract. In this one the parties expressly "agreed that coverage provided by this policy [ ...] shall not apply while such aircraft is in flight unless the pilot in command of the aircraft is properly certificated. * * * " The clear meaning of this language is not that the risk is excluded if damage to the aircraft is caused by failure of the pilot to be properly certificated, but that the risk is excluded if damage occurs while the aircraft is being flown by a pilot not properly certificated. Under such circumstances coverage under the policy simply did not exist and it was not necessary for the insured to show any causal connection between the breach of the exclusionary clause and the insured's loss.

Baker v. Ins. Co. of North America, 10 N.C.App. 605, 608, 179 S.E.2d 892, 894 (1971) (emphasis in original). See also Bruce v. Lumbermens Mutual Casualty Co., 222 F.2d 642 (4th Cir.1955); Arnold v. Globe Indem. Co., 416 F.2d 119 (6th Cir.1969).

We find the Baker court's statements in accord with Arizona law. It has long been the policy of this court that:

[The insurer] may lawfully exclude certain risks from the coverage of its policy, and where damage occurs during operation of the insured aircraft under circumstances as to which the policy excludes coverage, there is no coverage.

Pacific Indem. Co. v. Kohlhase, 9 Ariz.App. 595, 597, 455 P.2d 277, 279 (1969) (quoted in Omaha Sky Divers Parachute Club, Inc. v. Ranger Ins. Co., 189 Neb. 610, 613, 204 N.W.2d 162,...

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