Star Insurance Aviation Litigation

In an important aviation case, Locke Lord recently helped client Star Insurance win summary judgment in the U.S. District Court for the Central District of California confirming the requirement that pilots strictly comply with their insurance policy's pilot warranty endorsement. U.S. District Judge John Kronstadt granted partial summary judgment to Star Insurance Company in the case which involved a dispute with Star's Insured, the Walter Johnson Family Trust, over compliance with a pilot warranty endorsement (PWE). The PWE required training at a Cessna-approved ground and flight training school, or an equivalent approved school, in the insured make and model aircraft, within the preceding 12 months of the intended flight. This case arose out of a Sept 2011 crash in Tehachapi, Calif. The pilot, Walter Johnson, and a passenger, John Nuckolls, were killed when Johnson's 1979 Cessna P210 crashed into a hillside. The crash ignited a 14,000 acre brush fire that destroyed dozens of buildings in its path. In representing Star, Locke Lord lawyers Christopher Barth argued that Johnson did not complete the training required by the PWE, thus no coverage arose under the insurance policy. The Trust's attorneys failed to counter with any evidence showing Johnson completed the requisite training, but instead argued his completion of a biennial flight review (BFR) (pursuant to 14 CFR §61.56) was the functional equivalent of the manufacturer's training school. Judge Kronstadt's ruling rejected the Trust's arguments, finding that Johnson was obligated, but failed, to comply with the requirements of the PWE. The Court specifically found that a BFR was not the functional equivalent of a manufacturer-approved training school. The District Court relied upon the 9th Circuit's prior decision in Trishan Air, Inc. v. Federal Ins. Co., 635 F.3d 422 (9th Cir. 2011) to find strict compliance with the PWE's terms was central to the risk insured and, accordingly, exact compliance with its terms was required. As the Trust failed to counter with any evidence showing Walter Johnson's compliance with the PWE's training requirements, the Court granted Star summary judgment based on the PWE.

Posted August 30, 2013