Security Ins. Co. of Hartford v. Andersen
| Citation | 763 P.2d 251,158 Ariz. 431 |
| Decision Date | 16 September 1986 |
| Docket Number | CA-CIV,No. 1,1 |
| Parties | SECURITY INSURANCE COMPANY OF HARTFORD, a Connecticut corporation, Plaintiff- Appellee, Cross-Appellant, 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, deceased, Trustee of the Paul J. 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, Cross-Appellees. 8041. |
| Court | Court of Appeals of Arizona |
Appellants are the personal representatives and surviving relatives of the three men killed in the airplane crash out of which this action arose. They seek reversal of the trial court's summary judgment ruling that the aircraft liability policy issued by appellee Security Insurance Company of Hartford (Security) to decedent Don Thomas Andersen excluded coverage for the crash because Andersen failed to meet the requirements of the policy's "approved pilots" endorsement. On cross appeal, Security attacks the trial court's earlier ruling that coverage under the policy was not excluded on the ground that the crash occurred during IFR (Instrument Flight Rules) operation, for which Andersen was not rated. Security also challenges the trial court's refusal to grant its application for an award of attorney's fees pursuant to A.R.S. § 12-341.01.
The appeal presents the following issues for our consideration: (1) whether Security was estopped to deny coverage; (2) whether under the circumstances of the issuance of the policy Security was bound by Andersen's "reasonable expectations" concerning the coverage he was purchasing, pursuant to Darner Motor Sales, Inc. v. Universal Underwriters Ins. Co., 140 Ariz. 383, 682 P.2d 388 (1984); and (3) whether under Arizona law the facts that bring a case within a coverage exclusion in an aircraft liability policy must be causally connected to the accident in question before the exclusion may be given effect. Security's cross appeal raises two additional issues: (4) whether the trial court erred in holding that Andersen was properly rated for the flight that resulted in the crash; and (5) whether the trial court abused its discretion in denying Security an award of attorney's fees under A.R.S. § 12-341.01.
The facts essential to our resolution of the foregoing issues are undisputed. Don T. Andersen, the insured, owned a Cessna 210 airplane which later crashed and gave rise to this litigation. In July of 1981, Andersen contacted Walter Vance of Valley Insurance Associates in order to obtain aircraft liability coverage to commence when his current policy expired on August 31, 1981. Vance in turn contacted Carroll and Associates, Inc. (Carroll), an independent insurance agency in Tempe, Arizona, to obtain the required insurance. Over the telephone, Vance told Carroll employee Karen Lehman about the Cessna 210, Andersen's pilot certificate and ratings, his total logged hours, and his prior accident history. The "quote sheet" Lehman prepared based on that conversation neither called for nor included information concerning the status of the proposed pilot's medical certificate.
On July 30, 1981 Lehman called Vance and quoted an annual premium of $1,989 for an aircraft policy to be underwritten by Security and issued through Aerospace Managers Agency, Inc. Thereafter Lehman mailed Vance an aviation insurance application. The application requested no information concerning the proposed pilot's medical certificate. Andersen signed the application on August 27, 1981, and it was returned to Carroll. On August 31, 1981, Carroll issued a written binder and sent it to Andersen at Valley Insurance Associates' address. The binder included no reference to a medical certificate requirement. It provided in pertinent part:
APPROVED PILOTS: Don Andersen and any private pilot or better with 750 total hours of which 250 hours were in retractable gear aircraft and 25 hours in make and model insured.
Security issued Andersen's policy on September 9, 1981 and mailed it to Carroll. On September 24, 1981 Carroll mailed the policy to Andersen at the address for Valley Insurance Associates. By October 6, 1981, the date of the accident, Vance had not yet forwarded the policy to Andersen.
The "approved pilots endorsement" of Andersen's policy provided in pertinent part as follows:
In consideration of the premium for which this Policy is written, it is understood 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.
The "exclusions" portion of Andersen's policy provided in part:
This Policy does not apply and no coverage is afforded:
* * *
* * *
2. While the aircraft is in flight:
* * *
* * *
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:
C. Medical certificate. except for free balloon pilots piloting balloons and glider pilots piloting gliders, no person may act as pilot in command or in any other capacity as a required pilot flight crew member of an aircraft under a certificate issued to him under this part, unless he has in his personal possession an appropriate current medical certificate issued under part 67 of this chapter.
See also 14 C.F.R. § 61.23(c). In fact, Andersen held no valid, current medical certificate at any time relevant to this litigation. His previous certificate expired on May 30, 1981. It is undisputed that Andersen did not renew it, and there is no evidence concerning the reason he did not.
On October 4, 1981, decedents Don T. Andersen, Paul Jeffrey Alder and Forrest W. Cooper, Jr. flew in Andersen's Cessna 210 from Arizona to Stephenville, Texas to attend a farming seminar at the Texas A & M University research center. At approximately 9:40 a.m. on October 6, 1981, the three took off northbound from the Stephenville airport on a return flight to Arizona, which was to have included stops at Seminole, Texas and Portales, New Mexico to visit peanut farms. When the Cessna 210 took off, the weather at Stephenville was clear and the visibility was good. C.L. Castilaw, a pilot who left the Stephenville airport on a northward flight shortly after the Andersen party, obtained two weather briefings before he took off. He stated:
I got one at 7:00 a.m. from Abilene Flight Service. There [sic] were reporting 9,000 feet broken with 10 miles visibility. At 9:00 a.m. I got a weather briefing from Ft. Worth Flight Service that told me that Abilene was reporting 900 feet overcast with one half mile visibility with rain or fog and drizzle. 1
Castilaw further stated:
Q. Alright, after you departed the Stephenville area did you encounter any weather conditions?
A. Yes we did about twenty--I think it would be about twenty two or twenty three miles north of the airport there, we ran into that weather front, and it was very visible. It was just a solid cloud cover from as far as--as high as you could see all the way to the ground, you couldn't see the Interstate, that's how heavy it was.
Q. Okay, that appears to you to be IFR weather conditions?
A. Yes, I turned around and went back to Stephenville and tied my airplane down. Because I knew the weather front was moving, you know, I'd picked it up from both weather stations.
Concerning the Andersen flight, farmer Dale Wilson of Baird, Texas stated:
This statement concerns an incident which occurred at approximately 10:15 a.m. on Tuesday, October 6, 1981. At the time of the incident, I was located in the yard behind my residence where I was cutting wood. The weather at the time of the incident was extremely poor as the result of a very heavy fog which moved into the area from the north. A light mist was also falling at the time. Lateral visibility was extremely poor and restricted to approximately one thousand to one thousand five hundred feet which is the approximate distance from my location to a nearby stock tank. I estimated that the cloud ceiling at the time was approximately five hundred feet above the ground. As I was cutting wood in my backyard, I heard an aircraft approaching from the southeast. I was unable to see the aircraft. However, I heard the aircraft's engine which sounded as thought [sic] it were operating normally. I continued to look for the aircraft which sounded as though it made three descending passes as if it...
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