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IDEAL MUT. INS. CO. v. LIMERICK AVIATION CO.

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


October 22, 1982

IDEAL MUTUAL INSURANCE COMPANY and GLOBAL AVIATION, Plaintiffs
v.
LIMERICK AVIATION COMPANY, UWE BUEHL, GENERAL ELECTRIC CREDIT CORPORATION OF TENNESSEE, Defendants

The opinion of the court was delivered by: TROUTMAN

FINDINGS OF FACT

 TROUTMAN, J.

 I. JURISDICTION

 1. This is a declaratory judgment action brought to determine whether a certain policy of insurance on an airplane is applicable to an accident which occurred on June 22, 1978.

 2. The Plaintiff, Ideal Mutual Insurance Company, hereinafter "Ideal" is a New York Corporation.

 3. The other Plaintiff, Global Aviation, hereinafter "Global", is a Louisiana Insurance Company.

 4. The Defendant, Limerick Aviation Company, hereinafter "Limerick," is a Pennsylvania company.

 5. Uwe Buehl, a principal in Limerick was at the time of suit a resident of Pennsylvania.

 6. General Electric Credit Corporation, hereinafter "G.E.", is a Tennessee corporation.

 7. If the Insurance Policy was valid, the sums payable would exceed $10,000.

 8. Thus this Court has jurisdiction.

 II. THE PARTIES

 9. Plaintiff "Ideal" is a corporation which writes insurance policies on airplanes and which issued the subject policy in this case.

 10. Plaintiff "Global" is an insurance broker that received the application for insurance from Limerick Aviation and made the underwriting decisions as to issuance, and set forth the conditions governing the policy. Global then had the policy written through Ideal.

 11. "Limerick" was a company that was involved in the sale and use of airplanes. It was the named insured under the Ideal policy and the owner of the plane that was insured.

 12. "Uwe Buehl" was the principal owner of "Limerick" and the person who took out the application for insurance on behalf of Limerick. He was authorized to act on behalf of Limerick.

 13. "G.E." was a mortgagee of the airplane. As the case developed, the interest of "G.E." was taken over by Global and G.E. took no active part in the trial.

 14. "Joseph Colantonio" is not a party, but as the deceased pilot of the airplane on the date of the crash, he needs to be mentioned because the insurance policy sets certain minimum standards for pilots and he does not meet those standards. (See Findings of Fact 29 to 37).

 III. THE UNDERLYING FACTS

 15. "Limerick" was the owner of a Cessna 402 multi-engine airplane.

 16. Uwe Buehl had made application on behalf of Limerick for a policy of airplane insurance.

 17. Global Aviation in reliance of the application wrote a standard aircraft policy through Ideal Mutual on June 7, 1978.

 18. The application, the declaration and exclusions and a sample policy are Plaintiff's Exhibits 1, 2, and 3.

 19. They fairly and accurately represent the documents applicable to this case.

 20. On June 22, 1978 the said airplane crashed killing the pilot, Joseph Colantonio and four passengers.

 21. The policy, if in force, would have insured the pilot and the passengers for up to $100,000 per seat.

 22. If the policy were in force the insurance carrier would have the duty of investigating the accident, defending any claims, and paying any verdicts.

 23. The insurance company, after an investigation, determined that facts existed to deny coverage.

 24. Since the insurance carrier is contesting both the issuance of the policy and whether the exclusions apply and since Limerick will be affected by a decision as to whether a valid enforceable policy exists, an actual controversy exists between the parties.

 IV. ISSUES

 25. Plaintiff has set forth five counts for relief. Basically, they can be divided into two legal theories.

 A. If the policy were valid, Plaintiff maintains that certain exclusions from coverage set forth in the policy makes the insurance policy inapplicable to this accident.

 B. The other issue is the allegation of fraud in the application in areas material to the risk which allegedly make the contract void ab initio.

 26. For the purpose of these findings of fact, we will be dividing the issues into two categories labeled "The Exclusion Issues" and "The Fraud Issue".

 27. While the Plaintiffs presented testimony concerning two other issues, which we will label the "Ownership Issue" and the "Airworthiness Issue", because the findings of fact and conclusions of law support Plaintiff's view that the policy doesn't apply, we see no necessity to overburden the record by making unnecessary findings and conclusions on these issues and therefore make no findings on these issues.

 V. THE EXCLUSION ISSUES

 A. The Pilot Exclusion.

 28. The Exclusions in question are found in Plaintiff's Exhibit Nos. 2 and 3.

 29. The first applicable exclusion is stated as follows:

 

"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 Declaration."

 30. Item 7 of the declaration sets forth 2 classes of pilots. One, named pilots and two, unnamed pilots who had met certain minimum criterions.

 31. The only named pilot under the declarations was Uwe Buehl. He was not flying the airplane on the day in question and thus we must move to the second category to see if the policy applied.

 32. The policy did permit nonnamed pilots to fly the aircraft if they met certain requirements.

 33. Joseph Colantonio is in this second category and thus, the question is, what were the requirements and how did Joseph Colantonio measure up?

 34. The requirements were three in number:

 

(1) 1,000 total logged hours; and

 

(2) 250 of those hours in a multi engine aircraft; and

 

(3) 25 in the same make and model of aircraft as the one intended to be flown.

 35. The insured aircraft here was a twin engine Cessna Model 402. 36. The pilot of the aircraft, Joseph Colantonio did not meet any of the above 3 standards. Instead as the following reveals he was substantially below all three requirements: Required Colantonio 1,000 hours logged 280.7 hours 250 hours multi-engine 69.9 hours 25 hours make and model, 22.0 hours i.e., Cessna 402

19821022

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