Opinion ID: 301239
Heading Depth: 1
Heading Rank: 1

Heading: the pilot clause

Text: 8 One of the provisions in Culberson's policy provided: 9 Only the following pilot(s) will operate the aircraft while 'in flight' and while holding proper pilot certificate(s) with appropriate ratings as required by the Federal Aviation Agency: 10 W. A. Culberson or any other private or commercial pilot having a minimum of 200 total logged hours including at least 25 hours in retractable gear aircraft. 11 [The italicized portion was typewritten by Ranger; the rest was printed.] Ranger's argument goes as follows: 12 Culberson would be covered only while holding a proper certificate . . . with appropriate ratings ; because Culberson flew with a passenger, his certificate was improper and his ratings inappropriate. 13 Ranger begins its first argument under the Pilot Clause by contending that Culberson's certificate was not proper within the sanctions of the Pilot Clause because his carrying of a passenger violated the face of his student certificate. The certificate had the notation Passenger Carrying Prohibited stamped in two places. We cannot agree. 14 We do not read the word proper as requiring exact compliance with the face of the certificate. It is quite proper for an insurance company to insure a pilot for any permutation of circumstances, whether or not that permutation involves conduct that violates the certificate or the FAA regulations. Fireman's Fund Ins. Co. v. McDaniel, N.D.Miss.1960, 187 F.Supp. 614, aff'd, 5 Cir. 1961, 289 F.2d 926. It is the policy, not the pilot's certificate nor the FAA regulations, that sets the perimeters of insurance coverage. 15 In viewing the totality of the policy, we observe that omitted form paragraphs are parts of a written document. They serve to explain the intent of the parties, just as typewritten or handwritten statements serve to clarify or to change the sense of printed paragraphs. See Royal Indemnity v. John F. Cawrse Lumber Co., D.Or., 1965, 245 F.Supp. 707; Aetna Life and Casualty Co. v. Charles S. Martin Distributing Co., 1969, 120 Ga.App. 133, 169 S.E.2d 695; Fireman's Fund v. McDaniel, supra. Ranger included an additional page of printed exclusions in Culberson's policy. The page had four exclusions, with boxes to the side that Ranger was to check if applicable to the policy. Of the four exclusions printed on the page, only two were checked by Ranger as applying to Culberson. Those two checked exclusions are not relevant here. One omitted exclusion reads: 16 It is agreed that this policy does not apply and no coverage is afforded to any insured while any aircraft insured under this policy is being operated by a Student Pilot unless said Student Pilot is under the direct supervision of a properly qualified FAA Certified Flight Instructor who shall have specifically approved each flight undertaken by the student prior to takeoff. This exclusion shall not apply to any Student Pilot after he has received his Private Pilot Certificate. 17 By failing to check that provision, we must assume that Ranger fully intended to insure a student pilot. 1 18 Ranger not only omitted the exclusion that specifically forbade coverage to student pilots, but also omitted an exclusion that read as follows: 19 The following Exclusion is added to the Exclusions of the Policy: . . . to any Insured who operates or permits the aircraft to be operated . . in violation of any regulation pertaining to pilot certificates. [Emphasis added.] 20 Ranger's failure to check that exclusion is of some consequence in its argument that an infringement of the pilot certificate is an impropriety that negates coverage under the Pilot Clause. This omission is even more significant in light of the one extant Georgia case on the question of Pilot Clauses and noncompliance with the pilot certificate. In Grigsby v. Houston Fire and Casualty Co., 1966, 113 Ga.App. 572, 148 S.E.2d 925, the court held that the pilot's failure to complete the required number of practice take-offs and landings and his failure to obtain a current medical certification violated the terms of his pilot's certificate, and therefore suspended coverage. However, the insurance policy in Grigsby contained an exclusion specifically providing that there should be no coverage when the aircraft was operated in violation of any regulations pertaining to Airman's Certificates. The exclusion that Ranger chose to omit in Culberson's policy suspended coverage whenever there were operations in violation of any regulation pertaining to pilot certificates. While not precisely the same, the language and, we think, the intent of the two passages are close enough to lend weight to our concern with Ranger's omission. Ranger, through an affidavit from the vice-president of its aviation managers, argues that the omitted exclusion was intended to be applicable only to flying clubs. True or not, that is not quite relevant to our inquiry here. We wish to know what Culberson's reasonable expectation was when he read that exclusion page, saw two items checked as applicable, and saw the pilot certificate exclusion left unchecked as inapplicable. We feel that the words compel only one reasonable meaning, and that is that the omitted provision is intended to apply to whoever is insured. Without further explanation in the policy, Ranger cannot at this date stamp an only applicable to flying clubs into the policy. 21 In sum, if Ranger wished to suspend coverage in the event of any violation of Culberson's pilot's certificate, then it should have specifically said so in the policy. We do not read that specificity into the word proper in Ranger's behalf, and we find support for our decision in the fact that Ranger itself chose not to include easily-available form language that would have readily provided the necessary specificity. 22 The case of Roach v. Churchman, 8 Cir. 1970, 431 F.2d 849, does not support Ranger on this point. There is one statement by the Eighth Circuit regarding violation of a pilot's certificate, but the context of that statement makes it quite inapposite here. The policy provision in Roach specifically stated that a violation of the certificate would suspend coverage, a stipulation very much akin to the Grigsby provision and to Ranger's omitted exclusion. We might also note that the holding of Roach was that a violation of certain sections of the FAA regulations would not operate to suspend coverage under two separate exclusions, one that suspended coverage in case of violation of the pilot certificate and another that suspended coverage in case of unlawful purpose. We find the rationale of that holding quite in concert with our decision here. 23 Secondly, with respect to the Pilot Clause, Ranger insists that Culberson's admitted violation of the Federal Aviation Regulations in carrying a passenger operated to make his certificate improper. 14 C.F.R. Sec. 61.3(a). Again, we cannot agree. We would assume that an effective certificate is a proper one, however one might wish to muddle those words about. The FAA regulations provide specifically that any pilot certificate (including a student certificate) cases to be effective only if it is surrendered, suspended, or revoked. 14 C.F.R. Sec. 61.9. None of the three if's attached to Culberson's certificate. The student certificate provides on its face only that the certificate might be revoked by the carrying of a passenger in violation of the regulations. 2 Thus the fact that Culberson carried a passenger did not, ipso facto, revoke or suspend his certificate. See United States v. Eagle Star Ins. Co., 9 Cir. 1952, 196 F.2d 317, rev'd on other grounds on reh., 1963, 201 F.2d 764. Mr. Culberson held a perfectly proper certificate at the time of his accident, even though his conduct was regulated by the FAA, and the certificate remained proper until it was suspended or revoked by discretionary act of the FAA. See Hall's Aero Spraying, Inc. v. Underwriters at Lloyd's of London, 5 Cir. 1960, 274 F.2d 527; see also Roach v. Churchman, supra. 24 If Ranger wishes us to read the general term proper as requiring that any transgression of an FAA regulation should operate as an impropriety of sufficient intent to suspend coverage, then our declining to read a general word so broadly should come as no surprise, for we have declined to do so before. Hall's Aero Spraying v. Lloyd's of London, supra; accord, Roach v. Churchman, supra. 3 Words of exclusion in insurance policies should be given small tolerance when insurance companies choose to use words of imprecision. Indeed, the logic of Ranger's argument for exclusion would be to engraft as exceptions to coverage the violation of every proscribed peccadillo of FAA regulations. The cases cited by Ranger in its support go to the heart of coverage, and it cannot be that every impaired capillary blocks coverage. Almost all airplane accidents involve some violation of the Federal Aviation Regulations. Even careless flying, or simply negligence, is a violation. See 14 C.F.R. Sec. 91.9. The Roach case construed a similar argument: 25 Applying this analysis, the insuring agreements become illusory in effect since few accidents occur without the aircraft's owner or pilot violating one or more of the very detailed regulations promulgated by the Federal Aviation Administration. 26 431 F.2d at 853. 27 To read into the general word proper all violations of the regulations would be to hoodwink most insurance purchasers, for it would make a nullity of most coverage. Purchasers believe, and with good reason, that they have bought insurance to protect themselves from precisely those degrees of negligence or outright carelessness that FAA regulations might condemn. Insurance is procured to protect the violator, and every violation cannot nullify coverage. Any intent to use general words as a blunderbuss and every single regulation as birdshot cannot be reasonably upheld. If an insurance company has an intent to deny coverage in a specific set of circumstances, then it should so delineate. See Moulor v. American Life Ins. Co., 1884, 111 U.S. 335, 4 S.Ct. 466, 28 L.Ed. 447. 28 Ranger's third and final argument with regard to the pilot clause is that the coverage should be suspended because Culberson did not have a proper instrument flight rating. In the Roach case, supra, the Eighth Circuit was faced with a simlar argument concerning a full-fledged pilot who did not have proper instrument flight rating because he did not complete the required number of practice flights before flying at night. We have a student pilot. The pilot clause of Roach specifically allowed for suspension of coverage during acts in violation of the pilot certificate. Our pilot clause does not. Yet even under the former circumstances, the Roach court held that a general term in the pilot clause could not be interpreted to suspend coverage during any and all violations of the Federal Aviation Regulations. We took a similar approach in Hall's Aero Spraying, supra, on which the Eighth Circuit relied in Roach. 29 But we find another element controlling the appropriate rating issue in our case. Ratings of any sort are not given to student pilots, according to the regulations that we are asked to apply. 14 C.F.R. Sec. 61.16(d) (1) and Sec. 61.16(b). It was therefore quite impossible for Culberson, at any time, to receive an instrument flight rating or any other rating. And we are now asked to conclude that this fact suspended insurance coverage. Actually, what Ranger asks us to do is to invalidate the insurance policy. If the absence of flight ratings is an inappropriate rating within the ambit of the pilot clause, then, with no possibility of flight ratings of any sort, Culberson would be flying in constant violation of his policy; whatever he did would have an inappropriate rating. We refuse to hold that Culberson contracted to pay a premium of $553 per year for a policy that was suspended ab initio. When Ranger agreed to insure a student pilot, it was charged with the knowledge that he could not obtain any flight ratings whatsoever while he held that type license. Ranger is estopped from trying to raise appropriate ratings from the dead at this point. 30 The case of Lineas v. Travelers Fire Insurance, supra, cited by Ranger in its brief with regard to the pilot clause, is quite inapposite. In Lineas, a diversity action controlled by Florida law, the company insured an airplane for cargo purposes. The pilot clause of that policy provided that the airplane should be flown only by those regular pilots of the insured who held licenses issued by United States or Colombian authorities. The insured made his airplane available to a coadventurer for flights within the borders of Mexico, knowing that under Mexican law the craft would have to be registered as a Mexican airplane and would have to be piloted by Mexican pilots. The airplane crashed in Mexico, with Mexican pilots at the controls, while it was carrying passengers and no cargo. The incidents of Lineas operated to change fundamentally the matrix of the risks that the company had agreed to insure. The Mexican pilots who were in command when the airplane crashed were entirely outside the whole species of pilots specified in the pilot clause. In our case the pilot flying the airplane was well within the clause, specifically named in fact. The Mexican pilots of Lineas were not authorized to fly the plane at any time. Culberson was clearly authorized to fly the airplane. And, as we have discussed above, the pilot clause did not operate to forbid the carrying of passengers. Whether other provisions of the policy would suspend coverage in the event of passenger carriage remains to be explained. We refer now only to the pilot clauses of our case and of Lineas. We might add, however, that the ill-fated flight of Lineas involved a purpose entirely without the very specific purpose for which the insurance company had contracted, the carrying of cargo. In our case Culberson's flight was entirely within the purposes that Ranger agreed to cover. 4 Therefore, we find Lineas inapplicable to our policy and our set of facts.