The opinion of the court was delivered by: BECKER
This case requires us to construe a contract of aircraft insurance. It arises from a helicopter accident which occurred on July 20, 1976, when a helicopter owned by plaintiff Jasper DiSanto (DiSanto) crashed from an altitude of approximately 15 feet during a test flight while being piloted by an aircraft mechanic. The helicopter, an Enstrom F28A, was totally destroyed in the crash. Plaintiff brought this action against Enstrom Helicopter Corporation (Enstrom), the manufacturer of the helicopter, and against his insurers, Southern Marine and Aviation Underwriters, Inc. (Southern) and Manhattan Fire and Marine Insurance Company (Manhattan).
Enstrom filed a third-party complaint against the plaintiff's son, Robert DiSanto, who was the copter's regular pilot, and against two other third-party defendants.
Subsequently, Robert DiSanto filed his own third-party complaint against Southern and Manhattan.
Jurisdiction is based on diversity of citizenship, 28 U.S.C. § 1332, and the parties agree that the case is governed by Pennsylvania law.
The case is before us on the motion of Southern and Manhattan for summary judgment against the plaintiff, and the motions of Jasper and Robert DiSanto for summary judgment against Southern and Manhattan on their complaint and third-party complaint, respectively.
We will reserve decision on the motion of third-party plaintiff Robert DiSanto, as his motion has not been adequately briefed. See n. 3, supra. For the reasons set forth below, we will grant Southern and Manhattan's motion for summary judgment, and deny plaintiff's motion.
The material facts, which are undisputed, are as follows. At the time of the accident, Jasper DiSanto was the named insured under the defendants' policy No. H-5-1873, issued on July 1, 1976, for a policy period which began on June 22, 1976. The policy includes "Coverage F," also known as "Hull Coverage," by which the insurer agrees "to pay for any direct physical loss of or direct physical damage to the aircraft" up to the amount of $ 50,000, with $ 250 deductible for damage while the rotors are not in motion, and $ 2500 deductible for damage while the rotors are in motion. Item 10 of the policy declarations provides as follows:
Pilots-The coverage afforded by this policy shall not apply unless the aircraft is operated in flight by the pilots endorsed hereon and then only provided said pilots are qualified in accordance with the terms of the endorsement(s).
Under the heading "Exclusions," the policy provides as follows:
This policy does not apply and no coverage is afforded:
2. To any insured while the aircraft is in flight:
(a) If piloted by other than the pilot or pilots designated in the Declarations or endorsed hereon(.)
Under the heading "Pilot Qualification Endorsement," the policy provides as follows:
When in flight the aircraft shall be operated only by the pilot(s) designated below . . . :
Any other pilot, provided he has a Commercial Pilots Certificate with Rotorcraft Rating and has a minimum logged flying time of 500 hours as pilot in command of rotorcraft, of which 50 hours shall have been in same make and model as being flown.
Certain other clauses in the policy are relevant to the plaintiff's contention that the policy is ambiguous and will be discussed in detail when we address that contention.
This policy resulted from negotiations during the month of June 1976, between Susan Trahey of Harlan, Incorporated of Pennsylvania (Harlan), plaintiff's insurance broker, and Jim Harris, an employee of Southern. After requesting and receiving a quote from Southern for a new insurance policy, Trahey sent to Harris on June 22 a telex which read in pertinent part as follows:
The notation "Ded 250/2000" meant that the proposed hull coverage would include $ 250 deductible for damage occurring while the craft was not in motion and $ 2000 deductible for damage while in motion. Harris responded by telex of June 23, saying:
This is to confirm that we have bound all as per your tel June 22.
On June 22, Trahey also completed an "Insurance Order Form" which provided, inter alia, that the desired hull coverage include $ 2000 in-motion deductible. The order form also included the following statement with respect to pilots:
PILOTS: Robert Di Santo and/or any private or better certificated pilot who has a minimum of 300 total logged flying hours in Rotary-Wing Aircraft of which not less than 15 hours shall have been in make and model being flown.
COMPLETED PILOT DATA AND APPLICATION WILL BE FORTHCOMING (capitals and emphasis in original). On June 23, Jasper DiSanto signed his "Aircraft Application," in which he stated that Robert DiSanto had 400 hours of flight experience.
On July 1, Harris transmitted the policy to Trahey, with a cover letter which stated:
Please refer to Endorsement No. 1 (Pilot Qualification Endorsement) and note that we have named Robert DiSanto as an approved pilot and also we have provided you with an open pilot warranty which requires a pilot having a Commercial Pilot Certificate with Rotorcraft Rating and has a minimum logged flying time of 500 hours as pilot in command of rotorcraft of which 50 hours shall have been in same make and model as being flown. This open pilot warranty is different from the one on your binder of June 22nd, so please review this with the Insured in order that we will not have any misunderstanding as respects any pilots that may fly this rotorcraft.
On July 12, Trahey transmitted the policy to the plaintiff, with a cover memorandum which said:
Please note the pilot requirements are different from the ones outlined on our binder. We apologize for this error and hope it hasn't caused you any inconvenience.
On July 20, 1976, Robert DiSanto brought the helicopter to the premises of Lanes Valley Forge Aviation, Inc., in Collegeville, Pennsylvania, for tests because he was concerned about a vibration in the craft. He delivered it to Thomas H. Kilrain, III, an FAA licensed helicopter mechanic and pilot who was an employee of Lanes. Kilrain examined the craft and began a flight test to determine the cause of the vibration. While Kilrain was flying the helicopter at an altitude of approximately 15 feet, the rotor separated from the body of the craft, which crashed. Kilrain did not meet the description of "any other pilot" in the Pilot Qualification Endorsement, since he had less than 200 hours flight experience in helicopters, less than 20 hours flight experience in an Enstrom F28, and held only a private pilot's certificate instead of a commercial pilot's certificate. Kilrain's failure to meet the policy description had no causal connection whatsoever to the accident. Plaintiff promptly notified the insurers of the accident, but on September 20, 1976, Southern informed him through its agents, Peter J. McBreen & Associates, Inc., that coverage was denied. The sole basis for the denial was Kilrain's failure to meet the terms of the Pilot Qualification Endorsement.
In December of 1977, during the pendency of this lawsuit, plaintiff's insurance broker, Harlan, contacted Southern and requested that it return the unearned portion of DiSanto's premium. The policy provides:
25. CANCELLATION. . . . The company shall not be liable for any return premium with respect to an aircraft on ...