South Carolina Ins. Co. v. Collins

Decision Date29 August 1977
Docket NumberNo. 20498,20498
Citation237 S.E.2d 358,269 S.C. 282
CourtSouth Carolina Supreme Court
PartiesSOUTH CAROLINA INSURANCE COMPANY, Appellant, v. Lois S. COLLINS, Co-Administratrix of the Estate of Metz W. Collins, and Evelyn C. Lee, Co-Administratrix of the Estate of Metz W. Collins, and Wesley B. Nesbitt, Respondents.

John C. Thompson, Conway, for respondents Collins and Lee.

James T. Kalyvas, Myrtle Beach, for respondent Nesbitt.

RHODES, Justice:

This appeal presents the question of whether, in order to avoid liability under an aircraft insurance policy, the insurer is required to demonstrate a causal connection between the crash of the aircraft and the insured pilot's failure to have a valid and effective medical certificate as provided by the terms of the policy. For the reasons set forth herein, we affirm the relief granted by the special circuit judge and hold that such causal connection must be shown.

The plaintiff-appellant, South Carolina Insurance Company (hereinafter appellant), issued to Metz W. Collins, the named insured, its aircraft liability insurance policy, number AC-801297, effective for the period April 27, 1975 to April 27, 1976. The contract of insurance covered a Piper Colt aircraft, Federal Aviation Agency registration number N5723Z, owned by Collins. On May 23, 1975, Collins, while piloting the airplane described in the policy, crashed, resulting in Collins' death and injuries to one Wesley B. Nesbitt, a passenger in the airplane. Subsequently, Lois S. Collins and Evelyn C. Lee were appointed administratrices of the estate of the deceased, Metz W. Collins, and Nesbitt commenced an action against the estate seeking damages for injuries he sustained in the crash. Nesbitt's action is pending in the Court of Common Pleas of Horry County.

The appellant refused the demand of the administratrices to defend the insured's estate against the lawsuit instituted by Nesbitt and subsequently commenced this action for declaratory judgment pursuant to S.C.Code § 15-53-10 (1976) et seq. The appellant sought an order declaring that the policy issued to the insured was not in effect during the flight of May 23, 1975, and that it did not afford the estate of the deceased any coverage. Named as defendants in the appellant's action were both administratrices and the injured passenger, Nesbitt. (All defendants are hereafter referred to as "respondents").

The respondents answered and sought affirmative relief, demanding that the appellant's complaint be dismissed and seeking an order declaring that the aforesaid policy was in full force and effect at the time of the crash. The trial judge, after hearing arguments and considering briefs, issued an order which granted the relief prayed for by the respondents.

In the trial judge's order it is stated that the parties, through responses to requests for admissions and stipulations made before him, agreed that the following facts are not in dispute: The Federal Aviation Regulations promulgated by the Federal Aviation Agency require a medical examination of pilots under the supervision of the Federal Air Surgeon or his authorized representative. The insured held a third-class medical certificate which was valid for a twenty-four (24) month period. 1 The last medical certificate issued to the insured was in February, 1973, and it expired on the last day of February, 1975, or nearly three (3) months before the date of the crash. The Federal Aviation Regulations also require the insured to obtain and to have in his possession a valid and effective pilot certificate. 2 The insured had his last required flight review on November 3, 1974, or a period of six (6) months and twenty (20) days before the date of the accident. It was stipulated by the parties that at the time of the accident the insured possessed a valid and effective pilot certificate but that he did not have a valid and effective medical certificate. Moreover, for the purposes of this declaratory judgment action only, it was stipulated that the insured, to the best of the parties' knowledge, had no physical or mental defects at the time of or immediately prior to the accident and that there was no causal connection between the accident and the failure of the insured to have a valid and effective medical certificate. The above statement by the trial judge of the undisputed or stipulated facts has not been challenged on this appeal. 3

The appellant argues vigorously that the failure of the insured to have a valid and effective medical certificate on the date of the accident amounted to a breach of a condition subsequent or promissory warranty under the terms of the policy, thereby suspending coverage and permitting the appellant to avoid liability. The appellant contends that the trial judge's classification of the pertinent policy provisions as being merely an "exclusion" of the insured's liability was erroneous. Additionally, the appellant maintains that the case law does not support the court's holding that the insurer, in order to avoid liability on a policy such as that involved here, must show that there exists a causal connection between the resulting loss and the insured's failure to have the required effective medical certificate.

The appellant relies upon the following provisions of the policy as supportive of its contention that the policy stated a condition subsequent or promissory warranty which the insured breached:


This Policy does not apply:

2. to any occurrence or to any loss or damage occurring while the aircraft is operated in flight by other than the pilot or pilots set forth under Item 7 of the Declarations;

4. to any Insured:

(a) who operates or permits the aircraft to be operated in any manner which requires a special permit or waiver from the Federal Aviation Administration, whether granted or not, unless this Policy is specifically endorsed to include such operation;


7. PILOT CLAUSE. Only the following pilot or pilots holding valid and effective pilot and medical certificates with ratings as required by the Federal Aviation Administration for the flight involved will operate the aircraft in flight:



25. Declarations. By acceptance of this Policy the Named Insured agrees that the statements in the Declarations are his agreements and representations, that this Policy is issued in reliance upon the truth of such representations, that this Policy embodies all agreements existing between himself and the Company or any of its agents relating to this insurance."

The appellant maintains that the above-quoted provisions, when viewed together, established a condition with which the insured was bound to comply. 4

While provisions of aircraft liability insurance policies similar to the provisions quoted above have been passed upon in other jurisdictions, we have not found any case in this state which has dealt with such a policy. However, a line of South Carolina cases involving contracts of automobile liability and life insurance are, in our judgment, dispositive of the issues raised on this appeal.

The first in this series of cases was decided by this Court in 1932. In Reynolds v. Life & Casualty Ins. Co. of Tennessee, 166 S.C. 214, 164 S.E. 602, the mother of the insured brought suit in her capacity as beneficiary under two (2) policies of life insurance issued by the defendant company to her son. The contract of insurance involved in the first cause of action contained the following provision: "This policy does not cover . . . loss sustained by the insured . . . while committing some act in violation of law." The contract involved in the second cause of action provided that "(w)ithin two years from date of issuance of this policy, the liability of the company under same shall be limited, under the following conditions, to the return of the premium paid thereon: . . . (2) If the insured shall die . . . as a result of acts committed by him while in the commission of . . . some act in violation of law."

During the effective period of these contracts of insurance, an ordinance of the City of Greenville, the place of residence of the insured, provided that "(n)o person shall be allowed to ride upon the running board of any motor vehicle . . . ." The defendant company moved for a directed verdict at the close of the testimony in the trial of the case upon the ground that at the time of the accident, in which fatal injuries were sustained, the insured was riding on the running board of a truck in violation of the ordinance. The trial judge overruled the defendant's motion and the jury found for the plaintiff in the entire policy amounts sued for. The defendant appealed from the denial of its motion and also from the court's charge to the jury that the insurer must establish a causal connection between the insured's loss or death and his violation of the ordinance.

In Reynolds, this Court stated that under the evidence and the particular facts adduced at the trial, it could not be held as a matter of law, as defendant contended, that the insured's death was proximately caused by his riding upon the running board of the truck or that his death was the necessary or natural consequence of his act. The Court ruled that these questions had been properly submitted to the jury for determination.

In discussing the issue of causal connection, The Court stated the following:

(I)t is clear that the court properly refused defendant's motion, for, even if it should be admitted that the insured was violating the ordinance at the time he was injured, this alone would not be sufficient ground for direction of a verdict. In order to defeat recovery under policies excluding or limiting liability where death or injury...

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