This is a consolidated appeal from two separate declaratory judgment actions which raise identical legal issues. The two main issues raised in each action are: (1) whether a provision in an aviation liability insurance policy excluding coverage to renter-pilots is void as against public policy and (2) whether the exclusionary provisions are ambiguous.
The facts giving rise to the action in 1 CA-CIV 5374 are as follows. On June 13, 1977, Susan Elizabeth McCoy rented a 1972 Cessna aircraft from Precision Helicopter Service, Inc. (Precision) for the purpose of making a round trip pleasure flight from Glendale to Prescott. During an attempted landing at Glendale Municipal Airport, the aircraft, piloted by Ms. McCoy, crashed into a cement truck owned by Allied Concrete, Inc., killing Ms. McCoy, her passengers, Billie Eugene Andrews and Jolene Andrews and Thomas Catchings, the truck driver.
The personal representatives of the Andrews and Catchings estate and heirs of the deceased filed wrongful death actions against numerous defendants including Precision and the Estate of Susan Elizabeth McCoy. Allied Concrete and its insurer also filed suit against Precision and the Estate of Susan Elizabeth McCoy for damages to the cement truck.
The aircraft was owned by Eugene Hill who had leased it to Precision for the purpose of rental on an hourly basis to qualified pilots. At the time of the crash both Hill and Precision were covered by liability policies issued by National Union Fire Insurance Company of Pittsburgh (National), and Precision had an additional insurance policy from The Insurance Company of the State of Pennsylvania (Pennsylvania). National and Pennsylvania brought a declaratory judgment action in Maricopa County Superior Court seeking a determination that Ms. McCoy was not an insured under their policies issued to Precision and Hill. They sought a declaration absolving the companies from responsibility for defending the Estate of Susan Elizabeth McCoy in the lawsuits brought on behalf of the various decedents and heirs.
The trial court entered summary judgment in favor of National and Pennsylvania and this appeal was timely filed on behalf of the decedents' estates and heirs.
Similar circumstances led to the litigation in appeal 1 CA-CIV 6047. On April 16, 1977, David Carlson rented a 1977 Grumann American "Cheetah" Model AA5A, from June's Aviation, Inc. (June's Aviation) for a pleasure flight from Falcon Field in Mesa, Arizona, to Flagstaff, Arizona. The aircraft crashed with Mr. Carlson at the controls and resulted in the deaths of the pilot and his passengers, Robert D. Smith, Debbie Emberlin and Claudia Jean Carlson. The personal representatives of the estates of the deceased passengers filed suit against June's Aviation and the Estate of David Carlson. The defense of these claims was tendered to Compass Insurance Company (Compass) on behalf of the Estate of David Carlson.
Compass filed a declaratory judgment action in Maricopa County Superior Court seeking a determination that David Carlson was not an insured under its policy. At the time of the crash, June's Aviation had in effect a liability insurance policy issued by Compass containing an exclusionary provision identical to those in the policies issued by National and Pennsylvania. The trial court granted Compass's motion for summary judgment, holding that Compass had no liability to defend the Estate of David Carlson. The estates and heirs of the decedents and June's Aviation appealed this decision.
Pursuant to a stipulation of the parties, 1 CA-CIV 5374 and 1 CA-CIV 6047 were consolidated by order of this court. We affirm the decisions of the trial court in both appeals.
Appellants contend that by enacting A.R.S. §§ 28-1747, -1748 and -1749 as part of the statutory scheme regulating aircraft operation, the legislature intended to protect the public from financially irresponsible
The thrust of A.R.S. § 28-1747 is to make a pilot responsible for his negligence while operating an aircraft.
A policy argument similar to that raised by appellant was considered by the California Supreme Court in National Insurance Underwriters v. Carter, 17 Cal.3d 380, 131 Cal.Rptr. 42, 551 P.2d 362 (1976). The aviation policy in question there excluded coverage for accidents occurring while the aircraft was piloted by an unqualified pilot as defined by the policy declarations. The defendants in Carter contended that the public policy set forth in the omnibus clause of the California Motor Vehicle Financial Responsibility Act should be read into the Uniform Aircraft Financial Responsibility Act then in effect in California. The California court refused to transfer the public policy objectives set forth in the Motor Vehicle Financial Responsibility Act by analogy stating:
17 Cal.3d at 387, 131 Cal. Rptr. at 47, 551 P.2d at 367.
Similarly, we find no declaration of public policy in Arizona's statute which mandates coverage of permissive users of aircraft. Therefore, an aircraft liability insurance contract may properly limit the scope of coverage to exclude renter-pilots. See Arceneaux v. State Farm Mutual Auto. Ins. Co., 113 Ariz. 216, 550 P.2d 87 (1976).
Appellants' second major contention is that the policy exclusionary clauses are ambiguous and contrary to the reasonable understanding of laymen who read the policy. They argue that such ambiguity must be construed against the insurance company. See State Farm Mut. Automobile Ins. Co. v. Paynter, 122 Ariz. 198, 593 P.2d 948 (App. 1979); Ranger Insurance Co. v. Phillips, 25 Ariz.App. 426, 544 P.2d 250 (1976).
The following provisions are contained in the policies issued by National, Pennsylvania and Compass to their respective insureds, Precision, Hill and June's Aviation.
Appellants argue that these provisions read in conjunction with the portion of the policies which lists "commercial" use as a permissible use of the aircraft create an ambiguity which must be interpreted against the insurance companies.
While this is a case of first impression in Arizona, numerous other jurisdictions have considered identical or similar provisions in aviation insurance policies. The overwhelming weight of authority has held that such provisions do not create an ambiguity.
In Melton v. Ranger Insurance Company, 515 S.W.2d 371 (Tex.Civ.App. 1974), plaintiffs, who were injured in an aircraft crash involving a renter-pilot, contended that the renter-pilot was an omnibus insured under a policy issued to the fixed-based operator who had rented the aircraft to the pilot. The policy language defining the word "insured" was identical to the policy language set forth in the policies which are the subject of this appeal. Likewise, the "purpose of use" provisions of the Melton policy included "rental to pilots" as a permitted use of the aircraft. The court held that the policy provisions were clear and that no insurance coverage was afforded the renter-pilot. The court stated:
Melton, supra, 515 S.W.2d at 374.
Numerous other jurisdictions have likewise found that there is no inconsistency between a declaration that rental to pilots is a permissible use and the renter-pilot exclusionary clauses contained in those policies. See Crawford v. Ranger Ins. Co., 653 F.2d 1248 (9th Cir.1981); Levra v. National Union Fire Insurance Company of Pittsburgh, 99 Idaho 871, 590 P.2d 1017 (1979); Jahrman v. Valley Air Park, Inc., 333 So.2d 712 (La. App. 1976); Ranger Insurance Company v. Silverthorn, 553 S.W.2d 530, (Mo. App. 1977); Greemore v. American Home Assurance Co., 113 N.H. 250, 305 A.2d 681 (1973); Saliba v. American Policyholders Insurance Company, 158 N.J.Super. 48, 385 A.2d 328 (1976), aff'd 157 N.J.Super. 476, 385 A.2d 239 (1978); Buestad v. Ranger Insurance Company, 15 Wn.App. 754, 551 P.2d 1033 (1976).
Appellants rely upon Martin v. Ohio Casualty Insurance Company, 9 Mich.App. 598, 157 N.W.2d 827 (1968) to support their contention that the exclusionary provision in question is ambiguous. Under a policy containing an exclusion for rental pilots in the printed definition of "insured" and a purpose of use clause checked as "commercial", which permitted rental of the aircraft to pilots, the court concluded that a renter-pilot was an insured. Appellants further rely upon Wzontek v. Zurich Insurance Company,
We note that the decisions in these two cases have been expressly rejected by the courts in Melton v. Ranger Insurance Company, supra; Ranger Insurance Company v. Silverthorn, supra and Buestad v. Ranger Insurance Company, supra. Martin and Wzontek were impliedly rejected by the courts in Levra v. National Union Fire Insurance Company of Pittsburg, supra; Jahrman v. Valley Airpark, Inc., supra and Greemore v. American Home Assurance Company, supra.
We likewise reject the reasoning in Martin and Wzontek and find that there is no ambiguity in the policy provisions with respect to coverage of renter-pilots. We agree with the conclusion reached by the Missouri Court of Appeals in Ranger Insurance Company v. Silverthorn, supra at 534 in finding that:
Finally, we consider appellants' contention that the mere fact that different jurisdictions have reached different conclusions with respect to the policy provisions in question requires us to find that an ambiguity exists. Appellants cite Federal Insurance Company v. P.A.T. Homes, Inc., 113 Ariz. 136, 547 P.2d 1050 (1976) in support of this proposition. However, in Outdoor World v. Continental Cas. Co., 122 Ariz. 292, 594 P.2d 546 (App. 1979) and Thompson v. Government Employees Insurance Co., 122 Ariz. 18, 592 P.2d 1284 (App. 1979), this court explained that Federal Insurance Company v. P.A.T. Homes, Inc. does not require an automatic finding by an appellate court that ambiguity exists by virtue of different jurisdictions reaching different conclusions regarding the interpretation of similar language in insurance policies. Rather, these cases hold that such a conflict is merely a strong indication of ambiguity and that each court must examine the facts of each case and make the determination for itself. Having examined the policies in question, we find that they are not ambiguous.
The construction of an insurance contract is a question of law for the court, Coombs v. Lumberman's Mutual Casualty Company, 23 Ariz.App. 207, 531 P.2d 1145 (1975), and courts should enforce the insurance contract as made. The insurer should be required to pay damages only on claims intended to be insured against and to answer only for risks intended to be assumed. Queen Insurance Co. v. Watson, 31 Ariz. 340, 253 P. 440 (1927); Harbor Ins. Co. v. United Services Auto Ass'n., 114 Ariz. 58, 559 P.2d 178 (App. 1976). It is not the prerogative of the court to create ambiguities where none exist or to rewrite the contract in an attempt to avoid harsh results. Mission Ins. Co. v. Nethers, 119 Ariz. 405, 581 P.2d 250 (App. 1978); Lawrence v. Beneficial Fire and Casualty Insurance Company, 8 Ariz.App. 155, 444 P.2d 446 (1968).
OGG, P.J., and CORCORAN, J., concur.