Bologna et al v. Marnell et al
Filing
42
ORDER AND REASONS denying 26 Motion for Summary Judgment; granting 30 Motion for Partial Summary Judgment. Signed by Judge Ivan L.R. Lemelle. (ijg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FRANCIS BOLOGNA, ET AL.
CIVIL ACTION
VERSUS
NO. 15-2329
EAMON MARNELL, ET AL.
SECTION “B”(4)
ORDER AND REASONS
I.
NATURE OF MOTION AND RELIEF SOUGHT
Before the Court are Defendant’s, Old Republic Insurance
Company (“Old Republic”), “Motion for Summary Judgment” (Rec. Doc.
26), Plaintiffs’, Francis O. Bologna and Advanced Technological
Training, LLC (“ATT”), opposition thereto (Rec. Doc. 27), and
Defendant’s corresponding reply (Rec. Doc. 41). Also before the
Court are Plaintiffs’ “Motion for Partial Summary Judgment” (Rec.
Doc. 30), Defendant’s opposition (Rec. Doc. 36), and Plaintiffs’
reply (Rec. Doc. 40). Defendant seeks entry of summary judgment
and final judgment in its favor on the grounds that there is no
genuine dispute as to any material fact as to Defendant’s lack of
insurance coverage, while Plaintiffs seek entry of partial summary
judgment in their favor as to the converse. As stated more fully
herein,
IT IS ORDERED
that Defendant’s Motion is
DENIED
and
Plaintiffs’ Motion is GRANTED.
II.
FACTS AND PROCEDURAL HISTORY
The undisputed facts are as follows. Bologna is the sole owner
and member of ATT, the owner of a 1973 Piper Challenger, PA-28-
180 (“the Aircraft”). (Rec. Doc. 1-1 at 2). ATT insured the
Aircraft with Old Republic under an aviation insurance policy (“the
Policy”) with an insured value of $80,000, effective from June 1,
2014 to June 1, 2015. (Rec. Doc. 1-1 at 2). In the “EXCLUSIONS”
section of the Policy, Exclusion No. (2) states:
This policy does not apply:
. . .
2. To any Insured while the aircraft is in
flight
(a) If piloted by other than the pilot or
pilots designated in the Declarations;
(b) If piloted by a pilot not properly
certificated, qualified and rated under the
current
applicable
Federal
Aviation
Regulations for the operation involved,
whether or not said pilot is designated in the
Declarations[.]
(Rec. Doc. 26-2 at 33). As stated in the “DECLARATIONS” section,
“Pilots” is defined as follows:
When in flight, the aircraft will be piloted
only by the following pilots, provided he/she
has a valid pilot’s certificate and a valid
medical certificate, each appropriate to the
flight and the aircraft:
FRANCIS BOLOGNA;
ANY PRIVATE, COMMERCIAL OR ATP PILOT PROPERLY
CERTIFIED BY THE FAA HAVING A MINIMUM OF 300
TOTAL LOGGED FLYING HOURS, INCLUDING NOT LESS
THAN 10 HOURS IN THE SAME MAKE AND MODEL
AIRCRAFT INSURED HEREIN.
(Rec. Doc. 26-2 at 10). The Policy contains Liability Coverages
under
Coverages
A
through
D,1
Expenses
1
for
Medical
Services
Specifically, Coverage A covers Bodily Injury Liability Excluding Passengers,
Coverage B covers Property Damage Liability, Coverage C covers Passenger Bodily
2
Coverage under Coverage E, and Physical Damage Coverages under
Coverages F and G. (Rec. Doc. 26-2 at 31). Coverage F provides
“All Risk Basis” coverage “[t]o pay for any physical damage to or
loss of the aircraft, including disappearance of the aircraft.”
(Rec. Doc. 26-2 at 31).2
On or about September 13, 2014, Bologna leased the Aircraft
to Eamonn Marnell under an Aircraft Dry Lease Agreement. (Rec.
Doc. 1-1 at 2). The next day, Marnell crashed the Aircraft in St.
Petersburg, Florida. (Rec. Doc. 1-1 at 3; Rec. Doc. 26-4 at 2;
Rec. Doc. 27-1 at 2). At the time of the crash, Marnell had less
than 300 total logged flying hours. (Rec. Doc. 1-1 at 7).3 The
other passenger in the Aircraft, Grant Jordan, did not have a
license issued by the Federal Aviation Administration or other
credentials to legally operate the Aircraft. (Rec. Doc. 1-1 at 4).
Plaintiffs submitted proof of loss to Old Republic, but Old
Republic did not pay the first party claim for physical damage to
the Aircraft. (Rec. Doc. 1-1 at 4). Plaintiffs’ seek to recover
pursuant to the All Risk Basis Physical Damage Coverage under
Coverage F of the Policy. (Rec. Doc. 27 at 1).
Injury Liability, and Coverage D covers Single Limit Bodily Injury and Property
Damage Liability. (Rec. Doc. 26-2 at 31).
2 Coverage G covers All Risk Basis Not in Motion. (Rec. Doc. 26-2 at 31).
3 It should be noted that Plaintiffs neither admitted nor denied this fact as
listed in Defendant’s “Statement of Undisputed Material Facts in Support of
Motion for Summary Judgment.” (See Rec. Doc. 26-4 at 2; Rec. Doc. 27-1 at 2).
Pursuant to L.R. 56.2 and in light of Plaintiffs’ original complaint, this fact
is deemed admitted. Plaintiffs deny, however, that Marnell did not have ten
logged flying hours in the same make and model as the Aircraft. (Rec. Doc. 264 at 2; Rec. Doc. 27-1 at 2).
3
On June 5, 2015, Plaintiffs filed the instant suit in Civil
District Court for the Parish of Orleans, State of Louisiana. (Rec.
Doc. 1-1 at 1). In their original complaint, Plaintiffs include
allegations
of
negligence
and
violation
of
the
Louisiana
Racketeering Act, La. Rev. Stat. § 15:1301 et seq., against
Defendants Marnell and Jordan; allegations of breach of contract
against Defendants Marnell and Old Republic; an allegation of fraud
against Defendant Marnell; and an allegation of breach of duty of
good faith against Defendant Old Republic. (Rec. Doc. 1-1 at 48). On June 26, 2015, Defendant Old Republic timely removed the
instant action, maintaining that there was federal subject matter
jurisdiction pursuant to 28 U.S.C. § 1332, as the amount in
controversy exceeds $75,000 and because all parties are diverse as
Plaintiffs
are
citizens
of
Louisiana,
Defendants
Marnell
and
Jordan are citizens of Ireland, and Defendant Old Republic is a
citizen of Pennsylvania and Illinois. (Rec. Doc. 1).
III. CONTENTIONS OF DEFENDANT
Defendant argues that the Policy is clear that all coverage
is excluded under Exclusion No. (2) when the Aircraft is flown by
an individual not defined as a pilot in the declarations section,
which
is
maintains
explicitly
that
incorporated
Marnell
was
not
therein.
a
pilot
Defendant
as
defined
further
in
the
declarations section of the Policy, as proven through Plaintiffs’
own complaint, as well as other discovery. As such, Defendant
4
concludes that all coverage – including physical damage coverage
under Coverage F – is barred by Exclusion No. (2) under the
circumstances. Finally, Defendant cites other cases concerning
aircraft insurance policies with related pilot exclusions in which
coverage was denied.
IV.
CONTENTIONS OF PLAINTIFFS
Plaintiffs argue that physical damage coverage under Coverage
F is not excluded, as it provides “all-risk” coverage and Exclusion
No. (2) does not explicitly exclude such coverage by its terms.
Specifically, Plaintiffs point out that Exclusion No. (2) refers
only to coverage of “any Insured,” a term not defined with respect
to
Coverage
F
in
the
Policy.
Further,
Plaintiffs
aver
that
Exclusion No. (2) is inapplicable to Coverage F, as it does not
specifically state its application thereto, as does one other
exclusion in the Policy – Exclusion No. (8). Lastly, Plaintiffs
contend that the cases cited by Defendant are irrelevant, as those
cases did not concern first party property damage disputes.
V.
SUMMARY JUDGMENT STANDARD
Summary judgment is proper if the pleadings, depositions,
interrogatory
answers,
and
admissions,
together
with
any
affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477
U.S. 317, 327 (1986). A genuine issue exists if the evidence would
5
allow a reasonable jury to return a verdict for the nonmovant.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Although
the Court must consider the evidence with all reasonable inferences
in the light most favorable to the nonmoving party, the nonmovant
must produce specific facts to demonstrate that a genuine issue
exists for trial. Webb v. Cardiothoracic Surgery Assocs. of N.
Texas, 139 F.3d 532, 536 (5th Cir. 1998).
The
moving
party
bears
the
initial
responsibility
of
informing the district court of the basis for its motion. Celotex,
477 U.S. at 323. The movant must point to “portions of ‘the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with affidavits’ which it believes demonstrate
the absence of a genuine issue of material fact.” Id. (citing Fed.
R. Civ. P. 56). If and when the movant carries this burden, the
nonmovant must then go beyond the pleadings and use affidavits,
depositions,
interrogatory
responses,
admissions,
or
other
evidence to establish a genuine issue. Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
“[W]here the non-movant bears the burden of proof at trial,
the movant may merely point to an absence of evidence, thus
shifting to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact
warranting trial. . . . Only when ‘there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict for
6
that party’ is a full trial on the merits warranted.” Lindsey v.
Sears Roebuck and Co., 16 F.3d 616, 618 (5th Cir. 1994) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)).
Accordingly,
conclusory
rebuttals
of
the
pleadings
are
insufficient to avoid summary judgment. Travelers Ins. Co. v.
Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993).
VI.
DISCUSSION
“Interpretation of an insurance policy is a question of law.”
Principal Health Care of La., Inc. v. Lewer Agency, Inc., 38 F.3d
240, 242 (5th Cir. 1994) (citing F.D.I.C. v. Barham, 995 F.2d 600
(5th Cir. 1993)). Accordingly, “[a]s a federal court sitting in
diversity, we apply Louisiana rules of policy interpretation in
this case.” Id. at 242-43.4 “Louisiana law is clear that the
interpretation of insurance policy provisions is to be governed by
the rules pertaining to the interpretation of other types of
contracts.” Principal Health, 38 F.3d at 243 (citing Battig v.
Hartford Acc. & Indem. Co., 608 F.2d 119 (5th Cir. 1979)).
4
As Louisiana is the forum state, its conflict of law rules apply. See Ingalls
Shipbuilding v. Fed. Ins. Co., 410 F.3d 214, 230 (5th Cir. 2005) (“When federal
jurisdiction is based on diversity of citizenship, we apply the conflict of law
rules of the forum state[.]”). Pursuant to those rules, Louisiana law governs
claims related to the Policy because it was delivered in Louisiana for the
purpose of insuring the Aircraft, which was located in Louisiana and owned by
ATT, a Louisiana company owned solely by a Louisiana citizen. See Am. Int'l
Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254, 260 (5th Cir. 2003)
(“Louisiana choice of law rules dictate, that in [an] action involving the
interpretation of insurance policies issued in Louisiana, Louisiana substantive
law governs [the] decision.”).
7
A. Louisiana Contracts Principles Governing Insurance Policies
Under Louisiana law, “[i]nterpretation of a contract is the
determination of the common intent of the parties.” La. Civ. Code
art. 2045. “The words of a contract must be given their generally
prevailing meaning[,]” La. Civ. Code art. 2047, and “[w]hen [they]
are clear and explicit and lead to no absurd consequences, no
further interpretation may be made in search of the parties'
intent.” La. Civ. Code art. 2046. However, “[w]ords susceptible of
different meanings must be interpreted as having the meaning that
best conforms to the object of the contract.” La. Civ. Code art.
2048. Likewise, “[a] provision susceptible of different meanings
must be interpreted with a meaning that renders it effective[,]”
La. Civ. Code art. 2049, and “[e]ach provision in a contract must
be interpreted in light of the other provisions so that each is
given the meaning suggested by the contract as a whole.” La. Civ.
Code art. 2050. Finally, “[i]n case of doubt that cannot be
otherwise resolved, a provision in a contract must be interpreted
against the party who furnished its text.” La. Civ. Code art. 2056.
Here, interpreting the words of the Policy in light of their
generally prevailing meanings, while remaining mindful of the
Policy as a whole in assessing its phrases, this Court finds that
the Policy does not unambiguously include or exclude physical
damage coverage. Particularly, Exclusion No. (2) in the Policy
states that it “does not apply . . . [t]o any Insured while the
8
aircraft is in flight . . . [i]f piloted by other than the pilot
or pilots designated in the Declarations[.]” (Rec. Doc. 26-2 at
33) (emphasis added). In the Policy’s “DECLARATIONS” section, it
is clear that an individual is not a pilot under the terms of the
Policy so as to trigger coverage if he or she is neither Francis
M. Bologna nor a pilot certified as having a minimum of 300 total
logged flying hours. (Rec. Doc. 26-2 at 10).
Because Plaintiffs allege in their complaint that Marnell did
not have 300 total logged hours, did not object to Defendants’
statement of the same, and did not dispute that Marnell crashed
the Aircraft,5 it is clear that Marnell was operating the Aircraft
but was not a pilot so as to trigger coverage of “any Insured.”
Nevertheless,
the
exclusion
does
not
include
language
that
indicates similar consequences with respect to coverage of loss or
damage, e.g., the coverage afforded under Coverage F and at issue
presently. On the other hand, Exclusion No.(2) does not expressly
limit
its
application
to
Liability
and/or
Medical
Services
Coverage as do other exclusions in the Policy. (See Rec. doc. 262 at 33-34).
All the same, exclusion of physical damage coverage based on
the plane being flown by an individual not defined by the Policy
as a pilot would, at the very least, lead to ambiguity. Because
5
(Rec. Doc. 1-1 at 7; Rec. Doc. 26-4 at 2; Rec. Doc. 27-1 at 2).
9
physical damage coverage applies “[t]o pay for . . . loss of the
aircraft, including disappearance of the aircraft[,]” it appears
to apply in the case of theft. (Rec. Doc. 26-2 at 31). Limiting
coverage to theft only if occasioned by a pilot as defined in the
Policy would be absurd, highlighting the existence of ambiguity.
Such an ambiguity must be interpreted against the party who
furnished its text, such that Defendant cannot prevail on its
motion.
See
La.
Civ.
Code
art.
2056.
This
does
not
connote
automatic success on Plaintiffs’ motion, however, and this Court
must go beyond Louisiana’s general contract laws and evaluate more
specific precedent.
B. “All Risk” Insurance Policies
Principles relevant to the type of insurance coverage at issue
favor a finding of coverage. Physical damage to the Aircraft is
covered under the Policy’s Coverage F, which affords an “All Risk
Basis” for coverage. Under Louisiana law courts have held that
under “an ‘all risk’ policy, . . . all risks are covered unless
clearly and specifically excluded.” Cochran v. Travelers Ins. Co.,
606 So. 2d 22, 24 (La. Ct. App. 1992). This is because “[a] policy
of insurance insuring against ‘all risks’ creates a special type
of coverage that extends to risks not usually covered under other
insurance;” thus, “recovery under an all-risk policy will be
allowed for all fortuitous losses not resulting from misconduct or
fraud, unless the policy contains a specific provision expressly
10
excluding the loss from coverage.” U.S. Indus., Inc. v. Aetna Cas.
& Sur. Co., 690 F.2d 459, 461 (5th Cir. 1982).
“The insurer has the burden of proving that a loss comes
within a policy exclusion.” La. Maint. Servs., Inc. v. Certain
Underwriters at Lloyd's of London, 616 So. 2d 1250, 1252 (La. 1993)
(citations omitted). Further, “[a]ny ambiguity in an insurance
policy is construed against the insurer” and “[p]olicy ambiguities
are construed in favor of coverage.” Id. (citations omitted).
Consequently, if an exclusion is susceptible of more than one
reasonable
interpretation,
that
exclusion
“must
be
construed
against the insurance company and in favor of the reasonable
construction that affords coverage.” RPM Pizza, Inc. v. Auto. Cas.
Ins. Co., 601 So. 2d 1366, 1369 (La. 1992).
Here, the Policy does not expressly exclude the loss from
coverage and is, at the very least, ambiguous so as to warrant
construing it in favor of coverage. In the instant Policy, the
“All Risk Basis” for Physical Damage Coverage under Coverage F
states that it is “[t]o pay for any physical damage to or loss of
the aircraft, including disappearance of the aircraft.” (Rec. Doc.
26-2 at 31) (emphasis added). Thus, all risks that result in
physical damage or loss are covered unless clearly and specifically
excluded
or
if
they
are
the
result
of
misconduct
or
fraud.
Exclusion No. (2) expressly states that the Policy (which includes
Coverage F) does not apply “[t]o any Insured” while the Aircraft
11
is in flight if piloted by someone other than the defined pilots.
(Rec. Doc. 26-2 at 33). Accordingly, Exclusion No. (2) does not
clearly and specifically state that the Policy is inapplicable to
claims of damage or loss when the Aircraft is flown by a “nonpilot,” so as to expressly exclude the instant loss from coverage.
This is in contrast to other exclusions that clearly exclude
coverage for such claims. (See, e.g., Rec. Doc. 26-2 at 33)
(Exclusion No. (4) states that the Policy does not apply “[t]o any
loss or damage due to radioactive contamination.”). Consequently,
Exclusion No. (2) is not an express exclusion of the loss from
coverage and is ambiguous at best.
Also of note, Exclusion No. (2) bars application of the Policy
to any “Insured,” a term that was not defined with respect to
Coverages
F
and
G.
(Rec.
Doc.
27
at
5).
Specifically,
the
“DEFINITIONS” section of the Policy reads, in relevant part: “When
appearing in this policy: . . . [t]he unqualified word ‘Insured’
wherever used in this Policy with respect to Coverages A, B, C and
D, includes not only the Named Insured [ATT] but also any person
while using or riding in the aircraft” meeting certain criteria
set forth therein. (Rec. Doc. 26-2 at 36). Though the Named Insured
is defined with respect to Coverages F and G, this is further proof
that Exclusion No. (2), and its reference only to “any Insured,”
bars claims concerning persons – albeit natural or juridical – for
liability coverage for bodily injury, property damage, or medical
12
expenses. Those claims relevant to an Insured are not the same as
those related to the Aircraft, for physical damage or loss.
On the other hand, the Court does not agree with Plaintiffs’
argument that Exclusion No. (2) creates “illusory coverage” if
determined to be applicable to Coverage F. (Rec. Doc. 30-1 at 10)
(“If
insurers
like
Old
Republic
are
allowed
to
deceptively
bootstrap part of the Declarations into an exclusion which is not
clearly expressed to apply to All-risk coverage for physical damage
the
result
will
be
an
illusion
of
‘All-risk’
coverage.”).
Particularly, Plaintiffs argue that Exclusion No. (2) does not
apply to Coverages F and G because Exclusion No. (8) is the only
exclusion specifically referencing Coverages F and G, such that
the Policy is clear that it is the only applicable exclusion. (Rec.
Doc. 27 at 4-5; Rec. Doc. 30-1 at 6). If such an argument were to
prevail,
Exclusion
Nos.
(1)
through
(4)
would
be
completely
inapplicable to the Policy. Specifically, while Exclusion Nos. (5)
through (8) apply to specific Coverages,6 the first four exclusions
do not. If this Court determines that only Exclusion No. (8)
applies to Coverages F and G because it is the only exclusion to
expressly reference them, Exclusions No. (1) through (4) would be
rendered invalid, as Coverages A through E are likewise referenced
6
Exclusion No. (5) applies to “Coverages A, B, C, D and E[,]” Exclusion No.
(6) applies to “Coverages A, C and D[,]” Exclusion No. (7) applies to “Coverages
B and D[,]” and Exclusion No. (8) applies to “Coverages F and G[.]” (Rec. Doc.
26-2 at 41-42).
13
explicitly in Exclusions No. (5) through (7). We must interpret
the exclusions with a meaning that renders them effective. See La.
Civ. Code art. 2049.
C. First Party Physical Damage Coverage Disputes
Finally,
though
the
cases
cited
by
both
Plaintiffs
and
Defendant are distinguishable from the facts at hand, they are all
consistent with a finding of ambiguity and consequently, coverage.
The landmark case on the issue is Benton Casing Services, Inc. v.
Avemco Ins. Co., 379 So. 2d 225 (La. 1979), a dispute for physical
damage coverage of an airplane arising out of similar facts. In
Benton,
the
insured
sought
“to
recover
for
the
loss
of
an
airplane[,]” but was “denied coverage on the ground that the pilot
operating the aircraft at the time of the crash was not named by
the policy as a pilot during whose operation the policy applied.”
Id. at 226. Specifically, the insurer denied coverage based on a
provision in the declarations section of the insurance policy which
defined “PILOTS” and stated that the “policy applie[d] when the
aircraft [was] in flight, only while being operated by one of the
[defined] pilots[.]” Id. at 227. The Louisiana Supreme Court, on
rehearing, determined that the declaration was not an exclusion,
but a representation, such that coverage should be afforded.
Id.
at 236. The Fifth Circuit has succinctly described the three
principal factors relied on in Benton that courts should apply for
assessing whether a named pilot endorsement is an exclusion or
14
representation.
The
factors
include
“(1)
where
the
provision
appear[s] in the policy; (2) whether the endorsement, if read as
an exclusion, would render the policy ambiguous; [and] (3) the
past practice of the parties to the policy.” Graham v. Milky Way
Barge, Inc., 824 F.2d 376, 383 (5th Cir. 1987).
Applying Benton, this case is distinguishable from the outset
because, although the controverted exclusion appears in full in
the declarations section of the Policy, it is also referenced in
the exclusions section where “the exclusions specifically refer[]
to it.” Bridgefield Cas. Ins. Co. v. River Oaks Mgmt., Inc., 590
F. App'x 308, 315 (5th Cir. 2014) (quoting Compass Ins. Co. v.
Vanguard Ins. Co., 649 F.2d 331, 335 (5th Cir. 1981)). Nonetheless,
to read Exclusion No. (2) as applicable to Coverage F would render
the Policy ambiguous because excluding physical damage coverage
based on the plane being flown by a “non-Pilot” as defined by the
Policy would seemingly contradict the stated purpose of such
coverage.
Because
physical
damage
coverage
under
Coverage
F
applies “[t]o pay for . . . loss of the aircraft, including
disappearance of the aircraft[,]” it seems to apply in the case of
theft. (Rec. Doc. 26-2 at 31). Limiting coverage to theft only if
occasioned by a “pilot” as defined in the Policy would be absurd,
so as to render it ambiguous. See Compass, 649 F.2d at 335 (In
Benton, “if the endorsement were considered an exclusion, it would
have rendered the policy ambiguous because it was not on its face
15
limited to particular types of coverage and thus would have
contradicted the policy's coverage of loss when the plane was flown
by a thief.”). Lastly, the parties have not made this Court aware
of any past practices that might influence a decision.
The cases cited by Defendant are less instructive. In Compass,
the first case cited by Defendant, the Fifth Circuit held that a
claim for coverage under an insurance policy for an aircraft was
excluded because an unapproved pilot used the aircraft. See id. at
332. In that case, plaintiff sought in-flight, or “M-8” coverage,
for loss of an airplane. Id. Within the insurance policy, however,
it clearly stated in the “EXCLUSIONS” section: “This insurance
does not apply: . . . [u]nder coverage M-8 . . . [t]o aircraft
operated by other than the pilot or pilots set forth in Item 4 of
the Schedule.” Id. at 333. The pilot at the time of the airplane’s
crash was not a pilot as set forth in the policy. Id. at 332.
The circumstances at hand are remarkably different. First,
though not conclusive of success, the instant Policy did not
specifically qualify the application of Exclusion No. (2) to
Coverage F, as did the policy in Compass with respect to M-8
coverage.7 Second, the policy in Compass is clear that “insurance
7
Defendant failed to include the qualifying portion of the exclusion when
quoting it in its motion, or to cite to the proper page in the case for
reference. (See Rec. Doc. 26-1 at 7) (quoting Compass, 649 F.2d at 333) (“This
insurance does not apply: . . . [t]o aircraft operated by other than the pilot
or pilots set forth in Item 4 of the Schedule.”). Though this Court will treat
this selective quotation as a mere oversight, it should be noted that deceptive
recitation of law is frowned upon and not in line with the interests of justice.
16
does not apply . . . [t]o aircraft” if flown by a pilot that does
not meet the standards defined within, so as to bar recovery for
physical damage or loss of the airplane – but not necessarily
liability or medical services coverage to persons – under those
circumstances. To the contrary, the instant Policy states that it
“does not apply . . . [t]o any Insured while the aircraft is in
flight” if flown by a “non-pilot” under the Policy. Thus, while it
is clear that coverage is barred as to claims concerning those
defined under the Policy as Insureds (e.g., for bodily injury for
pilot and passengers, property damage, and medical services), it
is not clear that coverage is similarly excluded as to claims
associated with the Aircraft (e.g., for physical damage or loss).
This is in contrast to other exclusions which explicitly state
their application to claims connected to the Aircraft.8
The second case cited by Defendant is less informative, as it
concerned claims for liability coverage in relation to the death
of passengers killed in the crash of an airplane. See U.S. Fire
Ins. Co. v. W. Monroe Charter Serv., Inc., 504 So. 2d 93, 95 (La.
Ct. App. 1987), writ denied, 505 So. 2d 1141 (La. 1987). In that
case, the court held that the aircraft insurance policy provided
no liability coverage as a result of the pilot failing to meet the
8
(See Rec. Doc. 26-2 at 23) (“This policy does not cover claims caused by . .
. .”); (Rec. Doc. 26-2 at 33) (“This policy does not apply . . . [t]o any loss
or damage due to . . . .”); (Rec. Doc. 26-2 at 33-34) (“This policy does not
apply . . . [t]o loss or damage due to . . . .”); (Rec. Doc. 26-2 at 33-34)
(This policy does not apply . . . [to] damage to turbine engines . . . .”).
17
defined pilot standards. Id. There, the policy stated: “The policy
under Part Three, Liability to Others, provides: . . . What is Not
Covered. We do not cover any . . . [b]odily injury or property
damage unless the requirements of the Coverage Identification Page
regarding Pilots (Item 9) and Use (Item 10) are met.” Id. at 99.
In Item 9 of the Coverage Identification Page, the policy defines
pilot and also states that “[t]here is no coverage under the policy
if the pilot does not meet these requirements.” Id. This statement
is reiterated in the General Provisions and Conditions section.
Id.
Here, there is no question that Exclusion No. (2) bars
liability coverage for bodily injury or property damage, just as
the policy in U.S. Fire did. However, as in U.S. Fire, the Policy
does not expressly exclude coverage for physical damage to or loss
of the aircraft. Consequently, the case is of little value, except
to reestablish what is already clear from the Policy itself.
Furthermore, even if the facts of U.S. Fire involved a claim for
physical damages or loss of an aircraft, the policy in that case
was still clearer in scope, as it stated that there would be “no
coverage under the policy if the pilot [did] not meet the[]
requirements.” Id. No such language appears in the instant Policy.
Accordingly, the language of the Policy seems to afford
coverage for physical damage to or loss of the Aircraft under
Coverage F as Exclusion No. (2) appears inapplicable. Although
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this Court is wary to conclusively state that this was the intent
of the parties, it notes that Defendant had the burden of proving
that the loss fell within Exclusion No. (2) and failed to do so.
Therefore, there is no genuine dispute as to any material fact
that the Policy and specifically, Exclusion No. (2), is at the
very least ambiguous. See Lindsey, 16 F.3d at 618. The ambiguity
must be construed against Defendant and in favor of coverage. See
La. Maint. Servs., 616 So. 2d at 1252. Though the exclusion may be
susceptible of other interpretations, this Court holds that its
interpretation against Defendant and in favor of coverage is
reasonable. See RPM Pizza, 601 So. 2d at 1369 (An exclusion
susceptible of more than one reasonable interpretation “must be
construed against the insurance company and in favor of the
reasonable construction that affords coverage.”).
VII. CONCLUSION
In light of the foregoing, IT IS ORDERED that Defendant’s
Motion for Summary Judgment is DENIED and Plaintiff’s Motion for
Partial Summary Judgment is GRANTED.
New Orleans, Louisiana, this 18th day of July, 2016.
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE
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