Court Opinion

ID: 8887076
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:11:13.577744+00
Date Added: 2024-06-11T17:06:58.941535
License: Public Domain

DYER, Circuit Judge
(dissenting):
I respectfully dissent. The crucial issue in this appeal is whether “The Pilot Clause” under the “Declarations” in the policy issued by Ranger to Culberson means exactly what it says and says exactly what it means. The pilots’s clause provides:
“Only the following pilot(s) will operate the aircraft while ‘in flight’ and while holding proper pilot certificate^) with appropriate ratings as required by the Federal Aviation Agency:

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.”

[The italicized portion was typewritten by Ranger; the balance was printed.]
The majority opinion introduces the unsupportable assumption “that Ranger fully intended to insure a student pilot.” It then charges Ranger “with knowledge that Culberson, at his application as well as at his death, was a student pilot and no more.” Finally, it flatly states that “Ranger insured a student pilot . . . .” Upon this premise then the majority “does not read the word ‘proper’ as requiring exact compliance with the face of the [pilot’s] certificate.” In fact, the majority requires no compliance with the pilot certificate which expressly forbade Culberson from carrying passengers. There is not one iota of evidence in the record to support the majority’s assumption, charge or conclusion that Ranger knew that Culberson was a student pilot. On the contrary, the only information that Ranger had was that Culberson held a private pilot’s license.
The district court decided this case on cross motions for summary judgment. Before the court was the following: Ranger’s answer to an interrogatory that the policy was based on an application which stated that Culberson, the named insured, was a private pilot, and the application submitted by an insurance agent which contained the name and address of Culberson and detailed information that was copied directly into the “Declarations” of the policy, i. e., the policy period from August 1, 1967 to August 1, 1968, that the aircraft would be tied out at Fulton County Airport, the specific coverages and premium charges, a description of the aircraft, the purposes of use, and a loss payable clause to the mortgagee, Michigan National Bank, in the amount of $10,100. The application further contained pilot information showing that Culberson held a private pilot’s certificate with a single engine rating with a total of 100 logged hours, 15 in retractable gear aircraft, and described other pilots who could operate the insured aircraft with a private license and 200 total logged hours, 25 in retractable gear. There was also the un-contradicted affidavit of Parks, Senior Vice President of the aviation managers of Ranger, in which he stated that “Ranger Insurance Company had no knowledge that Mr. Culberson had only a student pilot license, as it had been represented to the company that he held a private pilot license with a single engine rating.” The district court also had before it the policy with the pilot clause limitations which tracked the information in the application, and a certified copy of Culberson’s Student Pilot Certificate issued January 21, 1966, on which was marked in two places, “PASSENGER CARRYING PROHIBITED.”
I would have no hesitancy in joining with the majority had Ranger issued the policy as written with knowledge that Culberson was a student pilot. The insurer may knowingly undertake a risk although it involves pilot conduct that violates his certificate or FAA regulations. And an insurer may be bound if the typewritten portion of the pilot’s clause names the insured “as a person authorized to operate this aircraft in flight, without regard to his certifica*869tion or rating as a pilot” even though the insured is a student pilot. Fireman’s Fund Insurance Company v. McDaniel, N.D.Miss.1960, 187 F.Supp. 614, aff’d 5 Cir. 1961, 289 F.2d 926. But this is, of course, not this case. Furthermore, the form, omitted as inapplicable, excluding coverage when the aircraft was being operated by a student pilot not under the direct supervision of a FAA flight instructor, would, as the majority suggests, be of considerable moment to explain the intent of the parties, but only if Ranger was aware of Culberson’s student pilot certificate. If Ranger knew this, then the omission of the exclusion would have been compelling evidence of Ranger’s intent to insure Culberson, notwithstanding he held only a student pilot certificate.
It bears repeating that Ranger did not know and was not charged with any knowledge that Culberson held a student pilot’s certificate. In the face of a record showing only that Ranger's information was that Culberson held a private pilot’s certificate, the failure of Ranger to cheek the omitted exclusion cannot provide this court with the basis for an assumption “that Ranger fully intended to insure a student pilot.” Quite the contrary is true, for if Culber-son had held a private pilot certificate as Ranger thought he did, the student pilot exclusion would have been inapplicable.
The majority seems to take the position that the information furnished Ranger that Culberson was a private pilot cannot be considered because Ranger did not plead fraud and misrepresentation, nor was this issue considered by the court below. As we have shown, the application for insurance, the uneon-tradicted affidavit, and the answer to interrogatory were before the district court in support of Ranger’s motion for summary judgment. They were not submitted for the purpose of showing fraud but for the evidentiary purpose of showing that the policy was written in conformity with the information Ranger possessed. This makes F.R.Civ.P. 8(c) inapposite. The crucial issue of whether this information was properly raised in the district court and hence properly before us cannot be glossed over in a footnote as the majority attempts to do. If Culberson had held a private pilot’s certificate, as was Ranger’s information, “Liability Including Passengers” would have been an appropriate coverage; Exclusion No. 3, covering student pilots, would have been inapplicable and the words “with appropriate ratings” in the pilot clause would have had significance, in contrast to the fact that “ratings” of any sort are not given to student pilots.1 But if Culberson was going to fly in violation of his FAA certificate and thereby increase the risk for passengers covered, Ranger should have been made aware of it and given an opportunity to decline the risk. In my view, Ranger was entitled to rely on the information furnished to it and the district court should not have ignored it.
But assuming arguendo that Ranger had no information concerning what type of certificate Culberson held, it was, of course, entitled to limit the coverage of the policy in any manner it desired. The limitations of coverage in the policy are perfectly clear and Culberson was bound by them. He knew that his student pilot certificate prohibited him from carrying passengers any time, any where. He knew that the “Including Passengers” provision would only be applicable when either a private or commercial pilot certificate holder, as specified in his policy, was flying the aircraft with passengers. He knew that his policy required him to have a proper pilot certificate. This could only mean that he was within the policy coverage if he flew the aircraft alone and that there would be no coverage while passengers were aboard.
Equating the word proper, as used in the insurance policy, with the word effective, which is not used in the policy, *870is, I deferentially suggest, an unwarranted exercise in semantics by the majority. We have repeatedly stated that
* * * our function is not to write insurance contracts. We are not underwriters. We must apply them as written by the parties * * * even though the result compelled by the plain words used may appear or be thought to appear to be unreasonable, unduly harsh, or stringent. We cannot ignore them. We cannot substitute others for them.
Canal Insurance Company v. Dougherty, 5 Cir. 1957, 247 F.2d 508, 512. Of course, Culberson’s student pilot certificate was effective until it was suspended, surrendered or revoked, but it was, nonetheless, an improper certificate when used by a student pilot to carry passengers. That the FAA did not revoke Culberson’s certificate after his death seems wholly immaterial. Neither Halls’ Aero Spraying, Inc. v. Underwriters at Lloyds London, 5 Cir. 1960, 274 F.2d 527, nor Roach v. Churchman, 8 Cir. 1970, 431 F.2d 849, are to the contrary. In Hall’s the aircraft crashed while crop dusting without a state permit. This activity was not within the exclusion prohibiting the operation of an aircraft “for any unlawful purpose.” In Roach the court found that “the pilot’s act * * * did not violate any express term of his pilot’s certificate.” (Emphasis added).
We are not concerned, as the majority suggests, with an attempt to “hoodwink” the insurance purchaser by nullifying coverage for simple negligence, careless flying or some other violation of the regulations. The word “proper” refers solely to and modifies “pilot certificate” and clearly has nothing to do with avoiding liability for tortious conduct.
Whether we accept the fact that Ranger was informed that Culberson held a private pilot’s certificate, or whether Ranger was without knowledge that Cul-berson held only a student’s pilot certificate, the policy as written and accepted by Culberson insured him while he was flying the aircraft without passengers (even though the insurer might not have agreed to this coverage had it known that it was insuring a student pilot, McDaniel, supra); but coverage was suspended during the time that Cul-berson was operating the aircraft with a passenger because this was expressly prohibited by his certificate. Lineas Aereas Columbiana Expresas v. Travelers Fire Ins. Co., 5 Cir. 1958, 257 F.2d 150. In Lineas Judge Brown made it clear that “underwriting is the business of estimating risks.” In doing so may not an insurer have properly taken into account that a student pilot is less qualified than one who has obtained a private pilot’s certificate; that one holding a private pilot’s certificate is authorized to carry passengers while a student pilot is forbidden to do so; and finally that covering a pilot in flight while he was doing what was expressly forbidden by his certificate would expose the insurers to almost incalculable risks ?
It is just such considerations that have led to the development of the principle * * * of suspension of coverage. It is, of course, true that development of the law along these lines has come from the desire to avoid an outright forfeiture. Consequently coverage is not permanently destroyed. It is suspended as long as, but only so long as the violations of the specified basic policy requirements continue. Equally clear, coverage is revived the moment the breaches or conditions cease. But until that time, there is no insurance for while the proscribed activity continues, the insurance is suspended as if it had never been in force. Travelers Protective Association of America v. Prinscen, 291 U.S. 576, 582, 54 S.Ct. 502, 504, 78 L.Ed. 999, 1003.
Lineas, supra at 155. See also Electron Machine Corp. v. American Mercury Insurance Co., 5 Cir. 1961, 297 F.2d 212.
The factual distinction that the majority makes between Lineas and the case sub judice, i. e., that in Lineas the Mexican pilots were entirely outside *871those specified in the pilot’s clause, while here Culberson was authorized to fly the aircraft, continues to disregard the fact that from the time a passenger came aboard Culberson was also entirely outside the specie of pilot specified in the pilot’s clause.
In this diversity case, as the majority points out, Georgia law is controlling. In Grigsby v. Houston Fire & Casualty Ins. Co., 1966, 113 Ga.App. 572, 148 S.E. 2d 925, the Georgia Court of Appeals cited Lineas with approval and held that a pilot clause almost identical to the one in issue here was “a valid and binding one.” Although there was no coverage due to a violation of a regulation pertaining to pilot certificates under an exclusionary clause in Grigsby, the court also relied upon the conditions of the pilot clause. Obviously, the court would not have discussed the pilot clause except for the fact that its violation also suspended coverage.
The district court and the majority seem unwilling to give effect to the sound precedent established by this court that:
The hazards against which a company is to insure are usually in the category of its business and the courts will not undertake to review its judgment or to hold it to the coverage of risks which it has expressly excluded.
Electron, supra at 214 of 297 F.2d.
I would reverse the judgment of the district court with directions to enter judgment in favor of Ranger.

. It is noteworthy that the application also referred to Culberson as having a single engine rating.